Corporate Presentation May 2016 Future Oriented Information (See - PDF document

Corporate Presentation May 2016

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") and its future plans and operations, this presentation contains certain forward-looking information and forward-looking 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 or forecasts. The Advisories Appendix lists some of the material assumptions, risks and uncertainties that these projections, estimates and forecasts are based on and are subject to. • 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 in this presentation is expressly forbidden. 2

Corporate Profile Corporate Profile Strategic Investments/Emerging Plays • Founded in 1976; IPO in 1978; TSX: POU • Emerging Montney plays at Valhalla and Birch • Emerging Duvernay play at Willesden Green • Q1 2016 production: 50,161 Boe/d (~49% Liquids) • Oil Sands • Market Cap: 106.2 MM shares @ $9.15/share ~ $972 Million • Liard Basin shale gas • ~50% insider ownership • Frontier gas in northern Canada (MGM) • Net Debt (April 30, 2016): $1.3 Billion • Equity investments portfolio Low Risk/Repeatable Growth Operations focused on large-scale Deep Basin development • Large contiguous acreage • Multi-zone potential • High condensate/gas ratios • Firm service access to infrastructure 3

Deep Basin Resource Land Position Paramount Acreage (gross): • 486 Sections Cretaceous Rights 362 Sections Montney Rights • • 170 Sections Duvernay Rights Cretaceous Deep Basin liquids-rich gas resources in multiple stacked horizons 40-160 Bcf/section DGIIP (1) • ~5 + Bcf EUR/Hz well (1) • >10 Tcf DGIIP + NGLs net to POU (1) • Montney • Liquids-rich gas play ~70 + Bcf/section DGIIP (1) • • ~ 22 Tcf DGIIP + NGLs net to POU (1) New Plays • Potential conventional Devonian exploration • Potential Duvernay Shale rock play (1) Internal estimates: EUR denotes Estimated Ultimate 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. 4

Montney Gas Resource • Liquids-rich Montney gas play; Paramount holds ~313 net sections of Montney rights • Competitive well economics • High liquids content • Thick pay • High pore pressure (over pressured Deep Basin) PARAMOUNT MONTNEY WELLS – KAYBOB AND GRANDE PRAIRIE (1) Natural Wellhead CGR Total Gas Liquids Wells (Bbl/MMcf) (Boe/d) (MMcf/d) (Bbl/d) IP 30 3.3 542 162 1,092 91 IP 90 2.8 382 138 849 88 IP 180 2.5 253 103 670 66 IP 270 2.3 227 100 610 47 IP 360 2.0 190 96 523 33 Less than 30 days on production 3 Wells in progress 4 Total wells 98 (1) Please refer to the "Montney Production Rates" paragraphs in the Advisories section of this presentation for further information. 5

Montney "Rich" Well Economics Economics (4) @ $2.50 AECO Assumptions (1) : US$/Bbl WTI $30 $40 $50 $60 Capital: $7.5 MM horizontal 1.5-mile lateral well (2) NPV 10% $MM -0.4 2.6 5.6 8.5 IP 30 : 5.4 MMcf/d (restricted) IRR 8% 30% 55% 84% Natural Gas (raw): 5.0 Bcf CGR(raw) (3) : 171 Bbl/MMcf (IP 30 ) Payout (Years) 5.3 2.5 1.8 1.4 (~72 Bbl/MMcf lifetime average) P/I (1) 0.9 1.4 1.8 2.2 C2-C4 NGLs: ~90 Bbl/MMcf through Deep Cut Facility FX (USD/CAD): $0.75 1) Please refer to "Well Economics" in the Advisories section 2) Estimated cost based on Paramount's ability to source sufficient water supply to perform slickwater fracs. Capital cost estimate if foamed water fracs are required is $8.9 MM 3) Wellhead Condensate Gas Ratio 4) Includes processing capital fees 6 6

Montney "Ultra Rich" Well Economics Economics (4) @ $2.50 AECO Assumptions (1) : US$/Bbl WTI $30 $40 $50 $60 Capital: $6.7 MM horizontal 1-mile lateral well (2) NPV 10% $MM -0.8 1.9 4.7 7.4 IP 30 : 2.2 MMcf/d (restricted) IRR 4% 29% 59% 92% Natural Gas (raw): 2.0 Bcf CGR(raw) (3) : 452 Bbl/MMcf (IP 30 ) Payout (Years) 18.9 2.3 1.6 1.3 (~192 Bbl/MMcf lifetime average) P/I (1) 0.9 1.3 1.7 2.1 C2-C4 NGLs: ~ 90 Bbl/MMcf through Deep Cut Facility FX (USD/CAD): $0.75 1) Please refer to "Well Economics" in the Advisories section 2) Estimated cost based on Paramount's ability to source sufficient water supply to perform slickwater fracs. Capital cost estimate if foamed water fracs are required is $7.6 MM 3) Wellhead Condensate Gas Ratio 4) Includes processing capital fees 7 7

