FORWARD-LOOKING INFORMATION ADVISORY Forward-Looking Statements or - - PowerPoint PPT Presentation

DECEMBER 2013

International - Unconventional Shale & Tight Sand Resources

Madale na

e n e r g y

inc . www.madalenaenergy.com

Head Office: MADALENA ENERGY INC. Suite 200, 707 - 7th Avenue SW Calgary, Alberta, Canada T2P 3H6 International Office: MADALENA ENERGY S.A. 1209 Posadas, 5th Floor Buenos Aires, ARG C1011ABE

MVN (TSX-V)

Domestic – Focused Core Area

FORWARD-LOOKING INFORMATION ADVISORY

DECEMBER 2013 2

Forward-Looking Statements or Information

Certain statements contained in this presentation of Madalena Energy Inc. ("Madalena" or the "Corporation") constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of the "safe harbour“ provisions of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "illustrative", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "objective", "aim", "potential", "target", "seek", "budget", "predict", "might" and similar words and derivatives thereof suggesting future events or future performance. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to "reserves" or "resources" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted

• r estimated and can be profitably produced in the future. In particular, this document contains, without limitation, forward-looking statements pertaining to the following: all details of, all projections of future activities related to, and all expectations of our

performance and results as a result of executing, Madalena's short and long term plans, strategies and goals, and the benefits anticipated to accrue to Madalena and its securityholders as a result thereof; expected production levels; expected additional oil and gas plays that could provide opportunities to the Corporation; expected product types in the Corporation's areas in which it holds assets; expected operations to be undertaken by the Corporation in the future and the timing thereof; type-curves for various kinds of wells that are expected by the Corporation and the assumptions related thereto; price decks provided by independent reserves evaluators; Madalena's inventory of drilling locations; the expected quality of the Corporation's assets and the probability of successful

• perations on such assets; the thickness of zones in Madalena's assets; and the quality of infrastructure in the areas in which the Corporation operates.

With respect to forward-looking statements contained in this document, we have made assumptions regarding, among other things: the expected nature of and timing of operational activity; Madalena's ability to execute on its short and long-term plans as described herein and the impact that the successful execution of such plan will have on Madalena and its shareholders; the laws and regulations that Madalena will be required to comply with, including laws and regulations relating to taxation, royalty regimes and environmental protection; future capital expenditure levels; future crude oil, natural gas liquids and natural gas prices and differentials between light, medium and heavy oil prices and Canadian, WTI and world oil prices; future crude oil, natural gas liquids and natural gas production levels; drilling results; future exchange rates and interest rates; future debt levels; the cost of expanding Madalena's property holdings and growing production; Madalena's ability to obtain equipment in a timely manner to carry out exploration and development activities and the costs thereof; Madalena's ability to market oil and natural gas successfully to current and new customers; the impact of increasing competition; Madalena's ability to obtain financing on acceptable terms; and our ability to add production and reserves through Madalena's development and exploitation activities. In addition, many of the forward-looking statements contained in this document are located proximate to assumptions that are specific to those forward-looking statements, and such assumptions should be taken into account when reading such forward-looking statements. Although Madalena believes that the expectations reflected in the forward-looking statements contained in this presentation, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not

