Painted Pony Petroleum Provides Operations Update on Montney Gas and Light Oil Projects

Painted Pony Petroleum Provides Operations Update on Montney Gas and Light Oil 
CALGARY, ALBERTA -- (Marketwire) -- 02/12/13 -- Painted Pony
Petroleum Ltd. ("Painted Pony" or the "Company") (TSX VENTURE:PPY) is
pleased to provide the following operations update and drilling
activity forecast for 2013. 

--  fourth quarter 2012 field-estimated sales averaged 7,290 boe/d (76%
    weighted to gas); a 40% increase over fourth quarter 2011; 
--  field-estimated sales for January 2013 averaged 8,100 boe/d (77%
    weighted to gas); a 27% increase over January 2012; 
--  successful testing of 2.0 net Montney wells on the 62-F pad at peak 24
    hour rates of 7.1 MMcf/d and 4.5 MMcf/d; 
--  currently drilling the first well on the recently-acquired Townsend
    (Kobes) lands in the upper Montney; 
--  2013 capital plans include drilling 22 (17.8 net) wells, with 12 (9.4
    net) Montney-directed; and 
--  exited 2012 with no debt and an undrawn demand credit facility of $100

During the fourth quarter of 2012, Painted Pony's field-estimated
sales averaged 7,290 boe/d, (weighted 76% gas), an increase of 15%
from average third quarter 2012 volumes of 6,327 boe/d (77% gas
weighted) and 40% above fourth quarter 2011. Painted Pony's
field-estimated production for January 2013 averaged 8,100 boe/d (77%
weighted to gas). This production estimate is up 11% over fourth
quarter 2012 average and 27% over January 2012. 
Painted Pony continues to pursue the development and expansion of its
Montney gas assets in northeastern British Columbia. In the fourth
quarter of 2012, the Company drilled or participated in drilling 4
(3.2 net) horizontal wells. To-date in 2013, the Company has
participated in drilling 1 (0.2 net) well and a 100% well is
currently being drilled. The Company has also completed two 100%
wells in the Blair area of the Montney. 
At Blair, British Columbia, Painted Pony has recently commenced
production testing on 2 (2.0 net) Montney wells on the c-62-F/94-B-16
pad, in-line to a third party gas processing facility. Over the past
ten days, the upper Montney well has flowed at an average wellhead
rate of 5.8 MMcf/d at a flowing casing pressure of 604 psi, and a
peak 24 hour rate of
 7.1 MMcf/d at an average flowing casing pressure
of 900 psi. The most recent 24 hour rate was 5.4 MMcf/d at an average
flowing casing pressure of 458 psi. The lower Montney well at 62-F
has flowed on cleanup and initial production test for the past five
days. During this period, the wellhead flow rate has averaged 3.8
MMcf/d at an average flowing casing pressure of 405 psi. The peak
24-hour rate was 4.5 MMcf/d at a flowing casing pressure of 500 psi. 
At Gundy (Cameron), Painted Pony has recently participated in the
drilling of 2 (0.4 net) non-operated Montney wells on the
c-68-J/94-B-09 pad. These two wells are expected to be completed and
production tested prior to the end of the first quarter. A further 2
(0.4 net) Montney wells are expected to be drilled on the nearby
c-75-J pad, also before the end of the first quarter. 
At Townsend (Kobes), Painted Pony completed the acquisition of
certain mineral interests in late December 2012 (please refer to
press releases dated December 4, 2012 and December 21, 2012).
Subsequent to closing this acquisition, the Company has commenced
drilling its first Montney well on these lands at a-B11-J/94-B-09.
This 100% working interest well is targeting liquids-rich gas from an
upper Montney interval. The B11-J well, plus an adjacent cased lower
Montney well on the same pad, are expected to be completed and
production tested prior to the end of the first quarter. 
Painted Pony's Montney exploration well at West Blair (Daiber)
a-80-E/94-B-16 has completed initial production testing of potential
gas pay in the upper, middle and lower Montney zones. This well was
fracture stimulated across 11 stages, including single stages in the
upper and middle Montney zones, plus nine stages in the lower Montney
horizontal section. The well flowed intermittently over a month for a
total of approximately ten flowing days. The last 36 hour test of all
three zones had a peak 24 hour wellhead rate of 5.5 MMcf/d at an
average flowing casing pressure of 911 psi. The combined average
wellhead flow rate for the total 36 hour test was 4.7 MMcf/d at an
average flowing casing pressure of 758 psi. A subsequent spinner
survey indicated that the upper Montney interval was contributing 47%
of the combined wellhead flow. Painted Pony believes that the upper
Montney zone represents the preferred target horizon in this area. A
further 2 (2.0 net) upper Montney horizontal wells are planned to be
drilled on the 80-E pad in 2013, and placed on production early in
Painted Pony continues to maintain its inventory of light oil
opportunities, focusing on projects in Saskatchewan and Alberta. In
the fourth quarter of 2012, the Company drilled 6 (5.2 net) wells
targeting light oil. In its southeast Saskatchewan core area, the
Company continues to explore for and develop various assets targeting
the Bakken light oil resource play. In the fourth quarter of 2012, 4
(3.2 net) wells were drilled in Saskatchewan and have all been placed
on production. In the first quarter of 2013, Painted Pony expects to
participate in the drilling of 3 (1.4 net) wells in Saskatchewan,
including 2 (0.6 net) wells on the Flat Lake Bakken project. 
Painted Pony currently has no net debt and has an undrawn $100
million demand revolving credit facility with a Canadian chartered
bank, which is subject to a review by the lender on or before June 1,
The Company continues to pursue the development and expansion of its
Montney gas assets in northeastern British Columbia. In 2013, the
Company expects to complete drilling operations on a total of 12 (9.4
net) Montney wells. This proposed program is expected to include
activity on the Company's Blair, West Blair, Cameron, and Cypress
projects, including at least 3 (2.8 net) wells on the recently
acquired Townsend (Kobes) project. A completion is also planned to
test the Buckinghorse formation in the greater Blair area. 
Painted Pony was not selected as the supplier of natural gas to the
Douglas Channel BC LNG initial project; however, as a founding member
of the co-operative, Painted Pony is entitled to bid for supply on
any future expansion. In general, the prospects for construction of
LNG (Liquefied Natural Gas) facilities on Canada's west coast
continue to gain momentum. Painted Pony's Montney gas project is
well-positioned to become an important supplier to these export
An updated presentation incorporating the Company's latest activity
plans for 2013 will be available on the Company's website in the next
For more information please visit 
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) pr
(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 2013; (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 proposed capital
program; (v) the accuracy of geological and geophysical data and
Painted Pony's interpretation of that data; (vi) production rates in
2013 are expected to show growth from 2012; (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
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 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 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 six thousand cubic feet (Mcf) to one
barrel (bbl). 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:1bbl, utilizing a conversion ratio at 6
Mcf:1bbl may be misleading as an indication of value. 
The well test results disclosed in this news release represent
short-term results, which may not necessarily be indicative of
long-term well performance or ultimate hydrocarbon recovery
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
Painted Pony Petroleum Ltd.
Patrick R. Ward
President & CEO
(403) 475-0440
(403) 238-1487 (FAX) 
Painted Pony Petroleum Ltd.
Joan E. Dunne
Vice President, Finance & CFO
(403) 475-0440
(403) 238-1487 (FAX) 
Painted Pony Petroleum Ltd.
300, 602 - 12 Ave SW
Calgary, AB T2R 1J3
(403) 475-0440
(403) 475-0440 (FAX)
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