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Paramount Resources Pitch (POU.TO)

Jonathan J. ChangBComm, 2017

Ait!a Pate" BA, #conomics, 201$

%i!i Jin BA, #conomics, 201&

'atas riui*+is BA, #conomics, 2017

Jan 2, 201$

This presentation is for informational purposes only, and is not an offer to buy or sell or a solicitation to buyor sell any securities, investment products or other financial product or service, an official confirmation of

any transaction, or an official statement of Queens Economics Investment Council (QEIC). Any vies oropinions presented are solely those of the author and do not necessarily represent those of QEIC.

E!E"#$ % &'E" E*ploration % &roduction

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Industry+readon

Company'vervie

-anaementTeam

InvestmentThesis &oint /0

InvestmentThesis &oint /1

Company2aluation

&ro3ectedCatalysts

Associated"iss

&rice Taret4ummary

Our Agena

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56

57

86

87

76

77

ector O-er-ie an Out"oo+

/Sources: Capital IQ

P "oa" #nerg! ne3 (ihares)

4hen i"" there e a

ounce ac+ i56ossi"e

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56.66

86.66

76.66

96.66

:6.66

;6.66

iht (!$-E?) Auture Contracts

1.66

1.76

5.66

5.76

8.66

8.76

7.66 !atural #as = @enry @ub (!$-E?) @istorical &ricin !atural #as = @enry @ub (!$-E?) Auture Contracts

8istorica" Commoit! Pricing an 201$# Pro9ections

:Sources: Capital IQ

;atura" as 8P

Crue Oi" 8P

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Com6an! O-er-ie

$Sources: Capital IQ

Paramount Resources Business o"ume Per5ormance

?inancia" 'etrics (Ca"ue 8,6;0.9 T#>#BT

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Com6an! O-er-ie

&Sources: Capital IQ

Prouction 6"it Paramounts n-estments

@eavy 'il (4 F bbl)D 8G>ihtF-edium 'il (4 F bbl)D 6G

!#> (4 F bbl)D 01G

!atural #as (4 F mcf)D ;8G

'ar+et >a"ue o5 D/:E '' or D/./2 shareas o5 Januar! 201$

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#3ecuti-e Team

7Sources: Paramount Resources Company Website

Joine in 17E

4as Presient6rior to 2002

#36erience in-arious areas o5O

ince June 2002

Been ith com6an!since 11

C#O o5 Tri"og!#nerg! an irectoro5 trategic Oi" as Ft.

C"a!ton Rie"", C#O James Rie"", Presient COO

Phi" Tahma@ian, >P 'istream

O-er 2$ !ears o5e36erincein Oinustr!

er-e as >P'istream at#ncana 6re-ious"!

ince 'a! 200/

nstrumenta" ins6inGo55 o5 Tri"og!#nerg! Cor6

Pre-ious"! he"senior 6osition ithA"erta #nerg!Com6an! Ft.

Bernar Fee, C?O

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n-estment Thesis Out"ine

ESources: Capital IQ, Equity Research Reports

Thouh costly to build a ne plant (176-) it entonline in the sprin of 1608

Increasin output throuh 160: to 096,666 +oeFd 07,666 +blFd condenser comin online in April

H ncrease Prouction H Attracti-e ross 'argins

Competin in unstable oil maret, &aramount hasdone e*ceptional ell to maintain solid rossmarins

Currently sits at 77G Indicates ability to compete in lo oil prices and is

positioned to outperform competition

1607 1609 160: 160; 160< 1616 1610 1611 1615 1618

;.06

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Argument H ncreasing Prouction

Sources: Paramount Investor Presentation

Pro9ecte Prouction Ca6acit! ncreases

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Argument H ncrease Prouction

Condensate stabiliHation isa process of utiliHin hatas once considered

aste of the productionprocess and filters it somore can be used

!e facility oin online inApril of 1607 ill increasethe companies condensatestabiliHation capacity to15,766 bblFd from ;,766

bblFd

All plants improvements and ne constructionpro3ects are fully funded

@ih level of debt but once the plants are at full

capacity they ill be producin :6,666 +oeFd hicheven at 76+blFd there ill be increasin cashflos

