Paramount Resources Announces Third Quarter 2025 Results, Sanctioning of Sinclair Montney Development, 2026 Budget and Production Outlook

2025-11-04

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

Canada NewsWire

CALGARY, AB, Nov. 4, 2025/CNW/ - Paramount Resources Ltd. ("Paramount" or the "Company") (TSX: POU) is pleased to announce its third quarter 2025 financial and operating results, the sanctioning of its Montneygas development at Sinclairand its 2026 capital expenditure budget and guidance. The Company is increasing its 2025 annual midpoint production guidance and also providing an outlook of planned production growth to over 100,000 Boe/d by the end of 2027.

HIGHLIGHTS

Third quarter sales volumes averaged 36,087 Boe/d (48% liquids), approximately 5,000 Boe/d higher than the midpoint of the prior guidance range of 30,000 Boe/d to 32,000 Boe/d (45% liquids) due to exceptional runtime at Paramount's new wholly-owned and operated Alhambra Plant in Willesden Green during the continuing ramp-up of production. (1) Sales volumes from the Central Alberta Region, which includes Willesden Green, averaged 13,550 Boe/d (59% liquids). Kaybob Region sales volumes averaged 21,155 Boe/d (42% liquids). Duvernayproduction accounted for 62 percent of total sales volumes and Duvernaycondensate production accounted for 82 percent of total oil and condensate sales volumes.

Cash from operating activities was $42 million($0.30per basic share) in the third quarter. Adjusted funds flow was $97 million($0.67per basic share). Free cash flow was ($117) million(($0.82)per basic share). (2) Third quarter capital expenditures totaled $207 million. Activities in the quarter included: Willesden Green Duvernay – commissioning and starting-up the first phase of the Alhambra Plant, continuing construction of the second phase of the Alhambra Plant, drilling four (4.0 net) wells and completing and bringing on production five (5.0 net) wells; and Kaybob North Duvernay – completing and bringing on production five (5.0 net) wells.

| _ | | | (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. |

Operating expenses were $10.18/Boe in the third quarter, compared to $12.39/Boe in the second quarter, reflecting the continuing ramp-up of production through the first phase of the Company's Alhambra Plant. (1) 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 60 percent of Paramount's expected natural gas sales volumes for the remainder of 2025 are priced at diversified markets outside of AECO. Revenue in the third quarter included $5 millionrelated to the finalization of the Company's insurance claims for 2023 Alberta wildfire losses. Asset retirement obligations settled in the third quarter totaled $4 million. As previously disclosed, Paramount monetized a portion of its investment in the common shares of NuVista Energy Ltd. ("NuVista Shares") on October 1, 2025, selling 18.5 million shares for cash proceeds of $296 million. The carrying value of the Company's investments in public and private company securities at September 30, 2025, _pro forma_the sale, was $317 million. Paramount received cash dividends of $3 millionin the third quarter from one of its private company investments. At September 30, 2025, Paramount had net cash of $629 million(including the value of the NuVista Shares sold on October 1, 2025) and its $500 millionrevolving credit facility remained undrawn. (2)

SANCTIONING OF SINCLAIRMONTNEYDEVELOPMENT

Paramount has sanctioned the development of its Montneynatural gas play at Sinclair, following continued strong results from the recent extended flow tests of the Company's first two appraisal wells. The Sinclair Montney play is a high-rate, low-cost natural gas project, the first phase of which is being designed for a plateau rate of sales gas in excess of 50,000 Boe/d that can be maintained for over 20 years. Paramount holds approximately 167 sections of contiguous, wholly-owned Montney rights in the Sinclairarea.

The Company is in the process of finalizing the design of a new natural gas processing plant (the "Sinclair Plant") which will be capable of handling up to 400 MMcf/d of raw gas production. The ordering of long-lead items has commenced. Paramount has contracted 335 MMcf/d of firm service sales egress commencing in the fourth quarter of 2027 to coincide with the planned start-up of the Sinclair Plant. The Company currently plans to have 24 (24.0 net) wells ready to produce to the Sinclair Plant on start-up.

INCREASED 2025 PRODUCTION GUIDANCE

Paramount is increasing its full-year 2025 production guidance at midpoint to account for the outperformance in the third quarter and is reaffirming its fourth quarter production guidance and the midpoint of its 2025 capital expenditure guidance within a narrower range. Paramount continues to expect total abandonment and reclamation expenditures of approximately $40 millionin 2025.

| | | | (1) | Operating expenses per Boe is a supplementary financial measure. Refer to the "Specified Financial Measures" section for more information on this measure. | | (2) | 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. |

2026 BUDGET AND GUIDANCE

In 2026, Paramount is budgeting capital expenditures of between $1,050 millionand $1,150 millionand abandonment and reclamation expenditures of $35 million.

