Paramount Energy Trust Releases Year End 2006 Reserves and Financial Results

Market Wire, March, 2007

HIGHLIGHTS

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FINANCIAL AND OPERATING HIGHLIGHTS

($CDN thousands,             Three months ended
 except volume and                  December 31     Year ended December 31
 per Trust Unit                               %                          %
 amounts)                 2006     2005  change       2006     2005 change
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FINANCIAL
Revenue, including
 realized gains and
 losses on financial
 instruments (2)       104,166  129,233     (19)   420,846  424,741     (1)
Cash flow (2)           58,166   78,200     (26)   236,653  260,218     (9)
 Per Trust Unit (1)(2)    0.69     0.96     (28)      2.82     3.47    (19)
Net earnings (loss)    (68,254)  17,928    (481)   (18,850)  61,870   (130)
 Per Trust Unit (1)      (0.80)    0.22    (464)     (0.22)    0.82   (127)
Cash distributions      50,968   58,990     (14)   221,789  205,032      8
 Per Trust Unit (3)       0.60     0.72     (17)      2.64     2.72     (3)
Payout ratio (%) (2)      87.6     75.4      16       93.7     78.8     19
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Total assets           805,764  820,408      (2)   805,764  820,408     (2)
Net bank and other
 debt outstanding (7)  245,484  166,975      47    245,484  166,975     47
Convertible
 debentures            157,391   64,888     143    157,391   64,888    143
Total net debt (7)     402,875  231,863      74    402,875  231,863     74
Unitholders' equity    202,713  394,643     (49)   202,713  394,643    (49)
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Capital expenditures
 Exploration and
  development           24,104   11,402     111    138,259   59,896    131
 Acquisitions, net       2,536       88   2,782     79,760  276,671    (71)
 Other                     456      718     (36)     1,267    1,267      -
 Net capital
  expenditures          27,096   12,208     122    219,286  337,834    (35)
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TRUST UNITS OUTSTANDING
 (thousands)

End of period           85,186   82,482       3     85,186   82,482      3

Weighted average        84,841   81,625       4     83,940   74,998     12

Diluted                 84,841   82,804       2     83,940   75,738     11

March 5, 2007           86,032                      86,032
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OPERATING
Production
 Total natural gas
  (Bcf) (8)               13.3     14.1      (6)      56.0     53.3      5
 Average daily natural
  gas (MMcf/d) (8)       144.6    153.7      (6)     153.4    146.0      5
  Per Trust Unit (cubic
   feet/d/Unit) (1)       1.70     1.88     (10)      1.83     1.94     (6)
 Gas over bitumen deemed
  production (MMcf/d) (9) 19.8     21.6      (8)      20.8     22.4     (7)
 Average daily (actual
  and deemed - MMcf/d)
  (8) (9)                164.4    175.3      (6)     174.2    168.4      3
  Per Trust Unit (cubic
   feet/d/Unit) (1) (9)   1.94     2.15     (10)      2.08     2.25     (8)
Average natural gas
 prices ($/Mcf)
 Before financial
  hedging and physical
  forward sales (10)      6.59    11.41     (42)      6.61     8.71    (24)
 Including financial
  hedging and physical
  forward sales (10)      7.83     9.14     (14)      7.52     7.97     (6)
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RESERVES (Bcf)
Proved (5) (6)           175.1    195.8     (11)     175.1    195.8    (11)
Proved plus probable
 (5) (6)                 258.8    282.6      (8)     258.8    282.6     (8)
 Per Trust Unit
  (Mcf/Unit) (4)          3.04     3.43     (11)      3.04     3.43    (11)
Estimated present value
 before tax ($ millions)
 (6)
 Proved                  605.4    849.7     (29)     605.4    849.7    (29)
 Proved plus probable    811.0  1,041.9     (22)     811.0  1,041.9    (22)
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LAND (thousands of net
 acres)
Total land holdings      2,637    2,420       9      2,637    2,420      9
Undeveloped land
 holdings                1,222    1,022      20      1,222    1,022     20
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DRILLING (wells
 drilled gross/net)
 Gas                   19/13.0   15/7.7   27/69  148/111.8 102/54.6 45/105
 Dry                         -        -     -/-      4/1.9    4/4.0  -/(53)
 Total                 19/13.0   15/7.7   27/69  152/113.7 106/58.6  43/94
Success Rate           100/100  100/100     -/-      97/98    96/93    1/5
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(1)  Based on weighted average Trust Units outstanding for the period.
(2)  This is a non-GAAP measure; please refer to "Significant accounting
     policies and non-GAAP measures" included in Management's Discussion
     and Analysis.
(3)  Based on Trust Units outstanding at each cash distribution date.
(4)  Based on Trust Units outstanding at period end.
(5)  As evaluated by McDaniel & Associates Consultants Ltd. in accordance
     with National Instrument 51-101. See "Reserves" included in
     Management's Discussion and Analysis. Natural gas reserves presented
     exclude royalty interest volumes of 2.2 Bcf in 2006 and 2.9 Bcf in
     2005.
(6)  Discounted at 10 percent using consultant's forecast pricing. Includes
     gas over bitumen royalty adjustments (2006 - $76.6 million,
     2005 - $100.9 million) and gas over bitumen shut-in reserves (probable:
     2006 - 21.6 Bcf and $34.1 million, 2005 - 25.1 Bcf and $25.8 million).
(7)  Net debt is measured as at the end of the period and includes net
     working capital (deficiency) before short-term financial instrument
     assets and liabilities related to the Trust's hedging activities. Total
     net debt includes convertible debentures.
(8)  Production amounts are based on the Trust's interest before royalties.
(9)  The Trust has 24.7 MMcf/d of natural gas production shut-in or denied
     production pursuant to various Alberta Energy and Utilities Board
     ("AEUB") decision reports, corresponding shut-in orders or general
     bulletins or through correspondence in relation to an AEUB ID 99-1
     application on or prior to July 1, 2004. Deemed production is not
     actual gas sales but represents shut-in gas that is the basis of the
     gas over bitumen financial solution during the period which is received
     monthly from the Alberta Crown as a reduction against other royalties
     payable.
(10) PET's commodity hedging strategy employs both financial forward
     contracts and physical natural gas delivery contracts at fixed prices
     or price collars. In calculating the Trust's natural gas price before
     financial and physical hedging, PET assumes all natural gas sales
     based on physical delivery fixed-price or price collar contracts
     during the period were instead sold at AECO daily index.