Painted Pony Announces June 30, 2009 Financial Results and Operational Update

Painted Pony's production for the second quarter of 2009 averaged 1,313 boe per day, weighted 41% oil, 3% liquids and 56% gas. Second quarter sales of light oil averaged 543 bbls/d with approximately 60 bbls/d of production temporarily shut-in due to spring breakup. Current field oil production rates for the first three weeks of August is estimated to be 990 bbls/d, bringing estimated total current production to 1,570 boe/d (approximately 63% light oil). In addition, two 100% Bakken oil wells are in various stages of completion and are expected to be placed on production by the end of the third quarter. In the third quarter, the Company began shutting in selected lower netback gas wells in the Cypress area (approximately 35 boe/d) due to weak natural gas prices.

The Company drilled 2 (2.0 net) successful step-out oil wells in the Midale/Huntoon area during the second quarter and 5 (5.0 net) wells in the third quarter to-date. Total horizontal Bakken light oil wells drilled this year is currently 9 (9.0 net) with 100% success. During the remainder of this year, the Company expects to drill an additional 8 (4.4 net) wells targeting the Bakken formation. With over 100 net development locations, the Company has a multi-year inventory of development drilling locations for Bakken oil.

After spring break-up, operations resumed in northeast British Columbia under two farm-out agreements. On the Cameron lands, one vertical Montney well was completed and flow tested. In the second half of 2009, two more vertical wells targeting the Montney formation are to be drilled under the terms of the farm-out agreement in the Cameron area, one of which spudded on July 29th, 2009. On the Cypress lands, a horizontal Montney well drilled primarily during the first quarter of this year is currently being completed. Painted Pony has 60,000 net acres of lands with Montney/Doig rights in the area.

The Buckinghorse shale gas play in the Blair area is in the testing stage. The zone is over-pressured, gas-charged throughout, over 800 meters thick and encountered at depths of 400 to 1,200 meters. The Company has over 70,000 net acres of land in this play. Stronger gas prices and additional evaluations of drilling and completion techniques would be required for Painted Pony to develop this potentially material resource. The Company has two pilot wells completed and on-stream to date. The feasibility of air drilling a well in the first quarter of 2010 is currently being assessed depending on commodity prices and costs.

Painted Pony's credit facilities have been increased to $29 million. The Company also issued 7 million Class A shares at $2.85 per share at the end of the second quarter, raising $20 million before costs. At the end of June 2009, Painted Pony had a positive working capital position of $22 million and no debt. In the second half of 2009, the Company expects to expend approximately $37 million primarily drilling for and acquiring light Bakken oil, mainly in the Midale/Huntoon core area.

Painted Pony continues to generate solid operating and financial results through successful drilling, acquisitions and a strong financial position. Improved oil prices and a successful financing combined with both drilling and completion cost reductions of 25 to 30% and acquisitions have allowed the Company to build operational momentum. Through focusing on further exploration and development of the Company's extensive Bakken assets, and testing unconventional resource exploitation play concepts for the Montney and Buckinghorse shale gas, Painted Pony aims to capitalize on a strong position in three of Western Canada's most attractive resource plays.

The Company announces Bruce Mezei has been appointed Vice President, Exploration South. Mr. Mezei previously was Vice President, Geology with the Company since November 2007. The Company also announces that Donald Slater has been appointed Vice President, Exploration North. Mr. Slater previously was Vice President, Geophysics with the Company since April 2007.

Investor Relations

Readers are invited to visit the Company's updated presentation dated August 27, 2009 available tomorrow on our website at www.paintedpony.ca.

For further information, please see www.paintedpony.ca.

