An anonymous director reports

MADALENA ANNOUNCES FIRST QUARTER 2015 FINANCIAL AND OPERATIONAL RESULTS

Madalena Energy Inc. has released its financial and operating results for the three months ended March 31, 2015. Selected financial and operational information is outlined herein and should be read in conjunction with Madalena's unaudited interim financial statements for the three months ended March 31, 2015, and the associated management's discussion and analysis, which are available for review under the company's profile at SEDAR and on the company's website.

Highlights (in Canadian dollars unless otherwise specified)

Highlights for the three months ended March 31, 2015, included:

• In first quarter 2015, Madalena's average realized prices in Argentina for crude oil and natural gas liquids were $90.43 per barrel and for natural gas were $5.30 per thousand cubic feet.
• Oil and gas production increased 215 per cent to 3,586 barrels of oil equivalent per day compared with 1,141 boe per day in first quarter 2014.
• Current production is approximately 4,000 boe per day (79 per cent oil and NGLs).
• The company realized a 22-per-cent increase in oil and gas revenue per boe to $74.78 per boe compared with $61.38 per boe in first quarter 2014.
• Corporate operating netbacks increased 12 per cent to $33.18 per boe compared with $29.62 per boe in first quarter 2014.
• Argentina operating netbacks averaged $37.16 per boe in first quarter 2015.
• Funds flow from operations increased 68 per cent and 27 per cent to $6.0-million compared with $3.6-million and $4.4-million in first quarter 2014 and fourth quarter 2014, respectively.
• The company drilled, completed and placed on production Madalena's fourth Sierras Blancas horizontal well at Coiron Amargo (35-per-cent working interest).
• It drilled a Loma Montosa light oil horizontal well (100-per-cent WI) and completed with a 12-stage frack, setting up a scalable resource play for development.
• The company entered into a three-year evaluation phase contract at Coiron Amargo Sur (southern portion of the Coiron Amargo block), securing key unconventional Vaca Muerta shale acreage.

                 SUMMARY FINANCIAL AND OPERATIONAL RESULTS
                                                                              
                                                   Three months ended March 31,
                                                           2015           2014    
Financial -- Canadian $000s, except per-share amounts                          
Oil and gas revenue                                     $24,135         $6,306
Funds flow from operations                                6,006          3,569
Per share -- basic and diluted                             0.01           0.01
Net income (loss)                                        (1,771)           297
Per share, basic and diluted                              (0.00)          0.00
                                                                             
Operating                                                                     
Average daily sales                                                           
Crude oil and NGLs -- bbl/d                               2,801            644
Natural gas -- Mcf/d                                      4,711          2,979
Total -- boe/d                                            3,586          1,141
Average sales prices                                                          
Argentina                                                                     
Crude oil and NGLs -- $/bbl                              $90.43         $85.31
Natural gas -- $/Mcf                                       5.30           4.60
Total -- $/boe                                            78.91          82.82
Canada                                                                        
Crude oil and NGLs -- $/bbl                               35.87          78.59
Natural gas -- $/Mcf                                       2.81           5.87
Total -- $/boe                                            26.78          53.44
Corporate                                                                     
Crude oil and NGLs -- $/bbl                               87.54          81.66
Natural gas -- $/Mcf                                       4.87           5.84
Total -- $/boe                                            74.78          61.38
Corporate operating netbacks                              33.18          29.62

Argentina operations update

Puesto Morales (100-per-cent working interest) field -- horizontal drilling of Loma Montosa oil resource play:

• As disclosed in a news release dated April 8, 2015, Madalena drilled and completed a Loma Montosa horizontal well (PMS-1135(h)) with a 12-stage frack. The well tested 860 boe per day and was tied into existing facilities on April 10, 2015. The well is still flowing up 5.5-inch casing with the first 30 days of production averaging 302 barrels of oil per day and an estimated 1.6 million cubic feet per day of gas for a total of 570 boe per day.
• Production results continue to exceed the company's type curve for the Loma Montosa resource play.
• The company is in the process of installing a production string (tubing) to optimize the flow and to allow for future pumping operations on the well.
• Madalena has a large inventory of horizontal development locations on the Puesto Morales block, and the company is currently taking steps to survey and prepare environmental permit applications for follow-up locations to the recent PMS-1135(h) horizontal success.

Coiron Amargo (35-per-cent WI) block -- block contract update and Sierras Blancas horizontal exploitation:

• The Coiron Amargo block (34,951 net acres) is divided into two regions called Coiron Amargo Norte (northern portion of the block) and Coiron Amargo Sur (southern portion of the block). Coiron Amargo Norte is currently held under a 25-year exploitation (development) concession until 2038 with no further firm commitments remaining on this portion of the block.
• Following a successful block renegotiation process, the company received approval on April 16, 2015, by way of an official decree signed by the Province of Neuquen, for a three-year evaluation-phase contract on Coiron Amargo Sur (south portion of the block). Coiron Amargo Sur is a key unconventional shale block located in the heart of the oil window for the Vaca Muerta shale and is a core asset within the company's portfolio. Madalena and its partners have until Nov. 8, 2017, to further evaluate the southern portion of the block. The company's share of the work commitment is $17.5-million (U.S.), which is to be incurred by Nov. 8, 2017. Following this three-year evaluation phase, Madalena is eligible to enter into a further exploitation (development) concession and/or enter into additional evaluation-phase periods to further evaluate Coiron Amargo Sur.
• As disclosed in a news release dated April 8, 2015, the company's fourth Sierras Blancas horizontal well at Coiron Amargo Norte CAN-16h is now on production. The average production over the first 60 days was 450 bopd (158 bopd WI) and 675,000 cubic feet per day (236,000 cubic feet per day WI) for a total of 489 boe per day (171 boe per day WI). In early May, the choke was opened to seven millimetres, and production increased to 480 bopd (168 bopd WI) and one million cubic feet per day (350,000 cubic feet per day WI) for a total of 650 boe per day (227 boe per day WI) at a flowing pressure of 1,225 pounds per square inch.

