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In March 2013, Paramount sold its properties in the Bistcho area of Alberta and the Cameron Hills area of the Northwest Territories for approximately $9 million, subject to closing adjustments. Average sales volumes for these properties were approximately 1,000 Boe/d in 2012.

STRATEGIC INVESTMENTS

SHALE GAS

Paramount's shale gas holdings encompass approximately 260 (220 net) sections in the Liard Basin and the Horn River Basin in Northeast British Columbia and the Northwest Territories, including approximately 180 net sections with potential from the Besa River shale gas formation.

To see a map of the Liard Basin, click the following link: http://media3.marketwire.com/docs/307pou_map2.pdf

Paramount drilled and completed its first horizontal shale gas exploration well at Patry in Northeast British Columbia. The well was drilled to a vertical depth of approximately 3,400 meters with a horizontal bore of approximately 1,200 meters, and was completed with a 10-stage fracture stimulation in the Besa River formation in early March 2013 that included the injection of approximately 120,000 barrels of completion fluids.

The well commenced flowing on clean-up in the first week of March 2013 and continues to recover the completion fluids. Over the first 69 hours of metered gas flow, natural gas rates ranged between 5 MMcf/d and 14 MMcf/d on clean-up and completion fluid recoveries averaged approximately 4,000 Bbl/d at flowing tubing pressures of 11,000 to 35,000 kPa up 114.3 mm tubing. During the last 24 hours of that period, natural gas rates averaged 7 MMcf/d at an average flowing tubing pressure of approximately 11,500 kPa and completion fluid recovery was approximately 2,800 Bbl/d. As a pressure transient analysis or well test interpretation has not been carried out at this time, the flow-back data provided should be considered preliminary. In addition, this data is not necessarily indicative of long-term performance or ultimate recovery.

The Company is working to confirm that all 10 stages of the fracture stimulation are open and contributing. In order to further evaluate well performance, the Company plans to tie the Patry well into existing pipeline infrastructure located within two miles of the well site and plans to bring the well on production by the end of 2013.

The Company re-commenced drilling operations on its initial shale gas evaluation well at Dunedin in February 2013 after drilling operations were suspended there in the spring of 2012 due to warm weather. Paramount plans to drill this well to the intended vertical depth of approximately 4,500 meters at which point it will evaluate further plans to complete the vertical wellbore and/or drill a horizontal leg. This activity is expected to extend the mineral rights surrounding the well location for an additional decade and provide information useful for future development.

CAVALIER ENERGY INC.

Cavalier Energy is designed to be a focused, self-funding entity, which was created in 2011 as a wholly-owned subsidiary of Paramount to execute the development of the Company's oil sands and carbonate bitumen assets. Cavalier Energy holds over 300 sections, representing approximately 200,000 net acres of Crown leases in the Western Athabasca region of Alberta.

Hoole Grand Rapids

The initial focus of Cavalier Energy is to develop the Grand Rapids formation in its 100 percent owned in-situ oil sands leases in the Hoole area of Alberta (the "Hoole Project"). The Hoole Project is 10 kilometers northeast of Wabasca-Desmarais, Alberta. Since 2004, approximately $60 million has been invested through land acquisitions, stratigraphic drilling, engineering studies, and environmental field programs to bring this asset to the development stage.