News Releases

NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR:  PARAMOUNT RESOURCES LTD.

TSX SYMBOL:  POU

JANUARY 23, 2005 - 23:31 ET

Paramount Resources Ltd. Reaches Agreement With 
Noteholder Committee; Amending Exchange Offer for 
Senior Notes and Proceeding With Trust Spinout

CALGARY, ALBERTA--(CCNMatthews - Jan. 23, 2005) - Paramount Resources 
Ltd. (TSX:POU) announces that it is amending its exchange offer and 
consent solicitation (the "Notes Offer") for its senior unsecured notes 
following negotiations with representatives of the noteholder committee 
formed in response to the Notes Offer. The principal amendments are as 
follows:

- the cash component of the consideration for each US$1,000 of 7 7/8% 
Senior Notes due 2010 (the "2010 Notes") and 8 7/8% Senior Notes due 
2014 (the "2014 Notes") will be US$138.05 and US$220.20, respectively; 
and

- the terms of the new Paramount notes to be issued in exchange for the 
2010 Notes and 2014 Notes will be changed so that:

- the maturity date will be January 31, 2013

- the interest rate will be 8.5% per year

- Paramount's obligations under the notes will be secured by 
substantially all of the trust units held by Paramount immediately 
following completion of its proposed trust spin-out transaction

- if, on September 30, 2005, noteholders owning more than 50% of the 
notes so elect, Paramount will be required to increase the interest rate 
to 10.5% per year commencing February 1, 2006 and, if so required, 
Paramount will be entitled to redeem all of the notes at any time on or 
before January 31, 2006 at par plus accrued and unpaid interest

Details of the amendments will be set forth in an amendment to 
Paramount's prospectus supplement and solicitation statement for the 
Notes Offer, which is expected to be sent to noteholders and filed with 
securities regulatory authorities shortly. The amended Notes Offer will 
be conditional upon Paramount obtaining requisite consents from the 
lenders under its existing senior credit facilities, which Paramount 
expects to obtain.

The offer expiration date for the Notes Offer has also been extended to 
5:00 pm New York time on February 4, 2005.

Noteholders beneficially owning or controlling, directly or indirectly, 
approximately 30% of the 2010 Notes and approximately 43% of the 2014 
Notes have entered into agreements with Paramount pursuant to which they 
have agreed to tender their notes to the amended Notes Offer. The notes 
covered by the tender commitments together with the notes already 
tendered under the offer exceed the amount necessary to satisfy the 
minimum tender condition of the offer. Paramount intends to proceed with 
the special meeting of securityholders necessary to approve its proposed 
trust spin-out transaction, which is now anticipated to be held in late 
March.

Paramount is a Canadian oil and natural gas exploration, development and 
production company with operations focused in Western Canada. 
Paramount's common shares are listed on the Toronto Stock Exchange under 
the symbol "POU".

This press release is neither an offer to sell nor a solicitation of an 
offer to participate in the Notes Offer.

Advisory Regarding Forward Looking Statements

Certain statements in this press release are "forward-looking 
statements" within the meaning of the United States Private Securities 
Litigation Reform Act of 1995. Specifically, this press release contains 
forward-looking statements relating to: the timing of the sending and 
filing of the amendment to Paramount's prospectus supplement and 
solicitation statement; Paramount obtaining the requisite consents from 
the lenders under its existing senior credit facilities; and the 
anticipated timing of the special meeting of securityholders. The reader 
is cautioned that assumptions used in the preparation of such 
information, although considered reasonable by Paramount at the time of 
preparation, may prove to be incorrect. Actual events may vary from 
those provided herein as a result of numerous known and unknown risks 
and uncertainties and other factors. Such factors include, but are not 
limited to: the failure to obtain the requisite consents from the 
lenders under its existing senior credit facilities; the failure to 
obtain the minimum tender condition of the offer; general economic 
conditions; and other factors, many of which are beyond the control of 
Paramount. There is no representation by Paramount that actual events 
will be the same in whole or in part as those forecast.

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