Mr. Kevin Shaw reports

MADALENA ANNOUNCES RE-PRICING OF BOUGHT DEAL OFFERING

Madalena Energy Inc. has repriced its previously announced subscription receipt offering. Pursuant to the amended agreement, the company will issue 98.1 million subscription receipts, on a bought deal basis, at a price of 51 cents per common share for aggregate gross proceeds of $50,031,000.

Madalena has also granted the underwriters under the offering an option to purchase up to an additional 14,715,000 subscription receipts at a price of 51 cents per common share to cover overallotments, if any, for additional gross proceeds of up to approximately $7,504,650. The overallotment option is exercisable in whole or in part at any time up to the date that is 30 days following the closing of the offering.

As previously announced, the company will use the net proceeds from the offering to finance the remaining cash component for the acquisition of the Argentinean business units of Gran Tierra Energy Inc. The purchase price for the acquisition is $63-million (U.S.), payable in $49-million (U.S.) cash and $14-million (U.S.) in common shares of Madalena. Pursuant to the definitive agreements underlying that acquisition, Madalena must pay the share consideration amount at the same deemed issue price as the offering; accordingly, Madalena will issue 29,831,537 common shares for the share consideration amount for the acquisition.

The subscription receipts will be offered by way of a short form prospectus to be filed in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia pursuant to National Instrument 44-101 -- short form prospectus distributions. Madalena will apply to list the subscription receipts and the common shares thereunder on the TSX Venture Exchange.

The gross proceeds from the offering will be held in escrow pending the satisfaction of all conditions to the completion of the acquisition (other than financing), provided that the closing date of the acquisition is on or before July 31, 2014, upon which time each subscription receipt will entitle the holder to receive a common share, without further payment or action on the part of the holder, upon the closing of the acquisition. If the acquisition is not completed on or before July 31, 2014, or it is terminated at an earlier time, then the purchase price for the subscription receipts will be returned to subscribers, together with a pro rata portion of interest earned on the escrowed funds.

Completion of the acquisition and the offering are subject to certain conditions including the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. Closing of the offering is expected to occur on or about June 24, 2014, and the acquisition is expected to close on or about June 30, 2014.

Madalena estimates pro forma consolidated annual cash flow from operations of $35-million (U.S.) to $45-million (U.S.) over the next 12 months with the corporation having the ability, when combined with cash on hand and available credit, to execute a $50-million (U.S.) to $60-million (U.S.) capital program over the next 12 to 18 months while maintaining a strong balance sheet. Madalena will provide additional go-forward guidance subsequent to the closing of the acquisition and the approval of a consolidated budget by the corporation's board of directors.

Pro forma the acquisition and the offering and after all transaction costs, the company estimates positive working capital of approximately $5.0-million (U.S.).

Updated acquisition highlights

• Acquisition cost per flowing boe of approximately $19,091 (U.S.), based on current estimated production at the expected closing date of the acquisition of 3,300 barrels of oil equivalent per day (boe/d);
• Reserve life index of 5.41 years, based on current estimated production and adjusted proved plus probable reserves;
• Recycle ratio of approximately 2.1 times, based on first quarter 2014 operating property netbacks of $33.93 (U.S.) per barrel of oil equivalent and acquisition costs of approximately $16.12 (U.S.) per boe;
• Key producing infrastructure, including batteries and pipelines;
• Approximately 890,000 net acres of developed and undeveloped lands;
• Lands have an average working interest of approximately 83 per cent, and the net production acquired is more than 94 per cent operated.

Attached is a summary of production, land and reserves information that is relevant to Madalena, prior to, and following, the acquisition and the offering.

                      Madalena(1) Acquisition(2) Adjustments(3)    Pro forma

Current production(6)                                                       
Oil and NGLs (bbl/d)          960          2,610              -        3,570
Gas (Mcf/d)                 3,840          4,150              -         7990
Boe (boe/d)                 1,600          3,300              -        4,900
Oil and NGLs (%)               60             79              -           72
Land (net acres)          239,000        890,000                   1,129,000
Reserves(4)                                                                 
Proved                                                                      
Oil and NGL (Mbbl)          1,350          4,248           (612)       4,986
Gas (MMcf)                  8,032          5,599           (510)      13,121
MBOE (6:1)                  2,689          5,181           (697)       7,173
Proved plus probable                                                        
Oil and NGLs (Mbbl)         2,373          6,295           (900)       7,768
Gas (MMcf)                 13,651          7,615           (900)      20,366
MBOE (6:1)                  4,648          7,563         (1,050)      11,161
                                                                            
Proved FDC(5) (US$mm)          20             46            (21)          45
Proved plus probable                                                        
FDC (US$mm)                    33             77            (35)          75

Accretion analysis       Madalena    Acquisition      Pro Forma    Accretion
Diluted shares (mm)         413.5          127.9          541.4            -
Proved reserves (boe                                                        
per mm common                                                              
shares)                       6.5           40.5           13.3         104%
2P reserves (boe per                                                        
mm common shares)            11.2           59.1           20.6          83%
Current production                                                          
(boe/d per mm common                                                       
shares)                       3.9           25.8            9.1         134%
Notes:

1.  Based on the independent reserve reports of Madalena evaluating the
    crude oil, natural gas liquids and natural gas reserves of the company
    as at Dec. 31, 2013, prepared by an independent reserves evaluator in
    accordance with National Instrument 51-101 -- standards of disclosure for
    oil and gas activities and the COGE handbook. 
2.  Based on the independent reserve reports of Gran Tierra evaluating the
    crude oil, natural gas liquids and natural gas reserves of Gran Tierra
    as at Dec. 31, 2013, prepared by an independent reserves evaluator in
    accordance with NI 51-101 and the COGE handbook. 
3.  Adjustments to the acquisition reserves were made pursuant to internal
    management estimates conducted by a qualified reserves engineer.
    Adjustments consisted of reduced PUD locations due to rescheduling or
    removal of proven undeveloped and probable locations on the subject
    assets and acreage consolidations. 
4.  Reserves are "gross reserves," being working interest share of reserves
    before the deduction of royalties owned by others. 
5.  "FDC" means future development costs. Madalena converted to U.S. dollars 
    at 92 U.S. cents per $1 (Canadian). 
6.  Based on field estimates.

We seek Safe Harbor.