PAINTED PONY ANNOUNCES A 52% INCREASE IN PROVED PLUS PROBABLE RESERVES TO 1.7 TCFE WITH A NET PRESENT VALUE DISCOUNTED AT 10% OF $1.

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1 1 FOR IMMEDIATE RELEASE March 4, 2014 PAINTED PONY ANNOUNCES A 52% INCREASE IN PROVED PLUS PROBABLE RESERVES TO 1.7 TCFE WITH A NET PRESENT VALUE DISCOUNTED AT 10% OF $1.5 BILLION March 4, 2014 Calgary, Alberta Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX: PPY) is pleased to announce the results of the Company s December 31, 2013 reserves position and its Montney natural gas prospective and contingent resource assessments. Highlights include: a 52% increase in proved plus probable ("P+P") reserves to 1.7 trillion cubic feet of gas equivalent ("Tcfe"), or million barrels of oil equivalent ("mmboe"), with a corresponding 41% increase in P+P net present value, discounted at 10% ("NPV10") to $1.5 billion, or $16.98 per share from December 31, 2012; a 123% increase in best estimate Montney contingent resources from December 31, 2012 to 7.0 Tcfe with an associated NPV10 of $4.7 billion; additional best estimate of Montney prospective resources of 7.3 Tcfe, as at December 31, 2013;production volumes in 2013 averaged 8,693 barrels of oil equivalent per day ("boe/d"), while fourth quarter production averaged 9,312 boe/d; a recycle ratio of 2.0 times based on an unaudited field operating netback for 2013 of $18.88/boe and finding, development and acquisition costs ("FD&A") for P+P reserve additions of $9.55/boe including future development costs ("FDC"); undeveloped land in British Columbia, Saskatchewan, and Alberta valued at $215 million at December 31, 2013; and a net asset value ("NAV") of $18.90 per share based on GLJ Petroleum Consultants Ltd. s ("GLJ") January 1, 2014 forecast prices and costs and a NPV10 value of P+P reserves plus undeveloped land value less unaudited year-end net debt of $45 million. CRUDE OIL, NATURAL GAS AND NATURAL GAS LIQUIDS RESERVES The reserves data of the Company set out in this press release is based upon independent evaluations by GLJ and Sproule Associates Limited ("Sproule") in accordance with the Canadian Oil & Gas Evaluation Handbook, each with an effective date of December 31, 2013 as contained in the consolidated report of GLJ dated February 14, 2014 (the "Painted Pony Reserves Report"). The tables below summarize Painted Pony s crude oil, natural gas and natural gas liquids ("NGLs") reserves and the net present values of future net revenue attributable to such reserves, as evaluated in the Painted Pony Reserves Report, based on GLJ s January 1, 2014 forecast prices and costs assumptions, and may be subject to rounding errors. GLJ evaluated the Company s reserves on its British Columbia properties and Sproule evaluated the Company s reserves on its Saskatchewan properties. Sproule incorporated the GLJ forecast prices and costs assumptions in their evaluation. GLJ prepared the Painted Pony Reserves Report by consolidating the GLJ evaluation with the Sproule evaluation using GLJ forecast prices and costs assumptions. Painted Pony s total working interest reserves are before royalties owned by others. The estimated future net revenues are stated before deducting income taxes and future estimated site restoration costs, and are reduced for estimated future abandonment costs and estimated

