Corporate Presentation May 2019 Advisories In the interest of - PowerPoint PPT Presentation

Corporate Presentation May 2019

Advisories • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount", "PRL" or the "Company") and its future plans and operations, this presentation contains certain forward-looking information and statements. • The projections, estimates and forecasts contained in such forward-looking information and statements necessarily involve a number of assumptions, and are subject to both known and unknown risks and uncertainties that may cause the Company's actual performance and financial results in future periods to differ materially from these projections, estimates and forecasts. The Advisories Appendix attached hereto lists some of the material assumptions, risks and uncertainties that these projections, estimates and forecasts are based on and are subject to. • Accordingly, recipients are cautioned that events or circumstances could cause actual results to differ materially from those predicted. • All dollar amounts in this presentation are expressed in Canadian dollars, unless otherwise noted. • Reserves and production information are presented in accordance with Canadian standards. • The Advisories Appendix attached hereto contains additional information concerning the oil and gas measures and terms and reserves data contained in this presentation. • The forward-looking information and statements contained in this presentation are made effective as of May 8, 2019. The type well information contained in this presentation has been prepared effective March 1, 2019 and the drilling location information contained in this presentation was prepared effective January 1, 2019. In each case, events or information subsequent to the applicable effective dates have not been incorporated. 2

Corporate Overview Founded in 1976 (IPO’d in 1978), Paramount has a proven track record and strategy that generates above-average long term rates of return. Early identification and low cost capture • Large and diversified suite of horizons/zones to pursue, dependent on market conditions Appraise and high-grade top tier economic returns • Current Focus: liquids-rich Montney and Duvernay Develop, Refine, Optimize • Continuous improvement in all facets of technical understanding and execution Harvest / Monetize • Free cash flow positive full field development • Well documented history of buying low and selling high Paramount Market Snapshot Quarterly Production Outlook Range (Boe/d) Ticker Symbol - TSX POU Share Count 130.9 MM Market Cap @ $8.50/share ~1.1 Bln Net Debt (1) $903 MM Enterprise Value ~$2.0 Bln Insider Ownership (2) 46% 1P Reserves (3) 390.7 MMBoe 2P Reserves (3) 634.4 MMBoe 1) At March 31, 2019. Refer to heading “Non-GAAP Measures” in the Advisories Appendix. 2) Represents position held by directors, officers and other insiders. 3) See the Advisories 3 Appendix – Reserves Data.

Montney and Duvernay Focus Areas Paramount is reaffirming its forecasted 2019F production of 81,000 to 85,000 Boe/d. The Montney and Duvernay account for ~45,000 Boe/d of this. (1) (1) 1) Excludes production from the Resthaven / Jayar asset that was sold in 2018. 4

Paramount Strategy Paramount has secured significant land positions in what is proving to be the most liquids-rich (and therefore economic) windows of the Montney and Duvernay. • Large suite of high rate of return assets at various stages in the development lifecycle provides significant optionality Paramount Portfolio of Assets 2019 Type Well Rate of Return (%) (1) 1) Based on Management’s estimates and price deck. See the Advisories Appendix – Type Well Information. 5

History of Generating Returns The 2019 capital expenditure program is heavily weighted towards our highest return projects and is expected to drive and maintain strong returns on a go-forward basis. • Paramount outperformed its peer group on return Paramount vs. Peers - Historical CFROCE (%) (1) metrics in the last three and five years • Reflects successful track record of monetizing assets well in excess of book value • Return on Average Capital Employed (“ROCE”) defined as Return divided by Average Capital Employed (1) • Cash Flow Return on Capital Employed (“CFROCE”) defined as Cash Flow divided by Average Capital Employed (1) Paramount Historical CFROCE (%) (1) Paramount vs. Peers - Historical ROCE (%) (1) 6 1) Refer to the heading “Non-GAAP Measures” in the Advisories Appendix. 2) Sale of midstream and upstream assets.

2019 Budget and Production Guidance Paramount has set a base 2019 capital budget of $350 MM to support annual production of 81,000 – 85,000 Boe/d; Q419 forecast to average 85,000 – 90,000 Boe/d. 2019F Budget and Production Guidance 2019F Capex Breakdown ($MM) (1) 2018 2019F Production (Boe/d) 85,941 81,000 - 85,000 Liquids (%) 37% 38% (1) Capex ($MM) $569 $350 ARO ($MM) $29 $32 • Capital budget down ~40% vs. 2018 program • Prioritizing lower-risk and higher return, liquids-rich Montney plays with the tie-in of 20 wells at Karr and Wapiti • 5 well completions at Kaybob South Duvernay • 3 well Montney Oil program • Minor capex for emerging play land retention • The $350 MM budget excludes capital to advance the Karr 6-18 facility expansion (“D2”) • Evaluating funding alternatives for $145 MM 2019F incremental spend • Sales volumes are expected to increase in the second half of 2019F as Wapiti ramps up 7 1) Base 2019 capital budget, excluding land acquisitions and abandonment and reclamation.

