Corporate Presentation July 2015 Future Oriented Information (See - PowerPoint PPT Presentation

Corporate Presentation July 2015

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 Corporate Profile • Founded in 1974; IPO in 1978 • TSX: POU • Market Cap: 106.2 MM shares @ $30.00/share ~ $3.2 Billion • ~50% insider ownership • Net Debt (March 31, 2015): $1.5 Billion (2) • 2015 Capital Guidance: $400 MM Low Risk/Repeatable Growth Operations focused on large-scale Deep Basin development • Large contiguous acreage • Multi-zone potential • High condensate/gas ratios • Owned and firm service access to infrastructure Significant near-term growth in production and cash flow • Surpass 70,000 Boe/d in 2015 following Q2 2015 startup of condensate stabilizer expansion • Average 55,000 to 65,000 Boe/d for 2015 • Production mix evolving to ~50% liquids Exposure to emerging plays and Strategic Investments • Duvernay • Oil sands • Liard Basin shale gas (1) Average sales volumes for the first quarter of 2015 (2) Pro-forma the June 2015 issuance of US$ 450 MM senior notes due 2023 and the redemption of CAD$ 370 MM senior notes due 2017 3

Deep Basin Resource Paramount Acreage (gross): • 500 Sections Cretaceous Rights • 364 Sections Montney Rights • 249 Sections Duvernay Rights • 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) • Liquids-rich Montney gas play • ~70 + Bcf/section DGIIP (1) • ~ 22 Tcf DGIIP + NGLs net to POU (1) • Potential conventional Devonian exploration • Potential Duvernay Shale rock play *Graphic courtesy of www.canadianoilstocks.ca (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

Cretaceous Gas Resource • Hz Falher well at Musreau • Hz Dunvegan well at Resthaven • Tested 16.4 MMcf/d (1) at • Tested 11.3 MMcf/d (1) at 20.8 MPa 6.2 MPa • IP: 12.0 MMcf/d • IP: 8.3 MMcf/d • Currently producing ~2.0 MMcf/d • Currently producing ~1.1 MMcf/d • Cost: $8.6 MM d/c/t • 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 5

Cretaceous Economics Assumptions Capital: $7.0 MM horizontal well IP: 9.0 MMcf/d Natural Gas (raw): 4.9 Bcf Raw Condensate Gas Ratio: 17 Bbl/MMcf C2-C4 NGLs: 61 Bbl/MMcf Deep Cut Facility Economics : $2.75 AECO, US$55.00 WTI (Deep-Cut) NPV 10%: $2.5 MM IRR: 31% Payout (Months): 30 P/I: 1.7 6

Montney Gas Resource  Liquids-rich Montney gas play  Paramount holds ~315 net sections of Montney rights  2011/2012 program included 16 Hz Montney wells: tested 5.5-15.4 MMcf/d (1)  Montney 2013 program: Drilled 15 wells; commenced drilling 25 additional wells off 3 pads in Musreau; participated in 5 non-op Montney wells in Karr  34 Montney wells rig released in 2014 including 23 pad wells at Musreau; participated in 2 non-op Montney wells in Karr  3-20 10-well pad at Musreau completed in Q3 2014 with combined test rates of 108 MMcf/d + NGLs (1)  8-22 10-well pad at Musreau completed in Q4 2014 with combined test rates of 130 MMcf/d + NGLs (1)  Two new 6-well pads at Musreau rig released in March 2015 (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information 7

Montney Economics Assumptions Capital: $10.0 MM horizontal well IP: 5.8 MMcf/d Natural Gas (raw): 3.0 Bcf Raw Condensate Gas Ratio (CGR): 150 Bbl/MMcf (50 Bbl/MMcf - 400 Bbl/MMcf) C2-C4 NGLs: 90 Bbl/MMcf Deep Cut Facility Economics @ $2.75 AECO, US$55.00 WTI (Deep Cut) NPV 10%: $7.7 MM IRR: 56% Payout (Years): 1.8 P/I: 1.8 8

