Painted Pony Petroleum Ltd. (TSX VENTURE:PPY.A) ("Painted Pony" or the
"Company") is pleased to report the financial results for the year ended
December 31, 2011. 

In 2011, the Company achieved several major milestones:

--  increased total proved plus probable reserves by 321% from 32.5 mmboe to
    136.9 mmboe; 
--  grew our net present value (NPV10%) of proven plus probable reserves by
    200.0% to $1.062 billion from $354 million; 
--  generated funds flow from operations of $44 million, up 21% from $36
    million, and cash flow from operations of $45 million from $35 million; 
--  produced an average of 4,221 boe/d, an increase of 48% over 2010. Fourth
    quarter production in 2011 averaged 5,189 boe/d (weighted 32% oil and
    liquids and 68% gas); 
--  enjoyed 2011 field netbacks of $31.34 per boe on sales prices averaging
    $47.99 per boe; 
--  exited 2011 with positive working capital of $68.3 million and an
    undrawn credit facility of $80 million; 
--  raised a total of $183.9 million gross in two bought-deal equity
--  drilled 42 (29.3 net) wells at a net success rate of 90%; 29 (20.7 net)
    targeting oil and 13 (8.6 net) targeting gas; and 
--  converted the Class B shares to Class A shares. 

In the calendar year 2011, the oil and gas industry experienced significant
volatility in commodity prices combined with capital market cautiousness.
Against this backdrop, Painted Pony continued its adherence to a conservative
fiscal strategy, underpinning a strong share price throughout 2011 and providing
stability and flexibility to react to these fluctuations. Painted Pony exited
2011 with positive working capital of $68.3 million and an undrawn credit
facility of $80 million.

In 2011, Painted Pony expanded its oil exploration program into Alberta,
targeting a regional Viking light oil play. Access to approximately 22 net
sections of land, including farm-in lands, was accumulated during the year. In
the first quarter of 2012, the first 100% working interest exploratory earning
well was drilled on this play, with completion results expected after breakup. 

The Company continued to develop its Saskatchewan light oil program throughout
2011, enjoying success on the Flat Lake Bakken oil project. Several recent Flat
Lake discoveries appear to have proved up a new Bakken trend, and are expected
to provide several years of development drilling inventory.

In February 2012, in response to the decline in North American natural gas
prices, Painted Pony announced it had reduced its 2012 capital program to $120
million, reducing both the overall amount of its capital program and slowing its
investment in gas projects in northeastern British Columbia by $90 million.
Expenditures directed towards natural gas projects are expected to result in
significant reserve additions. 

During the first quarter of 2012, the Company completed drilling operations on
10 (7.9 net) horizontal wells; 5 (4.7 net) in Saskatchewan, 4 (2.2 net) in
British Columbia and 1 (1.0 net) in Alberta. Looking ahead to the balance of
2012, the Company's capital plans call for the drilling of 26 (18.1 net) wells,
including 23 (14.2 net) targeting light oil projects. 

The recent weakness in gas markets, in tandem with a general bearish medium-term
view, has created an unprecedented interest in value-added ventures among many
of Canada's explorers and producers. The opportunity to directly participate in
innovative energy projects such as LNG (LiquefiedLiquefied Natural Gas) export
facilities, GTL (Gas-to-Liquids) conversion or power co-generation is
increasingly attractive, as these businesses offer the potential to add
significant value beyond basic gas production and processing.

Painted Pony is working hard to become an industry leader in the value-added gas
business. One of Painted Pony's goals is to leverage upon the Company's
ideally-located Montney gas asset in northeastern British Columbia. In this
regard, the Company is a founding member of the Douglas Channel BC LNG project.
The BC LNG CO-OP project, to be located in Kitimat, British Columbia, has
received its necessary export permits and is slated to commence LNG exports in
the first half of 2014. Painted Pony continues to evaluate a formal commitment
to be a gas supplier to this project.

An updated presentation incorporating the Company's 2011 financial results will
be available on the Company's website on March 30, 2012.

