Madalena Announces its 2013 Year End Financial Results and Highlights, Provides an Operational Outlook

    Madalena Announces its 2013 Year End Financial Results and Highlights,                        Provides an Operational Outlook  PR Newswire  CALGARY, April 29, 2014  TSXV Trading Symbol: MVN  CALGARY, April 29, 2014 /PRNewswire/ - Madalena Energy Inc. (TSXV: MVN) (the "Company" or "Madalena") is pleased to provide selected financial and operational information for the three months and year ended December 31, 2013 and the Company's 2013 year end reserves.  Copies of the Company's consolidated  financial statements for the year  ended  December 31, 2013, the  related management's discussion  and analysis and  the  Annual Information Form (the "AIF") of the Company for the year ended December 31, 2013 have been filed  with Canadian securities regulatory authorities  and  will be made available under the Company's profile at www.sedar.com and on the Company's website at www.madalenaenergy.com.  2013 HIGHLIGHTS and OUTLOOK    *Established and integrated an experienced, full-cycle operating team     capable of executing both internationally and domestically.    *Repositioned Madalena for flexibility with respect to its Neuquén basin     assets with the signing of three revised block contracts (new contractual     amendments and/or extensions) at each of the Company's Coiron Amargo,     Curamhuele and Cortadera blocks in Argentina.    *Conducted an extensive technical review of the Company's unconventional     shale resources on its three land blocks within the Neuquén basin. Ryder     Scott Company evaluated the Vaca Muerta shale, Lower Agrio shale and Basal     Quintuco formation throughout the Coiron Amargo, Curamhuele and Cortadera     blocks and prepared a comprehensive resource report which was released on     April 30, 2013 and effective December 31, 2012.      Highlights of the independent resource evaluation are as follows:         *Best Estimate P50 total petroleum initially in place ("PIIP") of 34.8          billion boe (51 % crude oil and natural gas liquids ("NGLs")) net to          Madalena, comprised of:              *Best Case P50 discovered PIIP ("DPIIP") of 257.4 million boe (95               % crude oil and NGLs) and             *Best Case P50 undiscovered PIIP ("UPIIP") of 34.6 billion boe               (50 % crude oil and NGLs).         *Best Estimate P50 contingent and prospective resources net to          Madalena as follows:              *Best case P50 prospective resources of 2.8 billion boe (45 %               crude oil and NGLs) and             *Best case P50 contingent resources of 19.4 million boe (95 %               crude oil and NGLs).         *A further breakdown (by block) of the petroleum initially in place          and the resource categories aggregating such total are shown in a          series of tables in the advisory section of this document.    *Increased proved plus probable reserves ("P+P") by 19% to 4.648 MMboe,     which is primarily supported by the Company's conventional assets. Net     present value of these P+P reserves before tax, discounted at 10%,     increased 49% to $50.2 million (see Summary of 2013 Year-end Reserves     below).    *A large inventory of horizontal locations on Madalena's western Canadian     and Argentinean lands remains unbooked.    *Q4 - 2013 production averaged 1,271 boe/d (56% oil and liquids), an     increase of 101% from Q4 - 2012.    *Madalena has been successfully recapitalized through raising a total of     $19.5 million in 2013 and an additional $23 million in February, 2014.    *Maintained a strong balance sheet with zero debt and approximately $8.0     million in positive working capital at the end of 2013. With the     subsequent $23 million raised in February 2014, unutilized credit     facilities of $13 million and funds from operations throughout 2014,     Madalena is well positioned to meet its commitments and execute its 2014     business plan.    *In late 2013, Madalena successfully implemented its first use of North     American based horizontal drilling technology on its international assets     focused initially at its Coiron Amargo block in the Neuquen basin.     Horizontal technology was applied to the Sierras Blancas formation which     is a conventional light oil reservoir sourced from the Vaca Muerta shale     across the Coiron Amargo block. The CAN.xr-2(h) well was re-entered and     drilled horizontally and has produced approximately 63,000 barrels of oil     in the first three months of 2014. The results to date on the CAN.xr-2(h)     horizontal have exceeded management's expectations and as a result,     Madalena has commenced a multi-well horizontal drilling program in Sierras     Blancas for 2014. To kick-off 2014, the CAN-15(h) well was recently     drilled horizontally and during testing operations the highest rates were     achieved on a 12 mm choke setting, when the well flowed at a rate of 1,393     bbls/d of oil with 3,301 mcf/d of associated natural gas for a total of     1,943 Boe/d (72% oil) over a 5 hour period. (see International Operations     below). The next Sierras Blancas horizontal in the multi-well program for     2014 is expected to commence drilling in Q2-2014. Madalena has a 35%     working interest in the Coiron Amargo block.    *Madalena has established a 2014 capital budget of $48 million, $37 million     of which is allocated to Argentina. The 2014 budget is focused on a     combination of high impact horizontal wells targeting the Sierras Blancas     light oil play in addition to unconventional shale and tight sand     delineation wells, re-entries and 3D seismic shooting on the Company's     international assets in Argentina. Operations in Canada will focus on     horizontal wells targeting the Ostracod and other emerging resource plays     in the greater Paddle River area.    *Ongoing drilling and completions operations will continue across     Madalena's international assets in Q2 through to year end 2014 and     drilling operations are expected to recommence in Canada post spring     break-up.  SUMMARY FINANCIAL AND OPERATIONAL RESULTS                                                                                                                Three months ended    Year ended                                               December 31       December 31                                             2013      2012     2013    2012 Financial - Canadian $000s, except per                                     share amounts Oil and gas revenue                            5,633    3,012   17,960   5,545 Net loss                                    (20,527)  (4,934) (23,285) (8,865) Per share - basic and diluted                 (0.06)   (0.02)   (0.07)  (0.03) Business combinations                              -   16,090        -  16,090 Capital expenditures                          13,121    6,310   43,296  22,851 Working capital                                8,016   30,025    8,016  30,025 Equity outstanding - 000s                                                  Common shares                                364,029  314,307  364,029 314,307 Stock options                                 19,530   22,334   19,530  22,334 Operating                                                                  Average Daily Production                                                   Crude oil and condensate - Bbls/d                551      327      392     173 Natural gas - Mcf/d                            3,366    1,377    3,346     369 NGLs - Bbls/d                                    160       78      137      20 Total - boe /d^(1)                            1,271      634    1,086     254 Average Sales Prices                                                       Crude oil and condensate - $/Bbl               73.71    74.75    79.69   75.23 Natural gas - $/Mcf                            3.52     3.35     3.18    3.41 NGLs - $/Bbl                                   54.99    48.04    53.61   48.04 Total - $/boe^(1)                              48.16    51.66    45.28   59.86 Operating Netbacks^(2) - $/boe^(1)             16.82    13.49    15.25   18.18  (1) Refer to - "Oil, Natural Gas Liquids and Natural Gas Conversions to boe"     in Advisory.     Operating netback is a non-GAAP measure calculated as the average per boe (2) of the Company's oil and gas sales, less royalties, operating and     transportation expenses.  SUMMARY OF ARGENTINEAN UNCONVENTIONAL RESOURCES (as prepared by Ryder Scott Petroleum Consultants Ltd. ("Ryder Scott") in accordance with National Instrument 51- 101 - Standards for Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101") (see separate press release dated April 30, 2013))  Highlights of the independent resource evaluation are as follows:    *Best Estimate P50 total PIIP of 34.8 billion boe (51 % crude oil and NGLs)     net to Madalena, comprised of:         *Best Case P50 DPIIP of 257.4 million boe (95 % crude oil and NGLs);          and        *Best Case P50 UPIIP of 34.6 billion boe (50 % crude oil and NGLs);    *Best Estimate P50 contingent and prospective resources net to Madalena as     follows:         *Best case P50 prospective resources of 2.8 billion boe (45 % crude          oil and NGLs), and        *Best case P50 contingent resources of 19.4 million boe (95 % crude          oil and NGLs);    *A further breakdown (by block) of the petroleum initially in place and     resources aggregating such totals are shown below in a series of tables in     the advisory section of this document.  SUMMARY OF 2013 YEAR-END RESERVES (as of December 31, 2013 - all amounts are in Canadian dollars and net to Madalena's interest unless otherwise stated.)    *Total Company proved plus probable ("P+P") reserves of 4.648 MMboe (51%     crude oil and natural gas liquids vs 46% at year-end 2012) representing a     19% increase from Madalena's 2012 year end P+P reserves;    *58% of P+P reserves are categorized as proved reserves;    *A P+P reserve life index of 10.0 years and a proven reserve life index of     5.8 years, based on Q4 - 2013 actual production of 1,271 boe/d;    *Reserve net present value of P+P reserves before tax (discounted at 10%)     of $50.2 million representing a 49% increase from Madalena's 2012 year end     P+P reserves; and  Disclosure of Reserves Data  All of Madalena's international reserves were evaluated by Ryder Scott Company and  all  of  Madalena's  domestic  reserves  were  evaluated  by  McDaniel  &  Associates Consultants Ltd. in separate  reports dated effective December  31,  2013 (collectively, the "Reserve Reports"). The Reserve Reports were prepared in accordance with NI 51-101 and  the standards contained in the Canadian  Oil  and Gas Evaluation Handbook (the "COGE Handbook"). The reserves data  provided  in this news release ("Reserves Data") summarizes the oil, liquids and natural gas reserves  associated with  Madalena's assets  and properties  and the  net  present values of future net revenue for these reserves using forecast  prices  and costs  as at  December 31,  2013. The  Reserves Data  represents only  a  portion of  the disclosure  required  under NI  51-101.  All of  the  required  information is  in the  AIF, which  has been  filed with  Canadian  securities  regulatory authorities and will be made available under the Company's  profile  at www.sedar.com and on the Company's website at www.madalenaenergy.com.  