Karr Asset Overview Producing Montney wells at Karr continue to exhibit strong production rates and condensate yields. • A multi-stacked horizon, offering development potential over three intervals • Primary focus has been the Middle Montney with no reserves bookings in other intervals Type Well (1) • Drilled and tested first Lower Montney Return (%) 64% well in 2018 with results on par with the Middle Montney Payout (Months) 18 • Two of the 2019 wells are targeting the IP 365 (Boe/d) 961 Lower Montney Sales Vol. (MBoe) 1,481 • Will incorporate results to determine inventory count Avg. CGR (Bbl/MMcf) 173 • Generated 2018 netback of ~$224 MM DCET ($MM) $12.7 on capex of ~$169 MM and is expected to continue generating free cash flow in 2019 (2) • Type well drilling inventory can sustain greater than 40,000 Boe/d of production (post D2) for nearly two decades from the Middle Montney alone Middle Montney Development Potential (1) Karr Middle Montney Type Well Inventory (#) >250 Type Well Raw Gas Volume (Bcf) 4.0 Calculated Recovered Gas (Bcf) >1,000 Current Raw Gas Production Capacity (Mcf/d) 100,000 Implied Number of Years Production (Years) ~27 Raw Gas Production Capacity Post D2 (Mcf/d) 150,000 Implied Number of Years Production (Years) ~18 1) Based on management estimates and price deck. See Advisories Appendix – Type Well Information. 2) See Advisories Appendix - Non-GAAP Measures. 8

Karr Asset Overview (Cont’d) Processing and takeaway capacity is in place to support Montney growth at Karr. Recent Developments Gas Processing and Takeaway Capacity • Five Montney wells drilled in 2018 on the 4-24 pad to be Gross Capacity completed in Q2 Post Current • Three new wells being drilled on the 1-19 pad D2 • Expansion of the 6-18 Facility on track for start-up in the Sour Raw Compression/Dehy 100 80 second half of 2020 (MMcf/d) • Higher-rate water injection system at the 6-18 Facility in Sour Raw Gas Processing (MMcf/d) - 70 February increased water injection capacity and reduced water disposal costs Total Raw Gas Handling (MMcf/d) 100 150 D2 Facility Expansion Raw Hydrocarbon Liquids 15,000 30,000 Handling (Bbl/d) • D2, which could be completed in 2020, would add 70 MMcf/d of raw natural gas processing capacity and an Implied CGR @ Capacity 150 200 additional 15,000 Bbl/d of raw liquids handling capacity (Bbl/MMcf) • Complete and equip water disposal well and infrastructure Raw Water Handling (Bbl/d) 15,000 28,000 • Currently evaluating funding alternatives for the $145 MM Sales Gas Takeaway (MMcf/d) ~65 ~130 of 2019F incremental spend 9

Wapiti Asset Overview The Company is delivering test volumes from the 9-3 pad as part of the commissioning of the new third-party Wapiti natural gas processing plant. • The Wapiti asset is a continuation of Type Well (1) Karr and is characterized by multi- Return (%) 45% interval potential in the Montney Payout (Months) 15 • All three intervals have been tested IP 365 (Boe/d) 1,395 • Wapiti is expected to generate free Sales Vol. (MBoe) 1,594 cash flow starting in 2020 upon completion of ramp up (2) Avg. CGR (Bbl/MMcf) 80 • Type well drilling inventory can DCET ($MM) $12.3 sustain over 40,000 Boe/d of production for over 20 years, based on Paramount’s high-graded inventory count in the Middle and Lower Montney • Intention is to also develop the Upper Montney, which would sustain that level of production for even longer Middle & Lower Montney Development Potential (1) Wapiti Montney Type Well Inventory (#) >250 Type Well Raw Gas Volume (Bcf) 5.0 Calculated Recovered Gas (Bcf) >1,250 Wapiti Plant - Phase 1 Capacity (Mcf/d) 150,000 Implied Number of Years Production (Years) ~23 1) Based on management estimates and price deck. See Advisories Appendix – Type Well Information. 2) See Advisories Appendix - Non-GAAP Measures. 10