Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX
VENTURE:PPY.A) (TSX VENTURE:PPY.B) is pleased to report the financial results
for the three months ended September 30, 2011 and to provide an operational
update. Highlights include:




--  Production averaged 4,064 boe per day (weighted 65% gas and 35% oil and
    liquids), an increase of 32% from the third quarter of 2010; 
--  Painted Pony drilled a total of 18 (13.2 net) wells during the quarter,
    including 13 (10.3 net) in Saskatchewan and 5 (2.9 net) wells in British
    Columbia. To date in 2011, the Company has drilled a total of 39 (27.3
    net) wells; 
--  In northeast British Columbia, operating and transportation costs
    declined by 32% to $7.66 per boe in the third quarter of 2011 as
    compared to the same period in 2010; 
--  The Company completed and tested a 50% working interest lower Montney
    horizontal well at d-44-C/94-B-16 which tested in excess of 24 mmcf per
    day at 2,700 psi; 
--  Two (0.4 net) non-operated Montney wells at Cameron/Kobes were completed
    in the third quarter and tested at rates of 10.9 mmcf per day and 10.8
    mmcf per day; 
--  Subsequent to quarter-end, the Company commenced production testing on
    the 100% working interest Blair a-41-F/94-B-16 pad. The upper Montney
    well on this pad produced at an average of 10.5 mmcf per day at over 700
    psi for the first seven days on production; 
--  The Company has negotiated an expansion to the Blair Creek gas plant,
    which will increase gross processing capacity from 24 mmcf per day to 70
    mmcf per day. Painted Pony's firm share of this capacity will increase
    to 32 mmcf per day. This expansion, which will be fully funded by the
    midstream operator, is expected to be completed by the end of the second
    quarter of 2012. Additionally, the Company is constructing a new
    production facility at its d-44-C/94-B-16 pad, which will deliver
    production from the northern Cameron area directly into the Spectra
    Energy Transmission sales system; and 
--  Painted Pony exited the quarter with a positive working capital position
    of $6.7 million and an $80 million undrawn credit facility. Subsequent
    to quarter-end, the Company closed a bought deal financing for total
    proceeds of $103.8 million before costs. 



PRODUCTION 

Painted Pony's sales volumes averaged 4,064 boe per day during the three months
ended September 30, 2011, an increase of 32% compared to the third quarter of
2010 and a 13% increase over the second quarter of 2011. Volumes were weighted
65% towards gas, compared to 43% in the comparable 2010 period.


In Saskatchewan, oilfield operations have gradually resumed as the wet surface
conditions which have impeded industry activity since spring 2011 have begun to
subside. Third quarter sales volumes averaged 1,365 boe per day compared to
1,422 boe per day in the second quarter of 2011. Solution gas and associated
liquids sales from the Midale/Huntoon area resumed in late September after
repairs were completed at a midstream gas processing facility. 


Sales volumes in northeast British Columbia averaged 2,699 boe per day during
the third quarter of 2011, compared to 2,171 boe per day in the second quarter
of 2011. This represents an increase of 24% from the second to the third quarter
of 2011 and a 99% increase from the third quarter of 2010.


BRITISH COLUMBIA ACTIVITY

Painted Pony continues to delineate and develop its Montney gas assets in
northeast British Columbia. During the third quarter of 2011, the Company
participated in the drilling of 4 (1.9 net) horizontal Montney wells and
increased its total land position to 135,115 net acres (211 net sections). The
Company currently has 85,200 net acres (133 net sections) of Montney rights. 


On the Cameron/Kobes block, 3 (0.9 net) Lower Montney wells were drilled and
completed. The 50% working interest well at d-44-C/94-B-16 tested at a
stabilized rate of 24.5 mmcf per day, and at the c-A58-J/94-B-9 and
a-C10-J/94-B-9 wells (both 20% working interest), initial production rates were
10.9 mmcf per day and 10.8 mmcf per day respectively. Two new production
facilities (one operated and one non-operated) are presently under construction
on the Cameron/Kobes block. Both are expected to be on stream by year end 2011,
adding approximately 50 mmcf per day gross additional gas processing capacity to
the area. 


At Blair/Town, Painted Pony drilled one (1.0 net) well in the third quarter of
2011 at a-41-F/94-B-16. A second (1.0 net) well on this pad has been
subsequently rig-released since the end of the third quarter. Initial combined
production rates from this pad were approximately 13.5 mmcf per day. This
includes 10.5 mmcf per day from the upper Montney well plus 3.0 mmcf per day
from the lower Montney well. Production rates from the lower Montney well on
this pad have been constrained by wellbore operational problems which arose
during completion operations. The Company is investigating alternatives for
remedial operations. The existing Blair Creek midstream gas processing facility
is being expanded from 24 mmcf per day to a total capacity of 70 mmcf per day,
of which Painted Pony's firm share will increase to 32 mmcf per day. The
expansion is scheduled to be completed by the end of the second quarter of 2012.



