Paramount Resources : 2022 Information Circular

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

An annual general meeting (the "Meeting") of the shareholders of Paramount Resources Ltd. (the "Corporation") will be held on Wednesday, May 4, 2022 at 10:30 a.m. (Calgary time) in a virtual-only format that will be conducted via live webcast accessible athttps://meetnow.global/MD9YA2M. The purpose of the Meeting is to:

• 1. receive the audited consolidated financial statements of the Corporation for the fiscal year ended December 31, 2021 and the independent auditors' report thereon;

• 2. elect the directors of the Corporation;

• 3. appoint the auditors of the Corporation; and

• 4. transact any other business as may properly come before the Meeting and any adjournment(s) of the Meeting.

By order of the Board of Directors

(signed) "Mark Franko"

Corporate Secretary

Calgary, Alberta, Canada

March 17, 2022

TABLE OF CONTENTS

GENERAL INFORMATION .......................................................................................................................... 3

Meeting Date and Time and Virtual-Only Format ..................................................................................... 3

Date of Information .................................................................................................................................... 3

Voting Shares and Principal Holders ........................................................................................................ 3

Meeting Materials - Use of Notice and Access ........................................................................................ 3

Additional Information ............................................................................................................................... 4

Contact Information ................................................................................................................................... 4

VOTING AND PARTICIPATION INFORMATION ........................................................................................ 4

General Voting Information ....................................................................................................................... 4

Registered Shareholder Voting and Participation ..................................................................................... 5

Beneficial Shareholder Voting and Participation ....................................................................................... 6

BUSINESS OF THE MEETING .................................................................................................................... 8

Financial Statements ................................................................................................................................. 8

Election of Directors .................................................................................................................................. 8

Appointment of Auditors ............................................................................................................................ 8

Other Matters to Be Acted Upon ............................................................................................................... 8

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS .............................................................. 9

Independence of Director Nominees ....................................................................................................... 13

Competency Matrix for Director Nominees ............................................................................................. 14

Board Interlocks ...................................................................................................................................... 14

COMPENSATION DISCUSSION AND ANALYSIS ................................................................................... 15

Introduction .............................................................................................................................................. 15

2021 Corporate Performance and Market Conditions ............................................................................ 16

2021 Compensation Determinations ....................................................................................................... 17

Compensation Mix ................................................................................................................................... 19

Peer Group .............................................................................................................................................. 20

Total Return Performance Graph ............................................................................................................ 21

Reported vs. Realizable Compensation .................................................................................................. 21

Compensation Governance .................................................................................................................... 22

Risk Oversight in Relation to Compensation Policies and Practices ...................................................... 24

Anti-Hedging Policy ................................................................................................................................. 24

EXECUTIVE COMPENSATION ................................................................................................................. 25

Summary Compensation Table ............................................................................................................... 25

Outstanding Options and RSUs .............................................................................................................. 26

Incentive Plan Awards - Value Vested or Earned During the Year ........................................................ 26

Termination and Change of Control Benefits .......................................................................................... 26

DIRECTOR COMPENSATION ................................................................................................................... 27

Director Compensation Table ................................................................................................................. 27

Narrative Discussion of Director Compensation ..................................................................................... 27

Outstanding Options and RSUs Held by Directors ................................................................................. 28

Incentive Plan Awards - Value Vested or Earned During the Year ........................................................ 29

Share Ownership and Hold Period Requirements .................................................................................. 29

INCENTIVE PLANS .................................................................................................................................... 29

Cash Bonus and Restricted Share Unit Plan (CBRSUP) ....................................................................... 29

Option Plan .............................................................................................................................................. 31

INDEBTEDNESS OF DIRECTORS AND OFFICERS ............................................................................... 33

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ............................................... 33

CORPORATE GOVERNANCE .................................................................................................................. 33

Role of the Corporate Governance Committee ....................................................................................... 33

Statement of Corporate Governance Practices ...................................................................................... 34

ENVIRONMENTAL AND SOCIAL GOVERNANCE .................................................................................. 40

