January / February 2013 MADALENA : MVN (TSX-V) Corporate Overview - - PowerPoint PPT Presentation

January / February 2013

Domestically Ramping-up Horizontal Development Across Three Key Resource Plays while Internationally Delineating Large-In-Place Shale & Unconventional Resources Focused Team, Large Acreage Positions & Steady Execution

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

www.madalena-ventures.com

• Corporate Overview
• Market capitalization ~$100mm (as of January 13th, 2013); 314.3mm s/o
• Strong balance sheet: positive working capital ~$31mm, ZERO debt & undrawn $4.8 mm facility
• Base production ~900 boe/d (60% oil & liquids) with ~500+ boe/d behind pipe (on-stream Feb. ’13)
• 2P reserves of 3 mmboe (63% oil and liquids)
• Large unbooked Canadian (domestic) inventory of horizontal development locations
• Vast in-place shale, unconventional and tight sand resources, provide exposure to a massive

unbooked “prize” Internationally

• Large 233,000 net acre land position in Western Canada & Internationally
• 135,000 net acres in prolific Neuquen Basin, Argentina across three key blocks at Coiron Amargo

(35,027 net acres), Curamhuele (50,400 net acres) and Cortadera (49,600 net acres)

• 98,000 net acres (153 net sections) in Alberta, Canada within the Greater Paddle River Core Area
• Balanced Approach between Lower Risk Development & High Impact Exploration
• Steady horizontal drilling to ramp production in Canada while delineating multiple thick

shale, unconventional & tight sand plays in Argentina

• Domestic focus on three horizontal resource plays; 4 to 5 net hztls being drilled in Q1-2013
• Exposure to multiple conventional, large shale, unconventional & high impact tight sand plays in

Neuquen: Vaca Muerta shale, Agrio shale, Quintuco, Mulichinco, Sierras Blancas, others

MADALENA: MVN (TSX-V)

2 JANUARY / FEBRUARY 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.

Anthony Potter, CA – VP Finance & CFO

• Previously CFO, Antrim Energy Inc., VP Finance of a US based explore-co
• Prior thereto a Principal with Coopers & Lybrand Chartered Accountants

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.

Rob 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.

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

John Wittnebel, P. Geol. –Manager, Geology

• Previously Exploration Manager, Online Energy Inc., VP, Exploration, Result

Energy Inc.

• Prior thereto with Encal Energy Ltd., Husky Energy Limited, Renaissance

Energy Ltd., and Chevron Canada Resources Ltd.

Raymond Smith, P. Eng. (Chairman)

• President, CEO & Director, Bellatrix Exploration Ltd.

Barry Larson

• VP Operations & COO, Parex Resources Inc.

Michael Lock

• President, Upsilon Holdings Ltd.

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 Anthony Potter, CA

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

Allan Carswell , P. Geoph., MSc. – Int’l Consultant

• Current VP Exploration at Perfco International (private-co)
• Prior thereto held senior technical or VP Exploration roles with Texaco,

ExxonMobil, Morrison Petroleum, Era Oil & Gas, High Pine Oil & Gas

Experienced Full Cycle Operating Team

3 JANUARY / FEBRUARY 2013

Ramping Up Horizontal Development

• Large Operated Acreage Position (153 Net Sections)
• Three Key Light Oil & Liquids-Rich Resource Plays

4 JANUARY / FEBRUARY 2013

DOMESTIC ASSETS: Alberta, Canada

• Strategically Focused – Greater Paddle River Core Area
• High W.I. and Operated
• Uniquely positioned with significant 197 gross (153 net)

sections of land

• 40 to 50% of the acreage spread of many midcap sized E&P’s
• Operated infrastructure & facilities
• Focused on Three Key Horizontal Resource Plays
• OSTRACOD oil
• NORDEGG oil and liquids-rich gas (100+ bbls/mmcf)
• Stacked Mannville channel trend –Initially focused on

NOTIKEWIN / WILRICH liquids-rich gas (30 bbls/mmcf)

• Large Horizontal Inventory of oil & liquids-rich gas

locations supports long-term production growth DOMESTIC GROWTH PLATFORM – Production Focused

