Madalena Executes JV Agreement in Neuquen Province of Argentina

Madalena Ventures has finalized the execution of the formal Joint Venture and Operating Agreement with Hidrocarburos del Neuquen Sociedad Anonima, the Neuquen Provincial Hydrocarbon and Estrella Servicios Petroleros. The execution of the Agreement follows the Company's news release of September 17, 2007 announcing the approval of a letter of intent and work program by HIDENESA on the Cortadera Block in the Province of Neuquen, Argentina. The joint venture participants in the Agreement are Madalena Ventures (Sucursal Argentina) 70%, HIDENESA 10%, and Estrella Servicios Petroleros SA (Estrella) 20%.

The joint venture carries an initial three year exploration term with a work commitment of U.S. $2.5 million in exploration expenditures on the Cortadera Block, including seismic and the drilling of at least one exploration well. Madalena and Estrella are proportionately responsible for the costs during the initial exploration term. Upon encountering commercial production on the Cortadera Block, a development plan would be implemented with a 12% royalty payable to the Province of Neuquen and a concession term of 25 years, with an option to request an additional 10-year extension. During the development phase, HIDENESA is responsible for its share of operating and development costs which are recovered from 80% of their 10% share of production proceeds.

The Neuquen Basin is the most prolific oil and gas producing basin in Argentina and contains a number of fields with oil and natural gas reserves ranging as high as 25 trillion cubic feet of gas and 800 million barrels of oil. The Cortadera Block is situated along the western thrust belt area of the Neuquen Basin and is approximately 500 km2 (123,500 acres) in size. Madalena has access to 400 km of existing seismic data located on the Block, which has identified several exciting features with multi-zone potential. Two wells drilled on the Block during the seventies had gas shows indicating the presence of hydrocarbon potential on the Block.

The work program will commence immediately with a baseline environmental study and the design and implementation of the seismic programs required to further delineate the leads identified on the existing seismic database.