2025 was a transformative year for the Company, marked by the following significant achievements and highlights:
Closing the sale of the Karr, Wapiti and Zama properties on January 31 for cash proceeds of $3.243 billion, after adjustments (the "Grande Prairie Disposition");
Bringing the first phase of the new Alhambra Plant at Willesden Green onstream in July, ahead of schedule and below budget, and sanctioning the second phase of the plant that is now expected to be brought onstream by early in the third quarter of 2026;
Sanctioning the Sinclair Montney natural gas development, planned to be onstream in the fourth quarter of 2027, which is being designed to add over 300 MMcf/d of natural gas sales volumes;
Growing sales volumes from approximately 30,000 Boe/d (39% liquids) immediately following the Grande Prairie Disposition to approximately 47,000 Boe/d (53% liquids) in the fourth quarter of 2025;
Increasing December 31, 2025 proved developed producing ("PDP") reserves by 46%, total proved ("TP") reserves by 43% and proved plus probable ("P+P") reserves by 115%, after adjusting for the impacts of the Grande Prairie Disposition;
Providing $2.4 billion in shareholder returns through a $2.15 billion special cash distribution of $15.00 per class A common share ("Common Share") in February, $101 million in regular monthly dividends totaling $0.70 per Common Share and $155 million in normal course issuer bid purchases of 4.9 million Common Shares;
Selling the Company's remaining investment in NuVista Energy for cash proceeds of $519 million;
Expanding the Company's core land positions at Willesden Green by approximately 20% to over 500 net sections (320,000 acres) and at Sinclair by approximately 30% to over 220 net sections (140,000 acres); and
Exiting the year with a strong liquidity position to execute on its Willesden Green Duvernay and Sinclair Montney developments, including $730 million of cash and cash equivalents and undrawn credit facilities totaling $750 million.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
Fourth quarter sales volumes were 46,973 Boe/d (53% liquids), a 30% increase over third quarter sales volumes. Annual sales volumes were 42,238 Boe/d (48% liquids), exceeding the upper end of the Company's guidance range of 41,000 to 42,000 Boe/d (47% liquids) with a higher than forecast liquids contribution.(1)
At Willesden Green, the ramp-up of production through the Company's wholly-owned and operated Alhambra Plant continued, with average sales volumes growing to 25,752 Boe/d (62% liquids) in the quarter. The Company continued to achieve high runtime at the Alhambra Plant and strong Duvernay well performance in the fourth quarter.
Gross 150-day peak production from the Company's first ten Duvernay wells brought onstream through the Alhambra Plant between late July and early September 2025 averaged approximately 1,250 Boe/d (61% liquids) per well. The four wells with the longest production history have averaged gross 210-day peak production of approximately 1,225 Boe/d (56% liquids) per well, reflecting continued shallow declines. (2)
Willesden Green sales volumes have grown from approximately 7,000 Boe/d (53% liquids) in January 2025 to average over 29,000 Boe/d (62% liquids) in December 2025.
At Kaybob, fourth quarter sales volumes were 20,387 Boe/d (41% liquids) and annual sales volumes were 21,216 Boe/d (40% liquids). Kaybob annual sales volumes were 5% lower than 2024.
Capital expenditures totaled $789 million in 2025, below the low end of the Company's guidance range of $795 million to $825 million. Paramount's 2025 capital program was largely focused on its Willesden Green Duvernay development, with lesser amounts directed to the Company's Kaybob North Duvernay and Sinclair Montney developments. Key activities included:
drilling 40 (40.0 net) wells and bringing 36 (36.0 net) wells on production;
completing the construction of the first phase of the Alhambra Plant and advancing construction of the second phase; and
advancing design work and purchasing long-lead items for the Sinclair Plant.
Cash from operating activities was $185 million ($1.29 per basic share) in the fourth quarter and $417 million ($2.90 per basic share) in 2025. (3)
Adjusted funds flow was $140 million ($0.97 per basic share) in the fourth quarter and $467 million ($3.25 per basic share) in 2025.