5 JANUARY / FEBRUARY 2013

GREATER PADDLE RIVER CORE AREA – Large Horizontal Inventory

ALBERTA

CALGARY EDMONTON

GREENCOURT PADDLE RIVER NITON LEAMAN BIGORAY WILDWOOD

197 Gross Sections 153 Net Sections 78% Avg. W.I. Madalena Lands 100’s Horizontal Locations

WEST COVE MAHASKA 6 JANUARY / FEBRUARY 2013

Operated Lands Operated Infrastructure

Greater Paddle River Core Area (153 Net Sections)

• Three Key Resource Plays for horizontal multi-stage frac development & exploitation:
• Resource Play #1: Ostracod
• oil
• 54 net sections
• Resource Play #2: Notikewin/Wilrich
• liquids-rich gas
• 133 net sections
• Resource Play #3: Nordegg
• oil & liquids-rich gas
• 144 net sections
• Additional opportunities exist across acreage in:
• Viking oil, Rock Creek oil, Duvernay shale
• Expansive re-entry inventory on existing vertical wells
• Drill Ready Program for ongoing horizontal drilling / fracing thru 2013

SIGNIFICANT RUNNING ROOM – Across Three Key Plays

7 JANUARY / FEBRUARY 2013

RESOURCE PLAY #1: OSTRACOD OIL

Madalena Ostracod Lands Ostracod Oil Prospectivity

54 Net Sections of Ostracod Rights

Recent Madalena Horizontal Wells (100% WI)

Madalena (100% WI) IP30 = 307 boe/d (65% Oil & Liquids)

Bonavista Location Long Run Well

Early 2013 Planned Madalena Horizontal Locations

50+ Net Horizontal Locations in Inventory

8 JANUARY / FEBRUARY 2013

Husky Location

Ø = 13.7% k = 5.33 md 2.69 gm/cc

HIGH QUALITY OSTRACOD SANDSTONE OIL RESERVOIR 50 100 150 200 250 300 350 6 12 18 24 30 36 42 48 54 60

Daily Average Production (boe/d) Months PADDLE RIVER OSTRACOD HORIZONTAL TYPE CURVE

Capital cost ($M) 3,600 EUR (Mboe) 290 F&D cost ($/boe) 12.42 Netback ($/boe) 29.92 Recycle ratio 2.41x IP30 (boe/d) 305 GOR (scf/bbl) 5000 NPV10% ($M) 2,961 IRR 51% Payout (years) 1.9

All amounts are based on Madalena management internally generated estimates Price Deck = McD. Jan. 1/13 ($3.35/mcf & $87.50/bbl) adjusted for transportation & quality

RESOURCE PLAY #1: OSTRACOD OIL - Type Well Economics

9 JANUARY / FEBRUARY 2013

Horizontal Development Wells

• Regionally Stacked Mannville

Trends

• Focused on Notikewin / Wilrich
• 133 net sections
• Est. 100+ Hztl Locations across

Mannville trends

• Liquids @ 28 to 35 bbls/mmcf

RESOURCE PLAY #2: NOTIKEWIN / WILRICH Stacked Trends

10 JANUARY / FEBRUARY 2013

LOWER WILRICH SANDS UPPER WILRICH SANDS NOTIKEWIN CHANNEL TRENDS NITON WILDWOOD

Madalena 6-27 Horizontal 5.5 mmcf/d on Clean-up

NITON NOTIKEWIN VERTICAL PRODUCER 500 1000 1500 2000 2500 3000 3500 6 12 18 24 30 36 42 48 54 60

Daily Average Production (mcfe/d) Months NITON NOTIKEWIN HORIZONTAL TYPE CURVE

Capital cost ($M) 3,800 EUR* (Mboe) 504 F&D cost ($/boe) 7.55 Netback ($/boe) 16.94 Recycle ratio 2.24x IP (30 day average -mcfe/d) 3,248 LGR (bbl/mmcf) 28 NPV10% ($M) 2,596 IRR 34% Payout (years) 2.8

*EUR amounts are based on Madalena management internally generated estimates of potentially recoverable reserves Price Deck = McD. Jan. 1/13 ($3.35/mcf & $87.50/bbl) adjusted for transportation & quality

RAW GAS (to: Oct. 2012) CUM: 518 mmcf CUR: 126 mcf/d

22m Net Pay

RESOURCE PLAY #2: NOTIKEWIN / WILRICH Type Well Economics

11 JANUARY / FEBRUARY 2013

RESOURCE PLAY #3: NORDEGG OIL & LIQUIDS-RICH GAS

Madalena Lands

180

Gross Secs.

