Painted Pony Petroleum provides operations update on Montney gas and light oil projects

Wednesday, Feb 13, 2013

Painted Pony Petroleum Ltd. (“Painted Pony” or the “Company”) (TSXV: PPY) is pleased to provide the following operations update and  activity forecast for 2013.

PRODUCTION

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.

MONTNEY GAS OPERATIONS

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 2014.

Source: Painted Pony Petroleum Ltd.

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