#114 May 2012 Madagascar Oil Limited Management Update 14 May 2012 MADAGASCAR OIL Not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan. Investor Update 1#2Disclaimer MADAGASCAR OIL This presentation (the "Presentation") is being made available publicly by Madagascar Oil Limited (the "Company") for information purposes only and does not constitute an offer or invitation to subscribe for or purchase any securities. Neither the Presentation nor anything contained in it nor the fact of its distribution shall form the basis of, be relied on in connection with, be considered to be or act as any invitation or inducement to enter into any contract or commitment whatsoever or otherwise engage in any investment activity (including within the meaning specified in section 21 of the Financial Services and Markets Act 2000). The information contained in the Presentation is for background purposes only and is subject to completion, revision, amendment and verification. The Company is under no obligation to update the Presentation. No reliance should be placed on the information and no representation or warranty (express or implied) is made by the Company, any of its directors or employees or any other person, and, save in respect to fraud, no liability whatsoever is accepted by any such person, in relation thereto. Some statements contained in the Presentation may be forward-looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors. Any forward-looking information contained in the Presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. Past performance of the Company or its shares is not a guide to future performance. The Presentation has been prepared in accordance with English law and the English courts will have exclusive jurisdiction over any disputes arising from or connected with the Presentation. By receiving any of the Presentation you agree to be bound by the foregoing provisions. 14 May 2012 Investor Update 2#3Contents Background and Overview Tsimiroro Heavy Oil Project Tsimiroro Economics Conventional Opportunities Funding and Capitalisation Appendix MADAGASCAR OIL 14 May 2012 Investor Update 3#414 May 2012 Background and Overview MADAGASCAR OIL Investor Update 4#5Madagascar Political Summary MADAGASCAR OIL Madagascar is the 4th largest island in the world covering almost 600,000 sq. KM and a population of 22 million Past socialist economic policies were replaced in the mid 1990s with a World Bank and International Monetary Fund sponsored liberalisation and privatisation schemes In 1993, free presidential and National Assembly elections were held ending 17 years of single-party rule In 2001, Marc Ravalomanana won a highly contested presidential election, but achieved a landslide victory in 2005 during free and fair elections In early 2009, protests over increasing restrictions on opposition press and activities resulted in Ravalomanana stepping down and the presidency was assumed by the mayor of Antananarivo, Andry Rajoelina As a result, the European Union, United States and other world bodies suspended aid to Madagascar In late 2011, the Southern African Development Community (SADC) proposed a road map to new elections. This plan was adopted, resulting in the appointment of a new cabinet with ministers from all 11 political parties. The Madagascar government remains in a transitional state as it seeks to establish a date for elections. The signing of the SADC Roadmap originally anticipated elections in 2012, but that has now moved into 2013 Source: CIA Fact book 14 May 2012 Investor Update 5#6Key Assets Madagascar Oil Limited (MOIL) has the largest onshore footprint in Madagascar comprising five contiguous blocks covering 29,500 km². Tsimiroro (100% MOIL) heavy oil field with 1.7 billon barrels Contingent Original-Oil-in-Place (3.9 billion barrels including prospective category) Steam Flood Pilot anticipated to begin steam injection during Q3-2012 2011 Management analysis showed valuation for P50 NPV10 contingent oil alone of US$6.7 billion 2011 AGG Survey being analysed for