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

Painted Pony Petroleum Ltd.

August 23, 2007 14:35 ET

Painted Pony Announces Q2 2007 Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 23, 2007) - Painted Pony Petroleum Ltd. (TSX VENTURE:PPY.A) (TSX VENTURE:PPY.B) ("Painted Pony" or the "Company") is pleased to announce the financial and operational results as at June 30, 2007.

Highlights

- Successful closing of the Company's financing on May 17, 2007 raised proceeds of $13.475 million, before costs.

- On May 23, 2007 Painted Pony was listed for trading on the TSX Venture Exchange under the symbols PPY.A and PPY.B.

- Painted Pony has approximately $19.5 million of tax pools.

- On June 22, 2007 commenced our horizontal drilling program in the Kisbey area of S.E. Saskatchewan targeting light oil in the Bakken formation.

- Gained access to two farmin deals in S.E. Saskatchewan totaling 98.7 gross sections (63,154 gross acres, 55,552 net acres) with multi-zone light oil potential.

- Gained access to over 1,000 kilometers of 3D seismic data and 1,200 kilometers of 2D seismic data in N.E. British Columbia.

- Put in place a full technical team of eight with over 200 years of Western Canada oil and gas experience.

Operations Overview

The Company has two active core areas. In SE Saskatchewan, Painted Pony has assembled opportunities through farm-in arrangements to access over 55,000 net acres of land prospective for oil primarily from the Bakken, Midale and Frobisher formations. In NE British Columbia, the Company has commenced the evaluation of the extensive seismic datasets (over 1,000 square kilometers of 3D and 1,200 kilometers of 2D seismic data) prospective for natural gas.

SE Saskatchewan

During the quarter, Painted Pony commenced the drilling of the first of a two (0.75 net) well horizontal drilling program in the Kisbey area, targeting light sweet oil in the Bakken formation. The first well was rig released on July 11th 2007 and is currently production testing oil. The second well was drilled early during the third quarter and was also successful. The Company is planning to fracture stimulate both wells during the third quarter. The oil is light (44 API) and sweet.

In the Alameda area, Painted Pony participated in the shooting of a 32 square kilometer 3D seismic program over a farmin block of land. The data has resulted in multiple potential drilling locations prospective for light oil.

The Company was also successful at acquiring 1,920 acres gross (940 net) at the Saskatchewan June land sale.

An initial evaluation of the large 90 section (57,390 gross, 51,230 net acres) farm-in along the Midale/ Elcott trend in SE Saskatchewan has resulted in the identification of multiple exploratory and development drilling opportunities. Following the first two successful wells, the Company is currently licensing four (2.0 net) wells all targeting light sweet oil. To control access to timing and costs, these wells will be operated by Painted Pony. The Company expects that all four will be drilled during the third quarter, or early in the fourth quarter of this year.

NE British Columbia

The Company has identified numerous potential drilling targets and has started negotiating farm-in deals on prospective lands. With a large 3D seismic data base, Painted Pony has an advantage over other junior oil and gas companies that operate in the area, in that it allows the Company to make drilling commitments, which in turn makes farm-in proposals more likely to be acceptable. Drilling will most likely take place in the first quarter of 2008.

Selected Financial Highlights

For the three months ending and as at June 30, 2007, selected unaudited financial highlights are:



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(unaudited)
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Current assets less current liabilities $ 12,005,429
Net loss $ 53,661
Net loss per basic and diluted share $ 0.01
Issuance of share capital for cash $ 13,475,000
Share issue costs $ 919,163
Expenditures on property & equipment for cash $ 497,615
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Painted Pony has 11,116,000 Class A Shares and 1,173,600 Class B Shares issued and outstanding which trade on the TSX Venture Exchange under the symbols "PPY.A" and "PPY.B".

Outlook

Painted Pony has already identified in excess of 20 drilling opportunities on existing farm-in lands, and under the 3D seismic. The Company is in a strong financial position to take advantage of available and increasingly less expensive services. Painted Pony has a very experienced and engaged team of oil and gas professionals with access to substantial farm-in deals and a large 3D seismic base; these give the Company a significant competitive advantage. The team at Painted Pony is excited about the potential we see in the existing assets, and is committed to share value growth for investors.

Readers are invited to visit the Company's new website at www.paintedpony.ca.

Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) funds to be raised in a financing; (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.

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