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(1)
In this press release, "natural gas" refers to shale gas and conventional natural gas combined, "condensate and oil" refers to condensate, light and medium crude oil, tight oil and heavy crude oil combined, "Other NGLs" refers to ethane, propane and butane and "liquids" refers to condensate and oil and Other NGLs combined. See the "Product Type Information" section for a complete breakdown of sales volumes for applicable periods by the specific product types of shale gas, conventional natural gas, NGLs, light and medium crude oil, tight oil and heavy crude oil. See also "Oil and Gas Measures and Definitions" in the Advisories section.
(2)
Gross 150-day and 210-day peak production is the highest daily average production rate for each well, measured at the wellhead, over a rolling 150-day period or 210-day period, as applicable, excluding days when the well did not produce. The production rates and volumes stated are over a short period of time and, therefore, are not necessarily indicative of average daily production, long-term performance or of ultimate recovery from the wells. Natural gas sales volumes were lower by approximately 9% and liquids sales volumes were lower by approximately 14% due to shrinkage. In addition, certain liquids entrained in the natural gas stream are only recovered once processed and therefore final sales volumes cannot be imputed from wellhead volumes and shrinkage estimates alone.
(3)
Adjusted funds flow and free cash flow are capital management measures used by Paramount. Cash from operating activities per basic share, adjusted funds flow per basic share, free cash flow per basic share and operating expense per Boe are supplementary financial measures. Refer to the "Specified Financial Measures" section for more information on these measures.
Free cash flow was $(85) million ($(0.59) per basic share) in the fourth quarter and $(386) million ($(2.68) per basic share) in 2025.
With approximately 71,000 Mcf/d of Paramount's natural gas sales volumes priced at diversified markets outside of AECO in 2025, Paramount's average realized natural gas price in 2025 was $3.02/Mcf. In 2026, approximately 58% of the Company's forecast natural gas sales volumes are expected to be priced at diversified markets outside of AECO, including at Dawn, Malin and Emerson.
Operating expenses were $9.84/Boe in the fourth quarter and $11.66/Boe in 2025. Per-unit operating expenses continued to decrease in the fourth quarter as production volumes ramped-up in Willesden Green. Willesden Green operating expenses averaged $4.71/Boe in the fourth quarter and $6.26/Boe in 2025.
Asset retirement obligation settlements totaled $39 million in 2025, which included the abandonment of 26 wells, decommissioning of 14 pipeline segments and reclamation of 61 sites.
In December 2025, the Company secured a five-year $250 million non-revolving, non-amortizing, delayed draw term loan facility with Export Development Canada and extended the maturity date of its $500 million financial covenant-based senior secured revolving bank credit facility to December 15, 2029.
2026 GUIDANCE
The Company is increasing its 2026 annual sales volumes guidance by 1,000 Boe/d to between 46,000 Boe/d and 51,000 Boe/d (50% liquids):
First half 2026 sales volumes are now expected to average between 39,000 Boe/d and 44,000 Boe/d (47% liquids), a 2,000 Boe/d increase from prior guidance. The increase reflects higher assumed reliability of the Alhambra Plant based on performance to date as well as stronger well productivity. Second quarter sales volumes continue to be expected to be lower than first quarter volumes due to the timing of new well production, as well as a planned one-week outage at the Alhambra Plant in the second quarter to accommodate the expansion of the facility.
Third quarter 2026 average sales volumes are expected to be between 46,500 Boe/d and 51,500 Boe/d (51% liquids) as the second phase of the Alhambra Plant comes onstream. A one-month outage at the Leafland Plant is planned starting in July as the interconnection to the Alhambra Plant is put into service.
Fourth quarter 2026 average sales volumes are expected to be between 59,000 Boe/d and 64,000 Boe/d (53% liquids).
Paramount is reaffirming its 2026 guidance for capital expenditures of between $1,050 million and $1,150 million and abandonment and reclamation expenditures of $35 million. With cash and cash equivalents of $730 million and $750 million in undrawn credit facilities at December 31, 2025, Paramount is in a strong financial position to advance its planned Willesden Green and Sinclair developments. The Company remains committed to prudently managing its capital resources and has the flexibility to adjust its capital expenditure plans depending on commodity prices and other factors.