Regulated Argentine oil and gas price market:

• In Argentina, oil prices are regulated and set by the government for product sold into the domestic oil market, which is where Madalena sells the oil from its Argentine operations. When world prices fell sharply in the latter half of 2014 and into 2015, Argentina prices continued to remain relatively stable. The Medanito oil price posting for April and May, 2015, has been set at $76 (U.S.) per barrel compared with a first quarter 2015 average of $76.30 (U.S.) per bbl. Madalena's average discount to this posting for quality and transportation is approximately $4 (U.S.) per bbl.
• On Feb. 2, 2015, the government of Argentina announced a new oil incentive program. The program runs from Jan. 1, 2015, to Dec. 31, 2015, and could be extended for one year. To stimulate production and to provide an additional incentive to producers to invest further, the government of Argentina has set a $3-(U.S.)-per-barrel royalty-free bonus payment on all production for companies of Madalena's size, which are able to keep their quarterly production above 95 per cent of its fourth quarter 2014 production levels. For the first quarter of 2015, Madalena believes it has qualified for this incentive and is making the appropriate application to receive this bonus payment on its Argentine production.
• Natural gas prices in Argentina are fixed by the regulator in U.S. dollars per million British thermal units. For Madalena's current producing fields, the company has recently entered into a contract in Argentina for the winter period between May and September, 2015, setting gas prices at $5.30 (U.S.) per million British thermal units compared with last winter (2014) at $5.20 (U.S.) per million British thermal units during the same period.

Canada operations update:

• As disclosed in a news release dated Jan. 30, 2015, Madalena was advised by Keyera Corp. that Keyera's Paddle River gas plant would be shut down for a minimum period of two months commencing Feb. 1, 2015, due to current economic conditions and recent commodity price declines in North America. As a result of the gas plant shutdown, Madalena temporarily suspended production of approximately 660 boe per day in Western Canada (40 per cent oil) on Feb. 1, 2015.
• As of March 10, 2015, the company was successful in restoring 140 boe per day (100 per cent oil) of the suspended production.
• The company, along with Keyera, has been evaluating various alternatives to bring the remaining shut-in volumes (estimated 400 boe per day) in the Paddle River area back on stream. Madalena expects to restore the rest of the company's Western Canadian production in the coming months.

Credit facilities update

Argentine debt facility

As at March 31, 2015, there were no credit facilities in place in Argentina. With 90 per cent of the company's conventional oil and gas assets in Argentina and a solid cash flow platform from its operations, Madalena has sufficient assets to leverage its balance sheet. On May 28, 2015, as an initial step in its anticipated broader debt financing strategy, Madalena closed a 90-million-Argentine-peso or $12.5-million (Canadian) loan with Industrial and Commercial Bank of China (Argentina) S.A.

Canadian debt facility

Subsequent to the year-end, in conjunction with the annual review, Madalena's Canadian credit facility was reduced from $10-million to $7-million, of which the maximum draw is currently limited to $3.5-million. In addition to this credit facility, the company's acquisition/development demand loan credit facility remains available to a maximum of $3-million. As of March 31, 2015, the company had utilized $2.5-million of the operating demand loan credit facility and had cash on hand in Canada in the amount of $2.1-million (U.S.). The acquisition/development demand loan credit facility was unutilized at March 31, 2015. Both the credit and acquisition/development facilities are subject to a periodic review by the bank, and the next review is scheduled on or before June 30, 2015.

Outlook for 2015

Madalena's current production is approximately 4,000 boe per day (79 per cent oil and natural gas liquids) with 3,800 boe per day (80 per cent oil and NGLs) in Argentina and 200 boe per day (55 per cent oil and NGLs) in Canada.

Over the last several months, Madalena has commenced operational planning related to the drilling of four resource plays in Argentina and continued horizontal development of its light oil assets. The four resource plays include the Loma Montosa oil resource play, Vaca Muerta shale, Lower Agrio shale and Mulichinco liquids-rich gas resource play.

At Coiron Amargo, Madalena and its partners plan to drill additional horizontal wells into the Sierras Blancas light oil formation later in 2015 and in 2016. To date, the company has drilled, completed and placed on production four successful horizontals in the Sierras Blancas and has an inventory of horizontal development wells identified on four main pools on the northern portion of the block. Madalena and its partners are also planning to execute the first horizontal multistage frack on the block in the Vaca Muerta shale (oil) and expect this to commence in first quarter 2016.

At Curamhuele, Madalena is planning its re-entry and testing program of the Lower Agrio oil resource play. The Lower Agrio is approximately 450 metres thick at Curamhuele, the Yapia re-entry location. Concurrently with the Lower Agrio re-entry operation, the company intends to complete and further evaluate the Mulichinco at Curamhuele. The Mulichinco is a liquids-rich gas resource play (approximately 200 metres thick) comprising the fourth resource the company intends to evaluate in 2015.

The company is well positioned to achieve its stated goals and objectives to advance four scalable resource plays in Argentina in 2015. With early success on the Loma Montosa, activity commencing on the Lower Agrio shale and Mulchinco over the next two quarters, and a continued focus on the company's horizontal development plays, 2015 will be the company's most active year in Argentina.

We seek Safe Harbor.