Paramount Resources Ltd. Updates Status of Exchange Offer for Senior Notes

CALGARY, ALBERTA - Dec. 31, 2004 /CNW/ - Paramount Resources
Ltd. (TSX:POU) is providing an update on the status of its exchange
offer and consent solicitation (the "Notes Offer") for its 7 7/8% Senior
Notes due 2010 and 8 7/8% Senior Notes due 2014.

The offer expiration date for the Notes Offer is on January 13, 2005.
Paramount offered an additional payment for tendering noteholders if the
requisite tenders and consents were received by 5:00 p.m. New York time
on December 29, 2004 (the "consent expiration time"). As of that time,
the requisite tenders and consents had not been received. The consent
expiration time has not been extended and the Notes Offer remains

Paramount has been advised that a committee of holders of each series of
notes, allegedly holding a sufficient amount of the notes to preclude
the minimum tender condition specified in the Notes Offer from being
satisfied, has been formed to respond to the Notes Offer. The committee
is seeking to engage Paramount in negotiations on the terms of the Notes

Moody's Investor Service has assigned a "B3" rating to the Paramount
notes to be issued under the Notes Offer. The Moody's ratings for
Paramount are with a negative outlook.

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".

For further information: Paramount Resources Ltd., J.H.T. (Jim) Riddell, President and Chief Operating Officer, (403) 290-3600 / Paramount Resources Ltd., B.K. (Bernie) Lee, Chief Financial Officer, (403) 290-3600, (403) 262-7994 (FAX),, Paramount Resources Ltd., C.H. (Clay) Riddell, Chairman and Chief Executive Officer, (403) 290-3600, (403) 262-7994 (FAX),, Paramount Resources Ltd., 4700 Bankers Hall West, 888 - 3rd Street SW, Calgary, AB T2P 5C5