Paramount Resources Announces Second Quarter 2025 Results, Early Alhambra Plant Start-Up and Increased Production Guidance

2025-07-30

TSX - Toronto Stock Exchange · Natural Gas · Oil · Natural Gas Liquids · Ethane · Canada

Canada NewsWire

CALGARY, AB , July 30, 2025 /CNW/ - Paramount Resources Ltd. ("Paramount" or the "Company") (TSX: POU) is pleased to announce its second quarter 2025 financial and operating results, the ahead of schedule start-up of its new Alhambra Plant in Willesden Green and an increase in midpoint sales volumes guidance for 2025.

HIGHLIGHTS

Second quarter sales volumes averaged 31,631 Boe/d (46% liquids). (1)

Sales volumes from the Central Alberta Region, which includes Willesden Green, averaged 9,223 Boe/d (60% liquids).

Kaybob Region sales volumes averaged 21,962 Boe/d (39% liquids).

Duvernay production accounted for 56 percent of total sales volumes and Duvernay condensate production accounted for 77 percent of total oil and condensate sales volumes.

Cash from operating activities was $40 million ( $0.28 per basic share) in the second quarter. Adjusted funds flow was $82 million ( $0.57 per basic share). Free cash flow was ($86) million ( ($0.60) per basic share). (2)

Second quarter capital expenditures totaled $158 million . Activities in the quarter included:

Willesden Green Duvernay – ten (10.0 net) wells drilled, five (5.0 net) wells completed and brought on production and the continuing construction of the first and second phases of the Company's wholly-owned and operated Alhambra Plant; and

Kaybob North Duvernay – three (3.0 net) wells drilled.

Construction of the first phase of the Alhambra Plant was substantially completed in July, ahead of schedule, and first sales volumes were achieved in late-July. Volumes are expected to ramp-up in stages as construction of third-party liquids egress is completed in August and an additional 11 new Duvernay wells are completed and brought onstream through the end of the third quarter and into the fourth quarter.

| | | | (1) | In this press release, "natural gas" refers to shale gas and conventional natural gas combined, "condensate and oil" refers to condensate, light and medium crude oil, tight oil and heavy crude oil combined, "Other NGLs" refers to ethane, propane and butane and "liquids" refers to condensate and oil and Other NGLs combined. See the "Product Type Information" section for a complete breakdown of sales volumes for applicable periods by the specific product types of shale gas, conventional natural gas, NGLs, light and medium crude oil, tight oil and heavy crude oil. See also "Oil and Gas Measures and Definitions" in the Advisories section. | | (2) | Adjusted funds flow and free cash flow are capital management measures used by Paramount. Cash from operating activities per basic share, adjusted funds flow per basic share and free cash flow per basic share are supplementary financial measures. Refer to the "Specified Financial Measures" section for more information on these measures. |

Paramount continues to have 10,000 Bbl/d of liquids hedged at a WTI price of C$105.00 /Bbl for the remainder of 2025.

Approximately 70 percent of Paramount's expected natural gas sales volumes for the remainder of 2025 are priced at diversified markets outside of AECO.

Asset retirement obligations settled in the second quarter totaled $3 million .

The carrying value of the Company's investments in securities at June 30, 2025 was $575 million , including $474 million of investments in publicly traded securities. Paramount received cash dividends of $3 million in the second quarter from one of its private company investments.

At June 30, 2025 , Paramount had net cash of $501 million and its $500 million revolving credit facility remained undrawn. (1)

GUIDANCE

Paramount is revising its 2025 sales volumes guidance as a result of the early start-up of the Alhambra Plant at Willesden Green. Annual sales volumes are now expected to range between 38,500 Boe/d and 42,500 Boe/d (47% liquids). The Company continues to anticipate a year-end 2025 exit rate in excess of 45,000 Boe/d (52% liquids). Capital expenditure guidance for 2025 remains unchanged at between $780 million and $840 million .

Paramount expects to incur abandonment and reclamation expenditures of approximately $18 million over the second half of 2025.