80%

• Avg. W.I.

144 Net Secs.

Nordegg Rights

• Nordegg resource widespread

across Madalena lands

• VERY liquids-rich with vertical

producers at 100+ bbls/mmcf

• Large inventory of horizontal

locations

• Wildwood area – initial focus

Depth to Nordegg

12 JANUARY / FEBRUARY 2013 GREENCOURT PADDLE RIVER LEAMAN BIGORAY WILDWOOD NORDEGG RESOURCE + 55 MM BOE of Oil and LIQUIDS-RICH GAS PRODUCED TO DATE Madalena 15-12 Horizontal

• Multi-stage Frac Pending

RESOURCE PLAY #3: NORDEGG OIL & LIQUIDS-RICH GAS Type Well Economics

Capital cost ($M) 3,700 EUR (Mboe) 621 F&D cost ($/boe) 5.96 Netback ($/boe) 17.99 Recycle ratio 3.02x IP30 (boe/d) 959 LGR (bbl/mmcf-Sales) 130 NPV10% ($M) 5,044 IRR 131% Payout (years) 1.0

All amounts are based on Madalena management internally generated estimates Price Deck = McD. Jan. 1/13 ($3.35/mcf & $87.50/bbl) adjusted for transportation & quality

WILDWOOD NORDEGG VERTICAL PRODUCER

To: Oct. 2012

GAS OIL/COND BOE CUM: 1,293 mmcf 53,084 bbls 268,584 boe CUR: 204 mcf/d 19 bopd 53 boepd NORDEGG PEKISKO

6% SS Ø

1000 2000 3000 4000 5000 6000 7000 6 12 18 24 30 36 42 48 54 60

Daily Average Production (mcfe/d) Months WILDWOOD NORDEGG HORIZONTAL TYPE CURVE

• ON-STREAM: SEPT. 2003

13 JANUARY / FEBRUARY 2013

13m Net Pay

DUVERNAY SHALE: Exposure Across 100+ Net Sections

14 JANUARY / FEBRUARY 2013

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

Edmonton

PEMBINA AREA KAYBOB AREA 24 miles

MADALENA DUVERNAY LANDS 102.5 Net Sections (100% WI)

Industry Duvernay Wells

DUVERNAY WEST SHALE BASIN: OVERVIEW

INTERNATIONAL ASSETS: Neuquén Basin, Argentina

15

Unlocking Value Across Large-In-Place Shale, Unconventional & Tight Sand Resources

• Focused Asset Base in a Prolific, Proven Producing Basin
• Exposure to Massive Shale & Unconventional Resources (Vaca Muerta & Agrio Shales)
• Exposure to Large-in-place Conventional Tight Sand Plays
• Stacked Conventional Oil & Gas zones across acreage

JANUARY / FEBRUARY 2013

• International assets located in Neuquén Basin, Argentina
• Three large acreage blocks with stacked Conventional &

Unconventional plays

• 280,000 gross acres (437 sections)
• 135,000 net acres (211 net sections)
• Well positioned in both the shale oil and shale gas windows
• Conventional development alongside high impact exploration
• Block #1: Coiron Amargo
• 99,923 gross acres (35,027 net acres (55 net sections))
• Block #2: Curamhuele
• 56,216 gross acres (50,400 net acres (78 net sections))
• Block #3: Cortadera
• 123,503 gross acres (49,600 net acres (78 net sections))

Strategically working to unlock significant upside, across massive large-in-place Shale & Unconventional Resources…..while exploiting conventional zones of interest

INTERNATIONAL GROWTH PLATFORM

16 JANUARY / FEBRUARY 2013

• April 2011 – EIA Released World Shale Gas

Assessment

• Argentina has 3rd largest technically

recoverable shale gas resource in the world

• Behind only China and USA
• 90% as large as USA
• 2x of Canada
• Larger than entire European potential

(including Poland, Austria, Germany, Hungary, etc.)

