Paramount Energy Trust Releases 2007 Year-End Reserves, Confirms February 2008 Distribution, Updates Hedging, and Announces Appointment of New Director



    TSX: PMT.UN, PMT.DB

    CALGARY, Feb. 11 /CNW/ - (TSX:PMT.UN) Paramount Energy Trust ("PET" or
the "Trust") confirmed today that its distribution to be paid on March 17,
2008 in respect of income received by PET for the month of February 2008, for
Unitholders of record on February 29, 2008, will be $0.10 per Trust Unit. The
ex-distribution date is February 27, 2008. The February 2008 distribution
brings cumulative distributions paid since the inception of the Trust in
February 2003 to $12.124 per Trust Unit.
    Natural gas prices continue to be highly volatile, largely around
uncertainty regarding weather and its effect on natural gas demand and storage
and the global factors influencing LNG shipments to North America. PET
continues to be cautious in its outlook with respect to near term natural gas
prices and is actively managing its forward gas price exposure to mitigate
risk. Financial and physical forward sales arrangements at the AECO and NYMEX
trading hubs as at February 7, 2008 are as follows:

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                 Volumes        % of              Current
                      at      Budget              Forward
    Type of      AECO (2) Production       Price    Price
     contract      (GJ/d)         (3)      ($/GJ)   ($/GJ)               Term
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial     75,000                   7.262                   March 2008
    Physical      12,500                   7.450                   March 2008
    -------------------------------------------------------------------------
    Period total,                                                  March 2008
     net (1)      87,500          41%      7.289     7.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial     59,500                   7.285                 April -
                                                                 October 2008
    Physical       5,000                   6.683                 April -
                                                                 October 2008
    -------------------------------------------------------------------------
    Period total
     AECO, net
     (1)          64,500                   7.238     7.13             April -
                                                                 October 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial
     NYMEX        10,000               7.700 US$                      April -
                                                                 October 2008
    -------------------------------------------------------------------------
    Period total
     NYMEX, net
     (1)          10,000               7.700 US$  8.39US$             April -
                                                                 October 2008
    -------------------------------------------------------------------------
    Period total,
     net (1)      74,500          35%                                 April -
                                                                 October 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                              November 2008 -
    Financial     93,500                   7.732                   March 2009
    -------------------------------------------------------------------------
    Period total,                                             November 2008 -
     net (1)      93,500          44%      7.732     7.97          March 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial     27,500                   7.122                      April -
                                                                 October 2009
    -------------------------------------------------------------------------
    Period total,
     net (1)      27,500          13%      7.122     7.16             April -
                                                                 October 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Weighted average prices are calculated by netting the volumes of the
        financial and physical sold/bought contracts together and measuring
        the net volume at the weighted average "sold" price for the financial
        and physical contracts.

    (2) All transactions at AECO unless identified specifically as a NYMEX
        transaction.

    (3) Includes projected actual and gas over bitumen deemed production
        volumes.
    

    In addition, PET realized gains totalling approximately $2 million in
January 2008 on crystallization of forward summer 2008 and winter 2008-2009
positions. Based on current natural gas prices, PET expects to maintain
monthly distributions at the current level for the foreseeable future.
Incorporating PET's current hedging portfolio and the forward market for
natural gas prices into the Trust's production, operations and cash flow
forecasts for 2008, the current level of distribution annualized would result
in an average payout ratio of approximately 53 percent for 2008 and bank debt
at year end of approximately $300 million. The Trust continues to focus on
what we believe is a sustainable distribution model that balances short term
cash returns to our Unitholders and long term value creation. PET reviews
distributions on a monthly basis. Future distributions are subject to change
as dictated by changes in commodity price markets, operations and future
business development opportunities.
    PET is also very pleased to announce the appointment of Robert A.
Maitland to the Trust's Board of Directors, effective February 7, 2008. Mr.
Maitland is a Chartered Accountant with 32 years of senior business
experience, primarily in the oil and gas industry. He has in-depth knowledge
of audit and corporate governance, and has recently completed the Institute of
Corporate Directors - Director Education Program. We are confident that Mr.
Maitland's past experience in management and administration, accounting,
corporate finance, as well as his past legal, income tax and corporate
secretarial responsibilities will be an asset to PET's Management, Board of
Directors and Unitholders.
    Following is a summary of PET's year-end 2007 reserves information, as
evaluated by the independent engineering firm McDaniel and Associates
Consultants Ltd. ("McDaniel").

