Paramount Resources Ltd. Announces Second Quarter 2014 Results and Imminent First Sales from the Musreau Deep Cut Facility

Paramount Resources Ltd. Announces Second Quarter 2014 Results and Imminent 
First Sales from the Musreau Deep Cut Facility 
CALGARY, ALBERTA -- (Marketwired) -- 08/06/14 --   Paramount
Resources Ltd. (TSX: POU)  
Oil and Gas Operations 

--  Second quarter sales volumes exceeded guidance, averaging 20,585 Boe/d.
    Shorter than expected facility downtime in the Kaybob COU enabled new
    condensate-rich Montney wells to be brought on in place of leaner wells.
--  First sales gas from the Musreau Deep Cut Facility is imminent. The
    facility is pressurized with natural gas, all of the systems have been
    successfully operated, and the Company expects to begin cooling the
    facility to operating temperatures imminently, with first sales to
    immediately follow. 
--  Paramount's sales volumes are expected to more than double to
    approximately 50,000 Boe/d later in 2014 and increase to approximately
    70,000 Boe/d in 2015. 
--  The Company is expanding its Montney drilling program in the Kaybob area
    and has sanctioned the construction of two new 100 MMcf/d refrigeration
    plants to provide incremental processing capacity. The first new plant
    is scheduled to be on-stream in the second half of 2016 and the second
    new plant approximately six months later. 
--  Paramount's walking drilling rigs have finished drilling one 10-well
    Montney pad and the second 10-well pad will be finished in early-August.
--  The Company has drilled and completed its first horizontal Duvernay well
    in the Willesden Green area of Alberta. The Company has also entered
    into a joint venture agreement that will increase its Willesden Green
    Duvernay land position to 86 (43 net) sections. 
--  In June 2014, Paramount received approximately $91.5 million cash from
    the sale of a 50 percent interest in its Birch property. 

Strategic Investments 

--  Cavalier Energy received regulatory approval for the initial 10,000
    Bbl/d phase of its Hoole Grand Rapids development and has expanded its
    land base, acquiring approximately 23 net sections of undeveloped land
    at Hoole, contiguous with its Hoole lands, for $20 million. 
--  Fox Drilling has commenced the construction of two new walking rigs to
    support the Company's expanded drilling program. 
--  In June, Paramount completed the acquisition of all of the outstanding
    common shares of MGM Energy Corp. that it did not already own in
    exchange for 1.1 million Common Shares of Paramount.  


--  Based on the results of Paramount's Deep Basin development programs, the
    Company's bank credit facility (the "Facility") was increased from $600
    million to $700 million following a scheduled mid-year review. As of
    July 31, 2014, $78.7 million was drawn on the Facility. 
--  The Company raised gross proceeds of $350.4 million through the issuance
    of 5.6 million Common Shares in July 2014.  
FINANCIAL AND OPERATING HIGHLIGHTS (1)                                      
($ millions, except as noted)                                               
                               Three months ended       Six months ended    
                                    June 30                 June 30         
                                                  %                       % 
                               2014    2013  Change    2014  2013(2) Change 
Petroleum and natural gas                                                   
 sales                         80.0    59.4      35   166.2   120.8      38 
Funds flow from operations     29.5    22.3      32    63.0    38.8      62 
  Per share - diluted                                                       
   ($/share)                   0.30    0.24            0.64    0.42         
Net income (loss)              53.1   (22.1)    340    44.2   (21.8)    303 
  Per share - diluted                                                       
   ($/share)                   0.53   (0.24)           0.45   (0.24)        
Exploration and development                                                 
 expenditures                 202.6    94.0     116   375.6   239.2      57 
Investments in other                                                        
 entities - market value (3)                          757.4   759.1       - 
Total assets                                        2,870.0 2,084.4      38 
Net debt                                            1,356.2   803.3      69 
Common shares outstanding                                                   
 (thousands)                                         99,047  95,375       4 
Sales volumes                                                               
  Natural gas (MMcf/d)         99.4   107.6      (8)  102.0   110.6      (8)
  NGLs (Bbl/d)                3,292   2,126      55   3,186   2,392      33 
  Oil (Bbl/d)                   730     722       1     615     859     (28)
  Total (Boe/d)              20,585  20,790      (1) 20,805  21,685      (4)
Average realized price                                                      
  Natural gas ($/Mcf)          4.96    3.97      25    5.51    3.71      49 
  NGLs ($/Bbl)                91.22   71.84      27   89.18   72.90      22 
  Oil ($/Bbl)                105.27   85.98      22  101.76   85.05      20 
  Total ($/Boe)               42.72   31.41      36   44.15   30.76      44 
Operating expense ($/Boe)      8.82    8.46       4    9.29    9.35      (1)
Netback ($/Boe)               28.71   19.99      44   29.06   17.55      66 
Net wells drilled (excl. oil                                                
 sands evaluation)               22       6     267      34      15     127 
Net oil sands evaluation                                                    
 wells                            -       -       -       -       6    (100)
(1) Readers are referred to the advisories concerning non-GAAP measures and 
    Oil and Gas Measures and Definitions in the Advisories section of this  
(2) Amounts include the results of discontinued operations. Refer to        
    Management's Discussion and Analysis for the three and six months ended 
    June 30, 2014.                                                          
(3) Based on the period-end closing prices of publicly-traded enterprises   
    and the book value of the remaining investments.                        

