Paramount Energy Trust Confirms Oct. Distribution, Updates Hedging

Paramount Energy Trust ("PET" or the "Trust") confirmed that its distribution to be paid on November 16, 2009 in respect of income received by PET for the month of October 2009, for Unitholders of record on October 22, 2009 will be $0.05 per Trust Unit. The ex-distribution date is October 20, 2009. The October distribution brings cumulative distributions paid since the inception of the Trust to $13.664 per Trust Unit.

It is important to note that the ex-distribution and record date have been adjusted to accommodate the Trust's Premium Distribution and Distribution Reinvestment Plan.

On September 21, 2009, PET announced that it had adopted a Premium Distribution(TM) and Distribution Reinvestment Plan (the "Premium DRIP Plan") payable with the September 2009 cash distribution and onwards. In addition to the features available under the Trust's previous Distribution Reinvestment Plan the Premium DRIP Plan allows eligible Unitholders to elect, under the Premium Distribution(TM) component of the Plan, to have Trust Units purchased under the Plan delivered to the designated Plan Broker in exchange for a premium cash payment equal to 102% of the cash distribution such Unitholders would otherwise have received on the applicable distribution payment date.

A complete copy of the Premium DRIP Plan, together with a related series of questions and answers and an enrollment form for eligible Unitholders, are available on PET's website at or by contacting PET's Investor Relations department directly at the numbers indicated below, or on the Plan Agent's website at A copy of the enrollment form is also available from the Plan Agent by calling 1-800-564-6253. Unitholders should carefully read the complete text of the Plan before making any decisions regarding their participation in the Plan.

Hedging Update

PET advises that it has crystallized gains from its November 2009 through March 2010 AECO-based financial fixed price natural gas swap contracts. These transactions resulted in the receipt of $41.4 million which have been applied to reduce the Trust's current outstanding net bank debt. The current crystallization transactions will be recorded as funds flow and a reduction in bank debt in the third quarter. The Trust's estimated current net bank debt is approximately $290 million. These arrangements are not expected to impact PET's borrowing capacity under its bank credit facility which is scheduled for redetermination at October 31, 2009 as hedge arrangements in the six month period following each borrowing base redetermination are not generally included in the lenders' evaluation of the borrowing base.

In addition PET has entered into replacement financial fixed price natural gas swap contracts for the period from November 2009 through March 2010 for 110,000 GJ/d at an average price of $5.38 per GJ. The Trust remains cautious with respect to near term natural gas prices despite significant declines to date in 2009, as strong supply from shale gas plays in the United States and Liquefied Natural Gas ("LNG") imports and weak industrial gas demand due to the economic recession in North America have contributed to very high gas storage levels compared to prior periods. As a result, while PET has applied a portion of the value of its hedge portfolio to its balance sheet, the Trust also believes that continued downside protection is warranted at this time.