Montney Drilling/Completion Cost Reductions • Lower drilling costs due to: • reduced drilling days by improving penetration rates and efficiencies • lower day rates for rigs and lower equipment rental costs • Lower completion costs due to: • the switch to 125 T/stage foamed water frac from 60 T/stage oil-based frac • lower rates for pumping, hauling, rentals, etc. • The use of slickwater to further reduce completion costs • Moving towards 1.5 + mile laterals (1) Estimated completion costs based on Paramount's ability to source sufficient water supply to perform slickwater fracs. (2) No 1.5 mile lateral wells were drilled from 2012 to 2015 8

9 Montney 16-7 Pad Cumulative Raw Gas

Sale of Musreau 8-13 Complex • Closed sale of Musreau 8-13 processing facilites (Musreau Complex) and related midstream assets to Pembina • $565 MM cash (including adjustments) • $35 MM carried plant expenditures • Paramount retains priority access to full facility capacity (1) • Entered into a 20-year processing arrangement ramping up to 200 MMcf/d by 2019: ~$3.00/Boe impact on Musreau operating costs • Commitment to build 6-18 plant upon Paramount’s request • Provides for flexibility of timing of existing transportation arrangements • Unlocks the value of Paramount's midstream assets and significantly reduces infrastructure capital requirements to support future growth (1) Please refer to the heading "Deep Basin Processing Capacity" in the Advisories section. 10

Deep Basin Gas Processing Capacity Owned and Contracted Potential Raw Gas Sales Processing Volumes Capacity MMcf/d (1) Boe/d (1) Musreau Complex 250 70,000 Smoky Deep Cut Facility 50 12,000 Other Kaybob area 18 3,300 capacity Karr area capacity 40 9,700 Total 358 95,000 Future Capacity Musreau 6-18 - up to 200 MMcf/d • (1) Please refer to the heading "Deep Basin Processing Capacity" in the Advisories section. 11 11

Illustrative Deep-Cut - Montney Wells 200 MMcf/d Raw Gas less 23% Shrinkage = 154 MMcf/d Sales Gas (25,667 Boe/d) + 22,000 Bbl/d condensate + 18,000 Bbl/d NGLs Price (1) Yield (Bbl/MMcf) Deep-Cut Sales Gas $2.65/Mcf 154 MMcf/d $408,100 Condensate $49.00/Bbl 22,000 Bbl/d $1,078,000 110 Butane $29.00/Bbl 2,500 Bbl/d $72,500 12.5 Propane $5.00/Bbl 5,000 Bbl/d $25,000 25 Ethane $14.00/Bbl 10,500 Bbl/d $147,000 52.5 Total: 65,667 Boe/d $1,730,600/day Royalty 5% ($86,530/day) Transportation and ($4.00/Boe) $(262,668/day) NGLs processing Operating Cost ($5.75/Boe) ($377,585/day) Netback $1,003,817/day Annual 24 MMBoe/yr $366 MM $15.29/Boe (1) WTI = US$40/Bbl, AECO = $2.50/Gj, F/X (USD/CAD) = $ 0.75 12 12

Willesden Green Duvernay Shale Play • 61,252 acres of land (100% WI) • Drilled and completed 3 Hz Duvernay wells to date: Cumulative production to March 31, 2016 Natural Gas Oil and NGLs MMcf MBbl 03/16-13-39-5W5 171.2 96 7-19-39-5W5 118.5 31 3-28-39-5W5 55.8 29 Total 345.5 156 • Two standing wells to be re-entered at a later date Paramount has explored for ideal combinations of rock quality/liquids ratio/pressure gradient 13 13

Montney Valhalla: ~65 sections (~49 net) Montney/~56 sections (~42 net) Doig rights • Montney/Doig Play • 16 wells currently tied in • Evaluating long term production/economics to determine future investment levels Birch: ~60 sections (~30 net) Montney rights • Montney shale play (50% WI) • Seven Hz Montney wells to date • NGL yields average 50 Bbl/MMcf • New 20 MMcf/d facility onstream December 2015 (1) Based on results from Paramount's wells and publicly disclosed results of competitor wells. 14 14

Paramount Investments

16 Paramount Investments 16

Paramount 100% Subsidiary Investments (1) As publicly disclosed by a large U.S. public E&P company with significant landholdings in the Liard Basin. The resource evaluation disclosed by such E&P company was not noted as having been prepared independently or by a qualified reserves evaluator or auditor (as such terms are defined in NI 51-101) or in accordance with the COGE Handbook. This information is relevant to Paramount’s landholdings in the Liard Basin as the information is in respect of landholdings in the Liard Basin that are close to Paramount’s lands and are, accordingly, likely to have similar geology. (2) Based on publicly available information. 17 17

18 Quarterly Operating Results 18