Madagascar Oil has successfully resolved the outstanding issues with the Government of Madagascar surrounding its three exploration blocks.

Key Updates •Following a recent Management Committee Meeting with OMNIS, the state regulatory agency responsible for overseeing the country's oil and gas operations, the validity of the Production Sharing Contracts ("PSCs") for Blocks 3105, 3106 and 3107 was confirmed and the forward work program and budgets for the blocks were approved. •This means that Madagascar Oil and the Government have now resolved the outstanding issues surrounding the Exploration Blocks and there are no further disputes with the Government of Madagascar regarding the Company's licenses. •The Company and OMNIS also approved formal amendments to the PSCs which recognize and adopt the minimum work program for the remainder of the exploration term, and allow for the 15 month delay since December 2010 to be added to the end of the exploration period for each of the Exploration Blocks. •With the approval of the amendments and the work programs, activity will begin immediately to initiate a planned airborne gravity gravimetric survey of approximately 13,049 miles (21,000 kilometers) at a total cost of approximately $3.3 million for the three blocks. •Madagascar Oil announced that the Force Majeure event on the Exploration Blocks has now terminated.

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