2 capital for future development associated with the reserves. It should not be assumed that the undiscounted and discounted net present values represent the fair market value of the reserves. The estimates of net present values for individual properties may not reflect the same confidence level as estimates of net present values for all properties, due to the effects of aggregation. During the year ended December 31, 2013, Painted Pony increased its total P+P reserves by 52% to mmboe (1.7 Tcfe) from December 31, 2012, weighted 91% towards natural gas, with an associated 41% increase in NPV10 to $1.5 billion, while proved reserves and the associated NPV10 increased by 39% to 59.9 mmboe and $0.5 billion, from December 31, 2012, respectively. The following tables outline the Company s reserves and associated NPV s for Summary of Company Reserves As at December 31, 2013 As at December Light and 31, 2012 Natural Gas (mmcf) NGLs (mbbl) Medium Oil (mbbl) Equivalent (mboe) Equivalent (mboe) Proved 318,478 4,192 2,607 59,878 42,978 Probable 1,272,542 16,236 2, , ,165 Total proved plus probable 1,591,020 20,428 4, , ,143 Summary of Net Present Values of Future Net Revenue Before Income Taxes ($ millions) As at December 31, 2013 As at December 31, % 8% 10% 5% 8% 10% Proved Probable 1,993 1,324 1,025 1, Total proved plus probable 2,676 1,870 1,502 1,810 1,301 1,066 Painted Pony grew P+P reserves per share in 2013 by 51% based on 88.5 million shares outstanding as at December 31, P+P reserve additions replaced 2013 production by 32 times, which averaged 8,693 boe/d (82% gas). In addition, the Company realized a P+P reserve life index ("RLI") of 85 years and a proved RLI of 18 years, based on fourth quarter annualized production of 9,312 boe/d (84% gas). The following tables summarize the change in reserves for the period from December 31, 2012 to December 31, Proved Reserves Natural Gas (MMcf) NGLs (Mbbl) Crude Oil (Mbbl) Equivalent (Mboe) December 31, ,907 3,853 2,807 42,978 Additions & Technical Revisions 116, ,133 Production (15,859) (195) (395) (3,233) December 31, ,478 4,192 2,607 59,878 Proved plus Probable Reserves December 31, ,012,651 17,416 4, ,143 Additions & Technical Revisions 594,228 3, ,361 Production (15,859) (195) (395) (3,233) December 31, ,591,020 20,428 4, ,271 The FDC associated with the P+P reserves as at December 31, 2013 was $2.4 billion over a seven year period and FDC associated with proved reserves are $0.4 billion over a four year period. The forecasted operating income associated with the P+P reserves over this same seven year period totals $3.0 billion and exceeds future development costs by $0.6 billion.

3 2013 CAPITAL PROGRAM EFFICIENCY During 2013, Painted Pony s cash capital expenditures of $143 million, and changes in FDC of $835 million resulted in P+P reserve additions of mmboe at a FD&A cost of $9.55/boe with proved reserve additions of 20.1 mmboe at a FD&A cost of $11.50/boe. The Company s recycle ratio for 2013 was 2.0 times based on an unaudited field operating netback for 2013 of $18.88/boe and FD&A on P+P reserve additions of $9.55/boe. The following table highlights the Company s capital program efficiency. 3 Capital Program Efficiency Proved P+P FD&A F&D FD&A F&D 2013 $ x $ x $ x $ x 2012 $ x $ x $ x $ x 2011 $ x $ x $ x $ x Three Year Weighted Average $14.84 $14.01 $9.98 $10.08 See advisories with respect to finding and development costs. The recycle ratio is calculated by dividing the annual average field operating netback by the FD&A for the same period. MONTNEY NATURAL GAS RESOURCE ASSESSMENT In addition to evaluating the Company s reserves, GLJ was engaged to prepare an independent contingent resources and prospective resources evaluations of the Company s properties in the Montney formation, as at December 31, 2013 using forecast prices and costs. Additional drilling and testing are required to confirm volumetric estimates and reservoir productivity for the contingent resources to be reclassified as reserves. Painted Pony s total working interest contingent resources are before royalties owned by others. The estimated future net revenues are stated before deducting income taxes and future estimated site restoration costs, and are reduced for estimated future abandonment costs and estimated capital for future development associated with the contingent resources. It should not be assumed that the undiscounted and discounted net present values represent the fair market value of the contingent resources. The estimates of net present values for individual properties may not reflect the same confidence level as estimates of net present values for all properties, due to the effects of aggregation. Based on GLJ s evaluation, Painted Pony s estimated total petroleum initially-in-place ("TPIIP") is 41.9 Tcf across the Company s Montney properties. Included in the 41.9 Tcf, is discovered petroleum initially-in-place ("DPIIP") of 20.4 Tcf, and undiscovered petroleum initially-in-place ("UPIIP") of 21.5 Tcf. The best estimate Montney contingent resource is 7.0 Tcfe, while the best estimate of additional prospective resources on the Company s Montney properties is 7.3 Tcfe. The following table summarizes GLJ s estimates of Painted Pony s Montney natural gas resources. Summary of Montney Natural Gas Resources as at December 31, 2013 TPIIP DPIIP UPIIP Contingent Resources Additional Prospective Resources See special note regarding disclosure of reserves and resources Billion cubic feet ( Bcf ) Billion cubic feet of gas equivalent ( Bcfe ) Best Estimate 41,890 Bcf 20,389 Bcf 21,475 Bcf 7,022 Bcfe 7,317 Bcfe Summary of Company Interest Montney Contingent Resources ($ millions) As at December 31, 2013 As at December 31, 2012 Low Estimate Best Estimate High Estimate Best Estimate (Bcfe) (mmboe) (Bcfe) (mmboe) (Bcfe) (mmboe) (Bcfe) (mmboe) Natural Gas 4, ,526 1,088 9,602 1,600 2, Liquids Total 4, ,022 1,170 10,333 1,722 3,