• ccur, which may cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties

include, among other things: the possibility that Madalena will not be able to successfully execute its short or long-term plan in part or in full, and the possibility that some or all of the benefits that Madalena anticipates will accrue to it and its securityholders as a result of the successful execution of such plans do not materialize; the impact of weather conditions on seasonal demand and Madalena's ability to execute capital programs; risks inherent in oil and natural gas operations; uncertainties associated with estimating reserves and resources; competition for, among other things, capital, acquisitions of reserves, resources, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems; general economic and political conditions in Canada, the U.S., Argentina and globally, and in particular, the effect that those conditions have on commodity prices and Madalena's access to capital; industry conditions, including fluctuations in the price of crude oil, natural gas liquids and natural gas, price differentials for crude oil produced in Canada and Argentina, respectively, as compared to other markets, and transportation restrictions; royalties payable in respect of oil and natural gas production and changes to government royalty frameworks; changes in government regulation of the oil and natural gas industry, including environmental regulation; fluctuations in foreign exchange or interest rates; unanticipated operating events or environmental events that can reduce production or cause production to be shut-in or delayed (including wild fires and flooding); failure to obtain regulatory, industry partner and other third-party consents and approvals when required, including for acquisitions, dispositions and mergers; failure to realize the anticipated benefits of dispositions, acquisitions, joint ventures and partnerships; changes in taxation and other laws and regulations that affect us and our securityholders; the potential failure of counterparties to honour their contractual obligations; and the other factors described under "Risk Factors" in our Annual Information Form, and described in our public filings available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive. The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, we do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Barrels of Oil Equivalent

All calculations converting natural gas to barrels of oil equivalent ("boe") have been made using a conversion ratio of six thousand cubic feet (six "Mcf") of natural gas to one barrel of oil, unless otherwise stated. The use of boe may be misleading, particularly if used in isolation, as the conversion ratio of six Mcf of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based

• n the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Analogous Information

Certain information in this document may constitute "analogous information" as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), including, but not limited to, information relating to areas, wells and/or

• perations that are in geographical proximity to or on-trend with prospective lands held by Madalena and production information related to wells that are believed to be on trend with Madalena's properties. Such information has been obtained from government

sources, regulatory agencies or other industry participants. Management of Madalena believes the information may be relevant to help define the reservoir characteristics in which Madalena may hold an interest and such information has been presented to help demonstrate the basis for Madalena's business plans and strategies. However, such analogous information has not been prepared in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook and Madalena is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or

• auditor. Madalena has no way of verifying the accuracy of such information. There is no certainty that the results of the analogous information or inferred thereby will be achieved by Madalena and such information should not be construed as an estimate of future

production levels. Such information is also not an estimate of the reserves or resources attributable to lands held or to be held by Madalena and there is no certainty that the reservoir data and economics information for the lands held or to be held by Madalena will be similar to the information presented herein. The reader is cautioned that the data relied upon by Madalena may be in error and/or may not be analogous to such lands to be held by Madalena.

Initial Production Rates

Any references in this document to test rates, flow rates, initial and/or final raw test or production rates, early production, test volumes behind pipe and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily indicative of long-term performance or of ultimate recovery. Such rates may also include recovered "load" fluids used in well completion stimulation. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for

• Madalena. In addition, the Vaca Muerta shale is an unconventional resource play which may be subject to high initial decline rates. Such rates may be estimated based on other third party estimates or limited data available at this time and are not determinative of

the rates at which such wells will continue production and decline thereafter.

MADALENA: Corporate Overview

3

• Market capitalization ~$179mm (as at Dec. 4, 2013); Shares outstanding (Basic) ~364 mm
• Strong Balance Sheet: Positive working capital ~$8.9 mm (end Sept. 2013) + net proceeds from ~$12.2 mm

flow-thru and common financings (Nov./Dec. 2013)

• Zero debt and undrawn $13.0mm debt facility
• Q3 production averaged ~1,177 boe/d (~46% oil & NGL’s); in Nov. 2013 the company’s Paddle River 1-32

Ostracod horizontal (100% W.I.) was brought on-stream and averaged ~606 boe/d (84% oil & NGL’s) over its initial 24 operating days

• 2P reserves of 3.9 mmboe (46% oil and liquids) as of Dec. 31, 2012

Alberta, Western Canada

• +100,000 net acres (~155 net sections) strategically focused within the

Greater Paddle River Core Area

• Unbooked inventory of horizontal development locations
• Expecting to grow production and reserves via horizontal resource plays

Neuquén Basin, Argentina

• +135,000 net acres (>210 net sections) across three blocks / concessions
• Focused on developing conventional oil and delineating unconventional

shale & tight sand resources

• Acreage positioned amongst large integrated E&P’s, NOC’s and major

utility companies

DECEMBER 2013

Kevin Shaw, P. Eng., MBA – President & CEO

• Previously Managing Director & Head of Energy Research, Casimir Capital,

Senior E&P Research Analyst and Partner, Wellington West Capital Markets

• Prior thereto, held various technical, senior management and/or officer

roles with ExxonMobil (via Imperial Oil), Trimox Energy Inc., WorleyParsons.

