First off, If you create a Graphics object, you are responsible for Disposing of it - and if you don't there will be problems. They are scarce resources and will run out long before your get low on memory and the Garbage Collector gets called in to sort it out.
Why are you drawing in the Panel via the Form Paint?
Either draw on the Form in the Form Paint event handler, or in the Panel in the Panel Paint event handler - and in both cases you are then passed the appropriate Graphics context read to use in teh PaintEventArgs parameter.
So to paint on the Form:
Private Sub Form3_Paint(ByVal sender As System.Object, ByVal e As System.Windows.Forms.PaintEventArgs) Handles MyBase.Paint
Dim g As Graphics = e.Graphics
...
g.DrawEllipse(yellowPen, 260, 180, 10, 10)
And the same code will draw on the panel in it's Paint handler without modification.