Corporate Presentation February 2018 Advisories In the interest - PowerPoint PPT Presentation

Corporate Presentation February 2018

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. • Any use of information contained in this presentation is expressly forbidden. • 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. 2

Corporate Overview • Founded in 1976; IPO in 1978; TSX: POU • Market Cap: ~$2.3 Bln (134.9 MM shares @$17/sh) • Net Debt at Sep 30, 2017 ~$564 MM (1) • Total land position: ~2.7 million net acres, including: • ~378,000 net Montney acres • ~230,000 net Duvernay acres • 345 MMBoe Proved Reserves; 600 MMBoe P+P Reserves (2) • 424 P+P Undeveloped Locations (2) , 2,049 P+P and High Grade Locations 2017 Results and Guidance Q3 2017 Production 49,023 Boe/d (~40% Liquids) Q4 2017E Production 95,000 Boe/d (>38% Liquids) October 2017 Production 98,000 Boe/d (~38% Liquids) 2017 YTD Capex (Sep 30, 2017) ~$380 MM Q4 2017E Capex ~$130 MM 2018 Guidance 2018E Production 100,000 Boe/d (40% Liquids) 2018E Capex $600 MM 2018E Opex $10.00 / Boe (1) Refer to the heading “Non-GAAP Measures” in the Advisories Appendix. (2) Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 3

Highlights Transaction Highlights • April 2016 sold Musreau Plant ~$565 MM • August 2016 sold Musreau Asset ~$2.1 Bln • December 2016 sold royalty on Cavalier Oil Sands Asset ~$100 MM • December 2016 dividend declared: ~3.8 MM Seven Generations shares ~$120 MM • May 2017 closed the sale of Valhalla assets for cash of ~$150 MM • August 16, 2017 closed Apache Canada acquisition for ~$460 MM • September 12, 2017 merged with Trilogy for 1 POU share for every 3.75 TET shares Operating Highlights • Record production throughput at Karr 06-18 hitting nameplate with October 2017 sales of ~26,600 Boe/d (~52% liquids) and peak wellhead throughput of ~30,500 Boe/d (~55% liquids) in the same period • Recent 6-well pad at Kaybob Duvernay achieved average wellhead production rate of ~1,600 Boe/d per well (51% condensate) over the first 30 days of production (1) (1) Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 4

Higher Sales & Stronger Balance Sheet • Organically grew legacy Paramount production from ~11,000 Boe/d following the Musreau sale to ~37,000 Boe/d in October 2017 through the Karr development program > 98,000 Boe/d ~ 38% Liquids • Returned to pre-disposition production levels in 14 months • Total sales volumes > 98,000 Boe/d in October 2017 following strategic transactions ~ $1.7 Billion Debt ~ $600 Million Cash Trilogy Merger Mar 31/16 Dec 31/16 Sept 12/17 Apache Canada Acq’n Aug 16/17 Musreau Sale Aug 18/16 5

Strategic Transactions • ~$487 MM acquisition; funded with cash on-hand • High quality Wapiti Montney acreage, liquids-rich Montney and Duvernay at Kaybob and lower decline, long-life assets in Central Alberta (including 176,000 net acres of fee simple lands) • Added ~39,000 Boe/d of production (26% liquids), ~288 MMBoe of Profitable growth while proved plus probable reserves (1) creating and delivering real value for all stakeholders ~$1.1 Billion (2) merger; issued ~28.5 MM Paramount common shares • • Lower decline, high netback, Montney oil and gas plays and highly economic, condensate-rich Kaybob Duvernay • Added ~22,000 Boe/d of production (36% liquids), ~165 MMBoe of proved plus probable reserves (1) (1) Sales volumes for the three months ended June 30, 2017. Reserves volumes as per the McDaniel and Associates report dated June 1, 2017. Refer to the heading “Reserves and Other Information” in the Advisories Appendix. (2) Represents transaction value for the entirety of Trilogy (including Paramount’s 15% ownership and debt of Trilogy); based on July 6, 2017 closing share price of Paramount and exchange ratio of one Paramount share for every 3.75 Trilogy shares. 6

Liquids Focused Assets Montney Assets Duvernay Assets Wellhead Asset Description Liquids (1) Bbl/MMcf MONTNEY Birch 25 Wapiti 90 Karr 120 Smoky/Resthaven 85 Ante Creek 120 Kaybob 220 Presley/Fir 12 DUVERNAY Kaybob North 360 Kaybob Smoky 220 Kaybob South 100 Kaybob Bigstone 60 Kaybob Pine Creek 30 Willesden Green 650 (1) Liquids yields based on internal estimated ultimate recoverable volumes of wellhead oil, condensate, and natural gas before surface losses and shrinkage. Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 7