Thomas Love, CA – VP, Finance & CFO

• Previously CFO, Online Energy Inc., CFO, Trimox Energy and Moxie

Exploration and President & CEO, Moxie Petroleum

• Prior thereto with Westward Energy Ltd. and Charterhall Oil Canada,

Articled at Clarkson Gordon & Co. (now Ernst & Young LLP)

Steve Dabner, P. Geol. – VP, Exploration

• Previously President and CEO, Online Energy Inc., President & CEO,

Trimox Energy and Moxie Exploration and VP Exploration, Moxie Petroleum

• Prior thereto with Cimarron Petroleum Ltd. and Home Oil Company Ltd.

Brent Foster, P. Eng. - VP, Engineering

• Previously VP, Engineering, Online Energy Inc., VP, Engineering & COO,

Blue Mountain Energy Ltd. and VP, Engineering of a Private-co E&P

• Prior thereto with Rigel Oil and Gas Ltd., Home Oil Company Ltd, Santos

Robert Stanton, P. Eng. - VP, Operations

• Previously VP, Operations, Online Energy Inc., VP, Engineering and

Operations, Result Energy Inc.

• Prior thereto with Oiltec Resources Ltd., Pinnacle Resources Ltd., Jordan

Petroleum Ltd., Transwest Energy Inc., Triton Canada Resources Ltd., Canadian Worldwide Energy Ltd. and Petro-Canada Inc.

Raymond Smith, P. Eng. (Chairman)

• President, CEO & Director, Bellatrix Exploration Ltd.

Barry Larson

• VP Operations & COO, Parex Resources Inc.

Keith MacDonald

• President, Bamako Investment Management Ltd

Jay Reid

• Partner, Burnet, Duckworth & Palmer LLP

Ving Woo, P. Eng.

• VP, Engineering & COO, Bellatrix Exploration Ltd.

Kevin Shaw, P. Eng., MBA

MANAGEMENT TEAM BOARD OF DIRECTORS

Ruy Riavitz – Argentina Country Manager

• Previously E&P Manager, Hidenesa Gas SA (now GyP of Neuquen) &

Independent Engineering Consultant

• Prior thereto Senior Consultant, PA Consulting, Reservoir Engineer, YPF

EXPERIENCED FULL-CYCLE OPERATING TEAM

4 DECEMBER 2013

Greater Paddle River Core Area (>150 Net Sections of Land)

• Key Resource Plays undergoing horizontal multi-stage frac operations:
• Ostracod
• Development
• 58 net sections
• Oil
• Nordegg
• Emerging
• 146 net sections
• Oil & liquids-rich gas
• Notikewin/Wilrich
• Development
• 136 net sections
• Liquids-rich gas
• Additional opportunities exist across acreage in:
• Viking oil, Rock Creek oil & Duvernay shale
• Inventory of Re-entries on existing vertical wells
• Drill-Ready Program for ongoing horizontal drilling / fracing

5 DECEMBER 2013

DOMESTIC ASSETS: Alberta, Canada

GREATER PADDLE RIVER CORE AREA: Strategically Focused

ALBERTA

CALGARY EDMONTON

GREENCOURT PADDLE RIVER NITON LEAMAN BIGORAY WILDWOOD

Madalena Lands

WEST COVE MAHASKA 6 DECEMBER 2013

~200 Gross Sections ~155 Net Sections High W.I. Multiple Horizontal plays Operated Lands Operated Infrastructure

6 miles

Long Run Hz Well⁽³⁾ 3 Husky Hz Locations⁽³⁾ 2 Husky Hz Wells⁽³⁾ MVN West Cove Hz Location