CAPITAL AND SALES VOLUMES OUTLOOK
Paramount continues to expect midpoint annual capital expenditures of approximately $1,100 million for each of 2026 and 2027, which will mostly be directed to the Willesden Green Duvernay and Sinclair Montney developments. The Company continues to expect its sales volumes to more than double to over 100,000 Boe/d (35% liquids) by the end of 2027.
Outlook
2026
2027
Capital expenditures (midpoint)
$1,100 million
$1,100 million
Willesden Green
$630 million
$440 million
Sinclair
$360 million
$440 million
Sales volumes (annual)
Exit rate
46,000, 51,000 Boe/d (50% liquids)
60,000, 65,000 Boe/d (50% liquids)
> 100,000 Boe/d (35% liquids)
RESERVES HIGHLIGHTS (1)
Paramount added substantial reserves in 2025, driven mainly by its developments at Willesden Green and Sinclair.
After adjusting for the impacts of the Grande Prairie Disposition:
PDP reserves were up 46% to 59 MMBoe, TP reserves were up 43% to 200 MMBoe and P+P reserves were up 115% to 522 MMBoe.
Paramount's reserves replacement ratios were 2.4x for PDP reserves, 5.2x for TP reserves and 21.7x for P+P reserves: (2)
additions to TP liquids reserves represented 571% of liquids production and to P+P liquids reserves represented 920% of liquids production; and
additions to TP natural gas reserves represented 479% of natural gas production and to P+P natural gas reserves represented 3,314% of natural gas production.
2025 finding and development ("F&D") costs were: (3)
$24.42/Boe for PDP reserves (1.2x recycle ratio);
$24.15/Boe for TP reserves (1.2x recycle ratio); and
$11.67/Boe for P+P reserves (2.5x recycle ratio).
The F&D cost calculations include 2025 capital expenditures and changes in future development costs related to the buildout of processing facilities and associated field infrastructure at Willesden Green and Sinclair of an aggregate of approximately $200 million ($2.80/Boe) on a TP basis and approximately $660 million ($2.30/Boe) on a P+P basis. While the inclusion of these costs impacts the calculation of F&D costs in the near term, the Company will benefit from substantially reduced operating costs and operational
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(1)
Readers are referred to the advisories concerning "Reserves Data". All reserves in this press release are gross reserves based on an evaluation prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") dated March 2, 2026 and effective December 31, 2025 (the "McDaniel Report"). Estimates of net present value of future net revenue of reserves do not represent fair market value. Readers should refer to the Company's annual information form for the year ended December 31, 2025, which is available on SEDAR+ at www.sedarplus.ca or on Paramount's website at www.paramountres.com, for a complete description of the McDaniel Report (including reserves by the specific product types of shale gas, conventional natural gas, NGLs, tight oil and light and medium crude oil) and the material assumptions, limitations and risk factors pertaining thereto.
(2)
See "Oil and Gas Measures and Definitions" in the Advisories section of this document for a description of the calculation and use of reserves replacement ratio.
(3)
Finding and development costs and recycle ratio are non-GAAP ratios. Refer to the "Specified Financial Measures" section and "Oil and Gas Measures and Definitions" in the Advisories section for more information on these measures and on the related non-GAAP financial measure of F&D capital.
control over the lifespan of the properties from the wholly-owned facilities and infrastructure that it is constructing compared to reliance on third-party natural gas processing facilities.
The Company's reserve life index, calculated excluding the production associated with the assets sold in the Grande Prairie Disposition, is 4.5 years for PDP, 15.2 years for TP and 39.5 years for P+P reserves.(1)
The following table summarizes Paramount's gross PDP, TP and P+P reserves at December 31, 2025.
