www.madalena-ventures.com 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 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 January / February 2013
MADALENA : MVN (TSX-V) 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 JANUARY / FEBRUARY 2013 2
Experienced Full Cycle Operating Team MANAGEMENT TEAM Ruy Riavitz – Argentina Country Manager Kevin Shaw, P. Eng., MBA – President & CEO • Previously Managing Director & Head of Energy Research, Casimir Capital, • Previously E&P Manager, Hidenesa Gas SA (now GyP of Neuquen) & Independent Engineering Consultant Senior E&P Research Analyst and Partner, Wellington West Capital Markets • Prior thereto Senior Consultant, PA Consulting, Reservoir Engineer, YPF • Prior thereto, held various technical, senior management and/or officer roles with ExxonMobil (via Imperial Oil), Trimox Energy Inc., WorleyParsons. Allan Carswell , P. Geoph., MSc. – Int’l Consultant Anthony Potter, CA – VP Finance & CFO • Current VP Exploration at Perfco International (private-co) • Previously CFO, Antrim Energy Inc., VP Finance of a US based explore-co • Prior thereto held senior technical or VP Exploration roles with Texaco, ExxonMobil, Morrison Petroleum, Era Oil & Gas, High Pine Oil & Gas • Prior thereto a Principal with Coopers & Lybrand Chartered Accountants Steve Dabner, P. Geol. – VP, Exploration BOARD OF DIRECTORS • 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. Raymond Smith, P. Eng. (Chairman) Rob Stanton, P. Eng. - VP, Operations • President, CEO & Director, Bellatrix Exploration Ltd. • Previously VP, Operations, Online Energy Inc., VP, Engineering and Barry Larson Operations, Result Energy Inc. • Prior thereto with Oiltec Resources Ltd., Pinnacle Resources Ltd., Jordan • VP Operations & COO, Parex Resources Inc. Petroleum Ltd., Transwest Energy Inc., Triton Canada Resources Ltd., Michael Lock Canadian Worldwide Energy Ltd. and Petro-Canada Inc. • President, Upsilon Holdings Ltd. Brent Foster, P. Eng. - VP, Engineering • Previously VP, Engineering, Online Energy Inc., VP, Engineering & COO, Keith MacDonald Blue Mountain Energy Ltd. and VP, Engineering of a Private-co E&P • President, Bamako Investment Management Ltd • Prior thereto with Rigel Oil and Gas Ltd., Home Oil Company Ltd, Santos Jay Reid John Wittnebel, P. Geol. –Manager, Geology • Partner, Burnet, Duckworth & Palmer LLP • Previously Exploration Manager, Online Energy Inc., VP, Exploration, Result Energy Inc. Ving Woo, P. Eng. • Prior thereto with Encal Energy Ltd., Husky Energy Limited, Renaissance Energy Ltd., and Chevron Canada Resources Ltd. • VP, Engineering & COO, Bellatrix Exploration Ltd. Kevin Shaw, P. Eng., MBA Anthony Potter, CA JANUARY / FEBRUARY 2013 3
DOMESTIC ASSETS: Alberta, Canada Ramping Up Horizontal Development • Large Operated Acreage Position (153 Net Sections) Three Key Light Oil & Liquids-Rich Resource Plays • JANUARY / FEBRUARY 2013 4
DOMESTIC GROWTH PLATFORM – Production Focused 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 JANUARY / FEBRUARY 2013 5
GREATER PADDLE RIVER CORE AREA – Large Horizontal Inventory GREENCOURT ALBERTA MAHASKA LEAMAN NITON PADDLE RIVER WILDWOOD WEST COVE EDMONTON BIGORAY CALGARY Madalena Lands 197 Gross Sections 100’s Horizontal Locations 78% Avg. W.I. Operated Lands 153 Net Sections Operated Infrastructure JANUARY / FEBRUARY 2013 6
SIGNIFICANT RUNNING ROOM – Across Three Key Plays 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 JANUARY / FEBRUARY 2013 7
RESOURCE PLAY #1: OSTRACOD OIL Madalena Madalena (100% WI) Ostracod Lands IP30 = 307 boe/d (65% Oil & Liquids) Husky Location Ostracod Oil Prospectivity Long Run Well 50+ Net Horizontal Locations in Inventory Bonavista Location Recent Madalena Horizontal Wells (100% WI) Early 2013 Planned Madalena Horizontal Locations 54 Net Sections of Ostracod Rights JANUARY / FEBRUARY 2013 8
RESOURCE PLAY #1: OSTRACOD OIL - Type Well Economics PADDLE RIVER OSTRACOD HORIZONTAL TYPE CURVE Capital cost ($M) 3,600 Daily Average Production 350 EUR (Mboe) 290 300 F&D cost ($/boe) 12.42 250 (boe/d) Netback ($/boe) 29.92 200 Recycle ratio 2.41x 150 IP30 (boe/d) 305 100 GOR (scf/bbl) 5000 50 NPV10% ($M) 2,961 IRR 51% 0 6 12 18 24 30 36 42 48 54 60 Payout (years) 1.9 Months All amounts are based on Madalena management internally HIGH QUALITY OSTRACOD SANDSTONE OIL RESERVOIR generated estimates Price Deck = McD. Jan. 1/13 ($3.35/mcf & $87.50/bbl) adjusted for transportation & quality Ø = 13.7% k = 5.33 md 2.69 gm/cc JANUARY / FEBRUARY 2013 9
RESOURCE PLAY #2: NOTIKEWIN / WILRICH Stacked Trends UPPER WILRICH SANDS Horizontal Development Wells LOWER WILRICH SANDS • Regionally Stacked Mannville NITON Trends Madalena 6-27 Horizontal • Focused on Notikewin / Wilrich 5.5 mmcf/d on Clean-up • 133 net sections NOTIKEWIN • Est. 100+ Hztl Locations across CHANNEL TRENDS Mannville trends WILDWOOD • Liquids @ 28 to 35 bbls/mmcf JANUARY / FEBRUARY 2013 10
RESOURCE PLAY #2: NOTIKEWIN / WILRICH Type Well Economics NITON NOTIKEWIN HORIZONTAL TYPE CURVE Capital cost ($M) 3,800 3500 Daily Average Production EUR* (Mboe) 504 3000 F&D cost ($/boe) 7.55 2500 (mcfe/d) Netback ($/boe) 16.94 2000 Recycle ratio 2.24x 1500 IP (30 day average -mcfe/d) 3,248 1000 LGR (bbl/mmcf) 28 500 NPV10% ($M) 2,596 0 IRR 34% 6 12 18 24 30 36 42 48 54 60 Payout (years) 2.8 Months *EUR amounts are based on Madalena management internally NITON NOTIKEWIN VERTICAL PRODUCER 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 JANUARY / FEBRUARY 2013 11
RESOURCE PLAY #3: NORDEGG OIL & LIQUIDS-RICH GAS Depth to Nordegg GREENCOURT Madalena Lands Nordegg Rights 180 Gross Secs. PADDLE RIVER LEAMAN 80% Avg. W.I. 144 Net Secs. WILDWOOD Nordegg resource widespread • across Madalena lands Madalena 15-12 Horizontal NORDEGG RESOURCE VERY liquids-rich with vertical BIGORAY • -Multi-stage Frac Pending + 55 MM BOE of Oil and LIQUIDS-RICH producers at 100+ bbls/mmcf Large inventory of horizontal GAS PRODUCED TO DATE • locations Wildwood area – initial focus • JANUARY / FEBRUARY 2013 12
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