6 miles

MVN Paddle R. Hz Location 5 Madalena Hz Wells (100% WI) 1-5: 307 BOE/d (IP30 average) 195 BOE/d (12 months⁽¹⁾) 8-5: 189 BOE/d (3 months⁽¹⁾) 12-5: 275 BOE/d (6 months⁽¹⁾) 1-32: 957 BOE/d (test⁽²⁾) 606 BOE/d (IP 24 day average)

7 DECEMBER 2013 Expected Area of Ostracod Prospectivity

Madalena Lands Depth to Ostracod

69

Gross Secs.

58 Net Secs.

Ostracod Rights

85%

• Avg. W.I.

⁽¹⁾ Approximate current production rates (Months indicated approximate the amount of time since production commenced) ⁽²⁾ Average rate during final 24 hours of a production test @ 1380 kPa; Sales production after accounting for shrinkage and NGLs recovery (87% oil & NGLs) ⁽³⁾ See “Analogous Information” on Slide 2 of this presentation

OSTRACOD OIL: Horizontal Development Project

NORDEGG OIL & LIQUIDS-RICH GAS: Emerging Resource Play

Madalena Lands

183

Gross Secs.

80%

• Avg. W.I.

146 Net Secs.

Nordegg Rights

• Nordegg Resource Widespread

across Madalena Lands

• Inventory of Horizontal

Locations

• Initial Focus – Wildwood Area
• Liquids-rich with Vertical

Producers at >100+ bbls/mmcf ⁽¹⁾⁽²⁾

Depth to Nordegg

8 DECEMBER 2013 NORDEGG RESOURCE + 55 MM BOE of Oil & LIQUIDS-RICH GAS PRODUCED TO DATE (AER Data) Madalena 15-12 Horizontal GREENCOURT PADDLE RIVER BIGORAY LEAMAN WILDWOOD 6 miles

⁽¹⁾ Based on AER data retrieved from Accumap on November 11, 2013. ⁽²⁾ See “Analogous Information” on Slide 2 of this presentation.

NOTIKEWIN / WILRICH GAS: Low-Risk Development Projects

9 DECEMBER 2013

• Regional Mannville Trends
• Focused on Notikewin & Wilrich
• Inventory of Horizontal Locations
• Liquids @ 28 to 35 bbls/mmcf ⁽¹⁾⁽²⁾

Madalena Lands Depth to Notikewin

175

Gross Secs.

136 Net Secs.

Notikewin Rights

78%

• Avg. W.I.

LOWER WILRICH SANDS UPPER WILRICH SANDS NOTIKEWIN CHANNEL TRENDS NITON WILDWOOD

6 miles

⁽¹⁾ Based on AER data retrieved from Accumap on November 11, 2013. ⁽²⁾ See “Analogous Information” on Slide 2 of this presentation.

Source: Geological Atlas of the Western Canadian Sedimentary Basin Figure 31.7: The occurrence and maturity of the Duvernay source facies in the Western Canadian Sedimentary Basin

DUVERNAY SHALE: Exposure on 100+ Net Sections

10 DECEMBER 2013

MADALENA DUVERNAY LANDS >100 Net Sections (100% WI)

Recent Industry Duvernay Wells

DUVERNAY WEST SHALE BASIN: OVERVIEW

Edmonton

PEMBINA AREA 24 miles KAYBOB AREA *** See “Analogous Information” on Slide 2 of this presentation.

INTERNATIONAL ASSETS: Neuquén Basin, Argentina

11 DECEMBER 2013

• 3 Large Land Blocks
• Activity to date has been mainly focused

at Coiron Amargo

• Conventional light oil (Sierras Blancas)
• Unconventional shale oil (Vaca Muerta)
• Unconventional oil and gas potential on

all three blocks

• Vaca Muerta, Lower Agrio, Mulichinco &

Basal Quintuco

Madalena is well positioned among established and well capitalized multi-national operators in the Neuquén Basin

Source: Based on mapping by the Gobierno de la Provincia del Neuquén, modified by Madalena Energy Inc. *** See “Analogous Information” on Slide 2 of this presentation.

