Petrogrand and Shelton Petroleum have agreed to form a combined and enlarged oil group with Russian oil assets exclusively and to dissolve the cross-ownership between the two companies.
Both companies are currently subject to a review by the Disciplinary Committee of Nasdaq Stockholm which has initiated an investigation of both Petrogrand and Shelton Petroleum regarding possible insufficient disclosure of information to the market and investors and non-compliance with the relevant takeover rules and good practices on the Swedish stock market.
The combined license portfolio will consist of Shelton Petroleum’s assets in Bashkiria and Petrogrand’s assets in Komi, with a net production of about 1,350 barrels of oil per day and 32 million barrels of oil reserves.
Shelton Petroleum’s oil assets in Ukraine will be spun-off to existing shareholders and will not be part of the new joint entity, the company said.
After the transaction, Petrogrand plans to shift its focus to new business ventures within real estate with cash generating operations in Moscow and Stockholm.
Björn Lindström will become chairman and Dmitry Zubatyuk will become chief executive of the new entity.