Strategy

Madalena's strategy is to create value through the generation of a balanced portfolio of high quality oil and gas assets in proven hydrocarbon areas characterized by competitive fiscal terms and significant development potential.

Value creation for Madalena is achieved by following some basic principles:

• Regional geographic focus - focus on those areas in which you have experience

• Focus on known oil and gas basins - increase prospectivity by being on trend with known discoveries and in close proximity to producing fields

• Underexplored areas - establish significant upside potential by securing large land positions in over-looked areas

• Low entry cost - manage capital commitments to minimize financing risk

• High working interests - secure high working interests and operatorship to control timing and development options

• High grade exploration areas - acquire new 3D seismic over prospective features

• Joint venture - manage capital exposure via joint ventures

• Drill high impact exploration and lower risk development targets

• Generate early cash flow - develop prospects that can generate good netbacks and early cash flow

• Develop new prospects - transition from exploration to development and utilize strong cash flow position to fund new projects