Financial and Operational Highlights
(unaudited)

----------------------------------------------------------------------------
                     Three months ended June 30,   Six months ended June 30,
                             2009          2008          2009          2008
----------------------------------------------------------------------------
Financial
Petroleum and natural
 gas revenue (before
 royalties)          $  4,889,384 $   6,435,897 $   9,448,816 $   7,790,656
Funds flow from
 operations (1)      $  1,825,515 $   3,946,823 $   3,715,529 $   5,020,683
 Per share -
  basic (2)          $       0.06 $        0.15 $        0.12 $        0.23
 Per share -
  diluted (2)        $       0.06 $        0.14 $        0.12 $        0.23
Cash flow from
 operating
 activities          $    530,563 $   2,949,215 $   2,029,816 $   4,263,821
Net earnings (loss)  $ (1,964,686)$   1,525,544 $  (3,561,835)$   4,871,095
 Per share - basic
  and diluted (2)    $      (0.06)$        0.06 $       (0.11)$        0.22
Capital
 expenditures (4)    $  4,892,340 $  12,592,455 $  12,422,407 $  43,178,938
Net working capital  $ 22,290,098 $  32,336,669 $  22,290,098 $  32,336,669
Total assets         $108,308,456 $  96,362,028 $ 108,308,456 $  96,362,028
Shares outstanding
 Class A               35,222,700    28,222,700    35,222,700    28,222,700
 Class B                1,173,600     1,173,600     1,173,600     1,173,600
Operational
Daily sales volumes
 Oil sales    (bbls/d)        543           316           563           232
 Condensate
  sales       (bbls/d)         23            14            25             7
 Natural gas
  liquids     (bbls/d)         15             7            13             3
 Natural gas   (Mcf/d)      4,395         2,713         4,015         1,357
 Total         (boe/d)      1,313           789         1,270           469
Realized prices
 Oil           ($/bbl) $    66.85 $      125.20 $       58.95 $      117.32
 Gas           ($/Mcf) $     3.58 $       10.66 $        4.35 $       10.66
Field operating
 netbacks
 Oil           ($/bbl) $    42.84 $       91.20 $       37.31 $       84.31
 Gas & liquids ($/boe) $     4.08 $       36.00 $        7.77 $       36.00
 Company combined      $    20.10 $       58.11 $       20.86 $       59.93
Wells drilled (3)
 Gross                          2            10             5            22
 Net                          2.0           4.5           4.5           9.3
 Net success rate             100%           90%          100%           95%
----------------------------------------------------------------------------
(1) This table contains the term "funds flow from operations", which should
    not be considered an alternative to, or more meaningful than "cash flow
    from operating activities" as determined in accordance with Canadian
    generally accepted accounting principles ("GAAP") as an indicator of
    the Company's performance. Funds flow from operations and funds flow
    from operations per share (basic and diluted) do not have any
    standardized meaning prescribed by GAAP and may not be comparable with
    the calculation of similar measures for other entities. Management uses
    funds flow from operations to analyze operating performance and
    leverage and considers funds flow from operations to be a key measure
    as it demonstrates the Company's ability to generate the cash necessary
    to fund future capital investment. The reconciliation between funds
    flow from operations and cash flow from operating activities can be
    found in "Management's Discussion and Analysis". Funds flow from
    operations per share is calculated using the basic and diluted weighted
    average number of shares for the period after the deemed conversion of
    the Class B shares to Class A shares.
(2) Class B shares are converted into Class A shares at $10 divided by the
    greater of $1.00 and the Current Trading Price, defined as the weighted
    average trading price of the Class A shares for the last 30 consecutive
    trading days.
(3) "Gross and net wells drilled" in 2008 excludes a salt water disposal
    well and includes a stratigraphic well. "Net wells drilled" refers to
    net revenue interest. "Net success rate" in 2008 excludes a
    stratigraphic well.
(4) Including Asset Retirement Costs and Stock-Based Compensation.

Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) drilling success; (ii) production; and (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.

With respect to forward-looking statements contained in this document, Painted Pony has made a number of assumptions. Certain or all of the 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, 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Patrick R. Ward
Painted Pony Petroleum Ltd.
President & CEO
(403) 475-0440
(403) 238-1487 (FAX)

Joan E. Dunne