MOIL.L Regulatory News (MOIL)

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

.

Madagascar Oil Limited

("Madagascar Oil" or the "Company")

Licence Update

The board of directors of Madagascar Oil is today providing an update regarding the group's licences.

Following a meeting between the Ministry of Mines and Hydrocarbons (the "Ministry") and Madagascar Oil in Antananarivo late on Thursday 16 December 2010, the Ministry has indicated that it is interested in acquiring from the Company all of its licences excluding Bemolanga, being blocks 3104, 3105, 3106 and 3107. There can be no guarantee that any price agreed for such an acquisition will be representative of the fair value of such assets. However, the Company has obtained legal advice that all of its licences are valid and that the obligations on both parties are legally binding. Madagascar Oil intends to robustly defend its position. 

Pending the resolution of such discussions, the Company has requested that trading in its ordinary shares on AIM be suspended with immediate effect. A further announcement will be made in due course.

- Ends -

For further information please contact: