Madalena Energy

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
Madalena
e n e r g y
inc.
www.madalenaenergy.com
MVN (TSX-V)
MDLNF (OTC)
Domestic and International Operations – Focused on Horizontal Oil Development
& Delineating Unconventional Shale / Tight Sand Resources
FEBRUARY 2014
FORWARD-LOOKING INFORMATION ADVISORY
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
or 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
operations 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
occur, 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
on 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
operations 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.
FEBRUARY 2014
2
EXPERIENCED FULL-CYCLE OPERATING TEAM
MANAGEMENT TEAM
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.
FEBRUARY 2014
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
BOARD OF DIRECTORS
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
3
MADALENA: Corporate Highlights

Market capitalization ~$235 mm (as at Feb. 11, 2014); Shares outstanding (Basic) ~397 mm

Strong Balance Sheet. Cash in the bank, 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)

Ongoing drilling, completion, evaluation and tie-in operations in both jurisdictions

2P reserves of 3.9 mmboe (46% oil and liquids) as of Dec. 31, 2012
Neuquén Basin, Argentina

+132,000 net acres (>200 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
Alberta, Western Canada
FEBRUARY 2014

+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
4
INTERNATIONAL ASSETS: Neuquén Basin, Argentina
 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
Cortadera (38% WI)
Partner: Apache (47%, Op.) GyP (15%)
123,503 Gross Acres
46,657
46,657Net
NetAcres
Acres(73
(73Net
NetSections)
Sections)
99,860 Gross Acres
34,951 Net Acres (54 Net Sections)
 Vaca Muerta, Lower Agrio, Mulichinco &
Basal Quintuco
January 10, 2014 (Bloomberg):
GYP discloses expected IPO
valuation of $8,000/acre
Source: Based on mapping by the Gobierno de la Provincia del Neuquén, modified by Madalena Energy Inc.
Madalena is well positioned among established and well capitalized
multi-national operators in the Neuquén Basin
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
5
VACA MUERTA SHALE – All Three Blocks

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 Thermal Maturity
See X-Section A-A’ in Appendix #2
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.
⁽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.
FEBRUARY 2014
6
VACA MUERTA VS US SHALES: Comparison
m
0
250
Shale Thickness
500
750
1,000
Gas Shales
Oil Shales
Shale Comparisons
Thickness (m)
Depth (m)
Porosity (%)
Permeability (nD)
TOC (%)
Reservoir Pressure (psi)
Pressure Gradient (psi/ft)
Vaca Muerta Shale
Madalena’s Coiron
Amargo Area ⁽¹⁾
70 - 140
2800 - 3200
4-8
50 - 250
2-7
6300 - 8000
0.65 – 0.75
Eagle Ford ⁽²⁾ Bakken ⁽³⁾
15 - 100
10 - 40
2200 - 3400 2700 - 3400
4 - 11
5-8
40 - 1300
50K – 500K
1-7
2 - 18
4700 - 7800 3800 – 8400
0.65 – 0.70 0.43 – 0.75
Vaca Muerta Shale
Madalena’s Cortadera
Area ⁽¹⁾
950 - 1350
3200 - 4500
6 - 10
30 - 1000
1-4
>11,000
>0.75
Barnett ⁽⁴⁾ Haynesville ⁽⁴⁾ Marcellus ⁽⁴⁾
45 - 75
70 - 90
20 - 45
2300
3700
2100
4-8
7-9
7-9
50 - 200
100 - 500
100 - 200
4-5
3-4
4-7
3000 - 3800 7200 - 9100 3500 - 4200
0.4 – 0.5
0.6 – 0.75
0.5 – 0.6
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.
FEBRUARY 2014
7
LOWER AGRIO SHALE: Curamhuele & Cortadera

>225 meter thick⁽³⁾ shale within the oil generation
window on the Curamhuele block
See X-Section A-A’ in Appendix #2

Lower Agrio flowed
~150 bopd without
stimulation/frac
at CH.x-1⁽¹⁾
Horizontal multi-stage frac potential
 Gas charged deltaic sandstone facies overlying the
shale at CorS.x-1 on the Cortadera block
Correlation
0
-100
MV
6
250
KG/MT
200
0.2
2000 0.450
50
0.2
2000 1908
16
0.2
2000 450
-250
2
UNKN
20000 0
0.2
UNKN
2000
-0.150
2898
90
20
3000
Deltaic
facies
3050
Significant Increase in Mud Gas
FEBRUARY 2014
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.
8
MULICHINCO TIGHT SANDSTONE: Curamhuele & Cortadera
Correlation
0
A PI
200
0.2
-100
MV
50
0.2
IN
16
0.2
6
250
-250
YP.x-1
2
0.2
2000 0.450
-0.150
2000 1908
KG/MT
2898
2000 450
US/MT
90
B/E
20
20000 0
2000
Lower Agrio
3650
3700
Mulichinco tested 10 mmcf/d +
500 bpd of 51⁰ API condensate
in Yp.x-1⁽¹⁾
Mud gas readings rose by 2
orders of magnitude at the
3750
top of the Mulichinco
Mulichinco
3800
Mulichinco
Low-stand
3850
Quintuco