Paramount's 2014 capital budget for exploration and development and
strategic investments, excluding land acquisitions and capitalized
interest, was increased in June 2014 by $150 million to $800 million.
The increased capital budget includes incremental spending of
approximately $70 million for the two new refrigeration plants, $50
million for Willesden Green Duvernay activities and $20 million to
commence construction of the two new walking drilling rigs.  
Following first sales from the Musreau Deep Cut Facility, sales
volumes will increase as the Company ramps-up production from its
inventory of behind-pipe wells, additional components of the
Company's Kaybob area infrastructure are completed and incremental
third-party de-ethanization capacity becomes available. Sales volumes
are expected to reach approximately 50,000 Boe/d later in 2014 and
increase to approximately 70,000 Boe/d in 2015, depending upon the
availability of downstream third-party de-ethanization capacity.  
Paramount is an independent, publicly traded, Canadian corporation
that explores for and develops conventional petroleum and natural gas
prospects, pursues longer-term non-conventional exploration and
pre-development projects and holds investments in other entities. The
Company's principal properties are located in Alberta and British
Columbia. Paramount's Class A Common Shares are listed on the Toronto
Stock Exchange under the symbol "POU". 
Paramount's second quarter 2014 report, including Management's
Discussion and Analysis and the Company's unaudited Interim Condensed
Consolidated Financial Statements can be obtained at: 
This information will also be made available through Paramount's
website at and SEDAR at 
Certain statements in this document constitute forward-looking
information under applicable securities legislation. Forward-looking
information typically contains statements with words such as
"anticipate", "believe", "estimate", "will", "expect", "plan",
"schedule", "intend", "propose", or similar words suggesting future
outcomes or an outlook. Forward looking information in this document
includes, but is not limited to: 

--  projected production and sales volumes and growth and the timing
--  forecast capital expenditures; 
--  exploration, development, and associated operational plans and
    strategies and the anticipated timing of such activities; 
--  projected timelines for, and the anticipated costs of, constructing,
    commissioning and/or starting-up new and expanded natural gas processing
    and associated facilities; 
--  projected timelines for, and the anticipated costs of, constructing new
    walking drilling rigs; 
--  the projected availability of third party processing, transportation,
    fractionation, de-ethanization and other facilities; and 
--  business strategies and objectives. 

Such forward-looking information is based on a number of assumptions
which may prove to be incorrect. Assumptions have been made with
respect to the following matters, in addition to any other
assumptions identified in this document: 

--  future oil, bitumen, natural gas, NGLs and other commodity prices; 
--  royalty rates, taxes and capital, operating, general & administrative
    and other costs; 
--  foreign currency exchange rates and interest rates; 
--  general economic and business conditions; 
--  the ability of Paramount to obtain the required capital to finance its
    exploration, development and other operations; 
--  the ability of Paramount to obtain equipment, services, supplies and
    personnel in a timely manner and at an acceptable cost to carry out its
--  the ability of Paramount to secure adequate product processing,
    transportation, fractionation, de-ethanization and storage capacity on
    acceptable terms; 
--  the ability of Paramount to market its oil, bitumen, natural gas and
    NGLs successfully to current and new customers; 
--  the ability of Paramount and its industry partners to obtain drilling
    success (including in respect of anticipated production volumes,
    reserves additions and NGLs yields) and operational improvements,
    efficiencies and results consistent with expectations; 
--  the timely receipt of required governmental and regulatory approvals;
--  anticipated timelines and budgets being met in respect of drilling
    programs and other operations (including well completions and tie-ins
    and the construction, commissioning and start-up of new and expanded

Although Paramount believes that the expectations reflected in such
forward looking information is reasonable, undue reliance should not
be placed on it as Paramount can give no assurance that such
expectations will prove to be correct. Forward-looking information is
based on expectations, estimates and projections that involve a
number of risks and uncertainties which could cause actual results to
differ materially from those anticipated by Paramount and described
in the forward looking information. The material risks and
uncertainties include, but are not limited to: 