The breakdown of capital expenditures by key area at midpoint is as follows:

Willesden Green Duvernay − $630 million; Sinclair Montney− $360 million; Kaybob Region − $65 million, including $40 millionat Kaybob North Duvernay; Northeast Alberta Heavy Oil - $20 million; and Other - $25 million.

The breakdown of capital expenditures by category at midpoint is as follows:

Drilling, completion, equipping and tie-ins − $670 million; Facilities and gathering − $410 million; and Corporate and other − $20 million.

Facilities and gathering capital expenditures budgeted for 2026 primarily relate to the construction and commissioning of the second phase of the Alhambra Plant, the ordering of long-lead items and commencing construction of the Sinclair Plant, and the construction of produced water recycling and disposal facilities, pipelines and other field infrastructure in both Willesden Green and Sinclair.

Paramount is forecasting 2026 annual average sales volumes of between 45,000 Boe/d and 50,000 Boe/d (50% liquids):

First half 2026 sales volumes are expected to average between 37,000 Boe/d and 42,000 Boe/d (47% liquids). Second quarter sales volumes are expected to be lower than first quarter volumes due to the timing of new well production. In addition, a one-month outage at the Leafland Plant from mid-June to mid-July and a one week outage at the Alhambra Plant in June are planned to accommodate facility expansions. Third quarter 2026 average sales volumes are expected to increase to between 46,500 Boe/d and 51,500 Boe/d (51% liquids) as the second phase of the Alhambra Plant comes onstream and begins to ramp-up, one quarter earlier than previously anticipated. Fourth quarter 2026 average sales volumes are expected to further increase to between 59,000 Boe/d and 64,000 Boe/d (53% liquids).

Following ramp-up of the second phase of the Alhambra Plant, fourth quarter 2026 operating expenses are forecast to be approximately $8.00/Boe.

PRODUCTION AND CAPITAL OUTLOOK

The Company anticipates midpoint annual capital expenditures of approximately $1,100 millionfor each of 2026 and 2027. Major capital projects over this timeframe include the second phase of the Alhambra Plant at Willesden Green and the Sinclair Montney development.

At Willesden Green, Paramount is expecting capital expenditures, at midpoint, of approximately $630 millionin 2026 and $440 millionin 2027. The second phase of the Alhambra Plant will double raw gas handling capacity from 50 MMcf/d to 100 MMcf/d and raw liquids handling capacity from 10,000 Bbl/d to 20,000 Bbl/d. The second phase is anticipated to be brought onstream in the third quarter of 2026, one quarter earlier than previously anticipated, and fully ramped up by the fourth quarter. The Company expects to bring 26 (26.0 net) Duvernay wells onstream at Willesden Green in 2026 to fully utilize its processing capacity, including the second phase of the Alhambra Plant.

At Sinclair, Paramount is expecting capital expenditures, at midpoint, of approximately $360 millionin 2026 and $440 millionin 2027, to: (i) construct the Sinclair Plant, (ii) build out the major sales line, gathering system, disposal and produced water handling for the field, and (iii) drill, complete and have ready to bring onstream 24 (24.0 net) wells for plant start-up.

The Company expects sales volumes to more than double to over 100,000 Boe/d by the end of 2027:

2025 - 41,000 Boe/d to 42,000 Boe/d (47% liquids). 2026 - 45,000 Boe/d to 50,000 Boe/d (50% liquids), representing a 14% growth rate year-over-year at mid-point. 2027 - 60,000 Boe/d to 65,000 Boe/d (50% liquids), representing a 32% growth rate year-over-year at mid-point. Year-end 2027 exit - over 100,000 Boe/d (35% liquids), representing a 60% growth rate between exit and mid-point average for the year.

Paramount has not yet sanctioned the third phase expansion of the Alhambra Plant, which would add an incremental 50 MMcf/d of raw gas handling and 10,000 Bbl/d of raw liquids handling capacity. Natural gas and liquids sales egress for the third phase remains contracted for the fourth quarter of 2029.

In light of the decision to sanction the Sinclair Montney development, Paramount has elected to moderate the pace of development at its Kaybob North Duvernay property. The Company plans to maintain average sales volumes in the Kaybob Region of between 19,000 Boe/d and 20,000 Boe/d (38% liquids) through to 2028.