    
    YEAR END RESERVE EVALUATION HIGHLIGHTS

    - In 2007, the Trust added 180.0 Bcfe of proved reserves and 130.7 Bcfe
      of probable reserves for total reserve additions of 310.7 Bcfe of
      proved and probable reserves, excluding production.

    - Offset by production of 62.3 Bcfe in 2007, proved reserves increased 66
      percent from 177.1 Bcfe at year-end 2006 to 294.8 Bcfe at year-end
      2007, and proved and probable reserves increased 95 percent to 509.9
      Bcfe, primarily due to the significant reserve additions resulting from
      the acquisition of natural gas properties in east central Alberta
      ("Birchwavy Acquisition") completed in June 2007 and the success of the
      Trust's capital spending programs in 2007.

    - Proved and probable reserves per Trust Unit increased 53 percent at
      year-end 2007 to 4.65 Mcfe per Trust Unit from 3.04 Mcfe per Trust Unit
      as at December 31, 2006.

    - Excluding future development costs, PET realized finding, development
      and acquisition costs of $2.81 per Mcfe ($16.86 per BOE) on a proved
      reserves basis and $1.63 per Mcfe ($9.78 per BOE) on a proved and
      probable reserves basis in 2007.

    - Including future development costs, PET realized finding, development
      and acquisition costs of $3.26 per Mcfe ($19.56 per BOE) on a proved
      reserves basis and $2.56 per Mcfe ($15.36 per BOE) on a proved and
      probable reserves basis in 2007.

    - The Trust's reserve to production ratio ("reserve life index")
      increased to 7.6 years on a proved and probable reserves basis (4.7
      years on a proved reserves basis) at year-end 2007, as compared to 4.9
      years (3.6 years on a proved basis) in 2006.
    

    RESERVES DISCLOSURE

    Company interest reserves included herein are before royalty burdens and
including royalty interests. Reserves information is based on an independent
reserves evaluation report prepared by McDaniel January 31, 2008 with an
effective date of December 31, 2007, and has been prepared in accordance with
National Instrument 51-101 ("NI 51-101") using McDaniel's forecast prices and
costs. Complete NI 51-101 reserves disclosure including after-tax reserve
values, reserves by major property and abandonment costs will be included in
PET's Annual Information Form ("AIF"), which will be filed in March 2008. PET
reports the results of the Trust's 93 percent-owned subsidiary Severo Energy
Corp. ("Severo") using consolidated accounting practices, and therefore the
amounts shown include 100 percent of the volumes and values related to the
natural gas reserves of Severo.
    Approximately 98 percent of PET's proved and proved and probable reserves
are natural gas and as such the Trust reports reserves in Mcf equivalent
(Mcfe). Mcfe may be misleading, particularly if used in isolation. In
accordance with NI 51-101 a Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has
been used, which is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not necessarily represent a value
equivalency at the wellhead.

    RESERVES SUMMARY AT YEAR-END 2007

    
    Company Interest (Working Interest + Royalty Interest)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            Light and               Natural Gas  Natural Gas
                         Medium Crude  Natural Gas      Liquids   Equivalent
                            Oil (MBbl)      (MMcfe)       (MBbl)      (MMcfe)
    -------------------------------------------------------------------------
    Proved Producing            1,013      225,161           16      231,339
    Proved Non-Producing           20       16,475            1       16,598
    Proved Undeveloped            137       46,021            -       46,843
    -------------------------------------------------------------------------
    Total Proved                1,170      287,656           17      294,780
    -------------------------------------------------------------------------
    Total Probable                449      212,401            5      215,126
    -------------------------------------------------------------------------
    Total Proved and
     Probable                   1,619      500,057           22      509,907
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Gross Interest (Working Interest)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            Light and               Natural Gas  Natural Gas
                         Medium Crude  Natural Gas      Liquids   Equivalent
                            Oil (MBbl)      (MMcfe)       (MBbl)      (MMcfe)
    -------------------------------------------------------------------------
    Proved Producing              961      222,344           16      228,206
    Proved Non-Producing           20       16,321            1       16,444
    Proved Undeveloped            137       45,770            -       46,592
    -------------------------------------------------------------------------
    Total Proved                1,118      284,435           17      291,243
    -------------------------------------------------------------------------
    Total Probable                441      211,238            5      213,916
    -------------------------------------------------------------------------
    Proved and Probable         1,559      495,673           22      505,159
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Net Interest (Company Interest - Royalties Payable)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            Light and               Natural Gas  Natural Gas
                         Medium Crude  Natural Gas      Liquids   Equivalent
                            Oil (MBbl)      (MMcfe)       (MBbl)      (MMcfe)
    -------------------------------------------------------------------------
    Proved Producing              931      183,810           12      189,467
    Proved Non-Producing           18       13,839            0       13,949
    Proved Undeveloped            104       38,595            -       39,217
    -------------------------------------------------------------------------
    Total Proved                1,053      236,244           12      242,633
    -------------------------------------------------------------------------
    Total Probable                404      174,860            4      177,306
    -------------------------------------------------------------------------
    Proved and Probable         1,457      411,104           16      419,939
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    RESERVES RECONCILIATION


