Release of Pledge Agreement between Baltic Petroleum Limited and Siberian Energy Group Inc.

Summary

This agreement confirms that Baltic Petroleum Limited has released Siberian Energy Group Inc. from all obligations under a previous pledge and security agreement, as well as related guarantee and option agreements. As of November 9, 2005, all security interests and claims over the pledged assets are terminated, and full rights to the collateral return to Siberian Energy Group Inc. Both parties acknowledge and accept the release, finalizing the discharge of all related obligations.

EX-10.4 5 ex10-4.txt RELEASE OF PLEDGE Exhibit 10.4 Agreed terms document under the joint venture shareholders' agreement dated 14th October 2005 among Baltic Petroleum (E&P) Limited, Siberian Energy Group Inc. and Zauralneftegaz Limited RELEASE OF PLEDGE Siberian Energy Group Inc. ("SEG") 275 Madison Avenue 6th Floor New York NY 10016 9th November 2005 Dear Sirs ACKNOWLEDGEMENT OF DISCHARGE OF SECURITY We refer to the pledge and security agreement (the "PLEDGE") dated 28 April 2005 made between SEG and Baltic Petroleum ("BP") pursuant to which SEG granted security over certain assets as security for the performance of certain obligations of SEG to BP under the terms of a guarantee from SEG to BP dated 28 April 2005 (the "GUARANTEE") and under an option agreement between BP and SEG dated 28 April 2005 (the "OPTION AGREEMENT"). BP has pursuant to a deed of release (the "DEED") dated today's date released and discharged SEG of all obligations under the Guarantee. Further, the Option Agreement (the "OPTION") has terminated in accordance with its terms as of today's date and SEG has no further obligations to BP thereunder. BP hereby acknowledges that the Secured Obligations (as defined in the Pledge) have been released, discharged, cancelled and/or terminated and therefore, in accordance with section 9 of the Pledge, the security interest granted under the Pledge has with effect from today's date terminated and all rights to the Collateral (as defined in the Pledge) have reverted to SEG. Yours faithfully Baltic Petroleum Limited PLEASE SIGN, DATE AND RETURN TO THE ABOVE ADDRESS THE ATTACHED COPY OF THIS LETTER AS ACCEPTANCE OF THE ABOVE. Acknowledged for and on behalf of Siberian Energy Group Inc. by Sign: /s/ David Zaikin -------------------------- Print Name: David Zaikin ------------------------ Date: November 9,2005