potential conventional plays Bemolanga (Total E&P 60% / MOIL 40%) initial efforts directed to a mining project with 1.2 billion barrels Contingent Petroleum-Initially-In-Place - project on hold pending more favorable economics and/or technological advances - amended the PSC in 2011 to pursue conventional plays: conducted an AGG Survey in 2011 which has led to interest in basement features; seismic needed for further assessment US$6.5 million gross carry by Total remains, which will fund the Company's capital commitment through 2012 Exploration Blocks (100% MOIL) Bemolanga Block 3102 Tsimiroro Block 3104 Manambolo Block 3105 Morondava Block 3106 - prior seismic programs and Gore surveys identified 3 to 5 prospects 24,000 line km AGG survey planned for Q2/Q3-2012 over the 3 blocks expecting to pursue farm-out opportunities in late 2012 COMOROS Mayotte administered by FRANCE claimed by COMOROS Mozambique MADAGASCAR OIL Glorioso Islands (FRANCE) Antsiranana 50 Nosy Be Maromokotro Channel Mahajanga field Bemolanga Field (Bitumen) psy Amparafaravola inte Marie Tsimiroro Field (Heavy Oil) AN NANARIV * Antanifotsy Antsirabe Manandaza Block 3107 Fianarantsoa, Manakara INDIAN OCEAN Toliara 20- Ambovombe 25- Tólanaro 0 50 100 km 50 100 mi 50 14 May 2012 Investor Update 9#7Madagascar Oil Acreage Position MADAGASCAR OIL Like Uganda several years ago, Madagascar is relatively unexplored with the current technology. Ра 10530 JEN Grande Compre Maroni Mochów Pemb MOZAMBIQUE Cidade de Nada Turbina de Mogambique Antonio Enos Bassas da India FRANCE Foambouri Muut Aryoun COMOROS Mate Glorioso Islands FRANCE winwinaiballstorms (Cap Ac Antsiranana Artbonda Мауссте by FRANCE, med by COMOROS Nowy Ambicba har Asthany Uganda International boundary District boundary National capital Amama ANTSIRANANA District capital Sambav Rairoad Roed Bagnato Track Ausatby Artlape Antal sha Ads the same name as is cap Bratara 26 A So w Matajarga MAHAJANGAL M Martirisara Tonra Har My Chesh Besalampy Manalanants Ancmang Mozambique Channel Europa Island FRANCE) 14 May 2012 Minanira Avarata Samara Noay Sainte Marie A Gourdary on is not sacessalyaorie Adve Bandar Kapota Demi Triangio SUDAN Gulu Juan de Nova Island FRANCE) Maintrano 310 310 ANTANANARIVO Anorobe Mananara Averasa Ambiondraza Fena Atsinanana TOA MASINA Toamasina DEMOCRATIC REPUBLIC OF THE CONGO Котиз NOSY DAVEN SVELAND Antananariag Arvoninamo Mwalonga Sandra Vatomandry Belo Tsinabing 310 INDIAN OCEAN Khee Artsiraty Arany Mananoro Bin Marondava 3106 3107 venge Ambosi trak Naedib Marja Marombe, FIARRANTSCA Mali Upate Mananjary Bavaratsoa Mtee Kampala Part Bet Estos Kirga Masaka Bustenyi SESE Mourara Toliara По JOLIARA Berghera Ampany Car Santan Morakara Madagascar Faraturoana Province (tarifany) boundary dangy National capital Province (fantany) capital Railroad Road ---- Track Antgisay Tolshare C 100 Ambos F 53 100 Mies T Investor Update RWANDA Kigali Soros Куора Kan Lokicheki Kabog Mera KENYA Palli Kt Kans Quest ISLAMOS Lake Victoria Ma TANZANIA Cheersp island Speke Gut whouse Juter Kakamega Crona Su 7#8MADAGASCAR OIL MOIL Acreage Compares Favourably Acreage held by MOIL in Madagascar is similar in size to acreage in Uganda where recent discoveries have occurred. Madagascar Oil Ltd Acreage Position Uganda acreage: Lake Albert to Lake Edward 2 30 30720 304 3 31200 31-400E 32200 South Sudan 324 33 E 14 May 2012 W E 3102 3104 LEGEND TOWNS LICENSED AREAS UNLICENSED AREAS LAKES Gas Discovery Oil Discovery ROAD NETWORK INTERNATIONAL BOUNDARY 3105 3106 3107 100 km E E KOBORO D.R.Congo BAZA EASE EAS АРЦА KIBALE EA30 BUNCHBUGETO FORT PORTAL KUUWENGE Tanzania 30 Rwanda 30 DOE 3100 20-400 ©Petroleum Exploration and Production Department, February 2012 Investor Update HAY Uganda EAS RHINO CAMP BASIN Size 2,941 sq.km Licensed to Neptune Petroleum (U) Ltd on 27 Sept 2005. EA1 PAKWACH BASIN Size 3058 sq.km Licensed to Tullow Uganda Ltd on 3 Feb 2012 for an exploration period of one year JOBI-RII DISCOVERY AREA Size 598 sq.km Six Discoveries: Ngiri, Jobi, Rii, Jobi- East, Mpyo and Gunya in