AUGUST DIVIDEND

Paramount's Board of Directors has declared a cash dividend of $0.05 per class A common share that will be payable on August 29 , 2025 to shareholders of record on August 15, 2025 . The dividend will be designated as an "eligible dividend" for Canadian income tax purposes.

| _ | | | (1) | Net (cash) debt is a capital management measure used by Paramount. This capital management measure has been expressed as net cash in this instance for simplicity. Refer to the "Specified Financial Measures" section for more information on this measure. |

REVIEW OF OPERATIONS

CENTRAL ALBERTA REGION

Second quarter 2025 sales volumes in the Central Alberta Region averaged 9,223 Boe/d (60% liquids) compared to 7,929 Boe/d (56% liquids) in the first quarter. Duvernay production accounted for 93 percent of second quarter sales volumes in the region.

Development activities at Willesden Green in the second quarter included the continuing construction of the new Alhambra Plant and the drilling of ten (10.0 net) Duvernay wells, including one well that was drilled to 9,060 meters, setting a new record for the longest Canadian onshore well.

The Company has now drilled all 16 (16.0 net) wells that will flow to the Alhambra Plant in 2025. The first five (5.0 net) of these wells were completed and flowed back over an extended period through temporary facilities beginning in the latter part of the second quarter. These wells are now tied-in to the Alhambra Plant. Completion and equipping operations are in progress for the remaining 11 (11.0 net) wells.

Construction of the first phase of the Company's wholly-owned and operated Alhambra Plant was substantially completed in July, ahead of schedule. This first phase provides the Company incremental raw handling capacity of 10,000 Bbl/d of liquids and 50 MMcf/d of natural gas.

First sales volumes from the new plant were achieved in late-July. Volumes are expected to ramp-up in stages as operational stability of the Alhambra Plant is achieved, the construction of third-party liquids egress is completed in August and the remaining 11 (11.0 net) new Duvernay wells are brought onstream through the end of the third quarter and into the fourth quarter. The Company expects average sales volumes through the Alhambra Plant to increase significantly in the fourth quarter.

Prior to the end of the year, Paramount plans to drill and bring onstream three (3.0 net) Duvernay wells that will flow to its Leafland Plant and drill a further 11 (11.0 net) Duvernay wells that will be tied into the Alhambra Plant in 2026.

The Company continues to advance the second phase expansion of the Alhambra Plant, which will double raw handling capacity to 20,000 Bbl/d of liquids and 100 MMcf/d of natural gas. Start-up of the second phase continues to be expected in the fourth quarter of 2026.

KAYBOB REGION

Kaybob Region sales volumes averaged 21,962 Boe/d (39% liquids) in the second quarter of 2025 compared to 21,371 Boe/d (36% liquids) in the first quarter. Duvernay production accounted for 42 percent of second quarter sales volumes in the Kaybob Region.

Development activities in the second quarter included the drilling of the final three wells of a five (5.0 net) well Duvernay pad at Kaybob North. Completion activities that were initiated in the second quarter are ongoing and the Company plans to equip, tie-in and bring the five new wells onstream in the third quarter.

Over the remainder of 2025, Paramount also plans to commence the drilling of a three (3.0 net) well Duvernay pad at Kaybob North.

SINCLAIR UPDATE

Following successful short-term flow tests of the Company's first two (2.0 net) Montney appraisal wells in the first quarter of 2025, Paramount anticipates flowing these wells into regional infrastructure for a portion of the third and fourth quarters of 2025. The additional data obtained is expected to further inform the Company's detailed engineering and design work for a potential new dry gas processing plant capable of handling up to 400 MMcf/d of raw gas production (the "Sinclair Plant") and related infrastructure. Incremental sales volumes from the test are not expected to be significant.

Paramount advanced its ongoing work related to the Sinclair Plant in the second quarter. As previously disclosed, the Company has secured downstream transportation capacity that would enable the first phase of Sinclair production to commence as early as the fourth quarter of 2027.

Over the remainder of 2025, Paramount plans to drill an additional two (2.0 net) Montney appraisal wells, which the Company plans to complete and flow test in 2026.

