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

JANUARY 2014

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) MDLNF (OTC)

Domestic and International Operations – Focused on Horizontal Oil Development & Delineating Unconventional Shale / Tight Sand Resources

FORWARD-LOOKING INFORMATION ADVISORY

JANUARY 2014 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 Highlights

3

• Market capitalization ~$250mm (as at Jan. 7, 2014); Shares outstanding (Basic) ~364 mm
• Strong Balance Sheet: Positive working capital ~$8.9 mm (end Sept. 2013) + net proceeds from ~$12.2 mm flow-

through and common financings (Nov./Dec. 2013)

• Zero debt and undrawn $13.0mm debt facility
• Q3-2013 production averaged ~1,177 boe/d (~46% oil & NGL’s) with the following subsequent events:
• 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 (See November 28, 2013 Press release)

• Dec. 2013: the company’s Coiron Amargo Sierras Blancas horizontal (35% WI) tested at rates up to ~2,238

boe/d (80% oil) (See December 27, 2013 Press release)

• 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

JANUARY 2014

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 JANUARY 2014

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 JANUARY 2014

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 JANUARY 2014

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

6 miles

Long Run Hz Well⁽¹⁾ 3 Husky Hz Locations⁽¹⁾ 2 Husky Hz Wells⁽¹⁾ Recently Drilled (92% WI) West Cove Hz Well (Completion Pending)

6 miles

Recently Drilled (100% WI) Paddle R. Hz Well (Completion Pending) 5 Madalena Hz Wells (100% WI) 1-32: On-Stream Nov. 1, 2013 ~606 BOE/d (IP24 day average) (84% Oil & NGLs)

7 JANUARY 2014 Expected Area of Ostracod Prospectivity

Madalena Lands Depth to Ostracod

69

Gross Secs.

58 Net Secs.

Ostracod Rights

85%

• Avg. W.I.

⁽¹⁾ See “Analogous Information” on Slide 2 of this presentation

OSTRACOD OIL: Horizontal Development Project

Ø = 13.7% k = 5.33 md 2.69 gm/cc

HIGH QUALITY OSTRACOD SANDSTONE OIL RESERVOIR Capital cost ($M) 3,500 EUR (Mboe) 302 F&D cost ($/boe) 11.61 Netback ($/boe) 36.85 Recycle ratio 3.15x IP30 (Sales boe/d) 377 GOR (scf/bbl) 8600 NPV10% ($M) 3,176 IRR 84% Payout (years) 1.2

All amounts are based on internally generated management estimates prepared by a qualified professional engineer Price Deck = McD. Jan. 1/14 ($4.00/mcf & $95.00/bbl) adjusted for transportation & quality

OSTRACOD OIL: Type Well Economics

8 JANUARY 2014

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

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

9 JANUARY 2014 NORDEGG RESOURCE + 55 MM BOE of Oil & LIQUIDS-RICH GAS PRODUCED TO DATE (AER Data)

Wildwood 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

10 JANUARY 2014

• 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

11 JANUARY 2014

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

12 JANUARY 2014

• 3 Large Land Blocks (132,200 net Acres)
• 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. 46,657 Net Acres (73 Net Sections)

January 10, 2014 (Bloomberg): GYP discloses expected IPO valuation of $8,000/acre

Cortadera (38% WI) Partner: Apache (47%, Op.) GyP (15%) 123,503 Gross Acres 46,657 Net Acres (73 Net Sections)

13 JANUARY 2014

• 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.

14 JANUARY 2014

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

15 JANUARY 2014

• >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.

JANUARY 2014 16

• 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

17 JANUARY 2014

• 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

18 JANUARY 2014

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 production testing

underway at CAN.xr-2(h)

• Pending additional horizontal well to be drilled
• n CAN3 structure (CAN-15(h))

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. CAN.xr-2(h) CAN-15(h)

BLOCK #1: COIRON AMARGO NORTE– Applying Horizontal Technology to Sierras Blancas Oil

19 JANUARY 2014

Source: Madalena Energy Inc. mapping *** See “Analogous Information” on Slide 2 of this presentation.

CAN.xr-2(h) CAN-15(h)

• 100

200 300 400 500 600 700 800 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

BOPD Months

Sierras Blancas - 8 Horizontal Wells Average Production Coiron Amargo Area – Offsetting Horizontals

Best Well- IP 700 bopd Year 1: 450 bopd Year 2: 190 bopd

Source: Secretaria de Energia de la Nacion

• Avg. Well-

IP 470 bopd Year 1: 290 bopd Year 2: 150 bopd

OIL 37⁰ API, Average GOR 1,400 scf/bbl

20 JANUARY 2014

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: +500m thick⁽¹⁾
• Lower Agrio shale: +225m thick⁽¹⁾
• Mulichinco tight sandstone: +200m thick⁽¹⁾
• 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 first 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. ⁽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.

• Madalena 37.8% W.I. & Partnered w/

in 123,503 gross (46,657 net) acres

• Recent multi-year block extension executed
• 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 in Q1- 2014

BLOCK #3: CORTADERA – Overview

21 JANUARY 2014

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.

Cortadera (38% WI) Partner: Apache (47%, Op.) GyP (15%) 123,503 Gross Acres 46,657 Net Acres (73 Net Sections)

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

22 JANUARY 2014

• Canadian Assets – Greater Paddle River Core Area
• Domestic strategy to continue to increase production, reserves & cash flow
• 2014 program includes multi-well horizontal activity with oil & liquids-rich gas focus
• Primarily focused on Ostracod oil development
• Continue to evaluate the emerging Nordegg liquids-rich gas play
• Argentina Assets – Coiron Amargo, Curamhuele & Cortadera Blocks
• Completed technical evaluation of shale, unconventional resources & tight sand plays on all three blocks
• Secured contracts on all three blocks
• Coiron Amargo 2014 operations:
• High-impact Vaca Muerta shale drilling via multiple well locations
• Drilling multiple high-impact horizontal Sierras Blancas light oil development wells
• Technically assessing deep gas potential on the block
• Curamhuele 2014 operations:
• Evaluate high-impact Lower Agrio shale and Mulichinco tight sand plays
• Shooting 75 km2 3D seismic survey in Q1 2014 and planning re-entries of CH.x-1 and YP.x-1001
• Assessing strategic partnerships
• Cortadera 2014 operations:
• Conduct re-entry at CorS.x-1 location to evaluate uphole zone(s) of interest; Operations expected to

commence in Q1

JANUARY 2014 23

APPENDIX # 1: 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.

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 # 2: EIA - Argentina’s Shale Potential

24 JANUARY 2014

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