Paramount Energy Trust Confirms January 2008 Distribution and Updates Hedging Position


    CALGARY, Jan. 17 /CNW/ - Paramount Energy Trust (TSX:PMT.UN) ("PET" or
the "Trust") confirmed today that its distribution to be paid on February 15,
2008 in respect of income received by PET for the month of January 2008, for
Unitholders of record on January 31, 2008, will be $0.10 per Trust Unit. The
ex-distribution date is January 29, 2008. The January 2008 distribution brings
cumulative distributions paid since the inception of the Trust in February
2003 to $12.024 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. PET remains cautious in its outlook with respect to near term natural
gas prices and continues to actively manage its risk management program.
Financial and physical forward sales arrangements at the AECO and NYMEX
trading hubs as at January 17, 2008 are as follows:

                                 % of        Current
               Volumes at      Budget        Forward
    Type of        AECO(2) Production   Price  Price
    contract        (GJ/d)         (3)  ($/GJ) ($/GJ)                  Term
    Financial      57,500                7.31                   February 2008
    Physical       12,500                7.45                   February 2008
    Period total,
     net(1)        70,000          33%   7.34   6.86            February 2008
    Financial      82,500                7.15                      March 2008
    Physical       12,500                7.45                      March 2008
    Period total,
     net(1)        95,000          45%   7.19   6.79               March 2008
    Financial      69,500                7.26              April-October 2008
    Physical        7,500                6.67              April-October 2008
    Period total
     AECO, net(1)  77,000                7.20   6.95       April-October 2008
     NYMEX         10,000            7.70 US$              April-October 2008
    Period total
     NYMEX, net(1) 10,000            7.70 US$ 8.03US$      April-October 2008
    Period total,
     net(1)        87,000          42%                     April-October 2008
    Financial      87,500                7.67        November 2008-March 2009
    Physical        7,500                8.36        November 2008-March 2009
    Period total,
     net(1)        95,000          45%   7.73   7.81 November 2008-March 2009
    Financial      20,000                7.09              April-October 2009
    Period total,
     net(1)        20,000          10%    7.09  7.19       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
    (3) Includes actual and gas over bitumen deemed projected production

    PET will continue to closely monitor the market drivers with respect to
near term natural gas prices and will proactively manage the Trust's forward
price exposure.
    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 51 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 through capital spending programs.
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.
    For those Canadian individuals wishing to obtain taxation information
relating to the Trust's 2007 distributions, this information may be accessed
through PET's website at after February 22, 2008.
Taxation information for U.S. residents is expected to be posted to the
website on February 29, 2008.

    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
    Mcf equivalent (Mcfe) may be misleading, particularly if used in
isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an
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

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

For further information:

For further information: 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:, Website:

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