    Company Interest (Working Interest + Royalty Interest)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                 Natural Gas
                                                           Equivalent (MMcfe)
    -------------------------------------------------------------------------
    TOTAL PROVED
    Opening Balance                                                  177,139
    Discoveries and Extensions                                        24,096
    Technical Revisions                                               11,585
    Acquisitions, net of Dispositions                                145,018
    Production                                                       (62,318)
    Economic Factors                                                    (740)
    Closing Balance                                                  294,780
    -------------------------------------------------------------------------


                                                                 Natural Gas
                                                           Equivalent (MMcfe)
    -------------------------------------------------------------------------
    PROBABLE
    Opening Balance                                                   84,360
    Discoveries and Extensions                                         9,822
    Technical Revisions                                              (10,187)
    Acquisitions, net of Dispositions                                131,063
    Production                                                             -
    Economic Factors                                                      69
    Closing Balance                                                  215,127
    -------------------------------------------------------------------------


                                                                 Natural Gas
                                                           Equivalent (MMcfe)
    -------------------------------------------------------------------------
    PROVED AND PROBABLE
    Opening Balance                                                  261,499
    Discoveries and Extensions                                        33,918
    Technical Revisions                                                1,398
    Acquisitions, net of Dispositions                                276,081
    Production                                                       (62,318)
    Economic Factors                                                    (671)
    Closing Balance                                                  509,907
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    RESERVE LIFE INDEX

    PET's proved and probable reserves to production ratio, also referred to
as reserve life index ("RLI") was 7.6 years at year-end 2007 while the proved
RLI was 4.7 years, based upon the 2008 production estimates in the McDaniel
Report. The following table summarizes PET's historical calculated RLI.


    Reserve Life Index (1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                            2007       2006       2005       2004       2003
    -------------------------------------------------------------------------
    Total Proved             4.7        3.6        4.0        4.5        5.2


    Proved and Probable      7.6        4.9        5.4        5.6        6.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Calculated as year end reserves divided by year one production
        estimate from McDaniel Report.
    

    NET PRESENT VALUE SUMMARY

    PET's light and medium oil, natural gas and natural gas liquids reserves
were evaluated by McDaniel using McDaniel's product price forecasts effective
January 1, 2008 prior to provision for income taxes, interest, debt service
charges and general and administrative expenses. The following table
summarizes the net present value ("NPV") of cash flow at January 1, 2008,
assuming various discount rates. It should not be assumed that the discounted
future net cash flows estimated by McDaniel represent the fair market value of
the potential future production revenue of the Trust.

    
    NPV of Cash Flow Using McDaniel January 1, 2008 Forecast Prices and Costs
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NI 51-101 Net              Discounted  Discounted  Discounted  Discounted
     Interest     Undiscounted      at 5%      at 10%      at 15%      at 20%
    -------------------------------------------------------------------------
    ($MM)
    Proved
     Producing        1,056,412    883,487    772,606     692,366     630,582
    Proved
     Non-Producing         (429)     9,395     11,426      11,147      10,223
    Proved
     Undeveloped        114,044     79,116     55,088      38,282      26,338
    -------------------------------------------------------------------------
    Total Proved      1,170,026    971,998    839,120     741,795     667,142
    -------------------------------------------------------------------------
    Total Probable      767,480    508,989    361,855     270,622     210,875
    -------------------------------------------------------------------------
    Total Proved
     and Probable     1,937,507  1,480,986  1,200,975   1,012,416     878,018
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    At a 10 percent discount factor, the proved producing reserves comprise 64
percent of the proved and probable value while total proved reserves account
for 70 percent of the proved and probable value. McDaniel's price forecast
utilized in the evaluation is summarized below.