• 75% of North & South African potential
• Three Shale Plays in Argentina:

Vaca Muerta, Agrio, Los Molles

• Neuquén Basin is the key focal point for

UNCONVENTIONAL & Tight Sand Resources by Major E&P’s and NOC’s

• Most “tangible” shale play outside of

North America

ARGENTINA’S WORLD-CLASS SHALE POTENTIAL

400 800 1,200 1,600 China USA Argentina Mexico South Africa Australia Canada Libya Algeria Brazil Poland France Norway Chile India Paraguay Pakistan Bolivia Ukraine Sweden Denmark Uruguay U.K. Other Colombia Tunisia Netherlands Turkey Morocco Venezuela Germany W.Sahara Lithuania Mauritania

Technically Recoverable Shale Resource (Tcf)

Global Ranking of Shale Resources (Source: EIA World Shale Gas Resources, April 2011)

Map of Globally Assessed Shale Resources (source: EIA)

17 JANUARY / FEBRUARY 2013

• Most Productive Basin (Estimates)
• 260,000 bbls/d
• 2.6 Bcf/d
• Reserves (Estimates)
• 26% of oil
• 39% of gas
• Features
• Robust infrastructure
• Multi-zone productive formations
• Three highly prospective shales
• Similar geology to WCSB

NEUQUÉN BASIN – BIG SHALE POTENTIAL

18 JANUARY / FEBRUARY 2013

JANUARY / FEBRUARY 2013 19

NEUQUÉN BASIN: Stacked Stratigraphy is “Home” to Multiple

Unconventional and Conventional Play Types

Oil Oil and Gas Gas S Source Shales S S S

Oil Gas

MVN’S NEUQUÉN ACREAGE - Three Large Blocks with Unconventional

Exposure & Surrounded by Major E&P’s

Other large acreage holders include:

Cortadera 40% WI Curamhuele 90% WI

New entrants have farmed-in or acquired existing blocks in order to build meaningful acreage positions:

Coiron Amargo 35% WI 20 JANUARY / FEBRUARY 2013

CURAMHUELE COIRON AMARGO

Quintuco/Vaca Muerta Net Isopach

CURAMHUELE CORTADERA COIRON AMARGO

Quintuco/Vaca Muerta Net Isopach

• Vaca Muerta Shale exposure

across all three blocks at Coiron Amargo, Curamhuele and Cortadera

• Vaca Muerta is comprised of a series
• f wedges that prograde toward the

north and west of the basin

• Vaca Muerta gets deeper & thicker

as it trends east to west in the basin

• Ranges from 50 to 700+ metres in

thickness

• A large part of the Vaca Muerta is oil

prone as seen at Coiron Amargo

• Gas prone Vaca Muerta shale is

present in the deeper, thicker (700m+) western area around the Cortadera block, with liquids contents increasing to North of block

• Curamhuele block likely gas, oil and

liquids prone in the Vaca Muerta given it is located across a transition zone

21 JANUARY / FEBRUARY 2013

MVN’S NEUQUÉN ACREAGE - Three Large Blocks with Vaca Muerta Shale Throughout

22 JANUARY / FEBRUARY 2013

MVN’S NEUQUÉN ACREAGE - Three Large Blocks with Vaca Muerta Shale Throughout

COIRON AMARGO

• Vaca Muerta Shale
• Maturity is based on vitrinite reflectance values
• Red = Gas Window; Yellow = Wet Gas/Transition

Window with both gas & liquids; Green = Oil Window

CURAMHUELE CORTADERA

Shale Comparisons Vaca Muerta Shale at YPF’s Loma Lata area, near Madalena’s Coiron Amargo Barnett Haynesville Marcellus Eagle Ford Bakken TOC (%) 6 5 2 12 4 12 Thickness (m) 200 91 76 61 61 30 Depths (m) 3000 2286 3658 2057 2287 1829 Area (sq. km) 30 16,726 23,310 245,773 5,180 51,800 Reservoir Pressure (psi) 8000 3525 10800 3375 4502 4200 Pressure Gradient (psi/ft) 0.65 - 1.0 0.47 0.9 0.5 0.6 0.7 STOOIP (Mbbls) ?

