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

Corporate Presentation March 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. 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 92,000 90,000 Share Count 130.9 MM 90,000 Market Cap @$7.50/share ~$980 MM 88,000 38% Liquids Production (Boe/d) Net Debt (1) 86,000 $896 MM 85,000 85,000 Enterprise Value ~$1.9 Bln 84,000 37% Liquids 82,000 Insider Ownership (2) ~46% 81,000 37% Liquids 80,000 80,000 80,000 1P Reserves (3) 390.7 MMBoe 78,000 2P Reserves (3) 634.4 MMBoe H1 2019F Q3 2019F Q4 2019F 1) At December 31, 2018. Refer to heading “Non - GAAP Measures” in the Advisories Appendix. 2) Represents position held by directors , officers and other insiders. 3) See the 3 Advisories Appendix – Reserves Data.

Montney and Duvernay Focus Areas Paramount is forecasting 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 2019 Type Well Rate of Return (%) (1) Paramount Portfolio of Assets 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 55% 2018 Ranked by • Reflects successful track record of monetizing 50% 3-Yr Avg 3-Yr Avg. 45% assets well in excess of book value 5-Yr Avg Historical CFROCE (%) 40% • Return on Average Capital Employed (“ROCE”) 35% defined as Return divided by Average Capital 30% Employed (1) 25% 20% • Cash Flow Return on Capital Employed 15% (“CFROCE”) defined as Cash Flow divided by 10% Average Capital Employed (1) 5% - POU 1 2 3 4 5 Paramount Historical CFROCE (%) (1) Paramount vs. Peers - Historical ROCE (%) (1) 140% 25% Musreau Sale (2) 2018 Ranked by 3-Yr Avg 3-Yr Avg. 120% 20% 5-Yr Avg Historical CFROCE (%) Sale of Oil 100% 15% Sands Assets Historical ROCE (%) 80% 10% 60% 5% Sale of U.S. Assets 40% - 20% (5%) - '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 3-Yr 5-Yr (10%) Avg Avg POU 1 2 3 4 5 1) Refer to the heading “Non - GAAP Measures” in the Advisories Appendix. 2) Sale of midstream and upstream assets. 6

2019 Budget and Production Guidance Paramount has set a base 2019 capital budget of $350 MM to support annual production of 81,000 – 85,000 Boe/d; 4Q19 forecast to average 85,000 – 90,000 Boe/d. 2019F Budget and Production Guidance 2019F Capex Breakdown ($MM) (1) 2018 2019F $400 Production (Boe/d) 85,941 81,000 - 85,000 Corporate Corporate Liquids (%) 37% 38% (2%) (2%) $350 (1) Capex $569 $350 ($MM) Central (5%) Maintenance Other (9%) ARO ($MM) $29 $32 (10%) Duvernay $300 Kaybob (10%) • Facility (14%) Capital budget down ~40% vs. 2018 program (20%) • Prioritizing lower-risk and higher return, liquids- $250 rich Montney plays with the tie-in of 20 wells at Capex ($MM) Karr and Wapiti $200 • 5 well completions at Kaybob South Duvernay • 3 well Montney Oil program Complete (56%) $150 • Montney Minor capex for emerging play land retention Grande (81%) Prairie • The $350 MM budget excludes capital to advance the (73%) Karr 6-18 facility expansion (“D 2 ”) $100 • Evaluating funding alternatives for $145 MM 2019F incremental spend $50 • Sales volumes are expected to increase in the Drill (18%) second half of 2019F as Wapiti ramps up - Region Play Type Category 1) Base 2019 capital budget, excluding land acquisitions and abandonment and reclamation. 7

Karr Asset Overview 4Q18 Karr liquids debottlenecking activities were successfully completed with sales averaging 26,282 Boe/d vs. 21,636 Boe/d in the first nine months of 2018. • A multi-stacked horizon, offering development potential over three intervals • Primary focus has been the Middle Montney with no reserves bookings in other intervals • Drilled and tested first Lower Type Well (1) Montney well in 2018 with results on Return (%) 64% par with the Middle Montney Payout (Months) 18 • Two of the 2019 wells are targeting the Lower Montney IP365 (Boe/d) 961 • Will incorporate results to Sales Vol. (MBoe) 1,481 determine inventory count Avg. CGR (Bbl/MMcf) 173 • Generated 2018 netback of ~$224 MM on capex of ~$169 MM and is DCET ($MM) $12.7 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 Vol. (Bcf) 4.0 Calculated Recovered Gas (Bcf) >1,000 Current Raw Gas Production Capacity (Mcf/d) 100,000 Implied Number of Years of Production ~27 (Years) Raw Gas Production Capacity Post D2 (Mcf/d) 150,000 Implied Number of Years of Production ~18 (Years) 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 • In 2018, the 1-2 five well pad was drilled, completed and Gross Capacity brought on production and the 4-24 five well pad was Current Post D2 drilled Sour Raw Compression / Dehy (MMcf/d) 100 80 • Completed, ahead of schedule and under budget, a Sour Raw Gas Processing - 70 (MMcf/d) number of facilities enhancements at the 6-18 facility in Total Raw Gas Handling 100 150 (MMcf/d) Q4 2018 Raw Hydrocarbon Liquids Handling 15,000 30,000 (Bbl/d) • Debottlenecked liquids handling processes Implied CGR @ Capacity 150 200 (Bbl/MMcf) • Expanded natural gas compression capacity from 80 Raw Water Handling (Bbl/d) 15,000 28,000 MMcf/d to 100 MMcf/d Sales Gas Takeaway ~65 ~130 (MMcf/d) • As a result, facility reliability in Q4 2018 exceeded 98% and sales volumes averaged 26,282 Boe/d 2019 Capital Program • Complete and tie-in the 4-24 five well pad drilled in 2018, and drill, complete and tie-in a three well pad at 1-19 to fully utilize available capacity at the existing 6-18 facility • Complete and equip water disposal well and infrastructure D2 Facility Expansion • D2, which could be completed in 2020, would add 70 MMcf/d of raw natural gas processing capacity and an additional 15,000 Bbl/d of raw liquids handling capacity • Currently evaluating funding alternatives for the $145 MM of 2019F incremental spend 9