Last updated on April 17, 2014 at 17:30 EDT

Madalena Ramps Up Domestic Drilling Operations with Two Rigs Focused on Three Horizontal Resource Plays & Production Growth; Internationally, Drilling Moves Ahead to Delineate the Vaca Muerta Shale as One of Three Shale Plays Across its Blocks

December 6, 2012

TSXV Trading Symbol: MVN

CALGARY, Dec. 6, 2012 /PRNewswire/ – Madalena Ventures Inc. (“Madalena“) (TSX-V: MVN), an international and Canadian (“domestic”) focused
upstream oil and gas company is pleased to provide the following
operational update.

Canadian Operations Update – Greater Paddle River Core Area:

Madalena has moved two drilling rigs into its core area of operations
located in the Greater Paddle River Area of Central Alberta, where the company holds a significant acreage
position of 197 gross (153 net) sections of land (78% average working
interest and largely operated by Madalena) across multiple light oil
and liquids-rich gas resource plays.  Madalena’s focus domestically is
to exploit its large inventory of horizontal development locations with
the expectation to increase production and cash flow year over year.

The plan between now and spring break-up is to drill, multi-stage frac,
equip and place on production four to five gross (4.0 to 4.2 net)
horizontals focused across three key resource plays.  To increase
production and reserves, the focus throughout 2013 will be to drill
horizontals targeting: 1.) Ostracod oil, 2.) Notikewin / Falher / Wilrich liquids-rich gas stacked development plays, and 3.) Nordegg oil & liquids-rich gas

Horizontal Resource Play #1 focuses on Ostracod light oil and is highlighted by a 54 net section position on the play and over 50
already identified, drill ready, horizontal locations.  Madalena’s most
recent Ostracod horizontal (Paddle River 01-05) which was put on-stream
in mid-October 2012 is currently exceeding the company’s expectations
with this horizontal continuing to flow without the assistance of
pumping equipment.  In July 2012 the well tested at an average rate of
438 boe/d (73% oil & liquids) over a three-day period following a
fourteen stage frac completion.  The IP 30 day average rate on this
horizontal was 307 boe/d (65% oil & liquids).

Horizontal Resource Play #2 focuses on the low-risk development of Madalana’s regionally stacked
Mannville channel trend highlighted by 133 net sections with liquids-rich Notikewin / Falher / Wilrich stacked development plays, vertical well production or control throughout, already in place
underutilized pipeline & infrastructure in the area, with liquid
contents in the range of 28 to 35 bbls/mmcf, and significant running
room for horizontal development.

Horizontal Resource Play #3 which is expected to be drilled, multi-stage frac’d and tested in the
near-term involves an emerging oil & liquids-rich Nordegg play.  Madalena has 144 net sections of Nordegg rights, containing or
proximal to vertical well production which produces oil, and/or high
liquids-rich content gas of over 100 bbls/mmcf.  Madalena plans to
utilize North American horizontal technology to test this emerging
resource play which is widespread across its sizeable land position.

International Operations Update РNeuqu̩n Basin

Madalena, which holds three large blocks (or concessions) within the
prolific Neuquén basin in Argentina, continues to move forward to
delineate its large in-place oil & gas unconventional resources with
shale positions in the Vaca Muerta, Agrio and Los Molles shales.  Madalena holds 135,000 net acres across the Coiron Amargo
(35,027 net acres), Curamhuele (50,400 net acres) and Cortadera (49,600
net acres) blocks.

On the Coiron Amargo Block (35% working interest), the CAN 8 development
well located 800 meters south east of the CAN 7 well is drilling ahead
at approximately 7,824 feet to a planned target depth of approximately
10,430 feet. The objectives for the CAN 8 well are both the
conventional light oil in the Sierras Blancas formation as well as to
further delineate and assess the Vaca Muerta shale on the block. Offset
to CAN 8, production from the CAN-7 Sierras Blancas alone has now
reached over 60,000 bbls since coming on stream in July this year and
continues to flow at over 300 bopd gross with associated gas.

At the end of November, Argentina announced plans to increase gas prices
to $7.50/mmbtu for new gas developments. With import prices
significantly above this, gas related drilling activity in the country
will contribute to reduced gas imports while receiving a substantially
higher price than obtained previously.  All three of Madalena’s Blocks
have the potential to benefit in the future from this recent
announcement via the contribution of new gas production from both
conventional zones of interest and the large-in-place unconventional
shale resources.

Corporate Update – Newly Focused Team, Production Update and Balance
Sheet Strength

With a full cycle corporate, technical and operational team now in
place, Madalena is well positioned with expertise to operate assets
both domestically & internationally and is focused on delivering
results in 2013 onward. Madalena’s current corporate production is
approximately 950 boe/d net (60 % oil and liquids) including an
estimated 650 boe/d net (51% oil and liquids) from its domestic assets
and 300 boe/d net (81 % oil and liquids) from its international
assets.  Madalena continues to have a strong balance sheet for
go-forward growth, with approximately $36 million in positive working
capital, zero debt and an undrawn initial $4.75 million bank facility
with a major Canadian bank.

Reader Advisories

The information in this news release contains certain forward-looking
statements. These statements relate to future events or our future
performance. 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 operational activities to be conducted by the
Company.  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.

Any references in this news release to test rates, flow rates, initial
and/or final raw test or production rates, early production 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.

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.

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 Ventures Inc.

Source: PR Newswire