Painted Pony Petroleum Announces Exceptional Montney Wells and Continued Bakken Production Growth

Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX
VENTURE:PPY.A) (TSX VENTURE:PPY.B) is pleased to announce results from recent
Montney wells and to provide an operational update.


LOWER MONTNEY RESULTS AT KOBES/GUNDY

Following a 5 day clean-up, the horizontal well Gundy d-B67-J/94-B-9 (20%
working interest) flowed in-line for 19 days at an average rate of 11.6 million
cubic feet per day (mmcf/d), with a peak rate of 13.1 mmcf/d. The average
pressure during the 19 day test was over 2,900 psi. Current production is 11.5
mmcf/d and the well has produced 0.3 Bcf in less than one month.


On the same pad, the horizontal well Gundy c-67-J/94-B-9 (20% working interest)
was brought on-stream in December 2010. The well was drilled and completed
during the summer of 2010 though it was not tied-in until the Gundy compressor
facility was completed. The well is currently producing 6.1 mmcf/d at over 1,400
psi, after one month on production. 


Approximately 4 miles away on the same contiguous block of land, the horizontal
well Kobes a-B10-J/94-B-9 (20% working interest) has been on production since
August 2010. Initial production was 9.8 mmcf/d, and the average production rate
during the first 30 days following cleanup was 8.5 mmcf/d at an average pressure
of over 2,900 psi. The well has produced 0.85 Bcf in approximately 4 months.


MIDDLE MONTNEY RESULTS AT KOBES

The horizontal well Kobes a-A10-J/94-B-9 (20% working interest) has been on
production since October 2010. The average production rate during the first 30
days following cleanup was 6.6 mmcf/d, at an average pressure of 1,000 psi. The
well has produced over 0.5 Bcf in less than three months, and is currently
producing at 5.9 mmcf/d. 


UPPER MONTNEY RESULTS AT GUNDY AND BLAIR/TOWN

In addition to the wells in the lower and middle Montney discussed above,
Painted Pony now has 3 upper Montney horizontal wells on production. Production
from the first two wells, which were brought on-stream at Blair approximately
eight months ago, has exceeded original expectations significantly. The third
upper Montney well (20% working interest), Gundy d-A67-J/94-B-9 is currently
producing at 2.3 mmcf/d after 29 days on production.


THREE-TIERED MONTNEY DELINEATION PROGRAM UNDERWAY

Painted Pony continues to actively delineate all three Montney intervals on the
Company's significant land position in northeast British Columbia. The Company
holds approximately 118 net sections with Montney rights in this area.


On the Cameron/Kobes block all three intervals in the Montney have been proven
commercially productive with horizontal wells. On the Blair/Town block (85 net
sections), the upper Montney has been proved commercially productive with
horizontal wells, and the lower and middle Montney have been tested successfully
using vertical wells. Additional horizontal piloting is planned for all three
intervals at Blair/Town in 2011. 


Currently, the Daiber b-60-C/94-B-9 upper Montney horizontal well (20% working
interest) is being completed with results expected by February. The Blair
d-8-F/94-B-16 vertical well (50% working interest) is currently being flow
tested and the Blair d-40-F/94-B-16 lower Montney horizontal well (30% working
interest) is scheduled to be completed before the end of January. An additional
upper Montney horizontal well (50% working interest) is currently drilling at
Blair d-5-K/94-B-16. Painted Pony plans to drill a total of 5 (2.9 net) Montney
wells during the first quarter of 2011. 


The Montney zone across the entire area contains sweet, low-carbon dioxide gas,
with high heat content and an estimated liquids-to-gas ratio of over 20
bbls/mmcf. 


OPERATIONAL UPDATE

Painted Pony's production has continued to grow to record levels despite
weather-related operational delays and pipeline apportionment, with
field-estimated December 2010 production averaging 3,950 boe/d (52% oil and
liquids, 48% gas). Based on field estimates, production for the fourth quarter
of 2010 was 3,360 boe/d (54% oil and liquids, 46% gas).


In Saskatchewan, the Company has completed construction of oil batteries and
solution gas gathering systems at Midale and Huntoon. After two months of sales,
the average gas-to-oil ratio was 1,140 cubic feet/barrel of oil, and the
recovered liquids-to-gas ratio was 180 bbls/mmcf. These results are believed to
be higher than other parts of the Viewfield Bakken pool, and enhance the
economics of the area. 


At Flat Lake, Painted Pony's Bakken discovery well (please refer to the press
release dated November 9, 2010) continues to produce at a rate of 176 bbls/d (88
bbls/d net) after 2 months on-stream. Flat Lake continues to be an exciting new
core area for the Company and further development planning is underway.


At North Weyburn, the Company drilled a Bakken exploration well (100% working
interest) in the fourth quarter of 2010 with completion planned for first
quarter 2011. 


In the first quarter of 2011, Painted Pony plans to drill 13 (8.0 net) wells
targeting light oil in southeast Saskatchewan, with a two-rig program. 


RETIREMENT

Don Slater, Vice-President of Exploration (North), announced his retirement,
effective January 18, 2011. Mr. Slater has been with Painted Pony since the
Company's inception, and has been a major contributor to its success. Painted
Pony thanks Mr. Slater for his contributions and wishes him the best in his
retirement. 


INVESTOR RELATIONS 

Painted Pony will be undertaking a series of presentations to interested parties
over the next two weeks in cities in Canada and the United States. Interested
parties are invited to visit the Company's website to view an updated
presentation dated January 14, 2011. 


The information contained herein is for information purposes only and is not an
invitation to purchase securities listed on TSX Venture Exchange and/or Toronto
Stock Exchange. TMX Group Inc. and its affiliates do not endorse or recommend
any securities referenced. Neither TMX Group Inc. nor its affiliated companies
represents, warrants or guarantees the accuracy or the completeness of the
information. You should not rely on the information contained herein for any
trading, business or financial purposes. TMX Group Inc. and its affiliates
assume no liability for any errors or inaccuracies herein or any use or reliance
upon this information.


Painted Pony Petroleum Ltd. was recognized as a TSX Venture 50(R) company in
2010. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.


Advisory

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.


Special Note Regarding Forward-Looking Information

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) production; (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 2011; (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 capital program; (v) the accuracy of geological and
geophysical data and Painted Pony's interpretation of that data; (vi)the results
of wells drilled by Painted Pony to date on its properties and production from
those wells, the results of wells drilled by third parties in the vicinity of
the Company's properties; (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, the planning and development of certain
prospects, production estimates, treatment under governmental regulatory regimes
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, 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 (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.