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

See X-Section A-A’ in Appendix #2
Total SA is drilling Mulichinco horizontals
at Aguada Pichana to the southeast of
Cortadera (Source: Neuquen Scout Information Meetings)
Source: Madalena Energy Inc. mapping
⁽¹⁾Average flow rate over the initial 8 hours of a production test conducted by OEA in November 1990
The Mulichinco tight sandstones are prospective for gas
within the Curamhuele and Cortadera blocks
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
9
BLOCK #1: COIRON AMARGO – Recent Developments
 Feb. 7, 2012 (Reuters): YPF discovers ~1 billion Boe at Loma La Lata
over 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
Petrobras Argentina / Total SA announce new Vaca Muerta
Discovery (December 2013) RDA.x-1001 at 2,501m
$120 Mn JV
 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
$3.35 Bn
$1.5 Bn
$1.24 Bn JV
Madalena
 September 23, 2013 (Reuters): Wintershall signs a non-binding LOI
with GyP for a 23,970 acre joint venture on the Aguada Federal
block
e n e r g y inc.
 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
oil & gas discovery (55% Petrobras, 45% Total SA) in Vaca Muerta
shale
FEBRUARY 2014
“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)
Shell Vaca Muerta
500m horizontal
5 fracs
Tested 465 boe/d (35⁰ API)
*** See “Analogous Information” on Slide 2 of this presentation.
10
BLOCK #1: COIRON AMARGO – Overview
Madalena 35% W.I.
in 99,860 gross (34,951 net) acres
COIRON AMARGO NORTE
Sierras Blancas (Conventional oil)

CAN-15(h)
Northern portion (108 km2) converted to
25-year exploitation license

4 light oil pools discovered to date

Horizontal re-entry on production at
CAN.xr-2(h)

Second horizontal well being drilled on CAN3
structure at CAN-15(h)
CAN.xr-2(h)
CAS x-5
BdIT.x-1001
SB.x-2
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)

CAS x-15
CAS x-1
SB.x-1
CAS x-14
Shell drilling offsetting Vaca Muerta shale
horizontals
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
Source: Madalena Energy Inc. mapping
11
BLOCK #1: COIRON AMARGO NORTE– Applying Horizontal
Technology to Sierras Blancas Oil
Sierras Blancas - 8 Horizontal Wells Average Production
Coiron Amargo Area – Offsetting Horizontals
800
700
Best Well-
IP 700 bopd
Year 1: 450 bopd
Year 2: 190 bopd
Avg. Well-
IP 470 bopd
Year 1: 290 bopd
Year 2: 150 bopd
600
BOPD
500
OIL 37⁰ API, Average GOR 1,400 scf/bbl
400
300
200
100
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Source: Secretaria de Energia de la Nacion
Months
CAN-15(h)
CAN.xr-2(h)
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
Source: Madalena Energy Inc. mapping
12
BLOCK #2: CURAMHUELE – Overview
 Madalena Operated 90% W.I.
in 56,216 gross (50,595 net) acres
56,216 Gross 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
e n e r g y inc.
 Madalena preparing 2 re-entry opportunities
 Madalena believes development supported by
significant legacy infrastructure and facilities
associated with offsetting conventional
operations
 Extension of first exploration period granted until
Nov. 2014
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.
FEBRUARY 2014
13
BLOCK #3: CORTADERA – Overview

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⁾
Cortadera (38% WI)
Partner: Apache (47%, Op.) GyP (15%)
123,503 Gross Acres
46,657 Net Acres (73 Net Sections)
99,860 Gross Acres
34,951 Net Acres (54 Net Sections)
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 Q12014
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.
FEBRUARY 2014
14
DOMESTIC ASSETS: Alberta, Canada
Greater Paddle River Core Area (>150 Net Sections of Land)

Key Resource Plays undergoing horizontal multi-stage frac operations:


