Shelton Petroleum comments on the notice to EGM Shelton

Shelton Petroleum yesterday gave notice to an extraordinary general meeting to be held 2 May 2014. Shelton Petroleum has received three requests from Petrogrand to give notice to an EGM. These requests are partly not valid and have partly been withdrawn by Petrogrand. Shelton Petroleum issues this press release in order to clarify the complex sequence of events for the financial markets so that investors can make informed decisions. The board of Shelton Petroleum AB (publ) (“Shelton Petroleum) yesterday convened an extraordinary general meeting to be held on 2 May 2014. The purpose of the meeting is to deal with Petrogrand AB’s (publ) (“Petrogrand”), a shareholder of Shelton Petroleum, request to appoint a minority auditor. The board has convened the general meeting with the shortest possible notice period to meet Petrogrand’s request for a prompt handling of this matter. While the board believes that this matter could be dealt with at the annual general meeting so as to avoid unnecessary costs for Shelton Petroleum and its shareholders, the board is, under the Swedish Companies Act, obligated to convene a general meeting as a result of Petrogrand’s written request.   The background can be summarized as follows. • On 18 March 2014, Petrogrand made a written request to Shelton Petroleum to convene an extraordinary general meeting to appoint a minority auditor. See enclosure 1. • At that time, Petrogrand did not own 10 per cent of the shares in Shelton Petroleum, which is the statutory threshold for this type of minority rights. On this basis, as it did not consider Petrogrand to have the lawful right to make such request, the board of Shelton Petroleum resolved not to convene any extraordinary general meeting. • On 19 March 2014, Petrogrand made an additional request to its request of 18 March 2014. See enclosure 2. Under this additional request, Petrogrand requested that the current board should be dismissed and a new board be appointed at the extraordinary general meeting that Petrogrand had requested on the day before. • On 24 March 2014, Petrogrand made a new second written request to Shelton Petroleum to convene an extraordinary general meeting to appoint a minority auditor and a new board. See enclosure 3. • Also at that time, Petrogrand did not own 10 per cent of the shares in Shelton Petroleum and, therefore, the board resolved not to convene any extraordinary general meeting. • On 28 March 2014, Petrogrand made a new third written request to Shelton Petroleum to convene an extraordinary general meeting to appoint a minority auditor and a new board. In conjunction therewith, Petrogrand also repeated its previous request. See enclosure 4. • At that time, Petrogrand did own more than 10 per cent of the shares in Shelton Petroleum. The board, therefore, notified Petrogrand that it would convene an extraordinary general meeting within the applicable time frames. • As part of the board’ evaluation of Petrogrand’s public offer, the board has submitted a number of questions to the Swedish Securities Council. In its statement AMN 2014:15, the Swedish Securities Council has (among other things) stated that Petrogrand does not have the right to request the board to convene an extraordinary general meeting to appoint a new board. See link to the Swedish Securities Council http://www.aktiemarknadsnamnden.se/ 201415  The Swedish Securities Council stated that: “Petrogrand’s request for an extraordinary general meeting for this purpose is in breach of sound practices on the Swedish stock market. In the council’s opinion, sound practices on the Swedish stock market require Petrogrand to withdraw its request for a board election.” • On the basis of the Swedish Securities Council’s criticism, Petrogrand withdrew its request as regards the appointment of a new board at the extraordinary general meeting. Instead, Petrogrand has stated that it will propose a new board at Shelton Petroleum’s upcoming annual general meeting. See link to Petrogrand’s press release and excerpt from the press release http://ir.petrogrand.se/releasedetail.cfm?ReleaseID=837997 “[…] Petrogrand has decided the following: 1. To withdraw the proposal for election of a board of directors in Petrogrand's request for an Extraordinary General Meeting in Shelton Petroleum dated 28 March 2014. Proposal for minority auditor remains. In addition, Petrogrand will instead propose a new board at the Annual General Meeting of Shelton Petroleum 20 May 2014;” • Despite the fact that Petrogrand did not own 10 per cent of the shares in Shelton Petroleum on 18 March 2014 when it made its first request, Petrogrand has on 27 March 2014 applied to the Swedish Companies Registration Office that the Swedish Companies Registration Office should convene an extraordinary general meeting in Shelton Petroleum in accordance with Petrogrand’s request. • The Swedish Companies Registration Office has in its decision of 2 April 2014 declined the application as Petrogrand had not been able to evidence to the Swedish Companies Registration Office that it had the right to request for an extraordinary general meeting. See enclosure 5. • Petrogrand has on 7 April 2014 appealed the Swedish Companies Registration Office’s decision to the administrative court in Härnösand. • The Swedish Companies Registration Office has in a statement to the administrative court maintained its view and presented additional arguments on why it thinks that Petrogrand does not have the right to request for an extraordinary general meeting. See enclosure 6.   For more information, please contact: Robert Karlsson, CEO, Shelton Petroleum, +46 709 565 141 robert.karlsson@sheltonpetroleum.com www.sheltonpetroleum.com   The information provided herein is such that Shelton Petroleum AB is obligated to disclose it pursuant to the Securities Markets Act (2007:528) and the Takeover rules. The information was submitted for publication at 11:00 (CET) on 10 April 2014.   About Shelton Petroleum Shelton Petroleum is a Swedish company focused on exploring and developing concessions in Russia and the resource-rich basins of Ukraine. In Russia, the company holds three licenses in the Volga-Urals area in Bashkiria and has commenced production on the Rustamovskoye field after a successful exploration program. In Ukraine, Shelton Petroleum’s wholly owned subsidiary has a joint venture with Ukrnafta and Chornomornaftogaz, two leading Ukrainian oil and gas companies. The Shelton Petroleum share is traded on NASDAQ OMX Stockholm under the symbol SHEL B.