Result of Placing and Open Offer

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12 February 2013

MADAGASCAR OIL LIMITED

("Madagascar Oil" or the "Company")

Result of Placing and Open Offer

Madagascar Oil (AIM: MOIL) is pleased to announce the result of the Placing and Open Offer, details of which were set out in the document sent to Shareholders on 24 January 2013 (the "Circular"). Unless the context otherwise requires, defined terms used in this announcement shall have the meanings given to them in the Circular and in the announcement of 24 January 2013.

The Open Offer closed at 12.00 p.m. on 8 February 2013. Valid applications were received in respect of 172,298,663 Open Offer Shares from Qualifying Shareholders, representing approximately 62.6 per cent. of the total Open Offer Shares. Of the 172,298,663 Open Offer Shares validly applied for, 160,609,340 Open Offer Shares were taken up by certain Shareholders pursuant to their Irrevocable Undertakings.

Accordingly, as set out in the Circular, the balance of 102,939,109 Open Offer Shares were placed with certain Shareholders (at the subscription price of 18 pence (approximately US$0.285)) in accordance with the terms of the Irrevocable Undertakings or, in respect of the Break Fee Shares and the Fee Shares, issued to meet pre-existing contractual arrangements.

In total, the Company has therefore raised the full anticipated amount of approximately £49.5 million (approximately US$78.4 million) (gross) via the issuance of, in aggregate, 275,237,772 New Common Shares. In addition, the Company has issued a further 100,000 new Common Shares pursuant to the vesting of existing restricted shares into Common Shares for nil consideration, pursuant to the Company's equity incentive plan. Application has been made to the London Stock Exchange for the admission of, in aggregate, 275,337,772 new Common Shares to trading on AIM (the "New Shares") ("Admission"). It is expected that Admission will become effective and that dealings in the New Shares will commence at 8.00 a.m. today.

Following the issue of the abovementioned New Shares, the Company's issued share capital will consist of 531,372,909 Common Shares, with voting rights. The Company does not hold any Common Shares in treasury and accordingly there are no voting rights in respect of any treasury shares.

The above figure of 531,372,909 Common Shares can 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 change in their interest in, Madagascar Oil under Bye-Law 51.15 of the Company's Bye-Laws (a copy of which is available on the Company's website) which requires Shareholders to notify the Company of the percentage of their voting rights in the Company as contemplated by the UK Financial Services Authority's Disclosure and Transparency Rules Sourcebook.

Bridge Loan, Break Fee Shares and Fee Shares

As announced previously, the Bridge Loan, provided by BMK and Persistency on 21 December 2012, was amended such that its maturity date was extended to 18 February 2013. The principal amount of US$15 million outstanding under the Bridge Loan has now been capitalised and repaid in full, in part payment of the subscription amounts of the Benchmark Parties and Persistency in the Placing and Open Offer.

As set out in the Circular, the Company was obliged to pay a break fee of US$3 million under the Bridge Loan Agreement (as amended by the Bridge Loan Amendment). This has now been satisfied by the issue of the Break Fee Shares at an issue price of US$0.32 each, out of the Open Offer Shares not taken up by Qualifying Shareholders in the Open Offer and in priority to the new Common Shares issued under the Placing. Accordingly, the terms of the amended Bridge Loan Agreement have now been satisfied in full and the Company is arranging for the share pledge securing the Bridge Loan to be released.

In addition, the Fee Shares due to Outrider Management, LLC in connection with the work undertaken by its legal advisers in relation to the preparation of an alternative to the Bridge Loan and related matters, have also been issued at a price of US$0.32 each out of the Open Offer Shares not taken up by Qualifying Shareholders in the Open Offer and in priority to the new Common Shares issued under the Placing.

Resultant shareholdings

Following the Placing and Open Offer and the admission of the New Shares today, the changes to the interests of significant Shareholders in the issued share capital of the Company are as follows:

* Including the Break Fee Shares.

** Including the Fee Shares.

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