12 DECEMBER 2013

• Vaca Muerta Shale:
• Thickness⁽¹⁾ >500m –Progressively deeper & thicker from east to west in the basin
• Thickness⁽¹⁾ >1000m with the inclusion of the overlying Quintuco
• Madalena expects that the Vaca Muerta is Oil prone at Coiron Amargo, Gas prone

around the Cortadera block & Oil, Liquids & Gas prone at Curamhuele

VACA MUERTA SHALE – All Three Blocks

Sources: (Isopach Map) Madalena Energy Inc. mapping; (Thermal Maturity Map) Based on mapping by the Gobierno de la Provincia del Neuquén, modified by Madalena Energy Inc.

Vaca Muerta Thermal Maturity

See X-Section A-A’ in Appendix #2

⁽¹⁾ Ryder Scott Company, Petroleum Consultants, May 2013 and Madalena Energy Inc. internal data; Please see Madalena’s news release dated April 30, 2013 for details with respect to the risks and uncertainty associated with the recovery of Madalena’s resources.

13 DECEMBER 2013

VACA MUERTA VS US SHALES: Comparison The Vaca Muerta shale compares favourably to leading US shale resource plays

(1) Ryder Scott Company, Petroleum Consultants, May 2013 and Madalena Energy Inc. internal data; Madalena owns a 35% working interest in the Vaca Muerta rights on the Coiron Amargo block and a 40% working interest in the Vaca Muerta rights on the Cortadera block in the Neuquen basin of Argentina. Madalena expects the Vaca Muerta to be oil prone at Coiron Amargo and gas prone at Cortadera. Please see Madalena’s news release dated April 30, 2013 for details with respect to the risks and uncertainty associated with the recovery of Madalena’s resources. (2) EOG Analyst Conference, April 2010 (3) Tudor, Pickering, Holt, “The Bakken Momentum Continues” November 2011, Hart Energy Playbooks 2008 & 2010, Jarvie –AAPG Section Meeting 2008 (4) Schlumberger, World Shale Summit September 2013 -Gas y Petroleo del Neuquén and YPF *** See “Analogous Information” on Slide 2 of this presentation. 250 500 750 1,000 m

Shale Thickness

Oil Shales Gas Shales Shale Comparisons Vaca Muerta Shale Madalena’s Coiron Amargo Area ⁽¹⁾ Eagle Ford ⁽²⁾ Bakken ⁽³⁾ Vaca Muerta Shale Madalena’s Cortadera Area ⁽¹⁾ Barnett ⁽⁴⁾ Haynesville ⁽⁴⁾ Marcellus ⁽⁴⁾ Thickness (m) 70 - 140 15 - 100 10 - 40 950 - 1350 45 - 75 70 - 90 20 - 45 Depth (m) 2800 - 3200 2200 - 3400 2700 - 3400 3200 - 4500 2300 3700 2100 Porosity (%) 4 - 8 4 - 11 5 - 8 6 - 10 4 - 8 7 - 9 7 - 9 Permeability (nD) 50 - 250 40 - 1300 50K – 500K 30 - 1000 50 - 200 100 - 500 100 - 200 TOC (%) 2 - 7 1 - 7 2 - 18 1 - 4 4 - 5 3 - 4 4 - 7 Reservoir Pressure (psi) 6300 - 8000 4700 - 7800 3800 – 8400 >11,000 3000 - 3800 7200 - 9100 3500 - 4200 Pressure Gradient (psi/ft) 0.65 – 0.75 0.65 – 0.70 0.43 – 0.75 >0.75 0.4 – 0.5 0.6 – 0.75 0.5 – 0.6

