Mr. Jim Riddell reports

PARAMOUNT RESOURCES LTD. ANNOUNCES SECOND QUARTER 2023 RESULTS

Paramount Resources Ltd. has released its second quarter 2023 financial and operating results.

HIGHLIGHTS

• Second quarter sales volumes averaged 88,243 Boe/d (45% liquids), reflecting an estimated 12,000 Boe/d impact of the Alberta wildfires. (1)
  • Grande Prairie Region sales volumes averaged 66,950 Boe/d (51% liquids). Despite the wildfires, Karr achieved record quarterly sales volumes of approximately 44,000 Boe/d and Grande Prairie Region sales volumes exceeded 80,000 Boe/d on multiple days.
  • Kaybob Region sales volumes averaged 13,238 Boe/d (24% liquids).
  • Central Alberta and Other Region sales volumes averaged 8,055 Boe/d (30% liquids).
• Cash from operating activities was $172 million ($1.20 per basic share) in the second quarter. Adjusted funds flow was $179 million ($1.25 per basic share). (2)
• Free cash flow was $31 million ($0.21 per basic share) in the second quarter. (2)
• Capital expenditures in the quarter totaled $140 million. Activities were focused on development in the Grande Prairie Region where Paramount drilled nine (9.0 net) Montney wells, completed three (3.0 net) Montney wells and brought ten (10.0 net) Montney wells on production and in the Kaybob Region where the Company drilled and completed three (3.0 net) Duvernay wells.
• Abandonment and reclamation expenditures in the second quarter totaled $6 million. Activities in the quarter included the abandonment of 28 wells and reclamation of 18 well sites.
• At June 30, 2023, Paramount held $39 million in cash and cash equivalents and its revolving credit facility remained undrawn. The carrying value of the Company's investments in securities at June 30, 2023 was $490 million.

UPDATED GUIDANCE

Paramount's operations in the Grande Prairie and Kaybob Regions were significantly interrupted by wildfires in the second quarter that necessitated the temporary shut-in of a number of fields and facilities. Although the wildfires did not result in any material property damage to Company owned assets or third-party infrastructure and have been extinguished, they had an estimated 6,000 Boe/d impact on first half 2023 sales volumes. This, combined with the impacts of other unplanned third-party facility downtime and the rescheduling of planned maintenance activities, resulted in first half 2023 sales volumes of 92,731 Boe/d (45% liquids) compared to prior guidance of 96,000 to 101,000 Boe/d (45% liquids).

The wildfires will have a residual effect on second half 2023 sales volumes as the Company restores the last of the 2,500 Boe/d of production in the Kaybob Region that remained curtailed at quarter end and the operators of third-party processing facilities proceed with turnarounds that were rescheduled from the second quarter, including an 11-day planned outage in Wapiti. In addition, the onstream timing of nine (9.0 net) Duvernay wells on two separate pad sites at Kaybob North has been delayed, on average, by approximately four weeks due to second quarter evacuation orders associated with the wildfires.

The Company is revising its 2023 second half and annual sales volumes guidance to account for the impacts of the wildfires and the temporary shut-in of low margin dry natural gas production and its 2023 free cash flow guidance to reflect the revised sales volumes. 2023 capital expenditure guidance remains unchanged.

The Company is reaffirming its preliminary 2024 sales volumes, capital expenditure and free cash flow guidance.

Paramount continues to expect that capital expenditures in 2023 and 2024 will be evenly split between sustaining and maintenance capital and growth capital. If required, the Company will utilize available capacity under its $1.0 billion senior secured credit facility, which was undrawn at quarter end, to fund any portion of the 2023 growth capital not funded from adjusted funds flow. In 2024, based on forecast assumptions, the Company's total preliminary midpoint 2024 capital program, abandonment and reclamation expenditures, geological and geophysical expenses and regular monthly dividend would be fully funded from adjusted funds flow with an estimated excess of approximately $230 million.

Paramount remains committed to prudently managing its capital resources and has the flexibility to adjust its capital expenditure plans depending on commodity prices, inflationary cost pressures and other factors.

AUGUST DIVIDEND

Paramount's Board of Directors has declared a cash dividend of $0.125 per Common Share that will be payable on August 31, 2023 to shareholders of record on August 15, 2023. The dividend will be designated as an "eligible dividend" for Canadian income tax purposes.

REVIEW OF OPERATIONS

GRANDE PRAIRIE REGION

Sales volumes and netbacks in the Grande Prairie Region are summarized below:

Second quarter 2023 sales volumes in the Grande Prairie Region averaged 66,950 Boe/d (51% liquids) compared to 69,507 Boe/d (51% liquids) in the first quarter of 2023.

