Mr. Jim Riddell reports

PARAMOUNT RESOURCES LTD. ANNOUNCES 2014 RESULTS: CONVENTIONAL P+P RESERVES INCREASE 159%; SALES TO SURPASS 70,000 BOE/D IN 2015; $400 MILLION 2015 CAPITAL BUDGET

Paramount Resources Ltd. has released its 2014 financial results and proved and probable reserves estimate.

Reserves

• Proved reserves increased 159 per cent to 226.8 million barrels of oil equivalent (MMboe), after production of nine MMboe and dispositions of 2.4 MMboe (replacement ratio of 17 times).
• Conventional proved and probable reserves increased 159 per cent to 347.1 MMboe (replacement ratio of 25 times), a record level for the company.
• P&P condensate and other natural gas liquids reserves increased to 163.7 million barrels (MMbbl), a 183-per-cent increase over 2013, representing 47 per cent of conventional P&P reserves.
• The net present value of conventional P&P reserves (10-per-cent discount, before tax) more than doubled to $3.8-billion, or $36.59 per share, despite significantly lower future commodity prices.
• P&P finding and development (F&D) costs, excluding facilities and gathering capital, were $14.29 per boe.

Oil and gas operations

• Paramount's sales volumes averaged approximately 40,000 barrels of oil equivalent per day in February, 2015, the highest monthly average since the 2005 Trilogy Energy spinout. The company expects third party NGLs processing constraints that have limited its ability to maximize production will begin to abate in the second quarter.
• Sales volumes in the fourth quarter of 2014 increased 70 per cent to 34,430 boe/d compared with the same period in 2013. Outages and apportionments of transportation and fractionation capacity impacted Paramount's ability to sustain production over 40,000 boe/d in the fourth quarter. The company's annual sales volumes increased 17 per cent to 24,524 boe/d in 2014 compared with 20,914 boe/d in 2013.
• Fourth quarter 2014 liquids sales volumes totalled 10,443 barrels per day, 226 per cent higher than the same period in 2013, and included 5,320 bbl/d of condensate and oil. Approximately 30 per cent of fourth quarter sales volumes and 46 per cent of petroleum and natural gas sales revenues were from liquids.
• The Kaybob COU's fourth quarter 2014 operating expense was $3.85 per boe. Paramount's operating expense per boe in 2014 was $7.96, 15 per cent lower than 2013. Per-unit operating costs are expected to continue to decrease in 2015.
• Netbacks in the fourth quarter increased 108 per cent to $61.0-million in 2014 from $29.3-million in 2013. Higher sales volumes, including an increasing proportion of liquids, more than offset the impact of lower liquids prices.
• The company's two 10-well Montney pads in Kaybob have been completed. Aggregate test rates for the 10 wells on the 3-20 pad were 108 million cubic feet per day (10.8 million cubic feet per day per well) plus liquids. Aggregate test rates for the 10 wells on the 8-22 pad were 130 million cubic feet per day (13.0 million cubic feet per day per well) plus liquids.
• The three wells on the 3-20 pad with at least 30 days of production have averaged six million cubic feet per day of natural gas production over their first 30 days. Following the recovery of load oil volumes, wellhead condensate gas ratios for these wells have averaged 193 barrels/million cubic feet.

Strategic investments

• In the first quarter of 2015, Paramount finished drilling the Dunedin d-71-G shale gas exploration well in the Liard basin and has commenced drilling the c-37-D shale gas exploration well at La Biche.
• Commissioning of Fox Drilling's two new triple-sized walking rigs is scheduled for the fourth quarter of 2015.
• Cavalier Energy received regulatory approval for the initial 10,000 bbl/d phase of its Hoole Grand Rapids development in the second quarter of 2014.
• Paramount completed the acquisition of all of the outstanding common shares of MGM Energy Corp. that it did not already own in exchange for 1.1 million common shares of Paramount in June, 2014.

