Investor Presentation June 2014 Future Oriented Information (See - PowerPoint PPT Presentation

Investor Presentation June 2014

Future Oriented Information (See additional advisories at the end of this document) • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount" or the "Company"), including management's assessment of the Company's future plans and operations, this presentation contains certain forward- looking information and forward-looking statements. • The projections, estimates and beliefs contained in such forward-looking information and statements necessarily involve a number of assumptions and are subject to known and unknown risks and uncertainties which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. The material assumptions, risks and uncertainties are referred to in the advisories contained in the Advisories Appendix. • Accordingly, shareholders and potential investors are cautioned that events or circumstances could cause actual results to differ materially from those predicted. • Any use of information contained within this presentation is expressly forbidden. 2

Corporate Profile Average Q1 2014 production: 21,028 Boe/d (~80% gas) • 97.9 MM shares outstanding • Market capitalization @ $56.00/share: $5.5 billion • > 50% insider ownership • 924,000 net acres undeveloped land (December 31, 2013) • Net Debt: $1,274 MM (at March 31, 2014) • Q1 2014 Capital Expenditures: $199 MM • 2014E Capital Expenditures: $650 MM • 2014 production projected to attain > 50,000 Boe/d (1) ; • >70,000 in 2015 (1) (1) Production dependent on availability of downstream NGLs transportation and processing capacity 3

Core Areas Average Production (Boe/d) Q1 2014 Kaybob 13,368 Grande Prairie 5,553 Southern 1,455 Northern 652 Total Boe/d 21,028 • 2014E capital expenditures: $650 MM (including Strategic Investments) 4

Kaybob Resource Paramount Acreage: • 560 sections Cretaceous Rights • 394 Sections Montney Rights • 258 Sections Duvernay Rights • Deep Basin liquids-rich gas resources in multiple stacked horizons • 40-160 Bcf/section (1) • ~5 + Bcf EUR/Hz well (1) • >10 Tcf DGIIP net to PRL (1) • Liquids-rich Montney gas play • ~70 + Bcf /section DGIIP (1) • ~ 23 Tcf DGIIP + NGLs (1) • Potential conventional Devonian exploration • Potential Duvernay Shale rock play *Graphic courtesy of www.canadianoilstocks.ca 5 (1) Internal estimates: EUR denotes Ultimate Estimated Recovery, DGIIP denotes Discovered Gas Initially In Place. Please refer to "Oil and Gas Measures and Definitions" in the Advisories section of this presentation for further information.

Dunvegan Hz Wells • Hz Dunvegan well at Resthaven • Tested 11.3 MMcf/d (1) at 6.2 MPa • IP: 8.3 MMcf/d • Currently producing ~1.3 MMcf/d • Cost: $8.3 MM d/c/t (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 6

Falher/Wilrich Hz Wells • Hz Falher well at Musreau • Tested 16.4 MMcf/d (1) at 20.8 MPa • IP: 12 MMcf/d • Producing ~2 MMcf/d • Cost: $8.6 MM d/c/t (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 7

Falher Type Curve 8

Economics of Kaybob 4.9 Bcf Horizontal Falher Well 9 * Based on processing through a refrigeration facility

Montney Gas Resource  Liquids-rich Montney gas play  Paramount holds ~325 net sections of Montney rights  2011/2012 program included 12 Hz Montney wells: tested 5.5-15.4 MMcf/d (1)  Montney 2013 program: Drilled 13 wells; commenced drilling 25 additional wells off 3 pads which are expected to rig release by mid 2014  Four well Montney pad completed with combined test rates of 34 MMcf/d + NGLs (1)  Offset activity indicating exciting test rates of over 10 MMcf/d + NGLs (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 10

Montney NGL Rates 11 For Paramount well test results please refer to the heading "Test Results" in the Advisories section of this presentation for further information. Test results from Competitor wells were obtained through publicly disclosed information.

3.7 Bcf Montney Type Curve * Based on processing through a refrigeration facility 12

Montney Drilling/Completion Improvements • Pad drilling/pad layout • Bits/muds/motors • Well design: monobores/orientation/reservoir placement • Toe up/toe down: effects on production • Natural gas fueled rigs • Cemented liners/open-hole packers (ECP’s) • Plug and perf/sliding sleeves • Frac sizing/spacing/clusters • Frac fluid/fluid handling • Pumping techniques • Frac fluid recycling • Proppants • Flow back/production practices 13

Fox Rig N o 3 14

Musreau 2014 Capital Plan  Drill 26 (26 net) horizontal Montney wells  Start drilling 11 (11 net) Montney pad wells  Drill 6 (5.8 net) horizontal Falher/Wilrich wells  Drill 4 (3.5 net) vertical wells to hold lands  Bring 70 (net) horizontal wells on production during 2014 15

