Mr. J.H.T. Riddell reports

PARAMOUNT RESOURCES LTD. FIRST QUARTER 2013 RESULTS, SALES VOLUMES INCREASE 20%, MUSREAU DEEP CUT FACILITY ON SCHEDULE FOR LATE THIRD-QUARTER COMMISSIONING

Paramount Resources Ltd. has released its first quarter 2013 results.

First quarter overview

Principal properties:

• Paramount achieved record sales volumes of 23,600 barrels of oil equivalent per day in March, 2013, the highest since the spinout of Trilogy in 2005, despite 800 boe per day of property dispositions and 2,000 boe per day of third party disruptions.
• First quarter 2013 sales volumes increased 20 per cent from the first quarter of 2012 to 22,591 boe per day. Kaybob COU sales volumes increased 46 per cent to 14,156 boe per day.
• Netbacks increased 38 per cent to $31.1-million in the first quarter of 2013 from $22.5-million in the first quarter of 2012 as a result of higher sales volumes and higher natural gas prices.
• Construction of the company's wholly owned 200-million-cubic-foot-per-day deep-cut facility at Musreau remains on schedule and in line with budget. Commissioning is scheduled to commence toward the end of the third quarter of 2013.
• Advance drilling for the deep-cut-facility expansions at Musreau and Smoky continued. The company currently has an inventory of 45 (35.5 net) Kaybob Deep basin wells awaiting start-up of the new facilities.
• In the first quarter of 2013, the company sold its remaining U.S. properties for $21.8-million (U.S.) and properties in the Bistcho area of Alberta and the Cameron Hills area of the Northwest Territories for net proceeds of $9.1-million. The company continues to rationalize its asset base to focus on the opportunities that generate the best returns.

Investments:

• Four of Fox Drilling's rigs are drilling through breakup in the Kaybob COU. Both of the new walking rigs are currently drilling on multiwell pad sites.
• Paramount's wholly owned subsidiary, Cavalier Energy Inc., continued with front-end engineering and design work for the first phase of the Hoole Grand Rapids project. These activities are being financed with drawings on Cavalier's $40-million credit facility.
• The company's shale gas exploratory well at Patry is expected to be tied in later in the year. Drilling operations at Dunedin were suspended in March due to warm weather and will resume after breakup.

Corporate:

• At March 31, 2013, Paramount had cash balances of $48.0-million, and its credit facility was undrawn.
• Corporate segment general and administrative costs per boe decreased 16 per cent to $1.48 in the first quarter of 2013 compared with $1.77 in the first quarter of 2012.

                FINANCIAL AND OPERATING HIGHLIGHTS                                     
                   ($ millions, except as noted)                       

                                     Three months ended March 31,
                                               2013         2012
Financial
Petroleum and natural gas sales               $61.3        $54.7
Funds flow from operations                     16.6         12.8
Per share -- diluted ($/share)                 0.18         0.15
Net income                                      0.4        124.5
Per share -- basic ($/share)                     --         1.46
Per share -- diluted ($/share)                   --         1.42
Exploration and development
expenditures                                  145.2        142.2
Investments in other entities --
market value                                  719.6        675.6

Operating
Sales volumes
Natural gas (MMcf/d)                          113.6         88.6
NGLs (bbl/d)                                  2,662        1,652
Oil (bbl/d)                                     998        2,386
Total (boe/d)                                22,591       18,813
Average realized price
Natural gas ($/Mcf)                           $3.47        $2.77
NGLs ($/bbl)                                  73.78        78.57
Oil ($/bbl)                                   84.37        89.21
Total ($/boe)                                 30.16        31.95
Net wells drilled (excluding oil
sands evaluation)                                 9           11
Net oil sands evaluation wells
drilled                                           6            1                          

Outlook

Paramount's 2013 capital budget for exploration and development and investments remains at approximately $550-million, excluding land acquisitions and capitalized interest. E&D spending will focus primarily on the Kaybob COU's Deep basin development. Construction of the Musreau deep-cut facility is progressing on schedule for completion in the fourth quarter, and construction of the third party Smoky deep-cut facility will continue into 2014. Drilling activities are continuing in the Kaybob COU through breakup in preparation for the start-up of the deep-cut facilities. Investment capital spending will be directed toward shale gas exploration activities in the Liard basin and continued front-end engineering and design work for the initial phase of the Hoole Grand Rapids development within Cavalier Energy.

Sales volumes for the second and third quarters of 2013 are expected to range between 21,000 boe per day and 25,000 boe per day, depending upon the availability of downstream natural gas liquids transportation and processing capacity. Sales volumes are expected to increase in the fourth quarter once the expansion of a third party NGLs pipeline is completed, additional fractionation capacity is secured and the Musreau deep-cut facility is on stream.

After the Musreau deep-cut facility starts up in late 2013, the company will have owned and firm service contracted natural-gas-processing capacity of 279 million cubic feet per day, which will increase to over 300 million cubic feet per day in 2014 with the addition of the Smoky deep-cut facility. Corporate production is expected to ramp up in 2014 to over 50,000 boe per day, with the timing dependent on the completion of downstream fractionation facilities expansions, in which Paramount has secured long-term firm-service capacity.

We seek Safe Harbor.