Painted Pony Petroleum Ltd.
TSX VENTURE : PPY.A
TSX VENTURE : PPY.B

Painted Pony Petroleum Ltd.

October 30, 2007 18:52 ET

Painted Pony Announces Operational Update

CALGARY, ALBERTA--(Marketwire - Oct. 30, 2007) - Painted Pony Petroleum Ltd. (TSX VENTURE:PPY.A) (TSX VENTURE:PPY.B) ("Painted Pony" or the "Company") is pleased to announce the drilling of its first five operated wells.

In May 2007, Painted Pony completed its initial public financing and commenced trading on the TSX Venture Exchange. Since then, the Company commenced an active operated exploration program, focused on SE Saskatchewan and NE British Columbia, and currently has an estimated positive net working capital position of approximately $8.0 million. To date, 5 (2.2 net) wells have been drilled in Saskatchewan: 2 (0.7 net) light, sweet horizontal oil wells targeting the Bakken formation in the Kisbey area, 2 (1.0 net) potential light, sweet horizontal Bakken oil wells in the Midale area, and 1 (0.5 net) vertical Midale formation light oil well in the Alameda area.

At Kisbey, 2 (0.7 net) horizontal Bakken oil wells have been drilled and fracture stimulated. The first well has now been producing post-frac since October 1, 2007. Over the last week, production has averaged 175 bbl/d of 430 API oil, based on field estimates. Painted Pony has a revenue working interest of approximately 33% in this well. The second well was fracture stimulated recently, and will take several weeks to establish a stabilized production rate. In November, Painted Pony is planning to drill another horizontal well targeting the Bakken formation with a revenue interest of approximately 13%.

At Midale, the 2 (1.0 net) horizontal Bakken potential oil wells are in the process of being completed and fracture stimulated and are expected to be on production within a month.

Following the drilling results to-date, Painted Pony has mapped 100 plus potential drilling locations for Bakken oil within 30 sections, of the approximate 94 sections (approximately 60,000 gross acres) of lands to which the Company has access.

The Alameda vertical well, targeting the Midale/ Frobisher formations, was placed on production October 13, 2007. In the past week production has averaged 16 bbls/d of light oil, based on field estimates. Painted Pony has a 50% working interest. Utilizing a recently shot three dimensional seismic survey, the Company has identified several horizontal development locations offsetting this discovery.

In NE BC, through an agreement with a seismic company, Painted Pony has access to over 1,000 kilometers of 3D seismic data and 1,200 kilometers of 2D seismic data. Numerous potential drilling locations targeting natural gas have been identified on these lands. Depending on natural gas price trends, management expects drilling in NE BC to commence in 2008.

Painted Pony has 11,116,000 Class A Shares and 1,173,600 Class B Shares issued and outstanding, and trades on the TSX Venture Exchange under the symbols "PPY.A" and "PPY.B" respectively.

Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (I) drilling success (ii) production; (iii) future capital expenditures; and (iv) cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.

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 plan 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, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition, the lack of availability of qualified personnel or management, 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, stock market volatility, 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, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. 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 Corporation will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Corporation 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.

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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Painted Pony Petroleum Ltd.
    Patrick R. Ward
    President & CEO
    (403) 475-0440
    (403) 238-1487 (FAX)
    or
    Painted Pony Petroleum Ltd.
    Joan E. Dunne
    Vice President, Finance & CFO
    (403) 475-0440
    (403) 238-1487 (FAX)
    or
    Painted Pony Petroleum Ltd.
    402, 620 - 12 Ave SW
    Calgary, Ab T2R 0H5
    Website: www.paintedpony.ca