Karr • Located 50 km SW of Grande Prairie • Multi-zone potential, including Halfway, Montney sour and Gething, Bluesky, Falher sweet commingled gas • Current lands ~93,500 net acres (~146 sections) • Average 78% working interest • Expanded plant and gathering systems to 40 MMcf/d • Seven horizontal Middle Montney wells now on production 2014 Capital Plan: • Drill 2 (1 net) horizontal Cretaceous wells • Drill 10 (9.3 net) horizontal Montney wells (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 16

Kaybob Plant Capacity Est. Net Net POU Gross Raw POU Sales Raw Capacity Capacity Capacity (1) Current Capacity MMcf/d MMcf/d Boe/d Musreau Refridge 45 45 8,500 Plant Resthaven Plant 20 10 2,000 Smoky Plant 100 10 2,500 Kakwa Plant 40 4 700 Pembina Musreau Processing Capacity 10 10 1,800 15,500 Subtotal 215 79 Capacity Under Construction Musreau Phase II 200 200 50,000 Deep-Cut Musreau Condensate Stabilizer Expansion - - 15,000 Smoky/Resthaven Deep-Cut 200 30 7,500 72,500 Subtotal 400 230 Projected Total 615 309 88,000 17 (1) Please refer to the heading “Estimated Net POU Sales Capacity” in the Advisories section for further information.

Kaybob Processing Capacity (1) (2) 18

Sales Turbines 19

Process Flow Chart: Musreau Deep Cut Facility Note: Illustrative example 21 Based on indicative prices and differentials which are subject to change

Illustrative Deep-Cut Mix of Cretaceous and Montney Wells Example Montney Wells Only Example 200 MMcf/d x 23% Shrinkage=154 200 MMcf/d x 15% Shrinkage=170 MMcf/d (25,667 Boe/d) Sales Gas MMcf/d (28,333 Boe/d) Sales Gas Price 150 Bbl/MMcf: ~30,000 Bbl/d 100 Bbl/MMcf: 20,000 Bbl/d NGLs NGLs Deep-Cut Rich $3.00/Mcf 170 MMcf/d $510,000 154 MMcf/d $462,000 Gas Condensate $100.00/Bbl 8,000 Bbl/d $800,000 12,400 Bbl/d $1,240,000 Butane $65.00/Bbl 2,000 Bbl/d $130,000 2,500 Bbl/d $162,500 Propane $35.00/Bbl 4,000 Bbl/d $140,000 5,000 Bbl/d $175,000 Ethane $12.00/Bbl 6,000 Bbl/d $72,000 10,480 Bbl/d $125,760 Total: 48,333 Boe/d $1,652,000/day 56,047 Boe/d $2,165,260/day Royalty 5% ($82,600/day) 5% ($108,260/day) Operating Cost ($0.50/mcf) ($85,000/day) ($0.50/mcf) ($77,000/day) $1,484,400/day $1,980,000/day 17.6 20.5 Total: $542 MM/year $723 MM/year MMBoe/year MMBoe/year $30.78/Boe $35.25/Boe 22

Paramount Deep-Cut Montney - Illustrative Project Economics • Paramount’s shallow rights will add substantially to the RLI • Paramount has de-risked a substantial amount of its land base and thus could have the potential to do this many times • Simple Payout after start up is 1.5 - 2.3 years Resource Needed: 200 MMcf/d x 365 ~ 73 Bcf/year x 10 year RLI = 730 Bcf 70 Bcf/section @ ~ 50% recovery = ~ 20 Sections Cost 60 (5 MMcf/d wells) x $10 MM/well = $600 MM Gas Plant = $200 MM Total: $800 MM Annual Deep - Cut Cash Flow $542 MM/year - $723 MM/year Annual Capital = 20 (3.5 Bcf) wells x $10 MM/well $200 MM/year Free Cash Flow $342 MM - $523 MM/year 23

Pembina Peace Pipeline Expansion Numbers provided by Pembina Pipelines LVP Capacity (Bbl/d) HVP Capacity (Bbl/d) In-Service Current 195,000 115,000 Phase 2 Expansion 55,000 20,000* 2015 Phase 3 Expansion 320,000** 2016/2017 Total 705,000 * By displacement onto 53,000 Bbl/d Pembina North Expansion 24 * *LVP/HVP combined; split to be determined

Valhalla • Montney/Doig Play • 16 wells tied in at restricted rates (midstream constraints) • Currently tied in to four different producer-mid streamers on interruptible capacity leading to intermittent production profiles • Exploring options for long- term processing arrangements with a dedicated mid streamer and investigating the possibility of a Paramount operated sweetening and refridge plant (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 25 (2) Based on results from Paramount's wells and publicly disclosed results of competitor wells.