Painted Pony Class A Shares trade on the TSX Venture Exchange under the symbol
"PPY.A". For more information please visit

Painted Pony Petroleum Ltd. was recognized as a TSX Venture 50(R) Company in
2012. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.

Financial and Operational Highlights

                                Three Months ended                          
                                      December 31,               Year ended 
                                        (Unaudited)             December 31,
                                  2011        2010         2011        2010 
Financial ($000s, except per share and shares outstanding)                  
Petroleum and natural gas                                                   
 revenue(1)                     20,528      16,621       73,936      58,283 
Funds flow from                                                             
 operations(2)                  12,517      10,411       44,150      36,393 
 Per share - basic(3)             0.19        0.20         0.74        0.78 
 Per share - diluted(4)           0.19        0.20         0.73        0.77 
Cash flows from operating                                                   
 activities                     12,889      10,200       44,884      35,474 
Comprehensive income             1,457       4,513        6,542       9,222 
 Per share - basic(3)             0.02        0.09         0.11        0.20 
 Per share - diluted(4)           0.02        0.09         0.11        0.19 
Capital expenditures(5)         54,452      35,929      162,868     124,104 
Working capital                                                             
 (deficiency)                   68,291      (1,205)      68,291      (1,205)
Total assets                   478,656     244,579      478,656     244,579 
Shares outstanding                                                          
 Class A                    69,693,027  51,016,700   69,693,027  51,016,700 
 Class B                             -   1,173,600            -   1,173,600 
Diluted weighted-average                                                    
 shares                     66,470,874  52,027,084   60,829,382  49,503,521 
Daily sales volumes                                                         
 Oil, condensate & NGL's                                                    
  (bbls per day)                 1,663       1,830        1,622       1,729 
 Gas (mcf per day)              21,151       9,678       15,589       6,718 
 Total (boe per day)             5,189       3,443        4,221       2,848 
Realized prices                                                             
 Oil (per bbl)             $     95.80 $     80.43  $     93.07 $     77.84 
 Gas (per mcf)             $      3.28 $      3.67  $      3.60 $      3.94 
Field operating netbacks                                                    
 British Columbia (per                                                      
  boe)                     $     13.05 $     13.66  $     14.12 $     12.35 
 Saskatchewan (per boe)    $     59.59 $     54.69  $     58.34 $     54.81 
 Company combined (per                                                      
  boe)                     $     28.43 $     35.54  $     31.34 $     37.88 

1.  Before royalties 
2.  This table contains the term "funds flow from operations", which should
    not be considered an alternative to, or more meaningful than "cash flows
    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 flows 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. 
3.  Basic per share information is calculated on the basis of the weighted
    average number of Class A shares outstanding in the period. 
4.  Diluted per share information reflects the potential dilution effect of
    options and the convertible Class B shares, each of which may be anti-
    dilutive. Comprehensive 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. 
5.  Including decommissioning obligations and share-based payments. 


Special Note Regarding Forward-Looking Information

This news release contains certain forward-looking statements, which 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. In addition, and without limiting the generality of the foregoing,
the key assumptions underlying the forward-looking statements contained herein
include the following: (i) commodity prices will be volatile, and natural gas
prices will remain low, 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)
production rates in 2012 are expected to show growth from the fourth quarter of
2011; (v) Painted Pony will have sufficient financial resources with which to
conduct the capital program; and (vi) the current tax and regulatory regime will
remain substantially unchanged. The reader is cautioned that certain or all of
the forgoing assumptions may prove to be incorrect.

Certain information regarding Painted Pony set forth in this document, including
its future plans and operations,and the planning and development of certain
prospects, 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 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.

Special Note Regarding Disclosure of Reserves or Resources

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. Given the value ratio based on the current price of
crude oil as compared to natural gas is significantly different from the energy
equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be
misleading as an indication of value.

Painted Pony Petroleum Ltd., Class A (TSXV:PPY.A)
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