INTERNATIONAL OPERATIONS - Neuquén Basin, Argentina  Coiron Amargo Block    *Industry activity in and around Madalena's Coiron Amargo block     (approximately 35,000 net acres) including developments in the greater     Loma La Lata and Loma Campana areas has seen a significant step change     from initial exploration and appraisal drilling in 2012 to an accelerated     exploitation / development phase in the unconventional Vaca Muerta shale     through 2013 and into 2014. Over 150 Vaca Muerta shale wells have been     drilled in and around this area and a number of significant joint ventures     (or other transactions) over the last 14 months have been announced. These     largely involve large integrated exploration and production companies such     as YPF, Chevron, Shell, Total SA, Wintershall, Petrobras and others. YPF     and Chevron have announced a 140 well drilling program in 2014 targeting     the Vaca Muerta shale to the west of Madalena's acreage and they expect to     increase production from the Vaca Muerta shale to approximately 80,000     bbls/d by 2017 in this area. Madalena's Coiron Amargo block is     strategically positioned within this area of intense Vaca Muerta shale     resource development and Madalena continues to execute its business plan     in this area.    *The Coiron Amargo block is divided into a North and South region with     active drill programs being executed in both areas. Coiron Amargo Notre     (the northern portion of the block) is currently under a 25 year     exploitation (development) concession. The southern portion of the block,     Coiron Amargo Sur, is currently under an exploration contract which was     extended until November 8, 2014 by way of an official decree signed by the     Province of Neuquén in Argentina on November 12, 2013. Subsequent to     November 8, 2014, Madalena has the ability to extend Coiron Amargo Sur     through further exploration, evaluation and/or exploitation (development)     phases.    *The focus of Madalena's business plan for the Coiron Amargo block     includes:                         Continue to advance the Company's Vaca Muerta shale          i)   activities with a combination of new delineation wells                        and completion techniques (stimulations and/or                        multi-stage fracs);                        Drill, complete, test and tie-in a number of high          ii)  impact horizontal wells targeting Vaca Muerta sourced                        light oil from the Sierras Blancas reservoir; and          iii) Technically assess deep gas potential on the block in                        response to offsetting industry activity.    *Recently, the Company has intensified its focus on the Vaca Muerta shale     given the unconventional prize across the Coiron Amargo block. The block     is strategically positioned within the Neuquén basin in the shallower     portion of the Vaca Muerta oil window and in an area where over 150 Vaca     Muerta shale wells have been drilled over the last 12 to 14 months.     Industry activity continues to increase offsetting the Coiron Amargo block     where Madalena drilled the CAS.x-14 and the CAS.x-15 vertical wells in     Coiron Amargo Sur for the Vaca Muerta shale in 2013. The CAS.x-14 and     CAS.x-15 wells were drilled and cased encountering approximately 105 and     114 meters respectively of Vaca Muerta shale on logs. Completion     (stimulation work and/or multi-stage frac) activities on these wells are     expected to commence in Q2 - 2014.    *Madalena has implemented a balanced business strategy between     unconventional shale delineation and high impact horizontal drilling.     Accordingly, Madalena successfully implemented North American based     horizontal technology and experience on the Coiron Amargo block. As the     first implementation of horizontal technology internationally, the     CAN.xr-2(h) well was re-entered, drilled and completed horizontally in the     Sierras Blancas light oil reservoir which is a high deliverability     conventional reservoir which is sourced from the Vaca Muerta shale. The     CAN.xr-2(h) well has now been producing since late 2013 and has exceeded     management's expectations. The well has been producing oil at restricted     rates for most of Q1 - 2014. Cumulative oil production for Q1-2014, based     on field estimates, was approximately 63,000 barrels of oil plus     associated solution gas. Average daily production was approximately 700     bbls/d and 1,560 mcf/d of associated solution gas for a total of 978 boe/d     (72% oil) over a three month period in Q1-2014. The well has been     recently tied into a permanent pipeline system to the central plant and     gas dehydration and compressor facility and, accordingly, associated     solution gas volumes will be realized as sales in future quarters.     Madalena has a 35% working interest in the CAN.xr-2(h) well.    *Encouraged by the results of the CAN.xr-2(h) horizontal, Madalena has     commenced a multi-well horizontal drilling program for 2014. The CAN-15(h)     well, in which the Company has a 35% working interest, was recently     drilled horizontally in the Sierras Blancas light oil reservoir in the     Coiron Amargo block to a total measured depth of 3,750 metres with a     horizontal lateral section of approximately 692 metres in length. This     well is the second horizontal well drilled into the Sierras Blancas which     is a conventional light oil reservoir sourced from the Vaca Muerta shale     across the Coiron Amargo block. The well was subsequently cased and     completed with a 3.5" slotted liner and a multi-rate production test was     carried out through temporary production facilities. Throughout the     multi-rate production test, the CAN-15(h) well flowed without artificial     lift equipment and was tested for approximately 75 hours at various choke     settings ranging from 6 mm to 12 mm in size with the following flow rates     observed during the test:                    i)   With the production test only being carried out on a                        portion of the horizontal lateral section as planned,                        the highest rates were achieved on a 12 mm choke               setting, when the CAN-15(h) well was flowed at a rate                        of 1,393 bbls/d of oil with 3,301 mcf/d of associated                        natural gas for a total of 1,943 Boe/d (72% oil) over a                        5 hour period and at an average flowing pressure of                        approximately 1,263 psi.                   ii)  On an 8mm choke setting, the CAN-15(h) well was flowed                        at a rate of 745 bbls/d of oil with 1,990 mcf/d of               associated natural gas for a total of 1,077 Boe/d (69%                        oil) over a 29 hour period and at an average flowing                        pressure of approximately 1,629 psi.                   iii) During the test period of 75 hours, the total gross                        produced cumulative volumes were approximately 2,553                        barrels of oil and approximately 7,210 mcf of natural               gas, for a total of approximately 3,754 barrels of oil                        equivalent (68% oil) gross. No significant flowing                        pressure declines were observed throughout the testing                        period and water cuts ranged from 0% to 3% throughout                        the test period.                  *Operationally, Madalena and its partners currently have a completion rig     running on the Coiron Amargo block with another drilling rig scheduled to     mobilize to the block in Q2 to continue drilling a combination of high     impact horizontals and Vaca Muerta shale delineation wells.    *Two 3D seismic programs were shot at Coiron Amargo Sur during the second     quarter of 2013 and were subsequently processed in the third quarter. The     Coiron Amargo block (both north and south regions) is now almost entirely     covered with 3D seismic.  Curamhuele Block    *The greater El Trapial / Curamhuele region is an evolving area within the     Neuquén basin which is seeing increased exploration and appraisal activity     for unconventional shale plays and tight sand reservoirs. Chevron has     recently announced that a second focus area for Chevron in the Vaca Muerta     shales is the El Trapial block which is adjacent and to the east of     Madalena's 90% working interest Curamhuele block. At El Trapial, Chevron     is drilling and testing four exploration wells in 2014 to further assess     the unconventional shale potential. Others, such as YPF are also drilling     on lands offsetting Madalena's Curamhuele block for unconventional shale     and tight sand plays.    *The primary zones of interest across the Curamhuele block are the     unconventional Vaca Muerta shale, Lower Agrio shale and liquids rich     Mulichinco sands. The block is also prospective for other conventional     reservoirs.    *To satisfy a portion of the 2014 block commitments, Madalena has recently     shot an approximately 75 square kilometer 3D seismic survey at Curamhuele.     Processing of this data is currently underway. The Company plans to merge     this newly acquired data with the existing 125 square kilometer 3D survey     on the block. This will provide 3D seismic coverage on the entire     northern portion of the Curamhuele block.    *To satisfy the remaining 2014 block commitments, Madalena plans to execute     two high impact re-entries of the Yp.x-1001 and Ch.x-1 wellbores. Through     these re-entries, Madalena plans to test an estimated 200 meter thick     tight Mulichinco sand liquids-rich gas play and an estimated 225 meter     thick oil zone in the Lower Agrio shale (which is a second emerging     unconventional shale play in Argentina). In response to offsetting     industry activity, Madalena is also evaluating the Vaca Muerta shale     across the block.    *To accelerate exploration and development activities on the block,     theCompany continues to assess different opportunities withRBC Capital     Markets ("RBC"), Madalena's exclusive advisor related to its Neuquén basin     assets,in respect of a possible joint venture partnership or other     transaction.  Cortadera Block    *On January 15, 2014, the Corporation announced that, on the Cortadera     Block, the joint venture partnership consisting of Apache Corporation, Gas     y Petroleo del Neuquén SA and Madalena had signed an amended contract     agreement to formalize a multi-year extension of the initial exploration     period and inclusion of subsequent exploration periods. Subsequent to that     agreement and following an application and approval process, the first     exploration period for Cortadera was extended by way of an official decree     which was signed by the Province of Neuquén in Argentina. This extension     provides the partnership until October 26, 2014 to satisfy the remaining     work commitments on the block, which involves an upcoming re-entry of the     CorS.x-1 well. Under the amended agreement, and subsequent to conducting     the upcoming re-entry work, the partnership at Cortadera has the option to     enter into a second exploration period extending to October 25, 2018 and a     third exploration period extending to October 25, 2021, or extend the     Cortadera Block through potential further evaluation and/or exploitation     phases.    *Madalena and its new block partner YPF S.A. (acquired through YPF's recent     purchase of the Apache subsidiary in Argentina) plan to re-enter the     previously drilled CorS.x-1 Vaca Muerta test well to evaluate the uphole     Mulichinco tight sand play (or other zone of interest). Madalena expects     that its share of any costs for the work performed will not be significant     due to YPF's continued earning obligations which include carrying Madalena     for the majority of the anticipated costs.  DOMESTIC OPERATIONS - Greater Paddle River Area, Alberta, Canada    *Domestically, Madalena's core area of operations is located in the greater     Paddle River area, where the Company holds approximately 196 gross (154     net) sections of land (approximately 78% average working interest) in     west-central Alberta that support light oil and liquids-rich gas resource     plays. Madalena entered the domestic E&P space in November, 2012 and     executed horizontal drilling activity in 2013 with a focus of bringing     increased production and cash flow into the company.    *Drilled 6 (5.92 net) wells in 2013 including 4 development horizontals and     2 exploration wells which qualify for Canadian Exploration Expense ("CEE")     , resulting in 4 (4 net) oil wells;    *Continued to make progress on the Ostracod horizontal oil project with 5     (4.92 net) wells drilled in 2013. Four (4.0 net) of these wells are     currently on production while the fifth (0.92 net), a significant step-out     well drilled in late 2013, continues to be evaluated. Q4 - 2014 production     from the producing Ostracod wells represented 70% of the Company's     domestic production of 1,098 boe/d. Operating costs for the Ostracod     horizontal wells in Q4, 2013 were $14.54 per boe. Overall, the Company     has gained valuable insights during 2013 on its emerging Ostracod project     and has an inventory of horizontal development locations on its 58 net     section land position.    *Madalena's domestic focus is to exploit its inventory of horizontal     development locations on its Ostracod oil, Notikewin/Wilrich liquids-rich     gas and other emerging oil & liquids-rich gas resource plays in the area.     Madalena also holds more than 100 net sections (100% W.I.) which are     prospective for the Duvernay shale.  About Madalena - International and Domestic Assets  Madalena  is  an  independent,  Canadian-based,  domestic  and   international  upstream  oil  and  gas  company   whose  main  business  activities   include  exploration, development and production of crude oil, natural gas liquids  and  natural gas.  Internationally, Madalena holds three large blocks within the Neuquén basin in Argentina where it is focused on  the delineation of large petroleum  in-place  shale and unconventional resources in the Vaca Muerta and Lower Agrio  shales,  in addition to  multiple tight sand  plays. The Company  is also  implementing  horizontal drilling and  completions technology to  high impact  international  plays and  is currently  focused on  a conventional  oil play  in the  Sierras  Blancas formation.  Madalena  holds approximately  132,200  net acres  on  the  Coiron Amargo (34,951 net acres), Curamhuele (50,595 net acres) and  Cortadera  (46,656 net acres) blocks.  Domestically, Madalena's core  area of  operations is located  in the  Greater  Paddle  River  area   of  west-central   Alberta  where   the  Company   holds  approximately 200 gross (>150 net) sections of land (approximately 78% average W.I.) encompassing light oil and  liquids-rich gas resource plays.  Madalena's  primary domestic  focus  is  to  exploit its  large  inventory  of  horizontal  drilling locations on  its Ostracod oil  and emerging oil  & liquids-rich  gas  resource plays.  Madalena trades  on the  TSX  Venture Exchange  under  the symbol  MVN.  Basic  corporate information, recent  news releases and  regularly updated  corporate  presentations are available on the Company's website at www.madalenaenergy.com  Reader Advisories  Forward Looking Information  The  information  in  this  news  release  contains  certain   forward-looking  statements.  These  statements   relate  to  future   events  or  our   future  performance,  including,  without   limitation,  with   respect  to   expected  operational activities, including  drilling, completion, re-entry,  evaluation  and seismic  activities, and  the timing  thereof, timing  matters related  to  Madalena's  properties,  including  potential  block  extensions  and  matters  pertaining to Madalena's efforts to seek  a joint venture partner for  certain  assets. All  statements  other than  statements  of historical  fact  may  be  forward-looking statements.  Forward-looking  statements are  often,  but  not  always, identified by the use of  words such as "seek", "anticipate",  "plan",  "continue", "estimate",  "approximate",  "expect", "may",  "will",  "project",  "predict", "potential",  "targeting",  "intend", "could",  "might",  "should",  "believe", "would" and similar expressions.  In particular, this news  release  contains  forward-looking   statements  pertaining   to  planned   operational  activities to be conducted by the Company. 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.  These  statements  involve substantial  known and  unknown risks  and uncertainties,  certain  of  which are  beyond the  Company's  control, including:  the impact  of  general  economic conditions;  industry conditions;  changes  in laws  and  regulations  including the adoption of new  environmental laws and regulations and  changes  in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange  and  interest  rates; stock  market  volatility  and  market  valuations; volatility in market prices  for oil and natural gas;  liabilities  inherent in  oil and  natural gas  operations; uncertainties  associated  with  estimating oil and natural gas reserves; competition for, among other  things,  capital, acquisitions, of reserves,  undeveloped lands and skilled  personnel;  incorrect assessments of the value of acquisitions; changes in income tax laws or changes in  tax laws and  incentive programs  relating to the  oil and  gas  industry; geological, technical,  drilling and processing  problems and  other  difficulties in producing petroleum reserves; and obtaining required approvals of regulatory  authorities.  The  Company's  actual  results,  performance  or  achievement could differ materially  from those expressed  in, or implied  by,  such forward-looking statements and, accordingly,  no assurances can be  given  that any  of the  events anticipated  by the  forward-looking statements  will  transpire or occur  or, if  any of  them do,  what benefits  the Company  will  derive  from  them.  These  statements  are  subject  to  certain  risks   and  uncertainties and may be based on assumptions that could cause actual  results  to differ materially from those anticipated or implied in the  forward-looking  statements. The forward-looking statements in this news release are  expressly  qualified in their entirety by  this cautionary statement. Except as  required  by law, the Company undertakes no obligation to publicly update or revise  any  forward-looking statements. Investors  are encouraged to  review and  consider  the additional  risk factors  set forth  in the  Company's Annual  Information  Form, which is available on SEDAR at www.sedar.com  Reserves and Other Oil and Gas Disclosure  Any references in this news release 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. While Madalena  is  very encouraged by the initial results from the CAN-15(h) horizontal well, the flowback information disclosed above should  be considered preliminary and  is  not indicative of the well's long-term performance. Ongoing technical work and operational enhancements are  expected to  continue to  improve the  Company's  understanding of the ultimate potential of its Sierras Blancas horizontal  oil  play.  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.  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, assets,  wells and/or operations  that are in  geographical  proximity to or  believed to  be on-trend with  lands held  by Madalena.  Such  information  has  been  obtained  from  public  sources,  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 or  the  actual  characteristics  and  quality  of  Madalena's  assets.   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  such  information will prove to be analogous in the future. 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.  Notes to Disclosure of Resources  (1) "Total Petroleum Initially In Place" means DPIIP + UPIIP. When     calculating DPIIP, there is no material production or reserves associated     with these properties. Contingent resources is the only category of DPIIP     that has been categorized as recoverable. Prospective resources is the     only category of UPIIP that has been categorized as recoverable. There is     no certainty that it will be commercially viable to produce any portion of     the contingent resources referred to in the tables above. There is no     certainty that any portion of the prospective resources referred to in the     tables above will be discovered. If discovered, there is no certainty that     it will be commercially viable to produce any portion of these resources. (2) Certain volumes are arithmetic sums of multiple estimates of contingent &     prospective resources, which statistical principles indicate may be     misleading as to volumes that may actually be recovered. Readers should     give attention to the estimates of individual classes of resources and     appreciate the differing probabilities of recovery associated with each     class as explained herein. Details on the categories that comprise these     calculations are in the tables that follow.       Coiron Amargo Discovered Petroleum Initially In Place ^(1) (net to Madalena)                     Oil, NGLs and Natural Gas at December 31, 2012               Oil & NGLs                Natural Gas            Oil & NGLs + Natural                 (MMbbl)                     (Tcf)                   Gas (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10  Vaca Muerta  242.6    244.4    246.2    0.077    0.077    0.078    255.4    257.4    259.2 Shale   Note: (1) When calculating DPIIP, there is no material production or reserves      associated with these properties. All DPIIP, other than contingent      resources, has been categorized as unrecoverable. There is no certainty      that it will be commercially viable to produce any portion of the      resources referred to in the table above. (2)  These volumes are arithmetic sums of multiple estimates, which      statistical principles indicate may be misleading as to volumes that may      actually be recovered. Readers should give attention to the estimates of      individual classes of resources and appreciate the differing      probabilities of recovery associated with each class as explained      herein.                  