US$5 million Working Capital Facility

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

30 June 2015

MADAGASCAR OIL LIMITED

("Madagascar Oil" or the "Company")

US$5 million Working Capital Facility agreed with Outrider

Madagascar Oil is pleased to announce that, as a continuation of the process in which the Company has appointed Jefferies International Limited as a strategic advisor to identify and secure a strategic partner who will work with the Company on the development and funding for the Development Phase of its Tsimiroro project, and to allow its funding planning to continue, the Company has entered into a working capital facility (the "Facility") with a company connected to the Company's substantial shareholder, Outrider Management LLC, a transaction which will constitute a related party transaction under the AIM Rules.

The following is a summary of the key details relating to the Facility:

Parties: Madagascar Oil Limited as the "Borrower" and Outrider Master Fund LP as the "Lender."

Description: The Lender will commit a US$5.0 million credit facility to the Borrower subject to the terms summarised below.

Loan Uses: The Borrower can apply all amounts borrowed towards any general corporate purposes of the Borrower.

Principal Loan Terms:

• A 3 month term from 29 June 2015.

• The Borrower can draw down in US$1.0 million increments.

• The interest rate on sums drawn down is 10% per annum payable in cash on the settlement of all outstanding amounts due under the full Facility at the end of the term.

• The Borrower will pay a US$250,000 commitment fee for the Facility.

• The outstanding balance due in full upon a "change of control" of the Borrower, the sale of all or substantially all of the Group's assets or in the event of an equity fundraising for an amount of US$5m or more, and the Facility will cancel upon the same.

• As security for the Facility, any revenues received by the Borrower or its subsidiaries from the sale of heavy oil that the Company currently has in storage in Madagascar shall be used to prepay amounts outstanding under the Facility.

• The Borrower will not enter into any joint venture transaction without the consent of the Lender, unless the Facility has been repaid in full as part of the agreement to enter into the joint venture.

• Guarantees for the Facility will be given by the Borrower's wholly-owned subsidiaries Madagascar Oil Limited ("MOM", based in Mauritius) and Madagascar Oil S.A. ("MOSA", based in Madagascar).

• The share certificates of MOM and MOSA will be placed with an escrow agent pursuant to an escrow agreement for the duration of the Facility.

Outrider Management LLC is a substantial shareholder in Madagascar Oil, holding 28.8 per cent. of the Company's issued share capital, and, as such, Outrider Master Fund LP is considered to be a related party of the Company pursuant to Rule 13 of the AIM Rules for Companies.

The entering into the Facility is therefore a related party transaction pursuant to AIM Rule 13.

The independent directors, as defined by the AIM Rules for the purposes of AIM Rule 13 (being Andrew Morris, Robert Estill, Michael Duginski, and Iain Patrick), having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the terms of the Facility are fair and reasonable insofar as the Company's shareholders are concerned.

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