    McDaniel January 1, 2008 Price Forecast
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                      West Texas
                     Intermediate  Edmonton Light    Natural Gas      Foreign
    Year               Crude Oil       Crude Oil        at AECO     Exchange
                        ($US/Bbl)      ($Cdn/Bbl)      ($Cdn/GJ)   ($US/$Cdn)
    -------------------------------------------------------------------------


    2008                   90.00           89.00           6.45         1.00
    2009                   86.70           85.70           7.00         1.00
    2010                   83.20           82.20           7.00         1.00
    2011                   79.60           78.50           7.00         1.00
    2012                   78.50           77.40           7.10         1.00
    2013                   77.30           76.20           7.30         1.00
    2014                   78.80           77.70           7.55         1.00
    2015                   80.40           79.30           7.80         1.00
    2016                   82.00           80.80           8.00         1.00
    2017                   83.70           82.50           8.25         1.00
    2018                   85.30           84.10           8.45         1.00
    2019                   87.00           85.80           8.70         1.00
    2020                   88.80           87.50           8.95         1.00
    2021                   90.60           89.30           9.20         1.00
    2022                   92.40           91.10           9.40         1.00
    Escalate
     thereafter at         +2.00%          +2.00%         +2.00%        1.00
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    EFFECT OF NEW ALBERTA ROYALTY REGIME

    On October 25, 2007, the Government of Alberta announced a "New Royalty
Framework" for oil and natural gas royalties in the Province of Alberta. New
royalty rates will apply to all production effective January 1, 2009. While
detailed Regulations have yet to be released, PET's initial assessment is
that, based on the Trust's current profile of well productivity and at various
natural gas prices, the effect of the new royalty framework on cash flow would
be approximately as shown below. Royalty rates would rise relative to their
current levels at higher gas prices, and decrease relative to their current
levels at lower gas prices.


    
    Estimated Change in Royalty Rate (1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        AECO Gas Price ($/GJ)
                                      $5.00   $6.00   $7.00   $8.00   $10.00
    -------------------------------------------------------------------------


    Estimated Crown
     Royalty Rate in 2009
     under Current Royalties           17.4%   17.4%   17.4%   17.4%    17.4%
    Estimated Crown
     Royalty Rate in 2009
     under Revised Royalties            6.8%   11.3%   15.8%   18.8%    24.9%
    Increase (Decrease)
     in Royalty Rate
     (percentage points)              (10.6%)  (6.1%)  (1.6%)   1.4%     7.5%
    Percentage Increase
     (Decrease) in
     Royalty Rate (%)                 (60.6%) (34.9%)  (9.4%)   8.0%    42.3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) PET estimated average 2009 well productivity based on McDaniel Report
        is 175 Mcf/d.
    

    With respect to the future cash flow related to the reserves booked in
the McDaniel Report, the declining productivity profile assumed from the
"blow-down" assumption of the McDaniel Report would result in lower royalty
rates in future years and increases in the future net revenue from PET's
proved and probable reserves at various gas prices, discounted at 5 percent as
shown below:

    
    Estimated Change in NPV of Future Net Revenue Resulting
    From Proposed Change in Alberta Royalty Framework
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        AECO Gas Price ($/GJ)
    Discounted at 5%                  $6.00(2) McDaniel(1) $8.00(2) $10.00(2)
    -------------------------------------------------------------------------
    ($MM)
    Increase (Decrease)
     in Net Present
     Value Due to Price
     Change from
     McDaniel Prices(3)               $(441.2)          -   $197.5    $825.5
    Increase (Decrease)
     in Net Present
     Value Due to New
     Royalty Regime(4)                  $83.7       $58.0    $48.5    $(37.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) McDaniel price forecast at January 1, 2008. See "NET PRESENT VALUE
        SUMMARY - NPV of Cash Flow Using McDaniel January 1, 2008 Forecast
        Prices and Costs"
    (2) AECO Spot price held constant with zero inflation.
    (3) Increase (Decrease) in net present value of future revenue assuming
        current royalty framework and forecast gas price indicated as
        compared to the McDaniel forecast.
    (4) Increase (Decrease) in net present value of future revenue related to
        the proposed royalty framework assuming the forecast gas price
        indicated.
    

