Shelton Petroleum has designed a multi-well infill development drilling program for the Rustamovskoye field in Bashkiria, Russia, following its one hundred per cent success ratio exploration drilling program and positive extended production tests on its first two wells. The implementation of the program is expected to start during the autumn of 2011.

Planning is being done for up to a six well drilling program, giving a total of up to eight production wells, with the new wells coming on stream starting the first half of 2012. Initial investments in project design and preparation of the drill pad have already been made. A drilling company will be contracted when the first tranche of funds from the liquidation of Tomsk Refining AB will be received, which is expected during the third quarter this year.

Robert Karlsson, CEO of Shelton Petroleum, said: 'We are very pleased to announce the drilling campaign on the Rustamovskoye field. It marks the start of a development program that we through focused efforts have been working towards throughout a successful four-year exploration program. We are excited about the incremental production this drilling program may provide as well as gaining more insight into the ultimate potential of the Rustamovskoye field.

An associated fluid processing facility will be constructed. Facility design throughput capacity will exceed production volumes from the six new wells so that additional future wells can be tied in without major investments. All the wells will be pipeline connected to this facility, which includes an oil shipping and load out facility.

Initially, test oil has been trucked to market. However as production volumes increase the company expects to be able to deliver to the closest oil sales pipeline point either by truck or lateral pipeline connection.

Shelton Petroleum currently produces oil from two wells, RS#1 and RS#2, on the Rustamovskoye field. Initial flow rates per well amount to 70-160 barrels per day. The drilling of six new wells is the first step in a long-term development program of Shelton Petroleum's three adjacent licenses in Bashkiria. With eight wells on production, the company will be able to generate cash flow to be used in financing further production and exploration drilling.

Further drilling on Rustamovskoye is anticipated as results from the first program become known.

In addition, new seismic control acquired during the second quarter of this year indicates the possibility of extending the Rustamovskoye oil field to the east. Other exploration drilling is being planned on new structures identified on the neighboring Aysky license with a potential of over twenty million barrels according to an estimate by the independent seismic service company Udmurtgeofizika.

Time plan for the development program

The preparation of the drill pad is underway. A tender process for the drilling company has been initiated and a contract will be entered into once Shelton Petroleum has received the first tranche of funds from the liquidation of Tomsk Refining AB. The company expects to be able to spud the first production well during 2011 and drill a total of six new wells coming on production starting the first half of 2012. Shelton Petroleum will continuously update the financial markets on the program's progress.

Tags: Shelton Petroleum