HEDGING

The Company's current financial commodity contracts are summarized below:

| | | Q3 2025 | Q4 2025 | | Average Price (1) | | | Oil | | | | | | | | NYMEX WTI Swaps (Sale) (Bbl/d) | | 10,000 | 10,000 | | C$105.00/Bbl | | | | | | | | | | | Natural gas | | | | | | | | Citygate / Malin Basis Swap (MMBtu/d) (2) | | 10,000 | 10,000 | | Citygate less US$0.97/MMBtu (Sell)

Malin (Buy) | |

| (1) | Average price is calculated using a weighted average of notional volumes and prices. | | (2) | "Citygate" refers to Pacific Gas & Electric Citygate and "Malin" refers to Pacific Gas & Electric Malin. Pursuant to the swap transaction, Paramount sells at Citygate less US$0.97/MMBtu and buys at Malin. The transaction is financially settled with no physical delivery. The remaining term of this contract is July 2025 to October 2028. |

ABOUT PARAMOUNT

Paramount is an independent, publicly traded, liquids-rich natural gas focused Canadian energy company that explores for and develops both conventional and unconventional petroleum and natural gas, including longer-term strategic exploration and pre-development plays, and holds a portfolio of investments in other entities. The Company's principal properties are located in Alberta and British Columbia . Paramount's Common Shares are listed on the Toronto Stock Exchange under the symbol "POU".

Paramount's second quarter 2025 results, including Management's Discussion and Analysis and the Company's Interim Consolidated Financial Statements, can be obtained on SEDAR+ at www.sedarplus.ca or on Paramount's website at www.paramountres.com/investors/financial-shareholder-reports .

A summary of historical financial and operating results is also available on Paramount's website at www.paramountres.com/investors/financial-shareholder-reports .

FINANCIAL AND OPERATING RESULTS (1)

| ($ millions, except as noted) | Q2 2025 | Q1 2025 | Q2 2024 | | | | | Net income | 4.2 | 1,288.8 | 84.5 | | | | | per share – basic ($/share) | 0.03 | 8.90 | 0.58 | | | | | per share – diluted ($/share) | 0.03 | 8.74 | 0.57 | | | | | Cash from operating activities | 39.8 | 149.9 | 220.5 | | | | | per share – basic ($/share) | 0.28 | 1.03 | 1.51 | | | | | per share – diluted ($/share) | 0.27 | 1.02 | 1.47 | | | | | Adjusted funds flow | 81.5 | 149.1 | 266.2 | | | | | per share – basic ($/share) | 0.57 | 1.03 | 1.82 | | | | | per share – diluted ($/share) | 0.56 | 1.01 | 1.78 | | | | | Free cash flow | (85.5) | (90.6) | 20.3 | | | | | per share – basic ($/share) | (0.60) | (0.63) | 0.14 | | | | | per share – diluted ($/share) | (0.60) | (0.63) | 0.14 | | | | | Total assets | 3,517.9 | 3,616.4 | 4,589.2 | | | | | Investments in securities | 575.3 | 522.8 | 579.5 | | | | | Long-term debt | – | – | – | | | | | Net (cash) debt | (500.9) | (637.9) | 29.3 | | | | | Common shares outstanding _(millions) _(2) | 143.3 | 143.2 | 146.7 | | | | | Sales volumes (3) | | | | | | | | Natural gas (MMcf/d) | 103.3 | 179.6 | 296.8 | | | | | Condensate and oil (Bbl/d) | 11,636 | 20,542 | 39,206 | | | | | Other NGLs (Bbl/d) | 2,786 | 3,934 | 6,928 | | | | | Total (Boe/d) | 31,631 | 54,409 | 95,609 | | | | | % liquids | 46 % | 45 % | 48 % | | | | | Central Alberta Region and Other (Boe/d) | 9,669 | 8,334 | 8,226 | | | | | Kaybob Region (Boe/d) | 21,962 | 21,371 | 23,946 | | | | | Sold Assets (Boe/d) (4) | – | 24,704 | 63,437 | | | | | Total (Boe/d) | 31,631 | 54,409 | 95,609 | | | | | Netback | | ($/Boe) (5) | | ($/Boe) (5) | | ($/Boe) (5) | | Natural gas revenue | 28.9 | 3.07 | 52.6 | 3.25 | 45.6 | 1.69 | | Condensate and oil revenue | 87.7 | 82.84 | 180.6 | 97.70 | 367.7 | 103.07 | | Other NGLs revenue | 6.9 | 27.02 | 14.3 | 40.47 | 20.8 | 33.07 | | Natural gas transportation assignment income (6) | 2.7 | 0.29 | 7.4 | 0.46 | – | – | | Royalty income and other revenue (6) | 1.0 | – | 11.7 | – | 9.5 | – | | Petroleum and natural gas sales | 127.2 | 44.20 | 266.6 | 54.43 | 443.6 | 50.99 | | Royalties | (5.7) | (2.00) | (26.7) | (5.44) | (66.1) | (7.60) | | Operating expense | (35.7) | (12.39) | (67.8) | (13.85) | (115.7) | (13.29) | | Transportation and NGLs processing | (13.2) | (4.57) | (20.4) | (4.17) | (31.3) | (3.60) | | Sales of commodities purchased (7) | 43.7 | 15.18 | 109.7 | 22.40 | 84.4 | 9.70 | | Commodities purchased (7) | (43.4) | (15.07) | (107.2) | (21.88) | (82.4) | (9.47) | | Netback | 72.9 | 25.35 | 154.2 | 31.49 | 232.5 | 26.73 | | Risk management contract settlements | 14.9 | 5.16 | 1.6 | 0.32 | 36.4 | 4.18 | | Netback including risk management contract settlements | 87.8 | 30.51 | 155.8 | 31.81 | 268.9 | 30.91 | | Capital expenditures | | | | | | | | Central Alberta Region and Other | 114.8 | 138.3 | 46.0 | | | | | Kaybob Region | 40.2 | 51.0 | 40.9 | | | | | Fox Drilling | 1.6 | 3.1 | 0.7 | | | | | Corporate (8) | 5.4 | 2.9 | (1.5) | | | | | Sold Assets (4) | (4.4) | 20.4 | 154.7 | | | | | Total | 157.6 | 215.7 | 240.8 | | | | | Asset retirement obligations settled | 3.0 | 22.2 | 2.3 | | | |