Proved Developed Producing
Total Proved
Total Proved Plus Probable
Natural gas (Bcf)
202
611
2,094
NGLs (MBbl)
23,492
95,890
168,336
Crude oil (MBbl)
1,988
2,290
4,243
Total (MBoe)
59,151
199,989
521,518
% Liquids
43 %
49 %
33 %
Columns may not add due to rounding
The following table summarizes the Company's gross proved and proved plus probable developed and undeveloped reserves at December 31, 2025 and the net present value of future net revenue of these reserves before income taxes, undiscounted and discounted at 10%.
Proved
Proved plus Probable
Gross Reserves
Future Net Revenue
NPV Before Tax
($ millions)
Gross Reserves
Future Net Revenue
NPV Before Tax
($ millions)
(MBoe)
0 %
10 %
(MBoe)
0 %
10 %
Developed
70,266
357
729
96,568
929
972
Undeveloped
129,723
2,485
950
424,951
7,401
2,278
Total
199,989
2,843
1,679
521,518
8,330
3,250
Columns may not add due to rounding
REVIEW OF OPERATIONS
WILLESDEN GREEN
The Willesden Green Duvernay development is located near Rocky Mountain House, Alberta where the Company holds over 320,000 net acres of Duvernay rights.
Paramount produces liquids-rich natural gas at Willesden Green which is handled at its wholly-owned and operated Alhambra Plant and its majority-owned and operated Leafland Plant, with minor volumes being handled at third-party processing facilities.
Construction of the first phase of the Alhambra Plant was substantially completed in July 2025 and first sales volumes were achieved in late-July. The first phase of the Alhambra Plant was designed to provide raw handling capacity of approximately 10,000 Bbl/d of liquids and 50 MMcf/d of natural gas. The Alhambra Plant is designed to be capable of expansion to a total raw handling capacity of 30,000 Bbl/d of liquids and 150 MMcf/d of natural gas through the construction of two additional phases. Onsite construction of the second phase of the Alhambra Plant commenced in the third quarter of 2025.
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(1)
See "Oil and Gas Measures and Definitions" in the Advisories section of this document for a description of the calculation and use of reserve life index.
The Leafland Plant has raw handling capacity of approximately 6,000 Bbl/d of liquids and 22 MMcf/d of natural gas.
Capital expenditures at Willesden Green totaled $570 million in 2025. Development activities were focused on the buildout of area infrastructure and the drilling of wells to fill the associated expanded processing capacity. Infrastructure development was focused on the Alhambra Plant where construction of the first phase was completed and onsite work for the second phase commenced. In addition, the Company began construction of water recycling facilities as well as a pipeline interconnect between the Leafland and Alhambra Plants. Duvernay well development activities in 2025 included the drilling of 27 (27.0 net) wells and the bringing on production of 22 (22.0 net) wells.
Willesden Green sales volumes averaged 14,161 Boe/d (60% liquids) in 2025 compared to 7,537 Boe/d (53% liquids) in 2024. Sales volumes were higher in 2025 due to new Duvernay well production that began flowing through the Alhambra Plant in late-July. The Company achieved record quarterly sales volumes at Willesden Green of 25,752 Boe/d (62% liquids) in the fourth quarter as additional Duvernay wells were brought on production.
Runtime at the Alhambra Plant has been exceptional in the seven months since start-up. In addition, recent capacity tests of the Alhambra Plant's raw liquids handling processes have demonstrated a functional limit of approximately 10,900 Bbl/d compared to the 10,000 Bbl/d original design specification. The Company plans to conduct tests of the plant's raw natural gas handling capacity in 2026 as plant throughput gradually shifts to include a higher percentage of natural gas.
Better than expected performance from the 16 wells flowing through the Alhambra Plant also significantly contributed to higher production. These wells have been and continue to be choked as part of Paramount's well drawdown strategy. This approach has resulted in shallower condensate production declines and higher initial CGRs when compared to Paramount's earlier Willesden Green Duvernay wells. (1) The strategy also maximizes condensate processing utilization while avoiding curtailment due to prematurely reaching natural gas capacity constraints.
