Grant of Options and Issue of Equity

11 July 2013

MADAGASCAR OIL LIMITED

("Madagascar Oil" or the "Company")

Grant of Options and Issue of Equity

Madagascar Oil (AIM: MOIL) announces that on 10 July 2013 the Company granted options over common shares of par value US$0.001 each ("Options") to a Director and to an Officer of the Company under the Madagascar Oil Limited Unapproved UK Incentive Plan as set out below:

Once vested, the Options are exercisable (in whole or in part) at any time up to the tenth anniversary of the date of grant, and are exercisable at a price of 18p per share. Vesting of the options granted to Mr. Laing will occur on 10 July 2014 and vesting of the options granted to Mr. Stein will occur in two equal tranches on 10 July 2014 and 10 July 2015.

In addition, 100,000 Common Shares have been issued to certain contractors following the vesting of restricted shares into new Common Shares.

Details of the restricted stock plan are set out in the Company's admission document which is available for download via the Company's website at www.madagascaroil.com.

The new Common Shares will rank pari passu in all respects with the Company's existing Common Shares and application has been made to the London Stock Exchange for these 100,000 new Common Shares to be admitted to trading on AIM ("Admission").

It is expected that Admission will become effective and that dealings in the new Common Shares will commence at 8.00 a.m. on 17 July 2013. Following Admission, the Company's issued common share capital will consist of 531,472,909 Common Shares with voting rights. Madagascar Oil does not hold any Common Shares in treasury.

The above figure of 531,472,909 Common Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Madagascar Oil under the Financial Services Authority's Disclosure and Transparency Rules (the relevant provisions of which have been incorporated into the Company's bye-laws).

-ENDS-