4 4 Summary of Company Montney Contingent Resources Net Present Values of Future Revenue Before Income Taxes ($ millions) As at December 31, 2013 As at December 31, % 8% 10% 10% Low Estimate 5,847 3,591 2, Best Estimate 10,125 6,265 4,650 1,449 High Estimate 15,589 9,554 7,085 2,217 UNDEVELOPED LAND Seaton-Jordan & Associates Ltd. was engaged to evaluate Painted Pony s undeveloped lands in British Columbia, Saskatchewan and Alberta in accordance with NI Standards for Oil and Gas Disclosure. At December 31, 2013, Painted Pony had 373 net undeveloped sections, at an average working interest of 74% valued at $215 million. NET ASSET VALUE Painted Pony s net asset value is estimated to be $1.7 billion, or $18.90 per share, based on the value of the Company s P+P reserves, as set out in the Painted Pony Reserves Report, undeveloped land, and estimated net debt at December 31, The following table highlights Painted Pony s estimated net asset value at December 31, Net Asset Value As at December 31, 2013 $ Millions Per Share P+P NPV10 $1,502 $16.98 Undeveloped Land $215 $2.43 Less: Net Debt (unaudited) ($45) ($0.51) Total NAV $1,672 $18.90 At December 31, 2013 there were 88.5 million shares outstanding. Net debt is defined as outstanding loans and borrowings plus or minus working capital OPERATIONS UPDATE In the first quarter of 2014, and to date, the Company has drilled 3 (3.0 net) wells at the core Blair area with a further 2 (2.0 net) wells at Blair currently drilling. In addition to wells currently drilling at Blair, 2 (2.0 net) wells have initiated completions operations. At Townsend, Painted Pony has completed 2 (2.0 net) wells in the first quarter of 2014, which will be brought on production in conjunction with commissioning of the Townsend gas facility. Construction of the 25 million cubic feet per day facility remains on schedule with completion expected at the end of the first quarter of 2014, which is currently anticipated to result in Company production increasing to approximately 11,500 boe/d in the second quarter of Painted Pony is a Canadian oil and gas exploration company that trades on the Toronto Stock Exchange under the symbol "PPY". For more information please visit or contact: Patrick R. Ward President & CEO John H. Van de Pol Vice President, Finance & CFO PAINTED PONY PETROLEUM LTD. 1800, th Avenue SW, Calgary, AB T2P 3T7 Phone: (403) Fax: (403) Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this news release.