| (1) | Adjusted funds flow, free cash flow and net (cash) debt are capital management measures used by Paramount. Netback and netback including risk management contract settlements are non-GAAP financial measures. Netback and Netback including risk management contract settlements presented on a $/Boe or $/Mcf basis are non-GAAP ratios. Each measure, other than net income, that is presented on a per share, $/Mcf or $/Boe basis is a supplementary financial measure. Refer to "Specified Financial Measures". | | (2) | Common shares are presented net of shares held in trust under the Company's restricted share unit plan (millions): Q2 2025: 0.3, Q1 2025: 0.3, Q2 2024: 0.2. | | (3) | Refer to the Product Type Information section of this document for a complete breakdown of sales volumes for applicable periods by specific product type. | | (4) | "Sold Assets" refers to the Karr, Wapiti and Zama properties that were sold on January 31, 2025. | | (5) | Natural gas revenue and natural gas transportation assignment income presented as $/Mcf. | | (6) | Natural gas transportation assignment income for the three months ended June 30, 2025 and March 31, 2025 relates to proceeds realized by the Company on the assignment of a portion of its ex-Alberta natural gas transportation capacity to third parties. Royalty income and other revenue for the three months ended March 31, 2025 includes $11.1 million related to a second interim payment from insurers for 2023 Alberta wildfire losses (three months ended June 30, 2024 includes $10.0 million related to the first interim payment from insurers for wildfire losses). The Company has realized $21.1 million in aggregate interim payments in respect of its 2023 Alberta wildfire losses to date and continues to advance its insurance claims process. These amounts were not allocated to individual regions or properties. | | (7) | Sales of commodities purchased and commodities purchased are treated as corporate items and not allocated to individual regions or properties. | | (8) | Includes transfers of amounts held in Corporate to and from regions. |

PRODUCT TYPE INFORMATION

This press release includes references to sales volumes of "natural gas", "condensate and oil", "NGLs", "Other NGLs" and "liquids". "Natural gas" refers to shale gas and conventional natural gas combined. "Condensate and oil" refers to condensate, light and medium crude oil, tight oil and heavy crude oil combined. "NGLs" refers to condensate and Other NGLs combined. "Other NGLs" refers to ethane, propane and butane. "Liquids" refers to condensate and oil and Other NGLs combined. Below is a complete breakdown of sales volumes for applicable periods by the specific product types of shale gas, conventional natural gas, NGLs, light and medium crude oil, tight oil and heavy crude oil. Numbers may not add due to rounding.