14 DECEMBER 2013

• >225 meter thick⁽³⁾ shale within the oil generation

window on the Curamhuele block

LOWER AGRIO SHALE: Curamhuele & Cortadera

• 100

• 250

• 0.150

Deltaic facies

Significant Increase in Mud Gas

• Gas charged deltaic sandstone facies overlying the

shale at CorS.x-1 on the Cortadera block

Lower Agrio flowed ~150 bopd without stimulation/frac at CH.x-1⁽¹⁾

• Horizontal multi-stage frac potential

See X-Section A-A’ in Appendix #2

Source: Madalena Energy Inc. mapping ⁽¹⁾Average oil flow rate over the initial 25 hours of a production test conducted intermittently over a 5 day period and where pressures declined from > 40 Mpa to <25 Mpa during each of the 5 daily flow periods ⁽²⁾Tested through perforations after acid stimulation at YP.x-1 and unstimulated at YP.x-1001 ⁽³⁾Ryder Scott Company, Petroleum Consultants, May 2013 and Madalena Energy Inc. internal data; Please see Madalena’s news release dated April 30, 2013 for details with respect to the risks and uncertainty associated with the recovery of Madalena’s resources.

DECEMBER 2013 15

• Liquids-rich gas bearing tight sands play
• >200 meters of Mulichinco on the

Cortadera and Curamhuele blocks

• Madalena expects there is horizontal

development potential in the lowermost and coarser clastic part of Mulichinco

• Total SA is drilling Mulichinco horizontals

at Aguada Pichana to the southeast of Cortadera (Source: Neuquen Scout Information Meetings)

MULICHINCO TIGHT SANDSTONE: Curamhuele & Cortadera

• 100

• 250

• 0.150

Lower Agrio Mulichinco Quintuco Mulichinco Low-stand

Mud gas readings rose by 2

• rders of magnitude at the

top of the Mulichinco

YP.x-1

The Mulichinco tight sandstones are prospective for gas within the Curamhuele and Cortadera blocks

Mulichinco tested 10 mmcf/d + 500 bpd of 51⁰ API condensate in Yp.x-1⁽¹⁾

See X-Section A-A’ in Appendix #2

Source: Madalena Energy Inc. mapping ⁽¹⁾Average flow rate over the initial 8 hours of a production test conducted by OEA in November 1990 *** See “Analogous Information” on Slide 2 of this presentation.

BLOCK #1: COIRON AMARGO – Recent Developments

16 DECEMBER 2013

• Feb. 7, 2012 (Reuters): YPF discovers ~1 billion Boe at Loma La Lata
• ver 428 km2 area (5.6 MMboe/section) in the Vaca Muerta shale
• December 28, 2012 (Reuters): Bridas signs $1.5 billion MOU for

Vaca Muerta development involving a 2 year plan to drill 130 shale wells at Bajadade Anelo and Bandurria blocks to earn 35% and 24.5 % WI respectively

• July 16, 2013 (Reuters): Chevron signs $1.24 billion agreement for

Vaca Muerta development with YPF at Loma La Lata Norte & Loma Campana blocks for 50% W.I.

• Includes $250 million for sunk costs (5,000 net boe/d @

$48,000/boe/d) and $500 million for land (~$10,245/acre for 48,804 net acres)

• July 24, 2013 (Reuters): YPF attributes basin-wide in-place Vaca

Muerta resources of 661 Billion bbl oil and 1,181 Tcf gas

• September 23, 2013 (Reuters): Wintershall signs a non-binding LOI

with GyP for a 23,970 acre joint venture on the Aguada Federal block

• Total investment of ~$3.35 billion over three phases
• Estimated metric of ~$7,300/acre on Phase 1
• September 25, 2013 (Dow Jones Newswires): Dow Chemicals

agrees to invest $120 million for a 50% W.I. in a joint venture with YPF at the 11,000 acre El Orejano block

• Estimated metric of ~$10,900/acre
• December 2, 2013 (ENE): Petrobras announces new unconventional
• il & gas discovery (55% Petrobras, 45% Total SA) in Vaca Muerta

shale

Madale na e n e r g y

$1.24 Bn JV $3.35 Bn $1.5 Bn

Shell Vaca Muerta 500m horizontal 5 fracs Tested 465 boe/d (35⁰ API) “We are drilling in the Vaca Muerta in Argentina, which looks good, early days but we have 2 rigs down there” (Shell: Oct.31, 2013)

$120 Mn JV *** See “Analogous Information” on Slide 2 of this presentation.

