Sale of treasury shares

MOL Hungarian Oil and Gas Public Limited Company announces (“MOL”) that on March 13, 2006 it has signed a share purchase agreement to sell 6,007,479 Series A Ordinary Shares of MOL currently held in treasury to Magnolia Finance Limited (“Magnolia”), incorporated in Jersey (22 Grenville Street, St Helier, Jersey, Channel Islands JE4 8PX), at a price of HUF 20,515 per share. The broker for the stock exchange transactions is ING Bank (Hungary) Rt (“ING”).

Pursuant to Section 67 of the Hungarian Capital Markets Act of 2001 Magnolia has announced that upon successful and unconditional closing of the transactions it will acquire 5.58 % of influence in MOL represented by 6,007,479 Series A Ordinary Shares of MOL.

Upon successful and unconditional closing of the transactions MOL will have 1,404,217 Series A Ordinary Shares and 578 Series C Ordinary Shares both held in treasury.

Magnolia announced the sale of up to € 610 million of perpetual exchangeable capital securities (the “Capital Securities”), exchangeable into the Series A Ordinary Shares of MOL between March 20, 2011 and March 12, 2016 (“Exchange Period”), to international financial investors. Capital Securities were sold at nominal value and with a fixed interest rate of 4.00 % per annum for the first ten years, based on an exchange rate of HUF 26,670 per share.   Morgan Stanley & Co. International Limited was acting as sole manager of the issue of Capital Securities.

MOL has also, concurrently with the sale, entered into a swap agreement in principle with Magnolia that, gives MOL a call option to buy back all or some of the Series A Ordinary Shares of MOL, in certain limited circumstances at a volume weighted average price during certain period before exercising the option right. Additionally in case the Capital Securities holders did not or partially exercise their conversion right, upon expiration of the Exchange Period and quarterly afterwards MOL is entitled to buy back the Series A ordinary shares, which have not been exchanged yet. In case Magnolia redeems the Capital Securities after 2016 and the trading price of MOL ordinary shares is below EUR 101.54 per share, MOL will pay the difference.

MOL does not have any direct or indirect equity interest in or control right over Magnolia, but will consolidate Magnolia for IFRS purposes.