this area. Discoveries under Appraisal by Tullow Uganda Limited. BULIISA DISCOVERY AREA Size 427 sq km Six discoveries; Ngege, Kasamene, Kigogole, Wairindi, Ngara and Nsoga in this area. Discoveries under Appraisal by Tullow Uganda Operations Pty Ltd. BOGA MASALA KAISO-TONYA DISCOVERY AREA Size 1100 sq.km Four discoveries; Mputa, Nzizi, Ngassa and Waraga in this area. Discoveries under Appraisal by Tullow Uganda Operations Pty Ltd before definition of Production Area. KAMPALA KINGFISHER DISCOVERY AREA Size 344 sq.km Production License granted to Tullow Uganda Ltd on 3rd Feb 2012 KANYWATABA PROSPECT AREA Size 171 sq.km Licensed to Tullow Uganda Ltd on 3 Feb 2012 for an exploration period of six months. EA4B LAKES EDWARD/GEORGE BASIN Size 510 sq.km Licensed to Dominion Petroleum Ltd. 27th July 2007. 0510 20 30 40 100 km 300 3020 240061 33-00 8#9Tsimiroro: Significant Resource Increase In September 2011 Netherland, Sewell & Associates, Inc. (NSAI) re-evaluated the 2009 CPR Tsimiroro data after incorporating the 2010 delineating drilling the 2011 resource evaluation exceeded Management expectations Contingent resources have increased 70% - 75% across low, best and high estimates Prospective resources have increased from nil to 991 mmb in the low estimate c. 175% and c. 275% in the base and high case resource estimates, respectively The NSAI recovery factor for the steam flood is unchanged from the CPR at 70% and the new Best estimate Contingent OOIP result in a recoverable volume (2C) of 1.1 Billion barrels 14 May 2012 MADAGASCAR OIL (STOIIP) Contingent Prospective Total mmb mmb mmb Low estimate NSAI 2009 644 0 644 NSAI 2011 1,100 991 2,091 Increase 70.8% na 224.7% Best estimate NSAI 2009 965 786 1,751 NSAI 2011 1,688 2,189 3,877 Increase 74.9% 178.5% 121.4% High estimate NSAI 2009 1,412 1,843 3,255 NSAI 2011 2,459 6,872 9,331 Increase 74.2% 272.9% 186.7% Investor Update 9#10Government Relations: Licenses in Good Standing Background MADAGASCAR OIL In December 2010, the Company's Tsimiroro block and exploration block licences came under threat. MOIL declared force majeure in March 2011 and began arbitration proceedings in April 2011. Tsimiroro In June 2011, OMNIS and the Ministry of Mines & Hydrocarbons acknowledged that the Tsimiroro Production Sharing Contract (PSC) was valid and that its validity had never been in question. In approving the 2012-2013 work programme, OMNIS and the Ministry acknowledged that MOIL would be exercising its option to a 2 year extension, effectively extending the contract term to August 2014, plus an additional 6 month extension if needed to account for the force majeure delay. Exploration Blocks In April 2012, OMNIS confirmed the validity of the PSC's for Blocks 3105, 3106, and 3107, recognised and adopted the work programme for the remainder of the exploration term to December 2014, plus an additional 15 month extension to account for the force majeure delay, which effectively extends the exploration period to March 2016. Bemolanga Total E&P, MOIL, and OMNIS are in discussions regarding a proposed contract amendment and extension allowing for a seismic programme to better assess prospects for drilling a well on a conventional target. The current phase expires in June 2012. VAT Dispute The Company continues its appeal of a long standing dispute with the government for approximately US$ 4 million value added tax on foreign services, plus US$ 2.8 million of interest and penalties relating to the 2007 and 2008 tax years. In January 2012, the Company filed an appeal with the Council of State, the judiciary body that hears final appeals of tax matters, in order to protect its legal rights. 14 May 2012 Investor Update 10#11Key Milestones Corporate Blocks Exploration Bemolanga Tsimiroro 14 May 2012 Steam Flood Pilot construction completed NSAI First Update Oil 2011-12 AGG/Drill Initial Steam Flood Pilot Results Anticipated PSC Amendment Seismic Programme and Processing Seismic Results/Next Steps Airborne Gravity (AGG) AGG Programme Survey results Begin Corp. Social Resp. U.S. ADR Programme Listing Begin farm- out marketing program Select strategic alternative (Farm-In, Sale, Development) Q2 Q3 Q4 2012 2012 2012 Q1 2013 Q2 Q3 Q4 Q1 2013 2013 2013 2014 Investor Update MADAGASCAR OIL 11#12Tsimiroro Heavy Oil Project 14 May 2012 Investor Update MADAGASCAR OIL 12 22#13MADAGASCAR OIL Multi Zone Steam Flood Key Features Proven technology and extensive industry experience minimizes concern over technical application in Tsimiroro. Vertical wells deal effectively with multiple zone layers and fault orientations. Injection wells can be completed in multiple sand intervals. ■ Steam injection and breakthrough is managed to optimize heat application. Much lower cost and higher potential recovery for shallow thin sands than SAGD or other thermal techniques. Steam Flood Schematic Injection Well Production Well TOW Zone Excellent analog is Chevron's Kern River steam flood project in California 1900 1910 1929 Kern River field produces 7,302 barrels per day. 1904 Produces a field record of 17 million barrels of oil nearly as much as Texas. Field enters a period of maturity, with production gradually declining over the next 50 years. 1913 Much of production is shut in for three years- no demand for the oil. Much of production shut in for 11 years due to the Great Kern River Oil Field Kem 1941 Bakersfield Lancaster Depression. 101 Santa Barbara Santa Clarita 0 MILES 100 Los Angeles Pacific Ocean 1900s 1910s 1920s 1930s 14 May 2012 Production Mode ▪A -Injection ■B -Hot Plate -C -Injection Field restored to production to Support World War II effort: 600 new wells are drilled. 1946 Demand subsides with the end of WWII. 1940s 1950 United States enters the Korean conflict; drilling resumes. 1950s 1961-1962 Average decline of field is 6 percent. Steam injection tests show promise, trigger buying spree. 19.277 1985 Oil production tops out at 141,000 barrels per day. 1960s 1970s 1980s 1990s Heat management initiative spawns innovations. 1995 Original well on Means Ranch is plugged and abandoned. 1990s Investor Update -120,000 barrels of oil per day 90,000 81,000 2007 3-D model 60,000 based reserve estimation starts 30,000 0 2000s 13#14Pilot Project Timeline MADAGASCAR OIL ☐ The steam flood pilot is designed to de-risk the reservoir performance and demonstrate commerciality - projected start in Q3 2012. - - production response estimated in 12 to 18 months remaining pilot capital cost estimated at US$19 million and 15 months' cost of operations at US$10 million Initial start-up uses cyclic steam ("huff and puff"). Continuous steam should begin 90 days later Pilot design with 9 patterns - 16 producers and 9 injectors with peak production of 1,200 BOPD in 12 months - is the best method to test the potential recovery Full field production, upon pilot success, is anticipated to commence in 2018 with rates dependent on the ultimate resource volumes and pilot performance current Contingent Resource Best Case shows 150,000 bbls/day gross current Contingent plus Prospective Best Case shows 300,000 bbls/day gross Estimated to be over 50 years of production Steam Engineering Engineering and Construction Government Delay Drilling and Construction Flood Start Pilot Operation Analysis Jan 10 Jan 11 14 May 2012 Jan 12 Jan 13 Investor Update Jan 14 14#15MADAGASCAR OIL 100 Tsimiroro Steam Flood Pilot Facilities Central Plant Designed Use oil to generate steam and electricity Recycle most of the water and re- inject as steam Uses technologies that are reliable and robust Safety and Environmental protection built into plan Instrumented to monitor key components, rates, temperatures and pressures, monitor and troubleshoot onsite and remotely Water Preparation/Conditioning Steam and Electrical Generation Oil/Water Separation Oil Storage LAY DOWN AREA 14 May 2012 Investor Update 15#16Pilot Oil Sales MADAGASCAR OIL Oil Available for Sale: Use some oil as fuel for pilot project steam - initially 50-75% of volume - 25% over time. Project has 180,000 barrels (1 year) of storage to allow storage until local