--  fluctuations in oil, bitumen, natural gas, NGLs and other commodity
--  changes in foreign currency exchange rates and interest rates; 
--  the uncertainty of estimates and projections relating to future revenue,
    future production, NGLs yields, royalty rates, taxes and costs and
--  the ability to secure adequate product processing, transportation,
    fractionation, de-ethanization and storage capacity on acceptable terms;
--  operational risks in exploring for, developing and producing crude oil,
    bitumen, natural gas and NGLs; 
--  the ability to obtain equipment, services, supplies and personnel in a
    timely manner and at an acceptable cost; 
--  potential disruptions or unexpected technical or other difficulties in
    designing, developing, expanding or operating new, expanded or existing
    facilities (including third party facilities); 
--  industry wide processing, pipeline, de-ethanization, and fractionation
    infrastructure outages, disruptions and constraints; 
--  risks and uncertainties involving the geology of oil and gas deposits; 
--  the uncertainty of reserves and resources estimates; 
--  general business, economic and market conditions; 
--  the ability to generate sufficient cash flow from operations and obtain
    financing at an acceptable cost to fund planned exploration, development
    and operational activities and meet current and future obligations
    (including costs of anticipated new and expanded facilities and other
    projects and product processing, transportation, de-ethanization,
    fractionation and similar commitments); 
--  changes in, or in the interpretation of, laws, regulations or policies
    (including environmental laws); 
--  the ability to obtain required governmental or regulatory approvals in a
    timely manner, and to enter into and maintain leases and licenses; 
--  the effects of weather; 
--  the timing and cost of future abandonment and reclamation obligations
    and potential liabilities for environmental damage and contamination; 
--  uncertainties regarding aboriginal claims and in maintaining
    relationships with local populations and other stakeholders; 
--  the outcome of existing and potential lawsuits, regulatory actions,
    audits and assessments; and 
--  other risks and uncertainties described elsewhere in this document and
    in Paramount's other filings with Canadian securities authorities. 

The foregoing list of risks is not exhaustive. For more information
relating to risks, see the section titled "RISK FACTORS" in
Paramount's current annual information form. The forward-looking
information contained in this document is made as of the date hereof
and, except as required by applicable securities law, Paramount
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise. 
In this document "Funds flow from operations", "Netback", "Net Debt",
"Exploration and development expenditures" and "Investments in other
entities - market value", collectively the "Non-GAAP measures", are
used and do not have any standardized meanings as prescribed by
International Financial Reporting Standards.  
Funds flow from operations refers to cash from operating activities
before net changes in operating non-cash working capital, geological
and geophysical expenses and asset retirement obligation settlements.
Funds flow from operations is commonly used in the oil and gas
industry to assist management and investors in measuring the
Company's ability to fund capital programs and meet financial
obligations. Netback equals petroleum and natural gas sales less
royalties, operating costs, production taxes and transportation
costs. Netback is commonly used by management and investors to
compare the results of the Company's oil and gas operations between
periods. Net Debt is a measure of the Company's overall debt position
after adjusting for certain working capital amounts and is used by
management to assess the Company's overall leverage position. Refer
to the liquidity and capital resources section of the Company's
Management's Discussion and Analysis for the period for the
calculation of Net Debt. Exploration and development expenditures
refer to capital expenditures and geological and geophysical costs
incurred by the Company's COUs (excluding land and acquisitions). The
exploration and development expenditure measure provides management
and investors with information regarding the Company's Principal
Property spending on drilling and infrastructure projects, separate
from land acquisition activity. Investments in other entities -
market value reflects the Company's investments in enterprises whose
securities trade on a public stock exchange at their period end
closing price (e.g. Trilogy Energy Corp., MEG Energy Corp., Strategic
Oil & Gas Ltd. and others), and investments in all other entities at
book value. Paramount provides this information because the market
values of equity-accounted investments, which are significant assets
of the Company, are often materially different than their carrying
Non-GAAP measures should not be considered in isolation or construed
as alternatives to their most directly comparable measure calculated
in accordance with GAAP, or other measures of financial performance
calculated in accordance with GAAP. The Non-GAAP measures are
unlikely to be comparable to similar measures presented by other
This document contains disclosures expressed as "Boe" and "Boe/d".
All oil and natural gas equivalency volumes have been derived using
the ratio of six thousand cubic feet of natural gas to one barrel of
oil. Equivalency measures may be misleading, particularly if used in
isolation. A conversion ratio of six thousand cubic feet of natural
gas to one barrel of oil is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent
a value equivalency at the well head. The term "liquids" is used to
represent oil and natural gas liquids.  
During the first half of 2014, the value ratio between crude oil and
natural gas was approximately 18:1. This value ratio is significantly
different from the energy equivalency ratio of 6:1. Using a 6:1 ratio
would be misleading as an indication of value. 
Paramount Resources Ltd.
J.H.T. (Jim) Riddell
President and Chief Operating Officer
(403) 290-3600
(403) 262-7994 (FAX) 
Paramount Resources Ltd.
B.K. (Bernie) Lee
Chief Financial Officer
(403) 290-3600
(403) 262-7994 (FAX)
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