| | Total Company by Product Type | Central Alberta Region and Other | Kaybob Region | | | | | | | | | | | | | | | | | | Q2 2025 | | Q1 2025 | | Q2 2024 | | Q2 2025 | | Q1 2025 | | Q2 2024 | | Q2 2025 | | Q1 2025 | | Q2 2024 | | | Shale gas (MMcf/d) | 58.9 | | 134.2 | | 243.1 | | 19.4 | | 17.6 | | 20.3 | | 39.5 | | 39.7 | | 35.8 | | | Conventional natural gas (MMcf/d) | 44.4 | | 45.4 | | 53.7 | | 3.2 | | 3.6 | | 4.8 | | 41.2 | | 41.8 | | 48.8 | | | Natural gas (MMcf/d) | 103.3 | | 179.6 | | 296.8 | | 22.6 | | 21.2 | | 25.1 | | 80.7 | | 81.5 | | 84.6 | | | Condensate (Bbl/d) | 9,688 | | 18,817 | | 36,825 | | 3,760 | | 2,992 | | 2,273 | | 5,928 | | 5,500 | | 6,617 | | | Other NGLs (Bbl/d) | 2,786 | | 3,934 | | 6,928 | | 1,523 | | 1,186 | | 1,156 | | 1,263 | | 1,292 | | 1,599 | | | NGLs (Bbl/d) | 12,474 | | 22,751 | | 43,753 | | 5,283 | | 4,178 | | 3,429 | | 7,191 | | 6,792 | | 8,216 | | | Light and medium crude oil (Bbl/d) | 1,263 | | 971 | | 1,566 | | 22 | | 28 | | 22 | | 1,241 | | 943 | | 1,544 | | | Tight oil (Bbl/d) | 285 | | 396 | | 466 | | 211 | | 234 | | 239 | | 74 | | 57 | | 80 | | | Heavy crude oil (Bbl/d) | 400 | | 358 | | 349 | | 400 | | 358 | | 349 | | – | | – | | – | | | Crude oil (Bbl/d) | 1,948 | | 1,725 | | 2,381 | | 633 | | 620 | | 610 | | 1,315 | | 1,000 | | 1,624 | | | Total (Boe/d) | 31,631 | | 54,409 | | 95,609 | | 9,669 | | 8,334 | | 8,226 | | 21,962 | | 21,371 | | 23,946 | |

| | Sold Assets | | | | | | | | Q2 2025 | | Q1 2025 | | Q2 2024 | | | Shale gas (MMcf/d) | – | | 76.9 | | 187.0 | | | Conventional natural gas (MMcf/d) | – | | – | | 0.1 | | | Natural gas (MMcf/d) | – | | 76.9 | | 187.1 | | | Condensate (Bbl/d) | – | | 10,325 | | 27,935 | | | Other NGLs (Bbl/d) | – | | 1,456 | | 4,173 | | | NGLs (Bbl/d) | – | | 11,781 | | 32,108 | | | Tight oil (Bbl/d) | – | | 105 | | 147 | | | Crude oil (Bbl/d) | – | | 105 | | 147 | | | Total (Boe/d) | – | | 24,704 | | 63,437 | |

2025 average sales volumes are expected to be between 38,500 Boe/d and 42,500 Boe/d (53% shale gas and conventional natural gas combined, 39% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 8% other NGLs).

Third quarter sales volumes are expected to average between 30,000 Boe/d and 32,000 Boe/d (55% shale gas and conventional natural gas combined, 37% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 8% Other NGLs).

Fourth quarter 2025 average sales volumes are expected to be between 42,000 Boe/d and 45,000 Boe/d (48% shale gas and conventional natural gas combined, 43% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 9% Other NGLs).

2025 year-end sales volumes exit rate is expected to be in excess of 45,000 Boe/d (48% shale gas and conventional natural gas combined, 43% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 9% Other NGLs).

SPECIFIED FINANCIAL MEASURES

Non-GAAP Financial Measures

Netback and netback including risk management contract settlements are non-GAAP financial measures. These measures are not standardized measures under IFRS and might not be comparable to similar financial measures presented by other issuers. These measures should not be considered in isolation or construed as alternatives to their most directly comparable measure disclosed in the Company's primary financial statements or other measures of financial performance calculated in accordance with IFRS.