    NET ASSET VALUE

    The following net asset value ("NAV") table shows what is normally
referred to as a "produce-out" NAV calculation under which the current value
of the Trust's reserves would be produced at forecast future prices and costs.
The value is a snapshot in time and is based on various assumptions including
commodity prices and foreign exchange rates that vary over time. It should not
be assumed that the NAV represents the fair market value of PET Units. PET
runs its business on a going-concern basis, investing in opportunities to add
value, improve profitability and increase reserves which enhance the Trust's
NAV beyond the amounts shown in its annual reserve evaluation.

    
    Net Asset Value at December 31, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net Asset Value at                    Discounted  Discounted  Discounted
     December 31, 2007(1)   Undiscounted        at 5%       at 8%      at 10%
    -------------------------------------------------------------------------
    ($MM except as noted)
    Total Proved
     plus Probable
     Reserves (2)                1,937.5     1,481.0     1,298.9     1,201.0
    Increment for Current Gas
     Prices (3)                     48.3        44.7        43.0        41.6
    Undeveloped Land (4)           140.1       140.1       140.1       140.1
    Effect of New Alberta
     Royalty Regime(5)              77.1        58.0        50.0        44.9
    Net Bank Debt (unaudited)     (337.5)     (337.5)     (337.5)     (337.5)
    Convertible Debentures
     (unaudited)                  (236.1)     (236.1)     (236.1)     (236.1)
    -------------------------------------------------------------------------
    Net Asset Value              1,629.4     1,150.2       958.4       854.0
    -------------------------------------------------------------------------
    Trust Units Outstanding
     (MM) - basic                  109.6       109.6       109.6       109.6
    -------------------------------------------------------------------------
    Net Asset Value per Trust
     Unit ($/Unit)                $14.87      $10.50       $8.75       $7.79
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Financial information is per PET's 2007 unaudited consolidated
        financial statements.
    (2) Reserve values per McDaniel Report as at December 31, 2007.
    (3) The average AECO gas price assumed in the McDaniel Report averaged
        $6.72/GJ for 2008 and 2009. At February 4, 2008 the forward market
        for AECO natural gas averaged $7.19 per GJ for 2008, 2009 and 2010.
        An increment for the higher forward prices has been included in this
        net asset value calculation.
    (4) Internal estimate.
    (5) See "Effect of New Alberta Royalty Regime" above.
    

    In the absence of adding reserves to the Trust, the NAV per Trust Unit
will decline as the reserves are produced out. The cash flow generated by the
production relates directly to the cash distributions paid to Unitholders. The
above evaluation includes future capital expenditure expectations required to
bring undeveloped reserves recognized by McDaniel that meet the criteria for
booking under NI 51-101 on production. The above evaluation does not consider
those opportunities in the Trust's extensive prospect inventory that are not
captured in the NI 51-101 evaluation.
    In order to determine the "going concern" value of the Trust, a more
detailed independent assessment would be required of the upside potential of
specific properties and the ability of the PET team to continue to make
value-adding capital expenditures. At inception of the Trust in February 2003,
based on year-end 2002 reserves the NAV was determined to be $8.91 per Trust
Unit based on a 5 percent discount rate. Since that time, including the
January 15, 2008 distribution, the Trust has distributed $11.92 per Trust
Unit. Despite having distributed $3.01 per Trust Unit more in cash
distributions than the initial NAV, the NAV as at December 31, 2007 had
increased to $10.50 per Trust Unit using a 5 percent discount rate.

    FINDING, DEVELOPMENT AND ACQUISITION ("FD&A") COSTS

    Under NI 51-101, the methodology to be used to calculate FD&A costs
includes incorporating changes in future development capital ("FDC") required
to bring the proved undeveloped and probable reserves to production. For
continuity, PET has presented herein FD&A costs calculated both excluding and
including FDC.
    The aggregate of the exploration and development costs incurred in the
most recent financial year and the change in estimated future development
costs during that year generally will not reflect total finding and
development costs related to reserves additions for that year. Consequently
PET has also presented three-year average FD&A cost information.

    FUTURE DEVELOPMENT CAPITAL

    NI 51-101 requires that FD&A costs be calculated including changes in
future development capital ("FDC"). Changes in forecast FDC occur annually as
a result of development activities, acquisitions and disposition activities
and capital cost estimates that reflect the independent evaluator's best
estimate of what it will cost to bring the proved undeveloped and probable
reserves on production.