With cash and cash equivalents of approximately $650 millionat October 31, 2025, an undrawn bank credit facility and its portfolio of investments in securities, Paramount is in a strong financial position to advance its planned Alhambraand Sinclairdevelopments. The Company remains committed to prudently managing its capital resources and also has the flexibility to adjust its capital expenditure plans depending on commodity prices and other factors.

NOVEMBER DIVIDEND

Paramount's Board of Directors has declared a cash dividend of $0.05per class A common share that will be payable on November 28, 2025to shareholders of record on November 14, 2025. The dividend will be designated as an "eligible dividend" for Canadian income tax purposes.

REVIEW OF OPERATIONS

CENTRAL ALBERTAREGION

Third quarter 2025 sales volumes in the Central Alberta Region averaged 13,550 Boe/d (59% liquids) compared to 9,223 Boe/d (60% liquids) in the second quarter. Duvernayproduction accounted for 95 percent of third quarter sales volumes in the region.

Development activities at Willesden Green in the third quarter included the commissioning and start-up of the Company's wholly-owned and operated Alhambra Plant, continuing construction activities for the second phase of the Alhambra Plant, the drilling of four (4.0 net) Duvernaywells and the completion and bringing on production of five (5.0 net) Duvernaywells. Also in the third quarter, Paramount began construction of a water recycling system that will provide a significant portion of the water required for well completion activities in the future. Water recycling is expected to reduce water related well completion capital costs as well as mitigate operating expenses related to water disposal. The system is expected to be operational in the first half of 2026.

Runtime at the Alhambra Plant, which commenced operations in late-July, has significantly exceeded expectations, resulting in higher than forecast third quarter sales volumes. Ten (10.0 net) Duvernay wells were brought on production and flowing through the Alhambra Plant by the end of the third quarter. Paramount expects sales volumes through the Alhambra Plant to continue to increase over the fourth quarter as the remaining six (6.0 net) 2025 Duvernay wells are brought onstream.

In the fourth quarter, the Company plans to complete and bring onstream three (3.0 net) Duvernaywells that will flow to its Leafland facility and to drill twelve (12.0 net) Duvernaywells that will be tied-in to the Alhambra Plant in 2026.

Onsite work to double the Alhambra Plant's raw handling capacity to 20,000 Bbl/d of liquids and 100 MMcf/d of natural gas began in the third quarter, with piles being set and pipe racks installed. More recently, major equipment has been delivered to site and set on piles. Pipelines connecting the Alhambra Plant to the Leafland Plant are also planned to be commissioned upon start-up of the plant expansion, allowing the Company to optimize the flow of production and processing capacities across its Willesden Green property.

In 2026, Paramount plans to drill 29 (29.0 net) Duvernaywells and complete and bring on production 26 (26.0 net) Duvernaywells at Willesden Green. The majority of new well production is anticipated to be brought onstream in the second half of the year following commissioning and start-up of the second phase of the Alhambra Plant. The Company has assumed reliability factors of 25% and 75% on volumes flowing through the second phase of the Alhambra Plant for the first and second months, respectively, post start-up to account for ramp-up.

SINCLAIR

In October 2025, Paramount commenced the drilling of an additional two (2.0 net) Montneyappraisal wells which the Company plans to complete and flow test in 2026.

Also in 2026, the Company plans to commence the construction of the Sinclair Plant, gathering pipelines and other field infrastructure and drill 14 (14.0 net) Montneywells.

KAYBOB REGION

Kaybob Region sales volumes averaged 21,155 Boe/d (42% liquids) in the third quarter of 2025 compared to 21,962 Boe/d (39% liquids) in the second quarter. Duvernay production accounted for 45 percent of third quarter sales volumes in the Kaybob Region.

Completion activities at the five (5.0 net) well Duvernaypad that were ongoing in the second quarter concluded in the third quarter and all five wells were subsequently brought on production.

In the fourth quarter of 2025, Paramount plans to drill a three (3.0 net) well Duvernaypad at Kaybob North.

In 2026, Paramount plans to complete and bring onstream a three well Duvernaypad that it will drill in the fourth quarter of 2025 and drill, complete and bring on production a two (2.0 net) well Montney Oil pad.

HEDGING

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

Malin (Buy) | | November 2025 –

December 2027 |

| (1) | Average price is calculated using a weighted average of notional volumes and prices. Foreign currency exchange average rate forward contracts are settled monthly against the average of the US$/CAD$ noon spot rate on each applicable day in that month. | | (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. |

ABOUT PARAMOUNT

Paramount is an independent, publicly traded 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 Albertaand British Columbia. Paramount's Common Shares are listed on the Toronto Stock Exchange under the symbol "POU".