market can be established. Pilot could sustain approximately 500 barrels per day for local use; No export from Madagascar possible for small pilot volume. Availability can extend for several years, but will end after 12-18 month pilot unless local oil market is cost-effective. The Company is developing analysis for Madagascar based markets: - Use as replacement fuel for power generation working with Jirama (National Power Company) could produce for several years until commercial project developed. could supply 10-20% of power fuel and offset current imports. - requires engineering to deal properly with heavy oil. BOPD & BFOPD 1,400 1,200 1,000 800 600 400 200 Pilot Production Profile Estimated local sales of 500 BOPD 2012 2013 2014 2015 2016 2017 2018 Oil Fuel Oil Used ---NET Oil Develop market as marine bunker fuel or fuel for established mining projects. May be possible to use some quantity for road construction 14 May 2012 Investor Update 16#1714 May 2012 Tsimiroro Economics MADAGASCAR OIL Investor Update 17#18Tsimiroro: A World-Class Resource Cumulative Production MMBOE 2500 14 May 2012 2000 1500 1000 500 0 0 5 10 15 Circa 1976 MADAGASCAR OIL -Tsimiroro Contingent & Prospective Cumulative Production Brent Field Cumulative Production T 20 25 30 35 40 Years of Production Source for Brent Field: UK PPRS "Petroleum Production Reporting System" (www.og.decc.gov.uk/pprs/full_production.htm) Investor Update 18#19Tsimiroro Estimated Contingent Case Production • 250,000 MADAGASCAR OIL Based on the 1.7 billion barrel Contingent resource case, peak production will reach approximately 150,000 BOPD in 12 years after production start. This rate would place Madagascar in the top 10 producers in Africa. Mean case generates Government income of over US$2 billion/year for several years and at least US$1 billion/year for 20 years of project life. Net Production Uncertainty Range 200,000 150,000 100,000 50,000 14 May 2012 BOPD Upper Range Lower Range Mean 2012 2017 2022 2027 2032 2037 2042 2047 2052 2057 2062 Investor Update 19#20Tsimiroro NPV Projection MADAGASCAR OIL Increase from 2010 CPR based on resource volume projected by Netherland Sewell Current case Brent price based on market projections increases from midpoint of $70 to midpoint of $80 Brent with a new low of $60 and a high of $100 ■ Mean Expected Value (EV) represents the best estimate probability of resource value at a 10% discount rate ■ CPR assumption is 70% recovery of Oil in place; Model ranges from 50%-80% (Kern River at 80%) Assumes 29% discount to Brent and 22% of production used for fuel P10 P50 P90 Mean EV US$ mm US$ mm US$ mm US$ mm Expected value of Contingent resources 2010 MOIL CPR 960 MM bbls @$70 Brent $ (412) $ 804 $2,764 CPR case at 1.7 B bbls @ $70 Brent Current case 1.7 B bbls @ $80 Brent $ 731 $ 3,164 $6,667 $ 1,024 $3,500 $2,500 $6,500 $ 11,600 $ 6,748 14 May 2012 Investor Update 20 20#2114 May 2012 Resource Increase Significantly De-risks the Project MADAGASCAR OIL Probability 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 2010 CPR Contingent Case at IPO NSAI 2011 Contingent NSAI 2011 Contingent + Prospective 0% -$5 $0 $5 $10 $15 NPV ($B) $20 $25 $30 $35 Investor Update 21#22Tsimiroro Project Has Positive NPV10 at $40 Brent Brent Crude $110.00 $100.00 Crude Price Sensitivity MADAGASCAR OIL $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 2010 CPR Contingent Case at IPO NSAI 2011 Contingent NSAI 2011 Contingent + Prospective $30.00 $- $3.0 $6.0 $9.0 $12.0 $15.0 $18.0 $21.0 $24.0 NPV-Billions 14 May 2012 Investor Update 22 22#2314 May 2012 -$2.0 -$4.0 Billions $0.0 $2.0 $4.0 $8.0 Cumulative Discounted Cash Flows $6.0 Year 0 Year 5 Year 10 Year 15 Year 20 Tsimiroro Compared to a Deepwater Tie-Back Project MADAGASCAR OIL Year 25 Investor Update Year 30 Key Project Metrics Recoverable BBLS (millions) Time to Peak Production Deep water Tie-Back Continuous Steam Flood 100 1,182 7 years 12 years Estimated Field Life 15 years 40 years Initial investment (billions) $2.0 $1.3 Gross Revenue (billions) $10.5 $104.1 Deepwater Tie Back Avg. Net Cash Flow Margin 75% 50% Steam Flood NPV10 (billions) $0.9 $6.7 Unlevered IRR 22% 30% Year 35 Year 40 23#2414 May 2012 Conventional Opportunities MADAGASCAR OIL Investor Update 24#25Conventional Prospects: Billion Barrel Plus Potential MADAGASCAR OIL There have been at least 7 conventional oil and gas prospects identified through work to date Potential OIP (millions Block Field Name Leads Lead Type of BBL's)¹ 3102 3102 Bemolanga 2 Basement 440 Basement 450 3104 Tsimiroro Undet Unknown 3104 3105 Manambolo 2 Channel Sand 200 Channel Sand 380 3106 Morondava 2 Channel Sand 500 Channel Sand 260 3107 Manandaza 1 Structural 520 1 Based on Company estimates. 14 May 2012 Investor Update 3106 3107 25#26Bemolanga Prospects 45°E In 2008 Total E&P farmed in to a 60% share and became operator. MOIL was paid US$100mm upfront and the remainder as a carry on the next US$100 million of the JV expenditures. During a shift to a conventional program in 2010, the carry was adjusted to US$80 million. ■ An Airborne Gravity Graviometry (AGG) survey of 8,400 line km was conducted in 2011 to determine presence of potential deep oil and gas structures. Two prospect areas are being examined in the south end of the block. Due to lack of seismic on the Block any new prospects identified will require additional seismic acquisition. The JV is in discussions with the government to determine how to incorporate seismic acquisition into the exploration programme. The same Amboloando sand containing heavy oil deposit in Tsimiroro extends into the southern portion of Bemolanga and will potentially be proved up by the Tsimiroro steam flood pilot. Deep Prospects + 14 May 2012 MADAGASCAR OIL Mine Area Investor Update 26#27Tsimiroro Prospects ■ The Airborne Gravity Gradiometry (AGG) survey was completed in October 2011. ■ Full analysis of the AGG will be complete in mid-2012. ■ No specific prospects have yet been identified. ■ The shallow field appears to follow a long gravity high on the block, which corresponds with our current findings and indicates that there is additional heavy oil to be explored. Heavy Oil Area 14 May 2012 Investor Update MADAGASCAR OIL 22 27#28Exploration Block Prospects The Airborne Gravity Gradiometry (AGG) survey of 24,000 line km to be conducted in mid-2012 covers all of the key prospect areas. Block 3015 Prospect Area Block 3107 Prospect Area Planned 2012 AGG acquisition boundary 14 May 2012 Block 3106 Prospect Area 3105 3106 3107 MADAGASCAR OIL Investor Update 28#29☐ Block 3105 Potential Channel Sands MADAGASCAR OIL Appears to be a seismic correlation to two channel sand areas, with a possible third area. Targeting light oil or natural gas. Channel characteristics similar to Mozambique finds and Angola channel sand production. Area 2,140 acres SER = Area 4,200 acres Serinam 1 2010 Gore Micro-seepage survey results (hydrocarbon potential indicated by red area) OOIP = 7,758 x 6,340ac x 100ft x 20% x 70%/1.2 = 574 MMBO ESER-1 E Seram 1 Clarify potential channel sand development and look for additional channels with AGG in 2012 and seismic in 2013. 14 May 2012 Investor Update 10km 29#30Block 3106 Potential Channel Sands MADAGASCAR OIL ◉ Currently appears to be a seismic correlation to two channel sand areas. Targeting light oil or natural gas. ☐ Cretaceous channels have not previously been targeted in any prior Madagascar drilling. 2010 Gore Micro-seepage survey results (hydrocarbon potential indicated by red area) NMK-1 Area 5,500 acres Namikia 1 Area 2,900 acres 14 May 2012 Investor Update Clarify potential channel sand development and look for additional channels with AGG in 2012 and seismic in 2013. OOIP = 7,758 x 8,400ac x 100ft x 20% x 70%/1.2 = 760 MMBO 10km 30#31Funding and Capitalization MADAGASCAR OIL 14 May 2012 Investor Update 31#32Funding Projection MADAGASCAR OIL At 30 April 2012, MOIL has approximately US$50 million to provide funding for the Tsimiroro field pre- development testing and the Exploration Block opportunities. Funding will now be allocated as shown: - Increasing resource and proving commerciality of Tsimiroro asset through a steam flood pilot Further development of conventional prospects on all 5 blocks This cash is expected to fully fund the MOIL capital programme into 2014. Capital Structure Basic common shares O/S 256,035,137 Restricted stock issued 533,330 Common shares O/S 256,568,467 Shares issuable upon: Item Delineation Drilling (Tsimiroro) Steam Flood Pilot Capex Use of funds Cost (US$ mm) $2.3 $19.0 $10.0 $3.9 $14.8 $50.0 Steam Flood Pilot operation Exploration Block FTG Working capital (into 2014) Total There is potential that additional funds will be needed for all project decisions. However, every effort will be made to conserve capital on planned expenditures. In addition, certain events may adjust costs and/or provide income. Options (ranging from 30-95 pence) Fully diluted shares O/S (1) 9,625,788 266,194,255 (1) Excludes 160,000 options and 70,020 warrants with a strike price of $10.00/share or greater 14 May 2012 Investor Update 32 2#33Appendix MADAGASCAR OIL 14 May 2012 Investor Update 33#34Organization Executive Directors and Senior Management J. Laurie Hunter - Chairman and CEO Mark Weller - COO ☐ Seth Fagelman - CFO - Gil Melman General Counsel Technical Staff ◉ L. Jim Lederhos - Chief Engineer Matt Meyer Chief Mining Engineer - Jim Collins Chief Geophysicist ◉ Tim Whitacre - Chief Geologist ◉ Joe Gathman-Geophysicist Non-Executive Directors Ian Barby John van der Welle Andrew Morris Colin Orr-Ewing Madagascar Management Alvaro Kempowsky - General Manager Emma Ralijohn - Deputy GM Darcy Dorscher - Pilot Operations Manager Ed Kueber- Pilot Operations Manager 14 May 2012 Key Contractors ◉ Ramsgate Engineering - Bakersfield ◉ Norwest Corp - Calgary ◉ KBR Granherne - Houston Simmons Drilling - Calgary Fugro Johannesburg EDG New Orleans - ■ SEMM Logging - Paris ◉ Worley Parsons - Calgary ◉ Decision Strategies - Houston ◉ Cimelta Antananarivo Colas Antananarivo Investor Update MADAGASCAR OIL 34#35Major Shareholders Shareholder Shares (millions)' % of total Benchmark Advantage Fund 51.1 19.9% Blakeney Group 30.8 12.0% Persistency 29.5 11.5% MSD 18.8 7.3% The John Paul DeJoria Family Trust 12.8 5.0% Outrider Management 15.1 5.9% RAB Special Situations 13.8 5.4% Carmignac 8.6 3.4% Norges Henderson 6.6 2.6% 6.6 2.6% Management Sub-Total Total Shares Outstanding 2 3.6 1.4% 197 76.9% 257 100.0% 14 May 2012 1 As reported to the Company by its shareholders in accordance with the Company's bye-laws. Excludes 9.6 million options at prices from 32-95 pence and 533,330 shares of restricted stock. IPO in December 2010; Secondary Offering in February 2012 Strong institutional base holds over 75%+ of shares Benchmark controlled by Al Njoo, CEO of heavy oil player Nations Petroleum Investor Update MADAGASCAR OIL 35#36Exploration Blocks History Highlights Ten wells were drilled on the blocks prior to Madagascar Oil involvement. Block 3105 - Manambolo numerous oil and gas shows in down-dip wells Block 3106 Morondava reservoirs expected in the Isalo Il sandstones and Bemaraha carbonates have been tested with out success gas and minor oil shows present in down dip wells within mapped reservoir intervals Block 3107 - Manandaza Lower Sakamena reservoir tested oil, however appears to be low permeability and porosity and size needs to be further assessed. MADAGASCAR OIL Exploration drilling history Year TD Well Name Drilled Operator (metres) Result PSC 3105 Manambolo Serinam-1 1971 Conoco 3,658 Heavy oil (100 API shows) Serinam East-1 1974 Chevron 2,970 Minor gas shows Manambolo -1 1985 Amoco 4,262 Heavy oil (10° API shows) Manambolo West-1 1987 OMNIS/P CIAC 2,600 15.6 mmscf/d DST Manambolo East-1 1990 Amoco 1,676 Minor gas shows Manambolo West-2 1993 OMNIS 1,890 No shows PCC 3106- Morondava Namakia-1 1984 Amoco 4,481 Live oil and trace gas Saronanala-1 1985 Amoco 2,385 No shows - PSC 3107 Manandaza Manandaza-1 1991 Shell 2,508 Non- commercial light oil (41° API) Manandaza South-1 1993 Shell 2,223 No shows 14 May 2012 Investor Update 36