Coiron Amargo Contingent Resources^(1) (net to Madalena)                      Oil, NGLs and Natural Gas at December 31, 2012               Oil & NGLs                Natural Gas          Oil & NGLs + Natural Gas                 (MMbbl)                     (Tcf)                     (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10  Vaca Muerta   5.8      18.3     30.6    0.002    0.006     0.01     6.1      19.3     32.2 Shale  Notes: (1) There is no certainty that it will be commercially viable to produce any     portion of the resources referred to in the table above.      Coiron Amargo Undiscovered Petroleum Initially In Place ^ (1) (net to Madalena)                     Oil, NGLs and Natural Gas at December 31, 2012                       Oil & NGLs                Natural Gas           Oil & NGLs +                          (MMbbl)                     (Tcf)               Natural Gas                                                                            (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10  Vaca Muerta 2,687.8  2,717.5  2,747.5   0.851    0.861    0.870   2,829.7  2,860.9  2,892.5 Shale  Notes: (1) Prospective resources is the only category of UPIIP that has been     categorized as recoverable. There is no certainty that any portion of the     resources referred to in the table above will be discovered. If     discovered, there is no certainty that it will be commercially viable to     produce any portion of these resources. (2) These volumes are arithmetic sums of multiple estimates, which statistical     principles indicate may be misleading as to volumes that may actually be     recovered. Readers should give attention to the estimates of individual     classes of resources and appreciate the differing probabilities of     recovery associated with each class as explained herein.                 Coiron Amargo Prospective Resources^(1) (net to Madalena)                     Oil, NGLs and Natural Gas at December 31, 2012               Oil & NGLs                Natural Gas          Oil & NGLs + Natural Gas                 (MMbbl)                     (Tcf)                     (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10  Vaca Muerta  122.7    249.7    377.2    0.039    0.079    0.119    129.2    262.9    397.1 Shale  Notes: (1) Prospective resources is the only category of UPIIP that has been     categorized as recoverable. There is no certainty that any portion of the     resources referred to in the table above will be discovered. If     discovered, there is no certainty that it will be commercially viable to     produce any portion of these resources.       Curamhuele Undiscovered Petroleum Initially In Place ^ (1) (net to Madalena)                     Oil, NGLs and Natural Gas at December 31, 2012                       Oil & NGLs                Natural Gas           Oil & NGLs +                          (MMbbl)                     (Tcf)               Natural Gas                                                                            (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10 Lower Agrio  3,835.7  4,763.4  5,834.0   2.777    3.955    5.443   4,298.4  5,422.5  6,741.2 Shale  Vaca Muerta 7,884.8  9,642.9  11,762.2  17.405   52.017   90.208  10,785.7 18,312.3 26,796.9 Shale Total  11,720.5 14,406.2 17,596.2  20.182   55.971   95.651  15,084.2 23,734.8 33,538.1  Notes: (1) Prospective resources is the only category of UPIIP that has been     categorized as recoverable. There is no certainty that any portion of the     resources referred to in the table above will be discovered. If     discovered, there is no certainty that it will be commercially viable to     produce any portion of these resources. (2) These volumes are arithmetic sums of multiple estimates, which statistical     principles indicate may be misleading as to volumes that may actually be     recovered. Readers should give attention to the estimates of individual     classes of resources and appreciate the differing probabilities of     recovery associated with each class as explained herein.                  Curamhuele Prospective Resources^(1) (net to Madalena)                     Oil, NGLs and Natural Gas at December 31, 2012               Oil & NGLs                Natural Gas          Oil & NGLs + Natural Gas                 (MMbbl)                     (Tcf)                     (MMboe)         Low      Best     High     Low      Best     High     Low      Best     High        Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate          P90      P50      P10      P90      P50      P10      P90      P50      P10 Lower Agrio    86.1    328.6    596.2    0.070    0.266    0.524     97.8    373.0    683.5 Shale  Vaca Muerta  174.7    667.4   1,207.4   0.663    2.942    8.096    285.2   1,157.6  2,556.7 Shale Total   260.8    996.0   1,803.6   0.733    3.208    8.620    382.9   1,530.6  3,240.2  Notes: (1) There is no certainty that any portion of the resources referred to in the     table above will be discovered. If discovered, there is no certainty that     it will be commercially viable to produce any portion of these resources.          