“We will shoot seismic on our permit this year,” says Potoczny. “Late in the year, we hope to start platform construction.” The shallow waters and potential ice drift and scour mean the partners will need to install rigid, all-season platforms from which to base operations, including drilling wells.

Once the wells are ready, they will be able to access a nearby pipeline. “And from there we can tie into the rest of Ukraine’s infrastructure, which is extensive.”

The pricing picture is equally positive. During the next few years, Shelton believes Ukrainian gas will reach parity with European prices. Recently, state-set gas prices were raised to $5.25 per thousand cubic feet, and Ukraine’s new prime minister, Yulia Tymoshenko, is a pro-Western leader who talked about deregulation during her successful political campaign. “That gives us considerable upside on prices as well.”

Additionally, Shelton has 150 square kilometers of exploratory concessions in the Biryuchya area in the northern Azov Sea. Prospects are between 250 and 500 Bcf in potential. Shelton and Chernomornefte gas, 50/50 partners on the Biryuchya concessions, drilled a dry hole on the project in 2006 but gained greater confidence in the region’s geology. Further work is planned.

Shelton is in negotiations on another project in the Sea of Azov and is looking at potential Black Sea shallow-water licenses. “We’re trying to get as many brownfield projects as we can while commodity prices are still low,” says Edgar.

Onshore, the company has acquired a mature project in the Dnieper-Donets Basin in the northeastern part of the country. Since the 1960s, Lelyaki Field has produced 380 million barrels of light oil. Current production is 1,000 barrels a day, of which Shelton’s net is 300. The company plans considerable development and recompletion work at Lelyaki this year, in which it has net resource potential of 30 million barrels.

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