Ostracod
Nordegg
 Notikewin/Wilrich

-Development
-Oil
-Emerging
-Oil & liquids-rich gas
-Development
-Liquids-rich gas
- 58 net sections
- 146 net sections
-136 net sections
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
FEBRUARY 2014
15
GREATER PADDLE RIVER CORE AREA: Strategically Focused
GREENCOURT
ALBERTA
MAHASKA
LEAMAN
NITON
PADDLE RIVER
WILDWOOD
WEST COVE
EDMONTON
BIGORAY
6 miles
CALGARY
Madalena Lands
Multiple Horizontal plays
~200 Gross Sections
~155 Net Sections
Operated Lands
High W.I.
Operated Infrastructure
FEBRUARY 2014
16
OSTRACOD OIL: Horizontal Development Project
5 Madalena Hz Wells (100% WI)
1-32: On-Stream Nov. 1, 2013
~606 BOE/d (IP24 day average)
(84% Oil & NGLs)
Depth to Ostracod
2 Husky Hz Wells⁽¹⁾
3 Husky Hz Locations⁽¹⁾
Madalena Lands
Long Run Hz Well⁽¹⁾
Expected Area of
Ostracod Prospectivity
Recently Drilled (100% WI)
12-31 Paddle R. Hz Well
(Tie-in & Equipping Ongoing)
Ostracod Rights
Recently Drilled (92% WI)
16-15 West Cove Hz Well
(Evaluation Ongoing)
6 miles
69 Gross Secs.
85% Avg. W.I.
58 Net Secs.
⁽¹⁾ See “Analogous Information” on Slide 2 of this presentation
FEBRUARY 2014
17
OSTRACOD OIL: Type Well Economics
TYPE CURVE ASSUMPTIONS
Capital cost ($M)
EUR (Mboe)
3,500
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
HIGH QUALITY OSTRACOD SANDSTONE OIL RESERVOIR
Ø = 13.7%
k = 5.33 md
2.69 gm/cc
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
18
NORDEGG OIL & LIQUIDS-RICH GAS: Emerging Resource Play
Depth to Nordegg
GREENCOURT
Madalena Lands
Nordegg Rights
LEAMAN
PADDLE RIVER
183 Gross Secs.
80% Avg. W.I.
146 Net Secs.
Wildwood 15-12 Horizontal
WILDWOOD
 Nordegg Resource Widespread
NORDEGG RESOURCE
across Madalena Lands
BIGORAY
 Inventory of Horizontal
+ 55 MM BOE of Oil & LIQUIDS-RICH
GAS PRODUCED TO DATE (AER Data)
6 miles
Locations
 Liquids-rich with Vertical
Producers at >100+ bbls/mmcf ⁽¹⁾⁽²⁾
⁽¹⁾ Based on AER data retrieved from Accumap on November 11, 2013.
⁽²⁾ See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
19
NOTIKEWIN / WILRICH GAS: Low-Risk Development Projects
Depth to Notikewin
UPPER WILRICH SANDS
Madalena Lands
LOWER WILRICH SANDS
Notikewin Rights
NITON
NOTIKEWIN
CHANNEL
TRENDS
WILDWOOD
6 miles
175 Gross Secs.
78% Avg. W.I.
136 Net Secs.
 Regional Mannville Trends
 Focused on Notikewin & Wilrich
 Inventory of Horizontal Locations
⁽¹⁾ Based on AER data retrieved from Accumap on November 11, 2013.
⁽²⁾ See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
 Liquids @ 28 to 35 bbls/mmcf ⁽¹⁾⁽²⁾
20
DUVERNAY SHALE: Exposure on 100+ Net Sections
DUVERNAY WEST SHALE BASIN: OVERVIEW
MADALENA DUVERNAY LANDS
>100 Net Sections (100% WI)
KAYBOB AREA
Edmonton
PEMBINA AREA
24 miles
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
Recent Industry Duvernay Wells
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
21
MADALENA (MVN TSX-V) – Activity & Catalysts for Growth

Argentina Assets – Coiron Amargo, Curamhuele & Cortadera Blocks

Argentina strategy to grow production, reserves and cash flow. Continue to delineate unconventional
resources. Continuously monitor market for the potential to monetize assets

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
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
FEBRUARY 2014

Primarily focused on Ostracod oil development

Continue to evaluate the emerging Nordegg liquids-rich gas play
22
APPENDIX # 1: Neuquén Basin Regional X-Section
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
Vaca
Muerta
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
Multiple unconventional formations with development potential across Madalena’s acreage
-Vaca Muerta shale, Lower Agrio shale, and Mulichinco tight sandstone
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
23
APPENDIX # 2: EIA - Argentina’s Shale Potential
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
*** See “Analogous Information” on Slide 2 of this presentation.
FEBRUARY 2014
24