SCHEDULE "A" - BOARD OF DIRECTORS MANDATE ......................................................................... 42

MANAGEMENT INFORMATION CIRCULAR

GENERAL INFORMATION

Meeting Date and Time and Virtual-Only Format

Paramount Resources Ltd. (the "Corporation" or "Paramount") will be holding an annual general meeting (the "Meeting") of holders ("Shareholders") of its Class A Common Shares ("Common Shares") on Wednesday, May 4, 2022 at 10:30 a.m. (Calgary time). In order to mitigate COVID-19 related health and safety risks, the Meeting will be held in a virtual-only format conducted via live webcast online athttps://meetnow.global/MD9YA2M. Through the meeting website, registered Shareholders and duly appointed proxyholders will be able to hear the Meeting live, submit questions and vote their Common Shares live on all items of business. Guests, including beneficial Shareholders who have not duly appointed themselves as proxyholder, will be able to login and listen to the proceedings of the Meeting but will not be able to vote or submit questions.

Date of Information

Information in this management information circular ("Information Circular") is given as of March 17, 2022 unless otherwise noted.

Voting Shares and Principal Holders

On March 17, 2022, Paramount had 141,314,328 issued and outstanding Common Shares. The Common Shares trade under the symbol "POU" on the Toronto Stock Exchange ("TSX").

To the knowledge of Paramount's directors and executive officers, the only persons that beneficially owned or controlled or directed 10% or more of the outstanding Common Shares as at March 17, 2022 were: (i) Mr. James H.T. Riddell, Paramount's President and Chief Executive Officer and Chairman of the Board of Directors, who beneficially owned or controlled or directed, directly or indirectly, 35,807,886 Common Shares, representing approximately 25.34% of the outstanding Common Shares as of such date; (ii) Ms. Susan Riddell Rose, a director of Paramount, who beneficially owned or controlled or directed, directly or indirectly, 14,503,011 Common Shares, representing approximately 10.26% of the outstanding Common Shares as of such date; and (iii) Ms. Brenda Riddell, who beneficially owned or controlled or directed, directly or indirectly, 14,359,842 Common Shares, representing approximately 10.16% of the outstanding Common Shares as of such date.

Meeting Materials - Use of Notice and Access

Paramount has elected to use the notice-and-access provisions under National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (the "Notice-and-Access Provisions") for the Meeting in respect of mailings to beneficial Shareholders, but not in respect of mailings to registered Shareholders (i.e. a Shareholder whose name appears on the register of Shareholders). The Notice-and-Access Provisions are a set of rules developed by the Canadian Securities Administrators that are intended to reduce the volume of materials which are mailed to shareholders by allowing a reporting issuer to post online an information circular and related materials in respect of a meeting of its shareholders.

While registered Shareholders will receive a paper copy of the notice of meeting, this Information Circular and a form of proxy, beneficial Shareholders will receive a notice containing information prescribed by the Notice-and-Access Provisions and a voting instruction form. In addition, a paper copy of the notice of meeting, this Information Circular, and a voting direction will be mailed to those Shareholders who do not hold their Common Shares in their own name, but who have previously requested to receive paper copies of these materials. Furthermore, Paramount's financial statements in respect of its most recently completed financial year will be mailed to registered Shareholders and those beneficial Shareholders who previously requested to receive such information.

Additional Information

Additional information concerning Paramount, including consolidated comparative interim and annual financial statements and management's discussion and analysis thereon, as well as the 2021 annual information form, is available through the internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) which may be accessed atwww.sedar.com. This information may also be accessed on the Corporation's website atwww.paramountres.com. Financial information in respect of Paramount's most recently completed financial year is contained in Paramount's comparative annual financial statements and management's discussion and analysis thereon.

Upon request by a Shareholder to Paramount's Corporate Secretary at the address set out below, Paramount will provide, without charge, copies of Paramount's 2021 annual information form, Paramount's consolidated comparative financial statements for fiscal 2021 together with the independent auditors' report and management's discussion and analysis thereon, interim financial statements for subsequent periods and this Information Circular.