Cortadera Undiscovered Petroleum Initially In Place^(1) (net to Madalena)                      Oil, NGLs and Natural Gas at December 31, 2012                 Oil & NGLs                Natural Gas          Oil & NGLs + Natural Gas                   (MMbbl)                     (Tcf)                     (MMboe)           Low      Best     High     Low      Best     High     Low      Best     High          Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate            P90      P50      P10      P90      P50      P10      P90      P50      P10  Basal     46.8    108.8    184.8    16.234   22.706   29.003  2,752.4  3,893.1  5,018.6 Quintuco   Vaca  Muerta    52.8    118.0    184.4    22.277   23.656   25.082  3,765.6  4,060.6  4,364.7  Shale  Total     99.6    226.8    369.2    38.510   46.362   54.085  6,518.0  7,953.7  9,383.3  Notes: (1) Prospective resources is the only category of UPIIP that has been     categorized as recoverable. There is no certainty that any portion of the     resources referred to in the table above will be discovered. If     discovered, there is no certainty that it will be commercially viable to     produce any portion of these resources. (2) These volumes are arithmetic sums of multiple estimates, which statistical     principles indicate may be misleading as to volumes that may actually be     recovered. Readers should give attention to the estimates of individual     classes of resources and appreciate the differing probabilities of     recovery associated with each class as explained herein.                    Cortadera Prospective Resources^(1) (net to Madalena)                      Oil, NGLs and Natural Gas at December 31, 2012                 Oil & NGLs                Natural Gas          Oil & NGLs + Natural Gas                   (MMbbl)                     (Tcf)                     (MMboe)           Low      Best     High     Low      Best     High     Low      Best     High          Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate            P90      P50      P10      P90      P50      P10      P90      P50      P10  Basal     5.6      14.0     27.2    1.745    2.932    4.569    296.5    502.6    788.7 Quintuco   Vaca  Muerta    6.4      14.8     27.6    1.958    3.189    4.428    332.7    546.3    765.6  Shale  Total     12.0     28.8     54.8    3.703    6.121    8.997    629.2   1,048.9  1,554.3  Notes: (1) Prospective resources is the only category of UPIIP that has been     categorized as recoverable. There is no certainty that any portion of the     resources referred to in the table above will be discovered. If     discovered, there is no certainty that it will be commercially viable to     produce any portion of these resources.                              Definitions                                                                   "Contingent resources"      Definition: Those quantities of petroleum                             estimated, as of a given date, to be potentially                             recoverable from known accumulations using                             established technology or technology under                             development, but which are not currently                             considered to be commercially recoverable due to                             one or more contingencies. Contingencies may                             include factors such as economic, legal,                             environmental, political, and regulatory matters                             or a lack of markets. It is also appropriate to                             classify as contingent resources the estimated                             discovered recoverable quantities associated with                             a project in the early evaluation stage.                             "Discovered petroleum       Definition: That quantity of petroleum that is initially-in-place" or      estimated, as of a given date, to be contained in "discovered resources" or   known accumulations prior to production. The "DPIIP"                     recoverable portion of discovered petroleum                             initially-in-place includes production, reserves                             and contingent resources; the remainder is                             unrecoverable.                             "Prospective resources"     Definition: Those quantities of petroleum                             estimated, as of a given date, to be potentially                             recoverable from undiscovered accumulations by                             application of future development projects.                             Prospective resources have both an associated                             chance of discovery and a chance of development.                             "Total petroleum            Definition: That quantity of petroleum that is initially-in-place", "total estimated to exist originally in naturally resources" or "TPIIP"       occurring accumulations; equal to DPIIP plus                             UPIIP. It includes that quantity of petroleum that                             is estimated, as of a given date, to be contained                             in known accumulations, prior to production, plus                             those estimated quantities in accumulations yet to                             be discovered.                             "Undiscovered petroleum     Definition: That quantity of petroleum that is initially-in-place",        estimated, on a given date, to be contained in "undiscovered resources" or accumulations yet to be discovered. The "UPIIP"                     recoverable portion of undiscovered petroleum                             initially-in-place is referred to as prospective                             resources; the remainder is unrecoverable.  Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.    SOURCE Madalena Energy Inc.  Contact:  Kevin Shaw, P.Eng, MBA President and Chief Executive Officer Madalena Ventures Inc. Phone: (403) 262-1901 (Ext. 230) kdshaw@madalenaenergy.com  Thomas Love, CA VP, Finance and Chief Financial Officer, Madalena Ventures Inc. Phone: (403) 262-1901 (Ext. 227) tlove@madalenaenergy.com  
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