Shelton Canada Corp.
TSX VENTURE : STO

Shelton Canada Corp.

April 30, 2008 18:45 ET

Shelton Canada Corp. Announces 2007 Year-End Reserves

EDMONTON, ALBERTA--(Marketwire - April 30, 2008) - Shelton Canada Corp. ("Shelton" or the "Company") (TSX VENTURE:STO) is pleased to provide its 2007 year end reserves information as evaluated by Trimble Engineering Associates Ltd. ("Trimble"), the independent reserves evaluator for all of Shelton's oil and natural gas properties. Trimble prepared the report (the "Shelton Report") in accordance with National Instrument 51-101 ("NI 51-101") effective December 31, 2007. As Shelton plans to announce its audited consolidated financial statement no later than May 5, 2008 certain financial information has been provided herein to facilitate discussion of its 2007 capital program. Readers are advised that these financial estimates are subject to audit and may be revised as necessary.

These extraordinary results are a product of the acquisition of Zhoda 2001, which closed August 1, 2007, and stronger forecasted commodity prices.

2007 Highlights

- Company interest total proved producing reserves increased 2,433% to 430,000 boe.

- Company interest total proved reserves increased 15,222% to 2.6 mm boe.

- Company interest total proved plus probable reserves increased 29,979% to 7.95 mm boe.

- Spent $4.6 mm in acquiring, and $0.55 mm in developing the Lelyaki property in Ukraine resulting in the addition of 7.95 mm boe proved plus probable reserves

- Acquisition and Development costs including future development costs ("FDC"), of $1.96 per boe. of proven and $0.65 per boe of proved plus probable reserves resulting in a recycle ratio (proven) of 11.95 times.

- The before tax net present value ( 10% discount rate) of Shelton's proven plus probable reserves grew to $85.3 million, a 19,734% increase over year end 2006.



The efficiency of Shelton's 2007 capital program is summarized as follows:

2007
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Including Future Development Costs ("FDC")(2)
FD&A Costs - Proved ($/boe.) (1) 1.96
FD&A Costs - Proven Plus Probable ($/boe) (1) 0.65
Operating Netback ($/boe.) 23.47
Recycle Ratio
Proved 11.95
Proved Plus Probable 23.47
Reserves Life Index - Proven 20.35

(1.) Includes all G&A
(2.) FDC discounted by 10%


Shelton 2007 Reserve Information

Trimble prepared the Shelton Report in accordance with NI 51-101. This report evaluated 100 percent of Shelton's oil, natural gas and natural gas liquids reserves at December 31, 2007. The tables below disclose in the aggregate, Shelton's gross and net proved and proved plus probable reserves and before tax net present value ("NPV") of future net revenue attributable to such reserves as estimated in the Shelton Report. These estimates were calculated using forecast prices and costs.

"Forecast prices and costs" means future prices and costs used by Trimble in the Shelton Report that are generally accepted as being a reasonable outlook of the future, or, fixed or currently determinable future prices or costs to which the Company is bound.

"Company Interest" reserves represent those reserves which are the Company's working interest (operating or non operating) share before deduction of royalties and including any royalty interests of the Company.

"Working Interest" reserves represent those reserves that are referred to as "Gross" reserves by the Canadian Securities Administrators ("CSA") in NI 51-101, which are the Company's working interest (operating or non operating) share before deduction of royalties and without including any royalty interests of the Company.

"Total Net" reserves represent those reserves that are referred to as "Net" reserves by the CSA in NI 51-101, which are the Company's working interest (operating or non operating) share after deduction of royalty obligations plus the Company's royalty interests in reserves.

The before tax net present value of future net revenue attributable to Shelton's reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, development costs, other income, future capital expenditures, and well abandonment costs for only those wells assigned reserves by Trimble. It should not be assumed that the undiscounted or discounted before tax net present value of future net revenue attributable to Shelton's reserves estimated by Trimble represent the fair market value of those reserves. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to effects of aggregations. The recovery and reserve estimates of Shelton's oil, natural gas and NGL reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein.



Summary of Reserves and Values
Effective December 31, 2007

Proved Total Total Total Proved
Producing Proved Probable plus Probable
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Light/Medium Oil (bbls)
Company Interest 429,800 2,599,500 5,351,300 7,950,800
Total Net 206,300 1,247,800 2,568,600 3,816,400
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Before Tax Net Present Value ($M)(1.)
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Discounted @
0% 9,347.4 60,877.9 157,170.2 218,048.1
5% 8,235.8 39,797.4 87,603.3 127,400.7
10% 7,383.6 29,096.5 56,188.9 85,285.4
15% 6,713.5 22,690.7 39,262.7 61,953.4
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After Tax Present Value ($M)(1.)
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Discounted @
0% 8,048.4 47,246.6 117,892.8 165,139.5
5% 7,046.2 30,505.6 65,222.7 95,728.4
10% 6,284.2 22,067.4 41,582.9 63,650.3
15% 5,689.7 17,056.4 28,916.3 45,972.6
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(1.) Lelyaki Crude receives Brent Crude Pricing. Brent Crude Pricing has
been converted to Canadian dollars and benchmarked against Edmonton Par
pricing for the purposes of this report. Future revenues are based on
Brent Crude pricing and crude prices are "exclusive of VAT".

The above summary of reserves and values was based on the following price
and cost assumptions:

Summary of Pricing and Inflation Rate Assumptions (Forecast Prices and
Costs) Trimble (December 31,2007)

OIL (1) GAS (4)
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WTI @ Edmonton Hardisty Bow Natural Gas
Cushing Light (2) River (3) AECO Spot Exchange Inflation
US$/bb. CDN$/bbl CDN$/bbl $/MMBTU US$/CDN$ Rate
2008 91.00 90.00 65.00 6.75 1.00 2.5%
2009 88.00 87.00 63.00 7.25 1.00 2.5%
2010 85.00 84.00 61.00 7.50 1.00 2.5%
2011 82.00 81.00 58.00 7.75 1.00 2.5%
2012 82.00 81.00 58.00 7.75 1.00 2.5%
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Prices escalating at 2.5% annually thereafter
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Notes:
(1) Oil and Condensate subject to quality differential and transportation
(2) Light oil prices for 40.0 degrees API, 0.3% sulphur at Edmonton
(3) Medium oil prices for Bow River Blend at Hardisty
(4) Alberta gas prices are quoted at AECO ( NOVA Inventory Transfer-NIT)


BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

About Shelton Canada Corp.

Shelton Canada Corp. (www.sheltoncdn.com), a Canadian-based junior oil and gas company, is focused on exploring and developing the resource-rich basins of Ukraine. The company has an internationally experienced board of directors and a long history of successful operations in Ukraine. These competitive advantages have helped Shelton to build effective personal relationships, strategic regional partnerships, a large land position and a portfolio of projects on and offshore. Shelton's long-term goals are to become the leader in oil and gas production from the resource-rich Azov and Black Sea basins in five years.

Forward-Looking Information

Except for statements of historical fact relating to the company, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information in this news release is characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" "will" or "could" occur. There are uncertainties inherent in forward-looking information, including factors beyond Shelton Canada Corp.'s control, and no assurance can be given that such events will occur on time or at all. Shelton Canada Corp. undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. The risks and uncertainties set forth above are not exhaustive. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Shelton Canada Corp.
    Zenon Potoczny
    President & CEO
    (416) 252-4101
    or
    Shelton Canada Corp.
    Richard Edgar
    Chairman
    (403) 237-9996
    Email: info@sheltoncdn.com