SASKATCHEWAN ACTIVITY

In Saskatchewan, the Company drilled a total of 13 (10.3 net) wells, 11 (8.3
net) Bakken wells and 2 (2.0 net) Mississippian wells, during the third quarter
of 2011. Sales of solution gas and associated liquids from the Midale-Huntoon
area resumed late in the third quarter after repairs at a non-operated midstream
facility were completed. In the Midale area, the gathering system was expanded
and seven single well batteries were tied-in to the Company's existing facility.
This expansion eliminates the need for the Company to truck produced volumes
from individual well sites. In addition to the gathering system expansion, the
Midale battery was connected to a third party oil sales line. These facility
upgrades are expected to help lower area operating costs during the fourth
quarter of 2011.


FINANCIAL RESOURCES

Subsequent to quarter-end, the Company closed a bought deal financing for total
proceeds of $103.8 million before costs. The Company has also announced the
conversion of its Class B shares to Class A shares, subject to necessary
regulatory approvals, effective on December 1, 2011. On the effective date, the
holders of the 1,173,600 outstanding Class B shares will receive 0.8250 of a
Class A share in exchange for each one (1) Class B share held, resulting in an
aggregate of up to 968,220 Class A shares being issued, subject to rounding
adjustments.


OUTLOOK

Painted Pony's development of the Montney asset continues. At Blair/Town, the
corporate focus has shifted to developing the 100% working interest lands, and
initial results have been encouraging. The Company intends to drill 4 (3.5 net)
Montney wells in British Columbia and 9 (4.4 net) wells in Saskatchewan during
the fourth quarter of 2011. For 2012, Painted Pony currently plans to spend
approximately $200 million on capital projects, to drill 25 (19.8 net) wells in
British Columbia and 27 (18.0 net) wells in Saskatchewan. 


INVESTOR RELATIONS

Interested parties are invited to visit the Company's website to view an updated
presentation. Painted Pony's Class A Shares and Class B Shares trade on the TSX
Venture Exchange under the symbols "PPY.A" and "PPY.B", respectively. 




Financial and Operational Highlights                                        
(unaudited)                                                                 
----------------------------------------------------------------------------
                                 Three months ended       Nine months ended 
                                       September 30,           September 30,
                                   2011        2010        2011        2010 
----------------------------------------------------------------------------
Financial (000s, except per                                                 
 share)                                                                     
Petroleum and natural gas                                                   
 revenue (before royalties) $    16,647 $    14,764 $    53,408 $    41,662 
Funds flow from                                                             
 operations(1)              $     9,159 $     9,123 $    31,633 $    25,983 
  Per share - basic(2)      $      0.15 $      0.19 $      0.55 $      0.58 
  Per share - diluted(3)    $      0.15 $      0.19 $      0.53 $      0.57 
Cash flow from operating                                                    
 activities                 $     8,586 $     7,699 $    31,995 $    25,275 
Net income                  $     4,765 $     2,258 $     5,085 $     4,709 
  Per share - basic(2)      $      0.08 $      0.05 $      0.09 $      0.10 
  Per share - diluted(3)    $      0.08 $      0.05 $      0.09 $      0.10 
Capital expenditures(4)     $    45,924 $    20,670 $   108,416 $    88,175 
Working capital             $     6,709 $    22,454 $     6,709 $    22,454 
Total assets                $   360,227 $   223,347 $   360,227 $   223,347 
Shares outstanding                                                          
  Class A                    59,633,673  50,975,700  59,633,673  50,975,700 
  Class B                     1,173,600   1,173,600   1,173,600   1,173,600 
Diluted weighted-average                                                    
 shares                      61,334,305  47,384,870  59,299,501  45,746,842 
Operational                                                                 
Daily sales volumes                                                         
 Oil (bbls per day)               1,312       1,687       1,464       1,643 
 Condensate (bbls per day)           41          28          51          26 
 NGL's (bbls per day)                50          38          94          26 
 Gas (mcf per day)               15,965       7,961      13,715       5,720 
 Total (boe per day)              4,064       3,080       3,895       2,648 
Realized prices                                                             
 Oil (per bbl)              $     89.48 $     75.94 $     92.16 $     76.92 
 Gas (per mcf)              $      3.60 $      3.65 $      3.76 $      4.09 
Field operating netbacks                                                    
 British Columbia (per boe) $     14.18 $     10.74 $     14.67 $     11.63 
 Saskatchewan (per boe)     $     51.56 $     54.01 $     57.90 $     54.85 
 Company combined (per boe) $     26.73 $     34.97 $     32.66 $     38.90 
----------------------------------------------------------------------------
                                                                            

