Completion of Tranche 1 Placing

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

14 March 2016

MADAGASCAR OIL LIMITED

("Madagascar Oil" or the "Company")

Completion of Tranche 1 Placing

Madagascar Oil announces that, further to its announcement of 4 March 2016, setting out, inter alia, that the Independent Directors had elected to draw down the Tranche 1 Placing, the Company has raised US$2.0 million (gross) via the issue of 143,636,885 new Common Shares, at a price of 1.3924 cents per Tranche 1 Placing Share (being the equivalent of 1.00p per Tranche 1 Placing Share), to the Relevant Lenders, as set out in the table below.

The Company confirms that no Other Major Shareholders have elected to take up their Pro-Rata Share of the Tranche 1 Placing Shares.

Accordingly, following Tranche 1 Admission, the shareholdings in the Company will be as set out below:

Pursuant to the Framework Agreement, the Company has received Irrevocable Undertakings from the Relevant Lenders to vote any Common Shares held by them, at the Record Date, in favour of the Resolutions which are to be proposed at the Special General Meeting of the Company to be held at the offices of Watson Farley & Williams, 15 Appold Street, London, EC2A 2HB at 11.00 a.m. 31 March 2016 (the "Delisting General Meeting").

The Irrevocable Undertakings provided by Relevant Lenders apply to all Common Shares held by them at the Record Date for voting (being 11.00 a.m. on 29 March 2016) at the Delisting General Meeting, totalling, following Tranche 1 Admission, 580,609,422 Common Shares, representing approximately 73.0 per cent. of the enlarged share capital of the Company.

Related Party Transaction

The participation of BMK and Outrider in the Tranche 1 Placing constitutes a related party transaction under AIM Rule 13 of the AIM Rules for Companies.

Accordingly, the Independent Directors, as defined by the AIM Rules for the purposes of AIM Rule 13 (being Robert Estill, Michael Duginski and Iain Patrick), having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the participation of the BMK and Outrider in the Tranche 1 Placing is fair and reasonable insofar as the Company's Shareholders are concerned.

Total Voting Rights

Application has been made to the London Stock Exchange for Tranche 1 Admission to become effective at 8.00 a.m. on 17 March 2016. Following Tranche 1 Admission, the Company will have 795,713,264 Common Shares in issue.

This will be the total number of voting rights in the Company following Tranche 1 Admission and may be used by Shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or change to their interest in, the Company under the Disclosure and Transparency Rules.

All capitalised terms used herein shall have the same meaning, unless stated or the context requires otherwise, as given to them in the Circular dispatched to Shareholders on 11 March 2016 which is available on the Company's website at www.madagascaroil.com.

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