Paramount Provides Update on Cavalier Energy Inc.

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Dec. 17, 2012 /CNW/ - Paramount Resources Ltd. ("Paramount") is pleased to announce that its wholly-owned subsidiary Cavalier Energy Inc. ("Cavalier") filed a regulatory application for the Hoole Grand Rapids Project ("Hoole Project") with the Energy Resources Conservation Board and Alberta Environment and Sustainable Resource Development, in November 2012.  The Hoole Project comprises a 10,000 barrel per day in-situ SAGD oil sands development. Subject to receipt of regulatory approval, the current Hoole Project schedule anticipates first steam in 2015 and the first full year of production in 2016. "The Hoole Project presents a great platform from which to grow Cavalier into a significant oil sands production company," stated William Roach, President and Chief Executive Officer of Cavalier.

Further to the submission of the regulatory application, Cavalier expects to receive a reserves report for the Hoole Project from its independent engineering evaluators in the first quarter of 2013.  "This is a major step forward for Paramount and the Cavalier team," said Jim Riddell, President and Chief Operating Officer of Paramount. "This is Paramount's first operated, strategic investment in the oil sands, and we look forward to the Cavalier team creating significant shareholder value at Hoole."

More information pertaining to Cavalier, including its latest corporate presentation, is available at the newly launched Cavalier website, www.cavalierenergy.com and may also be accessed via the Paramount website www.paramountres.com.

Advisory Regarding Forward-Looking Statements: This news release contains forward-looking statements pertaining to the regulatory approval for the Hoole Project, the timing of first steam at and production from the Hoole Project, expected production volumes from the Hoole Project and the reserves report of the independent third party engineering evaluator for Cavalier. Although Paramount believes that the expectations reflected in such forward looking statements are reasonable, undue reliance should not be placed on them as Paramount cannot give any assurance that such expectations will prove to be correct. The forward-looking statements in this news release are made as of the date hereof and, except as required by applicable securities law, Paramount undertakes no obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. Paramount is a Canadian oil and natural gas exploration, development and production company with operations focused in Western Canada.  Paramount's Class A Common Shares are listed on the Toronto Stock Exchange under the symbol "POU".

SOURCE: Paramount Resources

For further information on the Hoole Project specifically, or Cavalier in general, please go to www.cavalierenergy.com or contact William Roach, President & Chief Executive Officer, Cavalier Energy Inc. at 403.268.3940.

For further information regarding Paramount please contact J.H.T. (Jim) Riddell, President and Chief Operating Officer at 403.290.3600.