Petrobras Argentina / Total SA announce new Vaca Muerta Discovery (December 2013) RDA.x-1001 at 2,501m

BLOCK #1: COIRON AMARGO – Overview

17 DECEMBER 2013

COIRON AMARGO SUR Vaca Muerta (Unconventional oil)

• Recently shot two 3D seismic programs
• Ongoing Vaca Muerta shale exploration wells

(CAS x-14 & CAS x-15)

• Shell drilling offsetting Vaca Muerta shale

horizontals COIRON AMARGO NORTE Sierras Blancas (Conventional oil)

• Northern portion (108 km2) converted to

25-year exploitation license

• 4 light oil pools discovered to date
• Horizontal re-entry underway at CAN x-2
• Expect additional horizontal well inventory on

multiple structures

CAS x-14 CAS x-15

CAS x-5

CAS x-1

BdIT.x-1001 SB.x-2 SB.x-1

Source: Madalena Energy Inc. mapping

Madalena 35% W.I. in 99,923 gross (34,973 net) acres

*** See “Analogous Information” on Slide 2 of this presentation.

18 DECEMBER 2013

BLOCK #2: CURAMHUELE – Overview

• Madalena Operated 90% W.I.

in 56,216 gross (50,595 net) acres

• Madalena expects oil and liquids-rich gas

potential throughout block on high-impact plays:

• Vaca Muerta shale
• Lower Agrio shale
• Mulichinco tight sandstone
• Additional exploration potential in

conventional zones

• Madalena advancing 2 potential behind-pipe
• pportunities
• Madalena believes development supported by

significant legacy infrastructure and facilities associated with offsetting conventional developments

• Extension of exploration period granted until
• Nov. 2014

Madale na

e n e r g y

Source: Based on mapping by the Gobierno de la Provincia del Neuquén, modified by Madalena Energy Inc. *** See “Analogous Information” on Slide 2 of this presentation.

• Madalena 40% W.I. & Partnered w/

in 123,503 gross (49,401 net) acres

• CorS.X-1 deep test cased to 4,500m for

unconventional shale and tight sandstone gas plays encountered:

• 1. Quintuco + Vaca Muerta: 1097m thick⁽¹⁾
• Vaca Muerta : 520m thick⁽¹⁾
• Quintuco : 577m thick⁽¹⁾
• 2. Mulichinco tight sandstone: 206m thick⁽¹⁾
• 3. Lower Agrio tight sand / shale potential
• Two stage frac conducted in Vaca Muerta

shale gas resource

• Uphole zones (i.e. stacked on top of Vaca

Muerta source rock) to be evaluated

BLOCK #3: CORTADERA – Overview

19 DECEMBER 2013

Source: Based on mapping by the Gobierno de la Provincia del Neuquén, modified by Madalena Energy Inc. ⁽¹⁾ Ryder Scott Company, Petroleum Consultants, May 2013 and Madalena Energy Inc. internal data; Please see Madalena’s news release dated April 30, 2013 for details with respect to the risks and uncertainty associated with the recovery of Madalena’s resources.

