Paramount Energy Trust Releases Year End 2006 Reserves and Financial Results

Market Wire, March, 2007

Paramount Energy Trust (TSX: PMT.UN) ("PET" or the "Trust") is pleased to release its fourth quarter and year end 2006 results as well as its year end reserves information. Increased production and gains from the Trust's commodity hedging program helped offset weaker natural gas prices, leading to solid financial results in 2006. The full text of the Trust's audited consolidated financial statements and related management's discussion and analysis can be found at www.sedar.com and on PET's website at www.paramountenergy.com .

Conference Call and Webcast

PET will be hosting a conference call and webcast at 9:00 a.m., Mountain Time, Thursday March 8, 2007 to review this information. Interested parties are invited to take part in the conference call by dialing one of the following telephone numbers 10 minutes before the start time: Toronto and area - 1-416-644-3429; outside Toronto - 1-800-590-1508. The webcast will also be archived shortly following the presentation. For a replay of this call please dial: Toronto and area - 1-416-640-1917; outside Toronto - 1-877-289-8525, passcode 21221877# until March 15, 2007. To participate in the live webcast please visit: www.paramountenergy.com or http://www.newswire.ca/en/webcast/index.cgi?companyID=897511748 .

ANNUAL HIGHLIGHTS

- Daily average production increased five percent to a record 153.4 MMcf/d in 2006. A full year of production from the shallow gas assets acquired in May 2005 (the "Northeast Alberta Assets"), the acquisition of an Alberta private company ("AcquireCo") in February 2006 and a successful 2006 winter capital program all contributed to the production increase. Excluding average production from the AcquireCo assets of 7.7 MMcf/d, the Trust's exploration and development program of $126 million in 2006 essentially maintained production volumes at 146 MMcf/d. Production additions from the 2006 capital program continue to enhance the Trust's base production as wells drilled in the Trust's all-weather access areas are completed, tied in and brought onstream in early 2007.

- Higher production, hedging gains and lower royalty rates in 2006 relative to 2005 were offset by lower natural gas prices and higher operating costs as the Trust recorded cash flow of $236.7 million or $2.82 per Trust Unit for the year as compared to $260.2 million or $3.47 per Trust Unit for 2005.

- PET's average realized gas price was $7.52 per Mcf in 2006, down six percent from $7.97 per Mcf in 2005. PET's natural gas price before financial hedging and physical forward sales decreased 24 percent to $6.61 per Mcf in 2006 from $8.71 in 2005, in line with the decrease in AECO prices for the year. The $0.91 per Mcf increase in the Trust's realized natural gas price as compared to PET's gas price before financial hedging and physical forward sales can be attributed to fixed-price forward natural gas contracts entered into by the Trust in order to provide distribution stability for PET's Unitholders, lock in gas prices on the AcquireCo acquisition and take advantage of a strong forward price curve for natural gas in the first half of 2006. As a result of this price management strategy, PET realized $51 million of additional revenue and cash flow in 2006.

- In February 2006, PET completed the acquisition of AcquireCo for $91 million, adding 7.5 MMcf/d of operated high-netback shallow gas production in east central Alberta at the closing date of the acquisition. The corporate acquisition also provided the Trust with 54,000 net acres of year-round access undeveloped land and over 50 defined prospects which met PET's risk profile. AcquireCo's management team worked with PET through to the end of June 2006 in executing value-added capital projects on the lands acquired and identifying new low-risk, high deliverability prospects for future development.

- PET executed its most ambitious winter capital spending program in its four year history in the first quarter of 2006: an $80 million program focused in northeast Alberta pursuing shallow natural gas drilling targets, production optimization activities such as recompletions and workovers, pipeline construction to tie-in production from new wells and plant efficiency improvement activities. Also included were seismic data acquisition and land purchases of $8 million. PET spent $45 million on its all-weather access properties primarily located in the Southern core area during the final three quarters of the year.

- The Trust recorded $13 million in undeveloped land acquisition costs in 2006 which augmented the Trust's substantial prospect inventory.

- During the third quarter the Trust completed an internal restructuring in order to enhance the value of certain minor assets south of its Athabasca core area. An experienced technical team was recruited and assets in the Radway/Abee area producing approximately 1.4 MMcf/d (the "Severo Assets") were transferred to a newly formed private company, Severo Energy Corporation ("Severo" or the "Corporation") in exchange for common shares of Severo valued at $2.00 per common share. Severo also raised $2 million through a private placement of shares to employees and consultants of Severo and PET, priced at the same $2.00 per common share, in exchange for a collective 6 percent interest in the Corporation. The independent members of PET's Board of Directors reviewed the transaction and determined the exchange to be at fair market value of the Severo Assets. The remaining 94 percent of the Corporation is owned by the Trust and as such the financial results of Severo have been included in the consolidated results of the Trust. The Severo