5 Advisory Special Note Regarding Forward-Looking Information This news release contains certain forward-looking statements, which are based on numerous assumptions including but not limited to (i) drilling success; (ii) production; (iii) future capital expenditures;(iv)accuracy of FD&A and FDC estimates; (v) accuracy of reserves and resources estimates; and (vi) cash flows from operating activities. In addition, and without limiting the generality of the foregoing, the key assumptions underlying the forward-looking statements contained herein include the following: (i) commodity prices will be volatile, and natural gas prices will remain low, throughout 2014; (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) production rates in 2014 are expected to show growth from the fourth quarter of 2013; (v) Painted Pony will have sufficient financial resources with which to conduct the capital program; and (vi) the current tax and regulatory regime will remain substantially unchanged The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. This news release contains information, including in respect of Painted Pony's capital program, which may constitute future oriented financial information or a financial outlook. Such information was approved by management of Painted Pony on March 4, 2014, and such information is included herein to provide readers with an understanding of the Company's anticipated capital expenditures. Readers are cautioned that the information may not be appropriate for other purposes. Certain information regarding Painted Pony set forth in this document, including estimates of the Company s reserves and resources, estimates of future net revenue from the Company s reserves and resources, pricing, inflation and exchange rates, FD&Aand future development costs 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. This news release contains other industry benchmarks and terms, such as field operating netbacks (calculated on a per unit basis as oil, gas and natural gas liquids revenues less royalties and transportation and operating costs) and finding, development and acquisition costs (calculated by dividing the capital costs for the period, including the change in undiscounted future development capital, by the change in the reserves, incorporating revisions and production, for the same period), which are not recognized measures under International Financial Reporting Standards. These measures are commonly utilized in the oil and gas industry and are considered informative for management and stakeholders. Painted Pony's method of calculating field operating netbacks and FD&A costs may not be comparable to that used by other companies. Field operating netbacks should not be viewed as an alternative to cash flow from operations or other measures of financial performance calculated in accordance with IFRS. Per unit field operating netbacks reflect revenues less royalties, transportation and operating costs divided by production for the period. Painted Pony s method of calculating field operating netbacks may not be comparable to the method used by other companies. Additional information on these and other factors that could affect Painted Pony s operations and financial results are included in the Company s Management s Discussion and Analysis for the year ended December 31, 2012, and the Company's Annual Information Form for the year ended December 31, 2012 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website ( or Painted Pony s website ( 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. Special Note Regarding Disclosure of Finding and Development Costs The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. 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. 5

6 Special Note Regarding Resource Definitions "Total Petroleum Initially-In-Place or "TPIIP" is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered (equivalent to total resources ). "Discovered Petroleum Initially-In-Place" or "DPIIP" (equivalent to discovered resources) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially in place includes production, reserves, and contingent resources; the remainder is unrecoverable. "Undiscovered Petroleum Initially-In-Place" or "UPIIP" (equivalent to undiscovered resources) is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as prospective resources, the remainder as unrecoverable. "Reserves" are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are further classified according to the level of certainty associated with the estimates and may be subclassified based on development and production status. "Contingent Resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status. The contingent resources and prospective resources estimates contained in this press release, including the corresponding estimates of before tax present value estimates, are estimates only and the actual results may be greater than or less than the estimates provided herein. There is no certainty that such resources will be commercially viable or technically feasible to produce any portion of the resources. "Prospective Resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity. Painted Pony s total working interest reserves and contingent resources are before royalties owned by others. The estimated future net revenues are stated before deducting income taxes and future estimated site restoration costs, and are reduced for estimated future abandonment costs and estimated capital for future development associated with the contingent resources. It should not be assumed that the undiscounted and discounted net present values represent the fair market value of the contingent resources. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas ("mcf") to one barrel of oil ("bbl") (6 mcf:1 bbl) is used as an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived by converting natural gas to oil in the ratio of six mcf of gas to one barrel of oil. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio of 6:1 may be misleading as an indication of value. Mcfes may be misleading, particularly if used in isolation. A Mcfe conversion ratio of 1 bbl: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value. Estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation. The FD&A costs presented in this news release are used as a measure of capital efficiency and are calculated by dividing the capital costs for the period, including the change in undiscounted future development capital, by the change in the reserves, incorporating revisions and production, for the same period (eg. Total P+P ( )/102.4). In calculating the amounts of finding and development and/or acquisition costs for a year, the changes during the year in estimated FDC and in estimated reserves and resources are based upon the evaluations of Painted Pony's reserves and resources prepared by GLJ and Sproule effective December 31 of such year. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated FDC generally will not reflect total FD&A related to reserve and resource additions for that year. 6

7 7 The RLI is calculated by dividing the reserves (in boe) in each category by the annualized average production rate in boe/year. Painted Pony believes that the most accurate way to evaluate the current reserve life is by dividing the P+P reserves by the actual fourth quarter average production. The most significant positive and negative factors with respect to the resource estimates relate to the fact that the field is currently at an evaluation/delineation stage. The Montney formation is aerially extensive in this region, however well control is limited. Both resources-in-place and productivity may be higher or lower than current estimates.