• Canadian Assets – Greater Paddle River Core Area
• Progress being made on primary resource plays (Ostracod & Nordegg)
• 2014 program includes multi-well horizontal activity with oil & liquids-rich gas focus;

Madalena expects to:

• Follow-up on Ostracod oil success with additional horizontal wells
• Continue to advance the emerging Nordegg liquids-rich gas play
• Test conventional Nordegg & Viking oil plays
• Domestic strategy to continue to increase production, reserves & cash flow
• Argentina Assets – Coiron Amargo, Curamhuele & Cortadera
• Completed detailed technical evaluation, review & assessment of shale, unconventional resources &

tight sand plays across all three blocks

• Secured contracts on all three blocks
• Coiron Amargo operations include high impact Vaca Muerta shale drilling, conventional Sierras

Blancas horizontal development activity and additional 3D seismic programs

• Curamhuele – Assessing strategic partnerships to advance high impact Lower Agrio shale and

Mulichinco tight sand plays (Potential re-entries of CH.x-1 and YP.x-1001) and Vaca Muerta shale; planning 75 km2 3D seismic survey in Q1 2014

• Cortadera – Conduct re-entry at CorS.x-1 location to evaluate uphole zone(s) of interest; Operations

expected to commence late Q4 2013 or during Q1 2014

MADALENA (MVN TSX-V) – Activity & Catalysts for Growth

20 DECEMBER 2013

June 2013 – EIA Released Updated World Shale Oil & Gas Assessment

• Argentina has 4th largest technically

recoverable shale oil resource in the world

• Behind only Russia, USA & China
• 3X greater than Canada
• Argentina has 2nd largest technically

recoverable shale gas resource in the world

• Behind only China
• 1.2X greater than USA
• 1.4X greater than Canada
• Three Shale Plays in Argentina:

Vaca Muerta, Agrio, Los Molles

• Neuquén Basin is a the focus of Shale

Resource development by Major E&Ps and NOCs

APPENDIX # 1: EIA - Argentina’s Shale Potential

21 DECEMBER 2013

*** See “Analogous Information” on Slide 2 of this presentation.

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APPENDIX # 2: Neuquén Basin Regional X-Section Multiple unconventional formations with development potential across Madalena’s acreage

• Vaca Muerta shale, Lower Agrio shale, and Mulichinco tight sandstone

Vaca Muerta Mulichinco and Avile formations are both believed to be prospective as tight gas sand reservoirs in the western part of the basin Log character of the L. Agrio at Curamhuele suggests it has potential similar to that of the Vaca Muerta Fm. Oil was tested in both wells Gamma ray character is believed to be similar for the basal Vaca Muerta and basal Agrio Fm. as a result of a similar deep marine flooding event Green fill between Sonic and Resistivity is believed to indicate high TOC potential shale reservoir. This well is believed to be representative of the YPF successes in the Vaca Muerta Fm. This well on the Coiron Amargo block is believed to show potential for the Vaca Muerta shale reservoir

*** See “Analogous Information” on Slide 2 of this presentation.

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APPENDIX # 3: Primary Unconventional Target Formations

Lower Agrio Shale

• Known hydrocarbon source in the NW of the basin
• Consists of marine dark shales and marls deposited in

an anoxic environment

• Generally contains amorphous marine Type II to II-III

kerogen (oil-prone on Madalena blocks) Mulichinco Tight Sandstone

• Westward thickening liquids-rich gas play
• Deposited during and after a major fall in sea level

Quintuco

• Silty shale / mudstone overlying the Vaca Muerta with
• il and gas development potential

Vaca Muerta Shale

• Driving majority of unconventional exploration in the

basin to date

• Considered primary source rock for conventional

Neuquén oil production

• Similar in age to the Eagle Ford; exhibits similar range

in thermal maturity and transition in resource (dry gas to rich gas to oil)

• Finely stratified black and dark grey shale and

lithographic lime-mudstone

• Organic-rich marine shale, generally contains Type II

kerogen (oil-prone)

• Widespread across the basin

Source: EIA/ARI World Shale Gas and Shale Oil Resource Assessment (May 2013), Ryder Scott, Madalena

Curamhuele Cortadera

Present at:

Curamhuele Cortadera All Three Blocks All Three Blocks Additional Zones of Interest

• Tordillo / Sierras Blancas – all three blocks
• Deeper zones (Lotena, Lajas, Los Molles)

– predominantly at Coiron Amargo Varied Madalena’s Interpretations: Madalena believes these are present at:

*** See “Analogous Information” on Slide 2 of this presentation.