Paramount's third 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.caor 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) | Q3 2025 | Q2 2025 | Q3 2024 | | | | | Net income (loss) | (2.3) | 4.2 | 95.8 | | | | | per share – basic ($/share) | (0.02) | 0.03 | 0.65 | | | | | per share – diluted ($/share) | (0.02) | 0.03 | 0.64 | | | | | Cash from operating activities | 42.3 | 39.8 | 205.7 | | | | | per share – basic ($/share) | 0.30 | 0.28 | 1.40 | | | | | per share – diluted ($/share) | 0.30 | 0.27 | 1.38 | | | | | Adjusted funds flow | 96.8 | 81.5 | 200.7 | | | | | per share – basic ($/share) | 0.67 | 0.57 | 1.37 | | | | | per share – diluted ($/share) | 0.67 | 0.56 | 1.34 | | | | | Free cash flow | (116.7) | (85.5) | (26.3) | | | | | per share – basic ($/share) | (0.82) | (0.60) | (0.18) | | | | | per share – diluted ($/share) | (0.82) | (0.60) | (0.18) | | | | | Total assets | 3,560.9 | 3,517.9 | 4,544.1 | | | | | Investments in securities | 612.9 | 575.3 | 482.2 | | | | | Long-term debt | – | – | 44.0 | | | | | Net (cash) debt | (628.8) | (500.9) | 128.8 | | | | | Common shares outstanding _(millions)_(2) | 143.4 | 143.3 | 146.5 | | | | | Sales volumes (3) | | | | | | | | Natural gas (MMcf/d) | 112.4 | 103.3 | 294.5 | | | | | Condensate and oil (Bbl/d) | 13,997 | 11,636 | 38,770 | | | | | Other NGLs (Bbl/d) | 3,363 | 2,786 | 7,045 | | | | | Total (Boe/d) | 36,087 | 31,631 | 94,892 | | | | | % liquids | 48 % | 46 % | 48 % | | | | | Central Alberta Region and Other (Boe/d) | 14,932 | 9,669 | 6,390 | | | | | Kaybob Region (Boe/d) | 21,155 | 21,962 | 20,894 | | | | | Sold Assets (Boe/d)(4) | – | – | 67,608 | | | | | Total (Boe/d) | 36,087 | 31,631 | 94,892 | | | | | Netback | | ($/Boe) (5) | | ($/Boe) (5) | | ($/Boe) (5) | | Natural gas revenue | 20.3 | 1.96 | 28.9 | 3.07 | 37.2 | 1.37 | | Condensate and oil revenue | 105.6 | 82.01 | 87.7 | 82.84 | 342.9 | 96.15 | | Other NGLs revenue | 8.4 | 27.04 | 6.9 | 27.02 | 23.5 | 36.25 | | Natural gas transportation assignment income (6) | 3.6 | 0.35 | 2.7 | 0.29 | – | – | | Royalty income and other revenue (6) | 6.3 | – | 1.0 | – | 1.2 | – | | Petroleum and natural gas sales | 144.2 | 43.43 | 127.2 | 44.20 | 404.8 | 46.37 | | Royalties | (7.3) | (2.21) | (5.7) | (2.00) | (46.4) | (5.31) | | Operating expense | (33.8) | (10.18) | (35.7) | (12.39) | (116.3) | (13.33) | | Transportation and NGLs processing | (14.5) | (4.37) | (13.2) | (4.57) | (34.2) | (3.92) | | Sales of commodities purchased (7) | 54.2 | 16.33 | 43.7 | 15.18 | 79.6 | 9.11 | | Commodities purchased (7) | (53.1) | (16.00) | (43.4) | (15.07) | (78.5) | (9.00) | | Netback | 89.7 | 27.00 | 72.9 | 25.35 | 209.0 | 23.92 | | Risk management contract settlements | 14.0 | 4.21 | 14.9 | 5.16 | 2.0 | 0.23 | | Netback including risk management contract settlements | 103.7 | 31.21 | 87.8 | 30.51 | 211.0 | 24.15 | | Capital expenditures | | | | | | | | Central Alberta Region and Other | 193.9 | 114.8 | 73.8 | | | | | Kaybob Region | 9.2 | 40.2 | 56.5 | | | | | Fox Drilling | 1.6 | 1.6 | 2.6 | | | | | Corporate (8) | 1.8 | 5.4 | (0.1) | | | | | Sold Assets(4) | – | (4.4) | 83.9 | | | | | Total | 206.5 | 157.6 | 216.7 | | | | | Asset retirement obligations settled | 4.4 | 3.0 | 7.4 | | | |