• 114,000

200,000 STOOIP/sq. km (Mbbl/km2) 33 - 58

• 22

3.9 OGIP (Bcf) ? 422,337 717,016 1,499,215 OGIP /sq. km (Bcf/km2) ? 25.3 30.8 6.1

CAN 8 Drilled Dec. 2012

• 100,077 Acres (405 km2) gross, or

35,027 net Acres (55 net sections)

• Madalena 35% WI
• Northern portion (108 km2) shown on

map; converted to 25-year exploitation (development) license in 2012

• Multiple Stacked Formations
• Vaca Muerta Shale (oil)
• Approx. 100 to 150m thick oil

section over entire block

• Sierras Blancas (conventional oil)
• 6 light oil discoveries to date,

potential for horizontal

• development. North area facilities

development.

• Lotena Gas
• Gas pools on east / west sides
• Quintuco
• Oil shows on block, producing

pools nearby

• Lajas / Las Molles Shale
• Gas prone deep zones

Block #1: COIRON AMARGO – Focus To Date has been Vaca Muerta Shale

& Sierras Blancas Light Oil

CAN 7 Drilled Summer 2012 23 JANUARY / FEBRUARY 2013

Block #1: COIRON AMARGO – Proving Up Big Oil in the Vaca Muerta & Next Door to Billion Bbl Discoveries Vaca Muerta gaining attention around Coiron Amargo block:

• YPF discovers ~1 Billion Boe at Loma La Lata over 428 km2 area (5.6 mmboe/section) in the Vaca Muerta shale
• Chevron signs $1 Billion deal for Vaca Muerta development with YPF at Loma La Lata Norte & Loma Campana

blocks for 50% W.I.; Initial 100 well unconventional program with up to US $15 Billion in drilling to follow (2000+ wells to develop the field)

• Bridas signs $1.5 Billion deal for Vaca Muerta development involving a 2 year plan to drill 130 unconventional

shale wells at Bajadade Anelo and Bandurria blocks to end up with 35% and 24.5 % W.I. respectively

24 JANUARY / FEBRUARY 2013

• Vaca Muerta
• Across block gross thickness ranges from 100 to 150 meters; All wells drilled on block with oil in Vaca Muerta
• Entire Vaca Muerta section has been shown to be productive several km’s to the west by YPF & by our CAS X-1 well
• Basal, lower Vaca Muerta section (bottom unit on logs) ranges from 40 to 60+ meters thick alone
• Offset vertical Vaca Muerta well to north produced 760,000 bbls in a well 10 km north of the block and unstimulated

(not frac’d)

• Two Vaca Muerta plays on block: 1.) Regional Vaca Muerta Shale, 2.) Naturally Fractured Vaca Muerta

Block #1: COIRON AMARGO – Proving Up Big Oil in the Vaca Muerta

& Next Door to Billion Bbl Discoveries

25 JANUARY / FEBRUARY 2013

• 56,000 Acres (227 km2) or 50,400 net acres (78

net sections)

• Madalena 90% WI, Operated
• Tested Hydrocarbons on Unconventional Plays
• Lower Agrio Shale
• Existing light oil well on the block – flowed oil

without frac/stimulation

• Multiple sections within Agrio to be tested
• Layered and brittle makes it ideal to fracture
• Multi-stage frac potential (vertical & horizontal)
• Mulichinco
• Existing liquids-rich gas discovery on block
• Thick, lower sandier section to be tested
• Horizontal potential
• Untested Vaca Muerta Shale
• 600 to 600m over the block
• To be drilled or deepened with an existing well
• Major E&P’s have secured surrounding blocks

Block #2: CURAMHUELE – High Impact Agrio Shale, Mulichinco & Vaca Muerta Shale Plays

26 JANUARY / FEBRUARY 2013

• Lower Agrio Shale
• 180+ meters thick across

Curamhuele block

• Lower Agrio Shale is within the
• il generation window
• Lower Agrio Shale zone is

continuous / similar throughout the Curamhuele block, has flowed oil without stimulation, and is present in adjacent wells

