An anonymous director reports

MADALENA ANNOUNCES Q2 - 2016 RESULTS AND A REVIEW OF STRATEGIC ALTERNATIVES

Madalena Energy Inc. has provided its operating and financial results for the three and six months ended June 30, 2016. Selected information is outlined herein and should be read in conjunction with Madalena's unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2016, 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. (All dollar figures are expressed in U.S. dollars unless otherwise stated.)

  
                               SUMMARY FINANCIAL AND OPERATIONAL RESULTS  

                                                       Three months ended          Six months ended
                                                             June 30,                  June 30,
                                                       2016          2015         2016         2015
Financial ($000s, except per-share amounts)                                                      
Oil and gas revenue                                 $13,070       $24,115       $27,881     $43,008
Funds flow from continuing operations (1)             1,821         4,278        4,980        9,412
Per share -- basic and diluted (1)                     0.00          0.01         0.01         0.02
Net (loss) from continuing operations                (3,491)       (3,209)      (9,983)      (2,143)
Per share -- basic and diluted (1)                    (0.00)        (0.01)       (0.02)       (0.00)
                                                                                                   
Operating                                                                                          
Average daily sales                                                                                
Crude oil and NGLs -- bbl/d                           2,084         3,092        2,246        2,873
Natural gas -- Mcf/d                                  2,636         4,455        2,806        4,176
Total -- boe/d                                        2,523         3,834        2,714        3,569
Average sales prices                                                                               
Crude oil and NGLs -- $/bbl                          $62.41        $78.36       $62.29       $75.83
Natural gas -- $/Mcf                                   5.15          5.11         4.73         4.72
Total -- $/boe                                        56.93         69.11        56.45        66.57
Operating netbacks (2) -- $/boe                       26.23         30.40        25.48        30.20
                                                    =======       =======      =======      =======
                                                                                                   
(1) This table contains the term funds flow from continuing operations, which is a non-
generally accepted accounting principle measure and should not be considered an 
alternative to, or more meaningful than, cash flows from operating activities as 
determined in accordance with international financial reporting standards as an 
indicator of the company's performance. Funds flow from operations and funds flow from 
operations per share (basic and diluted) do not have any standardized meanings 
prescribed by IFRS and may not be comparable with the calculation of similar measures
for other entities. Management uses funds flow from continuing operations to analyze 
operating performance and considers funds flow from continuing operations to be a key 
measure as it demonstrates the company's ability to generate the cash necessary to 
finance future capital investment. The reconciliation between funds flow from continuing 
operations and cash flows from operating activities can be found in management's 
discussion and analysis. Funds flow from continuing operations per share is calculated 
using the basic and diluted weighted-average number of shares for the period, consistent 
with the calculations of earnings (loss) per share.
(2) Operating netback is a non-GAAP measure calculated as the average per barrel of oil 
equivalent of the company's oil and gas sales, less royalties and operating costs.  

Review of strategic alternatives

Madalena has initiated a review of strategic alternatives. Evercore Group LLC, which had been retained to assist in securing a joint venture partner for the Curamhuele block in Argentina, has had its mandate broadened to encompass this review of strategic alternatives. In part, the review was prompted by a number of unsolicited expressions of interest received by the company after the May 16, 2016, news release announcing the initial engagement of Evercore. These strategic alternatives may include, among other things, asset sales, a merger, sale or recapitalization transaction, joint ventures, or other opportunities.

The company does not intend to provide updates on this process until such time as the board of directors deems it appropriate. There can be no guarantee that this review will result in a transaction(s) or, if a transaction(s) is undertaken, as to its terms or timing.

About Madalena Energy

Madalena is an independent, Canadian-headquartered Argentina-focused upstream oil and gas company with operations in four provinces of Argentina, where it is focused on the delineation of unconventional resources in the Vaca Muerta shale, Lower Agrio shale and Loma Montosa oil plays. The company is implementing horizontal drilling and completions technology to develop both its conventional and resource plays.

We seek Safe Harbor.