Wildfires impacted Grande Prairie Region sales volumes by an estimated 6,000 Boe/d in the second quarter, including full shutdowns at Wapiti that lasted a total of approximately two weeks as well as other wildfire-related curtailments at Karr. Second quarter sales volumes were also impacted by an eight-day 50% maintenance-related curtailment at the third-party operated Wapiti natural gas processing plant (the "Wapiti Plant"), which had originally been scheduled for the fourth quarter, as well as unplanned downtime at the third-party Karr facility late in the quarter to accommodate maintenance activities. Notwithstanding these challenges, Karr achieved record quarterly sales volumes of approximately 44,000 Boe/d and Grande Prairie Region sales volumes exceeded 80,000 Boe/d on multiple days in the quarter.

Development activities in the Grande Prairie Region in the second quarter included the drilling of nine (9.0 net) Montney wells and the completion of three (3.0 net) Montney wells.

At Karr, all ten (10.0 net) wells on the 4-2 pad were brought on production in the second quarter. Production results from these wells are ahead of expectations, averaging gross peak 30-day production per well of 2,078 Boe/d (5.4 MMcf/d of shale gas and 1,174 Bbl/d of NGLs) with an average CGR of 217 Bbl/MMcf. (1)

The Company finished drilling three wells on the five (5.0 net) well 7-33 South pad at Karr in the second quarter. Completion operations commenced in July and all five wells are expected to be brought on production in the third quarter. Drilling of the three (3.0 net) well 6-36 pad at Karr commenced in the third quarter and these wells are now expected to be brought onstream in the fourth quarter.

At Wapiti, Paramount completed the three (3.0 net) well 1-27 pad in the second quarter and these wells are expected to be brought onstream in the third quarter. The Company also finished drilling the eight (8.0 net) well 8-15 pad in the second quarter and these wells are expected to be brought onstream in the fourth quarter. Drilling of the eight (8.0 net) well 14-5 pad that is expected to be brought onstream in 2024 also commenced in the second quarter.

The 11-day planned outage at the Wapiti Plant that was previously scheduled for the second quarter has now been deferred to the fourth quarter due to the wildfires.

KAYBOB REGION

Kaybob Region sales volumes averaged 13,238 Boe/d (24% liquids) in the second quarter of 2023 compared to 19,201 Boe/d (29% liquids) in the first quarter of 2023. Wildfires impacted second quarter Kaybob Region sales volumes by an estimated 6,000 Boe/d. Approximately 750 Boe/d of the 2,500 Boe/d Kaybob Region production that remained curtailed at quarter end has now been restored, with the remaining production expected to be back online prior to the end of September as third-party power line repairs are completed.

Development activities in the second quarter included the completion of three (3.0 net) Duvernay wells on the Kaybob North Duvernay 4-13 pad. The wells on this pad have the longest average well length by measured depth in the Company's history and include the single longest well at approximately 7,800 meters of total measured depth. All three wells, which were delayed by wildfire related evacuation orders, were recently brought on production at initial rates significantly exceeding expectations.

The Company has elected to drill an additional well at the Kaybob North Duvernay 15-7 pad, bringing the total number of wells to be drilled on the pad in 2023 to six (6.0 net). As a result of delays caused by the wildfires and the addition of this well, the 15-7 pad is now anticipated to be brought onstream in the first quarter of 2024, approximately two months later than previously planned.

CENTRAL ALBERTA AND OTHER REGION

Central Alberta and Other Region sales volumes averaged 8,055 Boe/d (30% liquids) in the second quarter of 2023 compared to 8,561 Boe/d (32% liquids) in the first quarter 2023.

The drilling of four (4.0 net) Duvernay wells at Willesden Green commenced late in the second quarter. The Company plans to complete all four wells over the second half of 2023 and bring the wells on production in the first quarter of 2024 to coincide with the start-up of the planned liquids handling expansion at the Leafland natural gas processing plant. Paramount continues to anticipate commencing the drilling of an additional four Duvernay wells late in the fourth quarter at Willesden Green.

HEDGING

The Company's current commodity and foreign exchange contracts are summarized below:

(1) Average price is calculated using a weighted average of notional volumes and prices. "NYMEX" refers to NYMEX pricing at Henry Hub. (2) Sweet crude oil located at the Peace Pipeline at Edmonton.

ABOUT PARAMOUNT

Paramount is an independent, publicly traded, liquids-rich natural gas focused Canadian energy company that explores for and develops both conventional and unconventional petroleum and natural gas, including longer-term strategic exploration and pre-development plays, and holds a portfolio of investments in other entities. The Company's principal properties are located in Alberta and British Columbia. Paramount's Common Shares are listed on the Toronto Stock Exchange under the symbol "POU".

Paramount's second quarter 2023 results, including Management's Discussion and Analysis and the Company's Consolidated Financial Statements, can be obtained on SEDAR at www.sedar.com or on Paramount's website at www.paramountres.com/investors/financial-shareholder-reports .

A summary of historical financial and operating results is also available on Paramount's website at www.paramountres.com/investors/financial-shareholder-reports .

We seek Safe Harbor.