• Horizontal multi-stage frac

potential

Block #2: CURAMHUELE – High Impact Agrio Shale

Shale Basin

25 km C.I. = 25 m

27 JANUARY / FEBRUARY 2013

CURAMHUELE CORTADERA

• Mulichinco Play
• Rapid thickening of the Mulichinco near

the Cortadera and Curamhuele Blocks

• 200+ meters thick across Curamhuele
• Potential to contain the lowermost and

coarser clastic part of the formation that was deposited during the initial low-stand period

• Yp.x-1 discovery tested the top of the

Mulichinco (i.e. thick, lower sandier section remains untested)

• Mulichinco untested in the Cur X-1 well
• Significant upside exists in this high

impact, conventional tight sand play

Block #2: CURAMHUELE – High Impact Mulichinco

Mulichinco tested 10 mmcf/d in YP.x-1 Production from the Mulichinco & Basal Sands ~1 TCF plus liquids in Sierra Chata field 28 JANUARY / FEBRUARY 2013 Cortadera

• Mulichinco Reservoir
• Historical production test at Yp.x-1st

after acidizing yielded 10 mmcf/d of gas and 500 bbls/d of 51º condensate in upper portion

• Upper portion of the Mulichinco tested

in Yp.x-1 has a high carbonate content

• Significant upside in a conventional

tight sand play in the lower, sandier, low-stand cycle

• Any future well drilled to test the Vaca

Muerta on the block will also penetrate the sandy low-stand Mulichinco

• bjective

Block #2: CURAMHUELE – High Impact Mulichinco

Correlation 200 API

• 100

50 MV 6 16 IN 250

• 250

0.2 2000 0.2 2000 0.2 2000 2 20000 0.2 2000 0.450

• 0.150

1908 2898 KG/MT 450 90 US/MT 20 B/E

3650 3700 3750 3800 3850

Lower Agrio Mulichinco Quintuco Mulichinco Lowstand

Mud gas readings rose by 2 orders of magnitude at the top of Mulichinco

29 JANUARY / FEBRUARY 2013

• Vaca Muerta Shale
• Maturity is based on vitrinite

reflectance values

• Vaca Muerta has not yet been

drilled on the Curamhuele block

• Field outcrop sampling including

joint Vaca Muerta and Agrio shale work completed

• Re-entry or new drill location to be

chosen to test the Vaca Muerta shale on the block

• Offsetting Vaca Muerta and Agrio

Shale tests being drilled and/or planned by other E&P’s

Block #2: CURAMHUELE – High Impact Vaca Muerta Shale

30 JANUARY / FEBRUARY 2013 CURAMHUELE

CORTADERA COIRON AMARGO

• Major’s like ExxonMobil drilling nearby
• Vaca Muerta Field Outcrop Sampling
• Vaca Muerta section is 600 to 800m thick
• Samples taken every 5m
• Very good mineralogy for hydraulic

fracture stimulation

Block #2: CURAMHUELE – High Impact Vaca Muerta Shale

31 JANUARY / FEBRUARY 2013 CURAMHUELE

• 124,000 acres (500 km2) or 49,600 net acres

(78 net sections)

• Madalena 40% W.I.; Partnered w/
• Apache Nq. CorS.x-1 well
• Multiple High Impact Plays on Block
• 1. Total Quintuco/Vaca Muerta Section : 1097m thick
• Vaca Muerta Shale: 520m thick
• Quintuco : 577m thick
• 2. Mulichinco : 206m thick
• 3. Agrio tight sands
• CorS X-1 Deep Test cased to 4,500 m for both

tight unconventional plays and shale gas

• Two stage frac conducted in Vaca Muerta shale
• Large-in-place Vaca Muerta Shale Gas Resource

discovered

• Quintuco zone (i.e. stacked on top of Vaca Muerta

source rock) expected to be evaluated in H1 2013

• Mulichinco and Agrio zones also present in CorS X-1

Block #3: CORTADERA – High Impact Vaca Muerta Shale, Quintuco,

& Mulichinco Plays

CorS.x-1

Regional seismic line

32 JANUARY / FEBRUARY 2013

• Vaca Muerta Shale discovery
• Maturity is based on vitrinite

reflectance values

• Apache Nq. CorS.x-1 well
• Condensate / liquids potential in

northern portion of Cortadera block

• Significant in-place resource

discovered in Vaca Muerta on block

• Gas Plus Pricing application approved
• Recent announcement for ~3X gas

price increase in Argentina could see $7.50+ / mcf for new developments

• Quintuco/uphole zone(s) expected to

be tested H1/12

Block #3: CORTADERA – High Impact Vaca Muerta Shale & Quintuco

33 JANUARY / FEBRUARY 2013 CORTADERA

CURAMHUELE COIRON AMARGO

Block #3: CORTADERA – High Impact Mulichinco Tight Sands Play

• Mulichinco Play
• Liquids-rich tight sands play
• Rapid thickening of Mulichinco near