1.  This table contains the term "funds flow from operations", which should
    not be considered an alternative to, or more meaningful than "cash flow
    from operating activities" as determined in accordance with
    International Financial Reporting Standards ("IFRS") as an indicator of
    the Company's performance. Funds flow from operations and funds flow
    from operations per share (basic and diluted) does not have any
    standardized meaning prescribed by IFRS and may not be comparable with
    the calculation of similar measures for other entities. Management uses
    funds flow from operations to analyze operating performance and leverage
    and considers funds flow from operations to be a key measure as it
    demonstrates the Company's ability to generate the cash necessary to
    fund future capital investment. The reconciliation between funds flow
    from operations and cash flow from operating activities can be found in
    "Management's Discussion and Analysis". Funds flow from operations per
    share is calculated using the basic and diluted weighted average number
    of shares for the period, and after the deemed conversion of the Class B
    shares to Class A shares, consistent with the calculations of earnings
    per share. 
2.  Basic per share information is calculated on the basis of the weighted
    average number of Class A shares outstanding in the period. 
3.  Diluted per share information reflects the potential dilution effect of
    options and the convertible Class B shares, each of which may be anti-
    dilutive. Net income is adjusted for the amount of finance expense
    applicable to the Class B shares for the period. The conversion of Class
    B shares into Class A shares, if dilutive, is computed by dividing $10
    by the greater of $1.00 and the Current Trading Price, defined as the
    weighted average trading price of the Class A shares for the last 30
    consecutive trading days. 
4.  Including cash expenditures and non-cash decommissioning obligations and
    share-based payments. 



Advisory

This news release contains certain forward-looking information (collectively
referred to herein as "forward looking statements") within the meaning of
applicable Canadian securities laws. Forward-looking statements are often, but
not always, identified by the use of words such as "anticipate", "believe",
"plan", "potential", "intend", "objective", "continuous", "ongoing",
"encouraging", "estimate", "expect", "may", "will", "project", "should", or
similar words suggesting future outcomes. These forward-looking statements are
based on numerous assumptions including but not limited to (i) drilling success;
(ii) production; (iii) future capital expenditures; and (iv) cash flow from
operating activities. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect.


Forward-looking statements are based upon the opinions and expectations of
management of the Company as at the effective date of such statements and, in
some cases, information supplied by third parties. Although the Company believes
that the expectations reflected in such forward-looking statements are based
upon reasonable assumptions and that information received from third parties is
reliable, it can give no assurance that those expectations will prove to have
been correct. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual events or outcomes to differ materially
from those anticipated or implied by such forward-looking statements.


With respect to forward-looking statements contained in this document, Painted
Pony has made a number of assumptions. The key assumptions underlying the
aforementioned forward-looking statements include assumptions that: (i)
commodity prices will be volatile throughout 2011; (ii) capital, undeveloped
lands and skilled personnel will continue to be available at the level Painted
Pony has enjoyed to date; (iii) Painted Pony will be able to obtain equipment in
a timely manner to carry out exploration, development and exploitation
activities; (iv) Painted Pony will have sufficient financial resources with
which to conduct the capital program; (v) the accuracy of geological and
geophysical data and Painted Pony's interpretation of that data; (vi) production
rates in 2011 and 2012 are expected to show growth from 2010 and from the third
quarter of 2011; (vii) that production from new wells will be substantially
similar to production rates associated with existing wells in the vicinity of
the Company's properties; (viii) the continued ability of the Company to
generate internal cash flow and the availability of capital on acceptable terms;
and (ix) the current tax and regulatory regime will remain substantially
unchanged. Certain or all of the forgoing assumptions may prove to be untrue.


Certain information regarding Painted Pony set forth in this document, including
management's assessment of Painted Pony's future plans and operations, number,
type and timing of wells to be drilled, the planning and development of certain
prospects, production estimates, and expected production growth may constitute
forward-looking statements under applicable securities laws and necessarily
involve substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and uncertainties,
certain of which are beyond Painted Pony's control, including without
limitation, risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of markets,
volatility of commodity prices, environmental risks, inability to obtain
drilling rigs or other services, capital expenditure costs, including drilling,
completion and facility costs, unexpected decline rates in wells, wells not
performing as expected, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from internal and
external sources, the impact of general economic conditions in Canada, the
United States and overseas, industry conditions, changes in laws and regulations
(including the adoption of new environmental laws and regulations) and changes
in how they are interpreted and enforced, increased competition, the lack of
availability of qualified personnel or management, fluctuations in foreign
exchange or interest rates, and stock market volatility and market valuations of
companies with respect to announced transactions and the final valuations
thereof. Readers are cautioned that the foregoing list of factors is not
exhaustive. Painted Pony's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these forward-looking
statements and, accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any
of them do so, what benefits, including the amount of proceeds, that the Company
will derive therefrom. All subsequent and forgoing forward-looking statements,
whether written or oral, attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these cautionary statements.


Additional information on these and other factors that could affect Painted
Pony's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com) or Painted Pony's website (www.paintedpony.ca).


The forward-looking statements contained in this document are made as at the
date of this news release and Painted Pony does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable securities laws.


Special Note Regarding Disclosure of Production Estimates

BOEs may be misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.


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