Paramount Resources Ltd. Reports 2017 Annual Results; Fourth Quarter Sales Volumes Average 95,412 Boe/d

CALGARY, March 8, 2018 /CNW/

OIL AND GAS OPERATIONS

• Paramount exited 2017 with fourth quarter sales volumes averaging 95,412 Boe/d compared to  sales volumes of 11,901 Boe/d in the fourth quarter of 2016. Full year sales volumes averaged 44,970 Boe/d in 2017.
• Paramount’s sales volumes, excluding sales volumes from properties acquired or sold in the year, more than doubled to approximately 22,500 Boe/d in 2017 compared to about 10,000 Boe/d in 2016. Fourth quarter sales volumes for these properties increased to approximately 34,100 Boe/d in 2017 compared to about 10,000 Boe/d in the fourth quarter of 2016.
• Adjusted funds flow was $218.7 million ($13.33 per Boe) in 2017 compared to $35.7 million ($3.06 per Boe) in 2016. Liquids revenue was $353.9 million, 72 percent of total revenue.
• Fourth quarter adjusted funds flow was $110.1 million in 2017 compared to $14.3 million in 2016.
• Operating costs in the fourth quarter of 2017 were $9.81 per Boe, with transportation costs of $2.77 per Boe and royalties of $1.92 per Boe.
• In the Grande Prairie region, 26 new wells from the 2016/2017 Karr capital program averaged 1,970 Boe/d (59 percent liquids) over their initial 30-day peak production periods. Grande Prairie sales volumes averaged 31,791 Boe/d in the fourth quarter of 2017.
• In the Kaybob region, six (3.1 net) new Duvernay wells completed with higher intensity fracs averaged 1,346 Boe/d (47 percent liquids) per-well over their initial 90-day production periods. Kaybob sales volumes averaged 41,531 Boe/d in the fourth quarter.
• In the Central Alberta and Other region, 9 (4.5 net) wells were drilled at Birch in 2017, four of which were producing by year-end. Sales volumes averaged 22,090 Boe/d in the fourth quarter in the Central Albertaand Other region.
• The Company is restarting legacy wells and maximizing oil production at the Zama property in northwest Alberta. These successful well reactivations underpin Paramount’s strategic objective of driving to a positive netback at Zama.

2018 GUIDANCE

• Paramount’s 2018 capital budget remains at $600 million. Approximately $200 million of the 2018 capital program is related to projects that will bring new production on-stream in 2019 when incremental third-party natural gas processing capacity is commissioned.
• Sales volumes in 2018 are expected to average 100,000 Boe/d with a 40 percent liquids weighting. The Company’s sales volumes are expected to remain at this level until production at Wapiti begins to ramp up in the the spring of 2019 when a new third-party natural gas processing facility is scheduled for completion.
• Operating costs in 2018 are expected to average approximately $10.00 per Boe, with transportation costs expected to average approximately $3.10 per Boe.

RESERVES

• The Company’s proved reserves at December 31, 2017 totalled 375.8 MMBoe compared to 59.6 MMBoe in 2016. Proved plus probable reserves (ʺP+Pʺ) at December 31, 2017 totalled 593.5 MMBoe compared to 115.2 MMBoe in 2016.
• Proved reserves, excluding reserves acquired through the Apache Canada Acquisition and the Trilogy Merger and after production, increased 56 percent to 92.7 MMBoe in 2017 compared to 59.6 MMBoe in 2016.
• P+P reserves, before acquisitions and after production, increased 34 percent to 153.9 MMBoe in 2017 compared to 115.2 MMBoe in 2016.
• The Company’s reserve replacement ratio, before acquisitions, was 5.3 times for proved reserves and 6.1 times for P+P reserves.
• P+P reserves for the Karr property, after production, increased 55 percent to 130.4 MMBoe in 2017 compared to 84.3 MMBoe in 2016.
• P+P finding and development (“F&D”) costs for Karr were $11.72 per Boe in 2017.
• Estimated future net revenue for proved reserves increased to $2.5 billion and future net revenue for P+P reserves increased to $4.4 billion (discounted at 10 percent, before tax).

CORPORATE

• Paramount’s revolving bank credit facility (the “Facility”) was increased by $500 million to $1.2 billion in March 2018. At Paramount’s request, the size of the Facility can be further increased by up to $300 million(to $1.5 billion) pursuant to an accordion feature in the Facility.
• The Company has delivered a redemption notice to redeem all $300 million outstanding principal amount of its 7.25% senior unsecured notes due 2019. The redemption will be funded using the upsized Facility and completed in early April 2018.
• To protect the Company’s cash flows and in support of its 2018 capital program, Paramount has entered into commodity hedges for 16,000 Bbl/d of liquids for fiscal 2018 at an average price of C$71.06/Bbl and 6,000 Bbl/d of liquids for fiscal 2019 at an average price of C$71.23/Bbl.
• Paramount has arrangements in place to transport and sell approximately 60,000 GJ/d of natural gas at the Dawn natural gas hub in Ontario at $US NYMEX reference prices and 21,000 GJ/d of natural gas in California at $US Malin reference prices.
• In December 2017, Paramount implemented a normal course issuer bid. To date, the Company has purchased and cancelled 1,454,100 common shares at a total cost of $27.4 million.

Paramount is an independent, publicly traded, liquids-focused Canadian energy company that explores for and develops both conventional and unconventional petroleum and natural gas resources, including long-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 Class A common shares are listed on the Toronto Stock Exchange under the symbol “POU”.

Paramount’s 2017 annual results, including Management’s Discussion and Analysis and the Company’s Consolidated Financial Statements can be obtained at: http://files.newswire.ca/1509/PAResultsMar8b.pdf

This information will also be made available through Paramount’s website at www.paramountres.com and SEDAR at www.sedar.com.