Outlook

• Sales volumes are expected to surpass 70,000 boe/d in 2015 following the start-up of Paramount's condensate stabilizer expansion in the second quarter and the completion of third party de-ethanization facilities expansions. Annual sales volumes in 2015 are expected to average between 55,000 and 65,000 boe/d. The company has 33 wells behind pipe as of Feb. 28, 2015, that can be brought on stream in 2015, with estimated first month production capability of 210 million cubic feet per day plus liquids.
• Paramount's 2015 capital budget totals $400-million, focused on the company's Deep basin development and maintaining the optionality of future growth initiatives.
• The company is continuing planning and detailed engineering work for the construction of incremental natural gas processing capacity in the Deep basin. The company has temporarily deferred the ordering of long-lead-time items until summer. Paramount expects that the first new 100-million-cubic-foot-per-day plant would be on stream 18 to 22 months following the placement of long-lead-time orders. The second new 100-million-cubic-foot-per-day plant is expected to commence operations nine to 12 months after the first.

Financial flexibility

• Paramount expects to finance its 2015 capital program with increasing funds flow from operations and available capacity under its bank credit facility. The company's capital budget remains flexible and activity levels may be adjusted depending on commodity prices and other factors.
• Paramount's revolving bank credit facility was increased to $900-million in December, 2014, and the maturity date was extended to November, 2016.
• The company's coverage ratios improved in 2014 as a result of the start-up of the Musreau deep cut facility and are expected to continue to strengthen in 2015 due to further growth in sales volumes and cash flows, despite the plunge in commodity prices.
• There are no financial maintenance covenants under the terms of Paramount's bank credit facility or its senior unsecured notes.
• In February, 2015, Moody's Investors Services affirmed Paramount's corporate credit rating of B2, positive outlook, and Standard & Poor's Rating Services upgraded Paramount's corporate credit rating to B, positive outlook.

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

                            Q4 2014  Q4 2013           2014     2013
Sales volumes
Natural gas (MMcf/d)          143.9    102.5          110.5    106.1
Condensate and oil
(bbl/d)                       5,320    2,530          3,986    2,313
Other NGLs (bbl/d)            5,123      674          2,128      911
Total (boe/d)                34,430   20,290         24,524   20,914
Petroleum and natural
gas sales                   $  99.4  $  57.8        $ 350.0  $ 232.5
Funds flow from
operations                     41.6     18.3          141.0     70.6
Per share -- diluted
($/share)                      0.40     0.19           1.39     0.75
Net income (loss)            (106.5)     0.3          (71.7)   (59.1)
Per share -- diluted
($/share)                     (1.02)       -          (0.71)   (0.63)
Principal properties
capital                       224.6    171.8          813.9    612.8
Cash proceeds from
divestitures                    0.5      8.3          100.0     37.9

                                                                                                                                                        
                           RESERVES HIGHLIGHTS

                                          Proved     Proved & probable

                                    2014    2013          2014    2013

Natural gas (Bcf)                  703.8   301.3       1,090.9   450.5
NGLs (Mbbl)                      108,410  36,777       163,736  57,844
Light and medium crude
oil (Mbbl)                         1,108     680         1,526     885
Total conventional (Mboe)        226,812  87,677       347,085 133,813
Oil sands bitumen (Mbbl)               -       -        93,468  93,468
Total company (Mboe)             226,812  87,677       440,553 227,281
Conventional F&D costs
Excluding facilities and
gathering ($/boe)                  19.72   17.79         14.29   10.87
Conventional reserves
replacement                          17x      6x           25x      8x
NPV10 future net revenue
before tax ($ millions)
Conventional                       2,255   1,093         3,836   1,793
Total company                      2,255   1,093         4,199   2,094

Reserves evaluated by the company's independent reserves evaluator, 
McDaniel & Associates Consultants Ltd., as of Dec. 31, 2014, in 
accordance with National Instrument 51-101 definitions, standards and 
procedures. Amounts are working interest reserves before royalty 
deductions. Net present values were determined using forecast prices 
and costs and do not represent fair market value.
P&P F&D costs, excluding facilities and gathering capital, were $10.87 
per boe in 2013 and $12.18 per boe in 2012, and the three-year average 
for the period 2012 to 2014 is $13.37 per boe.

We seek Safe Harbor.