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

Corporate Presentation April 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. • The forward-looking information and statements contained in this presentation are made effective as of April 11, 2019. The type well information contained in this presentation has been prepared effective March 1, 2019 and the drilling location information contained in this presentation was prepared effective January 1, 2019. In each case, events or information subsequent to the applicable effective dates have not been incorporated. 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 Share Count 130.9 MM Market Cap @ $8.50/share ~1.1 Bln Net Debt (1) $896 MM Enterprise Value ~$2.0 Bln Insider Ownership (2) 46% 1P Reserves (3) 390.7 MMBoe 2P Reserves (3) 634.4 MMBoe 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 Paramount Portfolio of Assets 2019 Type Well Rate of Return (%) (1) 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 • Reflects successful track record of monetizing assets well in excess of book value • Return on Average Capital Employed (“ROCE”) defined as Return divided by Average Capital Employed (1) • Cash Flow Return on Capital Employed (“CFROCE”) defined as Cash Flow divided by Average Capital Employed (1) Paramount Historical CFROCE (%) (1) Paramount vs. Peers - Historical ROCE (%) (1) 6 1) Refer to the heading “Non-GAAP Measures” in the Advisories Appendix. 2) Sale of midstream and upstream assets.

2019 Budget and Production Guidance Paramount has set a base 2019 capital budget of $350 MM to support annual production of 81,000 – 85,000 Boe/d; Q419 forecast to average 85,000 – 90,000 Boe/d. 2019F Budget and Production Guidance 2019F Capex Breakdown ($MM) (1) 2018 2019F Production (Boe/d) 85,941 81,000 - 85,000 Liquids (%) 37% 38% (1) Capex ($MM) $569 $350 ARO ($MM) $29 $32 • Capital budget down ~40% vs. 2018 program • Prioritizing lower-risk and higher return, liquids-rich Montney plays with the tie-in of 20 wells at Karr and Wapiti • 5 well completions at Kaybob South Duvernay • 3 well Montney Oil program • Minor capex for emerging play land retention • The $350 MM budget excludes capital to advance the Karr 6-18 facility expansion (“D2”) • Evaluating funding alternatives for $145 MM 2019F incremental spend • Sales volumes are expected to increase in the second half of 2019F as Wapiti ramps up 7 1) Base 2019 capital budget, excluding land acquisitions and abandonment and reclamation.

Karr Asset Overview Q418 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 Type Well (1) • Drilled and tested first Lower Montney Return (%) 64% well in 2018 with results on par with the Middle Montney Payout (Months) 18 • Two of the 2019 wells are targeting the IP 365 (Boe/d) 961 Lower Montney Sales Vol. (MBoe) 1,481 • Will incorporate results to determine inventory count Avg. CGR (Bbl/MMcf) 173 • Generated 2018 netback of ~$224 MM DCET ($MM) $12.7 on capex of ~$169 MM and is 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 Volume (Bcf) 4.0 Calculated Recovered Gas (Bcf) >1,000 Current Raw Gas Production Capacity (Mcf/d) 100,000 Implied Number of Years Production (Years) ~27 Raw Gas Production Capacity Post D2 (Mcf/d) 150,000 Implied Number of Years Production (Years) ~18 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 Post drilled Current D2 • Completed, ahead of schedule and under budget, a Sour Raw Compression/Dehy number of facilities enhancements at the 6-18 facility in 100 80 Q4 2018 (MMcf/d) Sour Raw Gas Processing (MMcf/d) - 70 • Debottlenecked liquids handling processes • Expanded natural gas compression capacity from 80 Total Raw Gas Handling (MMcf/d) 100 150 MMcf/d to 100 MMcf/d Raw Hydrocarbon Liquids 15,000 30,000 • As a result, facility reliability in Q4 2018 exceeded 98% Handling (Bbl/d) and sales volumes averaged 26,282 Boe/d Implied CGR @ Capacity 2019 Capital Program 150 200 (Bbl/MMcf) • Complete and tie-in the 4-24 five well pad drilled in 2018, Raw Water Handling (Bbl/d) 15,000 28,000 and drill, complete and tie-in a three well pad at 1-19 to fully utilize available capacity at the existing 6-18 facility Sales Gas Takeaway (MMcf/d) ~65 ~130 • 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