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 • Plug and perf/sliding sleeves • Cemented liners/open-hole packers (ECP’s) • Frac sizing/spacing/clusters • Frac fluid selection/fluid handling • Pumping techniques • Frac fluid recycling • Proppants • Flow back/production practices • Working with material and service providers to reduce costs 9

Deep Basin Processing Capacity (1) (1) Please refer to the heading “Deep Basin Processing Capacity” in the Advisories section for further information. 10

Musreau 8-13 Complex October 13, 2014

Illustrative Deep-Cut - Montney Wells 200 MMcf/d x 23% Shrinkage = 154 MMcf/d Sales Gas (25,667 Boe/d) + 22,000 Bbl/d condensate + 18,000 Bbl/d NGLs Price Yield Bbl/MMcf Deep-Cut Sales Gas $2.75/Mcf 154 MMcf/d $423,500 Condensate $65.00/Bbl 22,000 Bbl/d $1,430,000 110 Butane $35.00/Bbl 2,500 Bbl/d $87,500 12.5 Propane $10.00/Bbl 5,000 Bbl/d $50,000 25 Ethane $10.00/Bbl 10,500 Bbl/d $105,000 52.5 65,667 Boe/d Total: $2,096,000/day Royalty 5% ($104,800/day) Operating Cost ($3.00/Boe) ($197,000/day) $1,794,200/day Total: 24.0 MMBoe/year $655 MM/year $27.29/Boe 12

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 add a series of refrigeration or deep cut plants • Simple Payout from free cash flow after start up is less than two 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 = $250 MM Total: $850 MM Annual Deep - Cut Cash Flow $655 MM/year Annual Capital = 25 (3.0 Bcf) wells x $10 MM/well $250 MM/year Free Cash Flow $405 MM/year 13

Willesden Green Duvernay Shale Play  64,452 (34,305 net) acres of land when earning complete  Drilled and completed 2 (1.5 net) Hz Duvernay wells to date:  Well #1: > 1,000 Bbl/MMcf  Well #2: > 200 Bbl/MMcf  Drilled 1 (0.5 net) additional Hz Duvernay well in Q1 2015; completion in progress Paramount has explored for ideal combinations of rock quality/liquids ratio/pressure gradient (1) Includes Duvernay lands to be earned 14

Montney Valhalla: ~65 sections (~49 net) Montney/~60 sections (~44 net) Doig rights • Montney/Doig Play • 16 wells tied in at restricted rates (midstream constraints) • Montney wells tested 3.0 - 12.5 MMcf/d + NGLs/Condensate (1) • Doig wells tested 2.5 - 15 MMcf/d + NGLs/Condensate (1) • Evaluating long term production/economics to determine future investment levels Birch: ~67 sections (~34 net) Montney rights • Montney shale play (50% WI) • Seven Hz Montney wells • Production has been processed through pilot facility limited to 3 MMcf/d • NGL yields average 60 Bbl/MMcf (1) Please refer to the heading "Test Results" in the Advisories section of this presentation for further information. (2) Based on results from Paramount's wells and publicly disclosed results of competitor wells. 15

Paramount Investments

Paramount Investments 17

Cavalier Energy Inc.

Cavalier Energy Inc. Corporate Profile • Created in December 2011; experienced team led by CEO Dr. Will Roach • Paramount contributed its oilsands assets and seed capital to Cavalier • Funding at the Cavalier level will be via a combination of equity and debt • Assets retained as 100% WI within Cavalier Energy • Regulatory approval for the development of the first 10,000 Bbl/d SAGD project at Hoole received June 2014 Corporate Resources • Approximately 345 (net) sections • Prospective for conventional oil sands, bitumen in carbonates, and cold-flow heavy oil • Hoole Project: 100% WI (1) Resource estimates are Best Estimates based on McDaniel independent engineering reports dated as of October 31, 2011 for Saleski, House, Granor and Orchid; April 30, 2010 for Eagles Nest; and December 31, 2014 for Hoole. Please refer to "Oil Sands Measures and Definitions" in the Advisories section of this presentation for oil sands reserves, resources and related definitions (including NPV). 19