Cortadera & Curamhuele

• 200+ meters thick across Cortadera
• Potential to contain lowermost and

coarser clastic part of Mulichinco deposited during initial low-stand period

• Significant upside exists to test this high

impact, conventional tight sands play

34 JANUARY / FEBRUARY 2013 High mud gas readings in CorS.x-1 Mulichinco in these wells Production from the Mulichinco & Basal Sands ~1 TCF plus liquids in Sierra Chata field Chihuidos Anticline

25 km Curamhuele

• Canadian Assets – Greater Paddle River Core Area
• Drill, multi-stage frac and tie-in 4 to 5 horizontals (100% W.I.) prior to April/May 2013 (spring break-up)

across three key resource plays

• Follow-up on Ostracod oil success with additional hztls & drill liquids-rich Notikewin hztl
• “Test” emerging Nordegg via hztl multi-frac technology to prove-up 100+ bbl/mmcf potential
• Plan to drill steady thru 2013 to ramp horizontal activity and increase production & cashflow
• International Assets – Block#1: Coiron Amargo, Block#2: Cortadera & Block #3: Curamhuele
• H1 2013 - detailed technical evaluation, review & assessment of large-in-place shale, unconventional

resources & tight sand plays across all three blocks

• Q1 2013 – currently formulating drill program with partners at Coiron Amargo
• Go-forward drilling focused on delineating: Vaca Muerta Shale & Conventional oil
• H1 2013 – conduct re-entry at Cors X-1 location at Cortadera to evaluate uphole zone(s) of interest
• Evaluate next steps at Curamhuele to progress high impact Agrio Shale, Vaca Muerta Shale and

Mulichinco tight sand plays

MADALENA (MVN) – Near-term Activity & Catalysts for Growth

35 JANUARY / FEBRUARY 2013

Reader Advisory

This presentation contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “projects”, “plans”, “anticipates” and similar expressions. These statements represent management’s expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Online Energy Inc. (“Online” or the “Company”). Undue reliance should not be placed on these forward-looking statements which are based upon management’s assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted. These statements speak only as of the date specified in the statements. In particular, this presentation contains forward looking statements pertaining to the following:

• the performance characteristics of the Company’s interest in oil and natural gas properties;
• il and natural gas production levels;
• capital expenditure programs;
• the quantity of the Company’s oil and natural gas reserves/resources and anticipated future cash flows from such reserves/resources;
• projections of commodity prices and costs;
• supply and demand for oil and natural gas;
• expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
• treatment under governmental regulatory regimes.

The Company’s actual results could differ materially from those anticipated in the forward looking statements contained throughout this presentation as a result of the material risk factors set forth below, and elsewhere in this presentation:

• volatility in market prices for oil and natural gas;
• liabilities inherent in oil and natural gas operations;
• political risk;
• uncertainties associated with estimating oil and natural gas reserves/resources;
• competition for, among other things, capital, acquisitions of reserves/resources, undeveloped lands and skilled personnel;
• incorrect assessments of the value of acquisitions and exploration and development programs;
• geological, technical, drilling and processing problems;
• fluctuations in foreign exchange or interest rates and stock market volatility;
• failure to realize the anticipated benefits of acquisitions;
• general business and market conditions; and
• changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Online does not undertake any obligation to publicly update or revise any forward –looking statements, whether as a result of new information, future events or

• therwise.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this presentation are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The Common Shares have not and will not be registered under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act”) or any state securities laws and many not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable states securities laws.

FORWARD LOOKING STATEMENTS

36 JANUARY / FEBRUARY 2013 Kevin Shaw President and Chief Executive Officer +1.403.262.1901 (ext 230); kdshaw@madalena-ventures.com