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

Painted Pony Petroleum Ltd.

March 17, 2008 18:35 ET

Painted Pony Reports Year-End Reserves and Land Value

CALGARY, ALBERTA--(Marketwire - March 17, 2008) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX VENTURE:PPY.A)(TSX VENTURE:PPY.B) is pleased to announce the results of its year-end reserves report and its land value as of December 31, 2007.

RESERVES

The December 31, 2007 reserves report was prepared by McDaniel & Associates Consultants Ltd. ("McDaniel's"). At December 31, 2007 the Company's proved and probable working interest reserves, using forecast prices and costs, were 553.0 mboe, all light and medium oil. At December 31, 2007, Painted Pony's total proved working interest reserves were 201.7 mbbl and proved producing reserves were 77.7 mbbl.




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Summary of Reserves (1)
As at December 31, 2007
Reserves Category Light/Medium Oil Total Oil Equivalent
(Mbbl) (Mboe)(4)
Gross(2) Net(3) Gross(2) Net(3)
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Proved
Developed producing 77.7 66.8 77.7 66.8
Developed non-producing - - - -
Undeveloped 124.0 111.8 124.0 111.8
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Total proved 201.7 178.5 201.7 178.5
Probable 351.3 294.4 351.3 294.4
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Total proved plus probable 553.0 472.9 553.0 472.9
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(1) Numbers in this table are subject to rounding error.
(2) "Gross" means Painted Pony's total working interest reserves
before royalties owned by others.
(3) "Net" means Painted Pony's total working interest reserves
after deducting amounts attributable to royalties owned by
others.
(4) Natural gas is converted to barrels of oil equivalent ("boe")
at a ratio of six thousand standard cubic feet to one barrel
of oil.


NET PRESENT VALUE OF FUTURE NET REVENUE

The forecast prices used in the reserve report effective December 31, 2007 were McDaniel's published Forecast Prices and Costs as at January 1, 2008. The constant prices used were McDaniel's posted constant prices as at December 31, 2007.

The estimated future net revenues are stated before deducting future estimated site restoration costs and reduced for estimated future well abandonment costs, the Saskatchewan Capital Tax and estimated capital for future development associated with the reserves.

In the reserve report, the net total future capital required to bring undeveloped proved and probable reserves onto production is estimated to be $9,974,800 over the life of the reserves.



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Summary of Net Present Values of Future Net Revenue (1),(2),(3)
Forecast Prices and Costs ($000s)
Before Income Taxes(2), Discounted at (%/year)
As at December 31, 2007
0% 5% 10% 15% 20%
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Proved
Developed producing 3,802.6 3,535.5 3,309.5 3,117.1 2,952.1
Developed non-producing - - - - -
Undeveloped 2,966.0 2,385.6 1,916.9 1,536.2 1,224.0
-----------------------------------------------
Total proved 6,768.6 5,921.2 5,226.4 4,653.3 4,176.1
Probable 10,978.6 8,644.0 6,921.0 5,614.4 4,597.9
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Total proved plus probable 17,747.2 14,565.2 12,147.4 10,267.8 8,774.0
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(1) Numbers in this table are subject to rounding error.
(2) Values are net of abandonment liabilities.
(3) The net present values of future net revenue do not represent fair
market value.


Summary of Pricing and Inflation Rate Assumptions
Forecast Prices and Costs
As at January 1, 2008
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WTI Cushing Edmonton Par Inflation Exchange
Oklahoma Price 40 degree Rates Rate
($US/bbl) API ($Cdn/bbl) %/Year ($US/$Cdn)
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2008 90.00 89.00 2.0 1.000
2009 86.70 85.70 2.0 1.000
2010 83.20 82.20 2.0 1.000
2011 79.60 78.50 2.0 1.000
2012 78.50 77.40 2.0 1.000
2013 77.30 76.20 2.0 1.000
2014 78.80 77.70 2.0 1.000
2015 80.40 79.30 2.0 1.000
2016 82.00 80.80 2.0 1.000
2017 83.70 82.50 2.0 1.000
2018 85.30 84.10 2.0 1.000
2019 87.00 85.80 2.0 1.000
2020 88.80 87.50 2.0 1.000
2021 90.60 89.30 2.0 1.000
2022 92.40 91.10 2.0 1.000
Thereafter +2%/yr +2%/yr 2.0 1.000
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METHOD OF PREPARATION

In this press release both "Gross" reserves (being working interest reserves, excluding royalty interest reserves, before deduction of royalty burdens payable) and "Net" reserves (being working interest reserves and royalty interests less royalty burdens payable) are disclosed. The reserve reports were prepared utilizing definitions as set out under National Instrument 51-101.

UNDEVELOPED LAND

As at December 31, 2007, in a report prepared by Seaton-Jordan and Associates Ltd., the Company had 6,310 net undeveloped acres in Saskatchewan valued at $2,288,745 and an option to earn interest on 59,493 acres of other lands in Saskatchewan at a 100% gross working interest for a value of $36,259,137. Seaton Jordan's assessment of the Company's lands was prepared in accordance with National Instrument 51-101.

RESERVES SUBCOMMITTEE OF THE AUDIT COMMITTEE

The Reserves Sub Committee is comprised of independent board members appointed by the Board of Directors of Painted Pony, and is responsible to the Board to oversee and monitor the process for calculating the reserves and the procedures for compliance with applicable legislation and conformity with industry standards and disclosure of information. It reviews, reports and, when appropriate, makes recommendations to the Board on Painted Pony's policies and procedures related to their reserve estimates. The draft McDaniel's Report was reviewed by the Reserves Committee on March 10, 2008 and the final McDaniel's Report and the Seaton Jordan Report was approved by the Board of Directors on March 17, 2008.

Painted Pony trades on the TSX Venture Exchange under the symbols "PPY.A" and "PPY.B" respectively.



Patrick R. Ward Joan E. Dunne
President & CEO Vice President, Finance & CFO


READER 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, reserve estimates, undeveloped land holdings and values, capital expenditures and the timing thereof and the total future capital required to bring undeveloped proved and probable reserves onto production, 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
    or
    Painted Pony Petroleum Ltd.
    Joan E. Dunne
    Vice President, Finance & CFO
    (403) 475-0440
    or
    Painted Pony Petroleum Ltd.
    402, 620 - 12 Ave SW
    Calgary, AB T2R 0H5
    (403) 475-0440
    (403) 238-1487 (FAX)
    Website: www.paintedpony.ca