    
    FD&A Costs - Company Interest Reserves
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                  Proved and
                                                          Proved    Probable
    -------------------------------------------------------------------------


    FD&A Costs Excluding Future Development Capital
    Total Capital Expenditures
     Including Net Acquisitions - $MM(1) (unaudited)      $564.1      $564.1
    Increase in book value of undeveloped land - $MM
     (unaudited)                                          $(59.1)     $(59.1)
    FD&A Capital Expenditures Including Net Acquisitions-
     $MM (unaudited)                                      $505.0      $505.0
    Reserve Additions Including Net Acquisitions - Bcf     180.0       310.7
    Finding Development and Acquisition Cost - $/Mcf       $2.81       $1.63
    Three Year Average FD&A Cost - $/Mcf                   $3.57       $2.36


    FD&A Costs Including Future Development Capital
    Total Capital Expenditures
     Including Net Acquisitions - $MM(1) (unaudited)      $564.1      $564.1
    Increase in book value of undeveloped land - $MM
     (unaudited)                                          $(59.1)     $(59.1)
    FD&A Capital Expenditures Including Net Acquisitions-
     $MM (unaudited)                                      $505.0      $505.0
    Total Change in FDC - $MM                              $81.2      $291.2
    Total FD&A Capital Including Change in FDC - $MM      $586.2      $796.2
    Reserve Additions Including Net Acquisitions - Bcf     180.0       310.7
    Finding Development and Acquisition Cost Including FDC
     - $/Mcf                                               $3.26       $2.56
    Three Year Average FD&A Cost Including FDC - $/Mcf     $3.92       $3.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Historic Company Interest Proved FD&A Costs
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                2007    2006    2005    2004
    -------------------------------------------------------------------------


    Annual FD&A, Excluding FDC                  2.81    6.37    4.07    4.04
    Three Year Average FD&A, Excluding FDC      3.57
    -------------------------------------------------------------------------


    Annual FD&A, Including FDC                  3.26    6.38    4.34    4.09
    Three Year Average FD&A, Including FDC      3.92
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Historic Company Interest Proved and Probable FD&A Costs
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                2007    2006    2005    2004
    -------------------------------------------------------------------------


    Annual FD&A, Excluding FDC                  1.63    7.03    3.15    3.16
    Three Year Average FD&A, Excluding FDC      2.36
    -------------------------------------------------------------------------


    Annual FD&A, Including FDC                  2.56    7.08    3.41    3.21
    Three Year Average FD&A, Including FDC      3.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Forward-looking Information

    This news release contains forward-looking information. Implicit in this
information, particularly in respect of cash distributions, are assumptions
regarding natural gas prices, production, royalties and expenses which,
although considered reasonable by PET at the time of preparation, may prove to
be incorrect. These forward-looking statements are based on certain
assumptions that involve a number of risks and uncertainties and are not
guarantees of future performance. Actual results could differ materially as a
result of changes in PET's plans, changes in commodity prices, general
economic, market, regulatory and business conditions as well as production,
development and operating performance and other risks associated with oil and
gas operations. There is no guarantee by PET that actual results achieved will
be the same as those forecast herein.

    Non-GAAP Measures

    This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
Non-GAAP Measures" section of the Trust's Management's Discussion and
Analysis.
    Mcf equivalent (Mcfe) may be misleading, particularly if used in
isolation. In accordance with National Instrument 51-101 ("NI 51-101"), a Mcfe
conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based on an
energy equivalency conversion method primarily applicable at the burner tip
and does not necessarily represent a value equivalency at the wellhead.
    Paramount Energy Trust is a natural gas-focused Canadian energy trust.
PET's Trust Units and Convertible Debentures are listed on the Toronto Stock
Exchange under the symbols "PMT.UN", "PMT.DB", "PMT.DB.A", "PMT.DB.B", and
"PMT.DB.C" respectively. Further information with respect to PET can be found
at its website at www.paramountenergy.com.

    
    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.
    





For further information:

For further information: please contact Paramount Energy Trust, Susan L.
Riddell Rose, President and Chief Executive Officer, (403) 269-4400; or
Paramount Energy Trust, Cameron R. Sebastian, Vice President, Finance and
Chief Financial Officer, (403) 269-4400; or Paramount Energy Trust, Sue M.
Showers, Investor Relations and Communications Advisor, (403) 269-4400, (403)
269-4444 (FAX); or Paramount Energy Operating Corp, Administrator of Paramount
Energy Trust, Suite 3200, 605 - 5 Avenue SW, Calgary, Alberta, T2P 3H5, Email:
info@paramountenergy.com, Website: www.paramountenergy.com


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