Convertible, Secured Debenture and Warrants Issued to Paramount Resources Ltd. by Spearhead Resources Inc.



SEPTEMBER 17, 2003 - 09:00 ET

Convertible, Secured Debenture and Warrants Issued to
Paramount Resources Ltd. by Spearhead Resources Inc.

CALGARY, ALBERTA--Paramount Resources Ltd. ("Paramount") of 4700
Bankers Hall West, 888 - 3rd Street S.W., Calgary, Alberta, T2P
5C5, announces that pursuant to a private placement with
Spearhead Resources Inc. ("Spearhead"), Spearhead has issued to
Paramount a Convertible, Secured Debenture due September 16, 2004
in the principal amount of $990,000 (the "Debenture"), together
with 3,300,000 warrants to purchase 3,300,000 common shares at an
exercise price of $0.30 for a period of one year (the
"Warrants"). The Debenture bears interest on the outstanding
principal amount from time to time at the rate of 10% per annum
commencing September 16, 2003. The Debenture is convertible, in
whole or in part, into common shares of Spearhead ("Common
Shares") on the basis of one Common Share for each $0.30
outstanding principal amount of the Debenture for a period of one
year from September 16, 2003. If the Debenture was fully
converted and the Warrants exercised in full, Paramount would
acquire 6,600,000 Common Shares. 

Under the terms of an existing secured convertible debenture
between Paramount and Spearhead dated December 12, 2001 (the
"First Debenture"), which is due December 12, 2003, Paramount has
the ability to acquire up to 8,333,333 Common Shares on
conversion of outstanding principal, resulting in a combined
total number of 14,933,333 Common Shares that could potentially
be issued to Paramount. Currently, neither Paramount nor anyone
acting jointly or in connection with Paramount beneficially owns,
or exercises control or direction over, any Common Shares.
Assuming no other Common Shares are issued and no other
debentures are converted, Paramount could potentially own up to
48.6% of the issued and outstanding Common Shares.

Paramount's investment in Spearhead is for investment purposes
only and Paramount has no intention of increasing the beneficial
ownership, control or direction of Spearhead now or in the
future, nor does it have any intention of making a take-over bid
for Spearhead. Paramount reserves the right to purchase
additional Common Shares or other securities of Spearhead or,
from time to time, dispose of securities held in Spearhead.

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)