Gross 150-day peak production from the Company's first ten Duvernay wells brought onstream through the Alhambra Plant between late July and early September 2025 averaged approximately 1,250 Boe/d (61% liquids) per well. The four wells with the longest production history have averaged gross 210-day peak production of approximately 1,225 Boe/d (56% liquids) per well, reflecting continued shallow declines. The six-well Duvernay pad that was brought onstream in the fourth quarter of 2025 is exhibiting similar performance. Paramount continues to evaluate new well performance and will incorporate its findings into future development plans as additional data is obtained. (2)
The commissioning of Paramount's water recycling facility at the Alhambra Plant has commenced and is ongoing. Once completed, the Company will begin to redirect treated produced water to engineered containment ponds allowing it to pump recycled water to well sites for use in its completion operations, significantly reducing the amount of fresh water required for completion activities, lowering well capital costs and reducing operating costs associated with water disposal.
The expansion of the Alhambra Plant, which is set to double its raw handling capacity, is progressing well. Most mechanical packages have been received and on-site electrical and instrumentation work is well underway. The Company also continues to make good progress on the construction of the pipeline
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(1)
CGR means condensate to gas ratio and is calculated by dividing raw wellhead liquids volumes by raw wellhead natural gas volumes. See "Oil and Gas Measures and Definitions" in the Advisories section.
(2)
Gross 150-day and 210-day peak production is the highest daily average production rate for each well, measured at the wellhead, over a rolling 150-day period or 210-day period, as applicable, excluding days when the well did not produce. The production rates and volumes stated are over a short period of time and, therefore, are not necessarily indicative of average daily production, long-term performance or of ultimate recovery from the wells. Natural gas sales volumes were lower by approximately 9% and liquids sales volumes were lower by approximately 14% due to shrinkage. In addition, certain liquids entrained in the natural gas stream are only recovered once processed and therefore final sales volumes cannot be imputed from wellhead volumes and shrinkage estimates alone.
connecting the Alhambra and Leafland Plants and preparations to expand inlet compression at the Leafland Plant are ongoing. Combined, these activities will enable the Company to optimize the flow of raw production and the utilization of processing capacities across the field. The Company now expects start-up of the second phase of the Alhambra Plant by early in the third quarter of 2026.
Paramount anticipates 2026 midpoint capital expenditures of approximately $630 million at Willesden Green, of which approximately two-thirds is expected to be incurred in the first half of the year for facility expansion activities and drilling, completion and tie-in activities to fill the expanded capacity. The Company continues to expect a one-week outage at the Alhambra Plant in the second quarter to accommodate the expansion of the facility. A one-month outage at the Leafland Plant is planned starting in July as the interconnection to the Alhambra Plant is put into service.
In 2026, Paramount plans to drill 29 (29.0 net) Duvernay wells and complete and bring on production 26 (26.0 net) Duvernay wells at Willesden Green. Five wells are expected to be brought onstream in the first half of the year while the remaining 21 wells are anticipated to be brought onstream in the second half of the year as additional processing capacity is made available through the start-up of the second phase of the Alhambra Plant.
Paramount has not yet sanctioned the third phase expansion of the Alhambra Plant, which would add an incremental planned 50 MMcf/d of raw gas handling and 10,000 Bbl/d of raw liquids handling capacity. Natural gas and liquids sales egress for the third phase remains contracted for the fourth quarter of 2029.
To date, the Company has targeted a plateau production level at Willesden Green of approximately 50,000 Boe/d that can be sustained for a period of over 20 years. The recent substantial additions to the Willesden Green land position will enable Paramount to further increase this targeted plateau production level.
SINCLAIR
Paramount's Sinclair Montney development is located west of Grande Prairie Alberta where the Company holds over 140,000 net acres of contiguous Montney rights.
The Sinclair development is a high-rate, low-cost natural gas project that was sanctioned by the Company in the fourth quarter of 2025. Production will be processed at the Sinclair Plant, which is being designed to handle up to 400 MMcf/d of raw gas production and will be constructed in 2026 and 2027. The Company has contracted 335 MMcf/d of firm service sales egress commencing in the fourth quarter of 2027 to coincide with the planned start-up of the Sinclair Plant.
