Painted Pony Petroleum Ltd ("Painted Pony" or the "Company") (TSX VENTURE:PPY.A)
is pleased to provide an update on northeast British Columbia Montney and
southeast Saskatchewan Bakken operations.


Field-estimated production for the first 15 days of December averaged
approximately 5,500 boe/d (30% oil and liquids). In addition, over 2,200 boe/d
of production (initial productive capacity) has been tested and is awaiting
tie-in. This production is expected to be brought on stream before the end of
January. Furthermore, two 100% working interest Montney wells have been
completed but have not yet been tested. Both wells are currently flowing back,
with in-line production testing expected to be complete before year-end. 


Painted Pony continues to delineate and develop its Montney assets in northeast
British Columbia. During the fourth quarter, 2 (2.0 net) horizontal wells,
targeting the upper and lower Montney, were drilled and completed at the Blair
d-8-F/94-B-16 pad. Results are expected from both wells before year-end as they
are currently flowing back on clean-up.

In anticipation of incremental production from the d-8-F pad, the Altagas Blair
Creek gas plant was expanded from 24 mmcf/d to 32 mmcf/d late in November 2011.
Expansion of this plant to a licensed gross capacity of 80 mmcf/d is expected by
the end of the second quarter of 2012. 

At the Daiber d-44-C/94-B-16 pad (50% working interest), Painted Pony is
currently drilling one lower Montney well, offsetting the previously announced
lower Montney well which flowed in excess of 24.5 gross mmcf/d (over 4,000
boe/d) (see news release dated September 28, 2011). The Company expects the
d-44-C facilities and pipeline, which have been augmented in anticipation of
additional development, to be completed late in January 2012. 

At the Daiber d-60-C/94-B-16 pad (20% working interest), a partner-operated
facility was brought on-stream on December 16, 2011 servicing two previously
drilled Montney wells. Initial production from the two wells is estimated to be
over 12 mmcf/d (2.4 mmcf/d net). 

Painted Pony's Montney delineation program continues. During 2012, the Company
intends to transition to more focused development at Blair/Town to take
advantage of economies of scale while continuing to delineate additional lands
in West Blair and throughout the Cameron block, which includes Kobes, Daiber and


On the Flat Lake block in southeast Saskatchewan, Painted Pony has begun a
delineation program with 3 (1.2 net) wells drilled in the fourth quarter of
2011. The first well (30% working interest) was completed in mid-December and
flowed at a rate of 295 bbls/d of oil with a 30% water cut after approximately
one week. The second well (30% working interest) is currently being completed,
with the third well (65% working interest) to be completed in January 2012. 


Painted Pony is pleased to announce the appointment of Bruce Hall as
Vice-President, Corporate Development effective January 2, 2012 (Mr. Hall
previously held the title of Negotiations Specialist). Mr. Hall has over 30
years of experience in the oil and gas industry including land negotiations,
acquisitions, divestments and strategic planning initiatives. Mr. Hall has been
working with Painted Pony since 2008, and has been a key member of our team in
the development of corporate strategy, deal generation and partner
relationships. Previously, Mr. Hall was Vice-President, Land at Redcliffe
Exploration Ltd., Aquest Explorations Ltd. and Causeway Energy Corporation. Mr.
Hall holds a Bachelor of Science from the University of Calgary and a
Professional Landman (P. Land) designation from the Canadian Association of
Petroleum Landmen. 

Painted Pony is also pleased to announce the appointment of Slade Thornhill as
General Manager, Exploitation & Reservoir Engineering effective January 2, 2012
(Mr. Thornhill previously held the title of Manager, Exploitation Engineering).
Mr. Thornhill has 18 years of well-rounded experience with roles in operations,
reserves, development and infrastructure. Previously, Mr. Thornhill led a team
at Talisman Energy that delivered midstream infrastructure projects including
gas-liquids extraction. Prior to that, Mr. Thornhill was in an exploitation
leadership role for several properties throughout Western Canada including the
Montney and Deep Basin. Mr. Thornhill holds a B.Sc. in Chemical Engineering from
the University of Calgary and a Professional Engineering (P. Eng.) designation
from the Association of Professional Engineers, Geologists, and Geophysicists of

Painted Pony announces the resignation of Mr. Michael Belenkie, Vice-President,
Corporate Development & Reservoir Engineering effective December 31, 2011. Mr.
Belenkie has been an important part of the management team of Painted Pony since
2008, and has been a major contributor to the success of the Company. Painted
Pony thanks Mr. Belenkie for his contributions and wishes him the best in his
future endeavors.


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 2012; (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 2012 are expected to show growth from the fourth 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 globally, 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 ( or Painted Pony's website ( 

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. 

Certain natural gas volumes have been converted to barrels of oil equivalent
(BOE) on the basis of one barrel (bbl) to six thousand cubic feet (Mcf). BOE 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

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