Contact Information

Head Office: 2800, 421 - 7th Avenue SW

Calgary, Alberta, Canada T2P 4K9

Attention:	Corporate Secretary
Telephone:	403-290-3600
Website:	www.paramountres.com
VOTING AND PARTICIPATION INFORMATION

General Voting Information

Proxy Solicitation

Proxies are being solicited by management of Paramount to be used at the Meeting, or any adjournment(s) of the Meeting. Solicitations will be primarily by mail but may also be by newspaper publication, in person or by telephone, electronic transmission or communication by directors, officers, employees or agents of Paramount. All costs of the solicitation will be paid by Paramount.

Who is Entitled to Vote

If you are a registered holder of Common Shares at the close of business on March 17, 2022 (the "Record Date"), you are entitled to receive notice of and vote at the Meeting. You will be entitled to vote all of the Common Shares that you held on the Record Date at the Meeting except to the extent that:

• a. you have transferred ownership of any such Common Shares after the Record Date; and

• b. not later than ten days before the Meeting, the transferee of those Common Shares produces properly endorsed share certificates or otherwise establishes that they own such Common Shares and demands that their name be included on the list of Shareholders entitled to vote at the Meeting, in which case the transferee will be entitled to vote those Common Shares at the Meeting.

When Common Shares are held jointly by two or more persons, those shares may be voted at the Meeting by any one of those holders, or, alternatively, by all holders jointly. Each Common Share is entitled to one vote. A simple majority of votes cast (50% plus one vote) is required to approve all of the known matters to come before the Meeting.

Quorum

Quorum for the Meeting will be at least two individuals present in person (virtually), each being a Shareholder or proxyholder entitled to vote at the Meeting, who together own or represent Common Shares having at least 25% of the votes entitled to be cast at the Meeting.

Proxy Voting

You can indicate on your proxy how you want your proxyholder to vote your Common Shares or you can let your proxyholder decide for you. If you specify how you want your Common Shares voted, then your proxyholder must vote in accordance with your instructions. In the absence of specific instructions, your proxyholder can vote your Common Shares as he or she sees fit. If you appoint Mr. James H.T. Riddell of Calgary, Alberta, or failing him, Mr. Paul R. Kinvig also of Calgary, Alberta, and do not specify how you want your Common Shares to be voted, your Common Shares will be voted as follows:

Election of each management nominee as a director Appointment of auditors

FOR FOR

Amendments or Other Matters

At the time of printing this Information Circular, Paramount's management does not know of any matter that may come before the Meeting other than the matters referred to above or of any potential amendment to, or variation of, these matters. If any other matters or any amendments to, or variations of, the above matters do properly come before the Meeting, your proxyholder will vote on them using his or her best judgment.

Registered Shareholder Voting and Participation

If your Common Shares are held in your name and you have a share certificate you are a registered Shareholder.

How to Participate in the Meeting

Registered Shareholders may participate in the Meeting by attending online and will be able to listen to the proceedings of the Meeting, submit questions and vote during the specified times. Registered Shareholders can login to the Meeting by following the instructions below.

• a. Go tohttps://meetnow.global/MD9YA2M. The latest versions of Chrome, Safari, Edge or Firefox will be needed. Paramount recommends that you login at least 30 minutes before the Meeting starts. You should allow ample time to login to the Meeting to check compatibility and complete the related procedures.

• b. Select "Shareholder" and enter your 15-digit control number. The control number is located on the form of proxy enclosed with this Information Circular or in the e-mail notification delivered to you for the Meeting.

How to Vote by Proxy

Registered Shareholders may vote their Common Shares by proxy delivered by mail or by proxy delivered by telephone or the internet in accordance with the instructions contained in the enclosed proxy.

If you choose to vote by proxy delivered by mail, you may use the enclosed proxy or complete another proper instrument of proxy. In either case, you must deliver the completed and executed proxy to either:

• a. the registered office of the Corporation at Suite 2800, 421 - 7th Avenue S.W., Calgary, Alberta, T2P 4K9, Attention: Corporate Secretary; or

• b. the Corporation's transfer agent, Computershare Trust Company of Canada, Ninth Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1, Attention: Proxy Department;

no later than 10:30 a.m. (Calgary time) on May 2, 2022 or, if the Meeting is adjourned, at least 48 hours (excluding weekends and holidays) before the time set for the Meeting to resume (the "Proxy Deposit Deadline").