+1 on the dieting as well as drinking more water.

As far as exercise goes, the purpose for it is to build up more muscle and increase fitness more than it is to lose weight. If you are not fit, you will indeed put on muscle mass. If you look at the amount of calories burned, it's much more effective to diet than to exercise if your sole goal is weight loss. But exercise does indeed has its place.

Look at it in light of this: It's much better to be heavy because of muscle mass than fat.