The data set out below is a summary of reserves for the assets of Paramount Energy Trust as at December 31, 2007 as evaluated by the independent reserve engineering firm McDaniel & Associates Consultants Ltd. The reserves data summarizes the natural gas reserves of the Trust and the net present values of future net revenue for these reserves using McDaniel forecast prices and costs. The 2007 year end report suggests a reserve-to-production ratio (RLI) of 7.6 years (P+P).
Approximately 98% of PET's proved and proved and probable reserves are natural gas and as such the Trust reports reserves in Mcf equivalent (Mcfe). Mcfe may be misleading, particularly if used in isolation. In accordance with NI 51-101 a Mcfe conversion ratio for oil of 1 Bbl:6 Mcf has been used, which is based on an energy equivalencey conversion method primarily applicable at the burner tip and does not necesarily represent a value equivalency at the wellhead.