!early doublin production

ecreasin to under

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P"ants an ?aci"ities

&lant Capacity&otential 4ales

2olume

-usreau eepCut 166 --cfFd 76,666 +oeFd

-usreasu"efride 87 --cFfd ;,766 +oeFd

4moy eep Cut 166 --cfFd 06,666 +oeFd

Jarr 86 --cfFd 06,666 +oeFd

'ther :6 --cfFd 8,766 +oeFd

4ubtotal 777 --cfFd ;5,666 +oeFd

nderConstruction Capacity

&otential 4ales2olume

Condensate4tabiliHerE*pansion !FA 07,666 +oeFd

Jarr E*pansion 86 --cfFd 06,666 +oeFd

9 = 0; 066 --cfFd 17,666 +oeFd

5 = 07 066 --cfFd 17,666 +oeFd

4ubtotal 186 --cfFd :7,666 +oeFd

&ro3ected Total :

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Argument H ustantia" ross 'argins

12Sources: Capital IQ, Equity Research Report

'il prices are seein a bit of sure after hittin thelo point durin last ee

"ecovery form I4I4 In midst of this recovery, e are bullish oin

forard at the taret of 97Fbbl by Q8, in line ithmost analysts

&aramounts hih ross marins allos them to

compete in rouh periods of lo prices @ave better ability to absorb the lo price shoc Allos &aramount the fle*ibility to maintain profits

and continue investments

trong Pricing Poer

Oi" 'ar+et

Comination o5 'argins Prouction

&aramount has done e*cellent 3ob in maintainin

the hih marins but also aims to increaseproduction Increase in production paired ith their marins ill

be lead to a stron 1607 for &aramount

ross 'argins G ncrease

166< 1606 1600 1601 1605 16086

76

066

076

166

176

566

576

6G

06G

16G

56G

86G

76G

96G

"evenue (-) #ross &rofit (-) #ross -arins

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Argument H ustantia" ross 'argins

1/Sources: Capital IQ, Equity Research Report

Paramounts A-erage Prouction Cost

166; 166< 1606 1600 1601 1605

08.50

01.:1

06.:6 06.86

;.11

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>a"uation = ;et Asset >a"ue (O6erating 'oe")

1:Sources: Capital IQ, Equity Research Reports

;A> moe" ase on 201/ A?. ;o 6re-ious o6erations in terms o5 6rouction5or oi" san itumen so conser-ati-e 6ro9ection as mae.

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>a"uation = ;et Asset >a"ue (;etac+ Ca"cu"ations)

1$Sources: Capital IQ, Equity Research Reports

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Cata"!sts

1&

Sources: Capital IQ, Equity Research Reports

&aramount hascompleted their ne4moy and -usreaudeep cut plant

. Thans to the ne

e*pansion, their output atthis plant alone can triplefrom ;,766 barrels per

day to 15,766.

E*pandin -ontneydrillin proram in theJaybob area ith toplants, one scheduled tobe online in the secondhalf of 1609 and thesecond one si* monthslater.

irst sales of ne plantcompleted in Q5 of 1608,enables &aramount tobein ramp=up productionfrom their ells to beprocessed at ne plant

The Company has drilled and completed its firstell in the illesden #reen area of estern

Alberta. The Company has also entered into a 3ointventure areement that ill increase its illesden#reen uvernay land position to ;9 ells.

'usreau an ?uture P"ants 4estern #36ansion

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Ris+s

17

Sources: Equity Research Reports

Any mechanical issues ould

impact the rate of forecastedroth

-arins concentrated on-usreau plant e*pansion at acost of 57 million.

ue to its e*ploratory nature,lare scale technoloicalimprovements in E%&

competition ould destroy anycompetitive position and futuremarins

Condensate stabiliHer has beendelayed a couple of times anyfurther delays could bedetrimental

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ummar! G Price Target

1ES C it l IQ E it R h R t

;A> ensiti-it!

Ana"!st Price Targets m6"ie Return

Kan. 1< 4hare &rice 19.