Diversified Assets Location Breakeven Breakeven Wellhead Production Stage of Asset Description Inventory WTI Oil NYMEX Gas Potential (Gross) Development P+P | Total (1) US$/Bbl (2) US$/MMbtu (2) Liquids Bbl/d | Total Boe/d (3) 2017 – 2021 Focus Assets Karr Montney Development 76 | 227 31.92 0.92 18,000 | 43,000 (Phase 1) Wapiti Montney Development 96 | 504 28.81 1.21 13,500 | 38,500 (Phase 1) Kaybob Montney Oil Development 75 | 175 32.03 (1.06) 8,000 | 14,000 Kaybob South Duvernay Development 57 | 167 39.62 1.80 8,000 | 21,000 Kaybob Smoky Duvernay Development 49 | 66 30.52 (0.89) 13,000 | 23,000 Subtotal 353 | 1,139 60,500 Bbl/d | 139,500 Boe/d Longer-Term Assets Resthaven/Jayar Montney Piloting 0 | 84 Analyzing long-term performance from completion at 01-05 Hz. Ante Creek Montney Demonstration 0 | 50 Analyzing long-term production results from new 6-well pad Presley/Fir Montney Gas Development 41 | 135 9.74 2.69 720 | 10,000 Birch Montney JV Development 26 | 163 35.27 2.47 3,500 | 26,000 Kaybob North Duvernay Delineation 4 | 228 Studying offset performance from MUR Kaybob Bigstone Duvernay Delineation 0 | 50 Studying offset performance from CVX and XTO Kaybob Pine Creek Duvernay Delineation 0 | TBD Commercial potential from new completion learnings Willesden Green Duvernay Piloting 0 | 200 Analyzing results from completion at 02/13-05 Hz. (1) Refer to the heading “Reserves and Other Information” in the Advisories Appendix. (2) Breakeven analysis discounted at 10 percent before tax, based on McDaniel P+P type well assumptions, FX rate of $0.775 $US/$C and AECO basis of US$0.95/MMbtu and constant costs based on current cost structure. Breakeven oil prices based on a constant NYMEX gas price of US$3.00/MMbtu. Breakeven gas prices based on a constant WTI oil price of US$50.00/Bbl. (3) Wellhead production volumes are before surface losses and shrinkage. Potential production levels are estimated to be achieved by 2021 or sooner. 8

Focus Assets – Btax Return and NPV10 (1) (1) McDaniel P+P unless noted as “(Internal)”, US$50/Bbl WTI & US$3.00/MMbtu NYMEX, US$0.95/MMbtu AECO Basis & FX US$/C$ 0.775. Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 9

Revenue/Boe and AECO Revenue WTI NYMEX AECO BASIS PROPANE BUTANE ETHANE FX C$/Boe US$/Bbl US$/mmbtu C$/GJ US$/mmbtu US$/Bbl US$/Bbl US$/Bbl 2018 Budget 50.00 3.00 2.37 (1.00) 17.50 28.25 11.07 29.21 0.8000 January 3 60.37 2.81 1.42 (1.73) 25.55 36.53 6.56 30.66 0.8026 2018 Strip Oil/ Oil/ Condensate Condensate 30,000 Bbl/d 72% NGL 10,000 Bbl/d Natural Gas Natural Gas 60,000 Boe/d NGL 19% 9% 2018E Revenue (1) 2018E Production (1) (100,000 Boe/d) 1) Based on January 3, 2018 strip prices 10

Midstream & Marketing Strategy Midstream Portfolio Positioned for Growth Karr 06-18 • Focus assets in Montney and Duvernay have takeaway capacity to manage growth plan through 2021 Keyera Wapiti • Owned and operated infrastructure coupled with 3 rd party midstream provide balanced opex structure • Opportunities to increase 3 rd party fee revenue from non-core infrastructure assets Firm, Reliable Market Access • Portfolio of firm service TransCanada Pipeline (“TCPL”) capacity at receipt points for growth plays in Wapiti, Karr and Kaybob secures gas takeaway Kaybob North • Majority of key gas processing facilities are dually 08-09 18.2 MMcf/d connected to TCPL and Alliance Pushing Further Downstream 51.2 MMcf/d • Contracts for firm TCPL transport to Dawn and Malin provide access to downstream markets • Shipper status on both Pembina and Plains feeder pipelines allows for direct marketing of our 318.6 MMcf/d products • Own and operate a major Pembina-connected battery in Kaybob area which offers terminalling November 2017 Exposure and blending opportunities 11