Capital expenditures at Sinclair totaled $65 million in 2025 and were focused on well appraisals, plant engineering and design and the ordering of long-lead items, as well as regulatory and other activities that informed the decision to sanction the Sinclair Montney development. In 2025, Paramount completed and flow-tested two (2.0 net) Montney appraisal wells and drilled two (2.0 net) additional Montney appraisal wells.
The Company anticipates 2026 midpoint capital expenditures of approximately $360 million at Sinclair. Activities in 2026 will include flow-testing the two (2.0 net) Montney appraisal wells that were drilled in late-2025, procuring equipment and advancing construction activities related to the Sinclair Plant and other area infrastructure and drilling 15 (15.0 net) Montney wells. Completion and tie-in activities are planned to commence in 2027.
KAYBOB
The Company's Kaybob properties are located in the greater Kaybob area near Fox Creek, Alberta and include the Kaybob North Duvernay development and other natural gas and oil producing properties. Paramount's Kaybob land holdings include approximately 110,000 net acres of Duvernay rights and approximately 180,000 net acres of Montney rights. The Company owns and operates extensive processing and gathering infrastructure in the area.
Capital expenditures at Kaybob totaled $121 million in 2025 and were focused on the Kaybob North Duvernay development. Development activities included the drilling of eight (8.0 net) Duvernay wells and the bringing on production of nine (9.0 net) Duvernay wells at Kaybob North.
Kaybob sales volumes averaged 21,216 Boe/d (40% liquids) in 2025 compared to 22,404 Boe/d (41% liquids) in 2024. The Company anticipates maintaining average production at Kaybob of between 19,000 Boe/d and 20,000 Boe/d (38% liquids) through to 2028.
In 2026, the Company plans to drill two (2.0 net) Duvernay wells and bring on production three (3.0 net) Duvernay wells that were drilled last year. Paramount also plans to drill and bring two (2.0 net) Montney oil wells on production.
OTHER PROPERTIES AND LAND POSITION
Paramount continues to hold material land positions with large-scale future development potential, including:
1.3 million net acres of land in Alberta that are prospective for cold flow heavy oil and in-situ thermal oil recovery, including approximately 300,000 net acres with Clearwater and Bluesky cold flow heavy oil potential and approximately 70,000 net acres with thermal oil potential at the Company's Hoole Grand Rapids property;
shale gas properties in northeast British Columbia in the Horn River Basin, where the Company holds approximately 110,000 net acres of Muskwa rights, and in the Liard Basin, where the Company holds approximately 195,000 net acres of Besa River rights; and
approximately 170,000 net acres of undeveloped land in the Mackenzie Delta and Central Mackenzie in the Northwest Territories prospective for natural gas and oil production.
In addition to minor planned exploration and development activities at its northeast Alberta heavy oil properties in 2026, the Company continues to evaluate opportunities within its portfolio that have the potential for scalable and highly economic development in the medium and long-term term.
LAND
Paramount's total land position as at December 31, 2025 is summarized below.
(thousands of acres)
Gross (1)
Net (2)
Acreage assigned reserves
852
704
Acreage not assigned reserves
3,363
2,349
Total
4,215
3,053
(1)
Gross acres means the total acreage in which Paramount has an interest. Gross acreage is calculated only once per lease or license of petroleum and natural gas rights ("Lease") regardless of whether or not Paramount holds a working and/or royalty interest, or whether or not the Lease includes multiple prospective formations. If Paramount holds interests in different formations beneath the same surface location pursuant to separate Leases, the acreage set out in each Lease is counted.
(2)
Net acres means gross acres multiplied by Paramount's working interest therein.
HEDGING & GAS MARKET DIVERSIFICATION
HEDGING
The Company's current financial commodity and foreign currency exchange contracts are summarized below:
Instruments
Aggregate amount / notional
Average price or rate (1)
Remaining term
Natural Gas
Citygate / ...
