Perpetual Energy Inc. Provides Operational Update on Game Changers

CALGARY, November 4, 2010 -

    - Tight oil Success in the Cardium at Carrot Creek
    - Positive Liquids-rich gas Production Results in the Wilrich at Edson
    - Encouraging Early Montney Test Results at Elmworth
    - Warwick gas Storage Withdrawal Facility Start-up

Perpetual Energy Inc. ("Perpetual" or the "Company") has focused its
capital spending in the second half of 2010 on de-risking several of its
large scope, resource-style opportunities, referred to as 'game changers'.
Perpetual is pleased to provide an update on recent horizontal drilling
activities in west central Alberta targeting tight oil and liquids-rich gas
from the Cardium, Wilrich and Montney Formations.

Carrot Creek/Edson Cardium

A primary focus of Perpetual's 2010 exploration program has been to
determine the productivity of the Cardium formation across the Carrot Creek
and Edson areas through the use of horizontal drilling and multi-stage
fracture completion technologies. Perpetual yesterday completed the
multi-stage fracture stimulation operation on the final well in its five
well Cardium tight oil evaluation program at Carrot Creek and Edson in the
greater Pembina area, where innovative horizontal drilling techniques are
combining with advances in multi-stage fracture completion technology to
extract oil from the tight halo around the Pembina Cardium oil field. To
date, Perpetual has participated in five (3.2 net) wells, each testing a
different and independent part of the Cardium reservoir, of which two wells
(1.5 net) were drilled in the current quarter. The average production per
well for the first 30 days was approximately 175 BOE/d for the first four
wells. The fifth and final well in this initial exploration program is
currently testing, with production scheduled to commence in early November.

Of note, Perpetual's top producing well thus far is a top decile
horizontal Cardium oil producer as compared to the 64 Cardium horizontal
wells reporting production up to the end of the second quarter in the greater
Pembina Area. The Carrot Creek 4-16-52-13W5 well is currently producing at an
average rate of 315 BOE/d after 45 days following load oil recovery, and
follow up locations have been identified and licensed.

Average production results for Perpetual's four evaluation wells are thus
far consistent with the type curve as modeled by Perpetual. The Company is
encouraged by the value potential associated with Cardium development on the
Carrot Creek and Edson lands, particularly as potential cost savings are
realized in the future with the implementation of multi-well pad drilling and
monobore well designs, and with adjustments to stimulation programs going
forward. Perpetual has a total of 61 gross sections (36 net) of Cardium
rights under lease, and an additional 37 gross sections (31 net) under option
in the greater Carrot Creek/Edson area.

Edson Wilrich

In late June, Perpetual initiated an exploration program comprised of
three vertical well zonal completions and a horizontal evaluation well
targeting the liquids-rich Wilrich sand in the Edson area of West Central
Alberta. The vertical recompletions confirmed the extent of recoverable
liquids-rich gas in the Wilrich formation across the Edson land base and
initial production results from the first horizontal well are encouraging
and consistent with results seen in analogous Wilrich wells as reported.
In the first 30 days, the well had an average production rate of 4.3 MMcf/d
of raw gas and 40 Bbls per MMcf of natural gas liquids and condensate. An
additional three horizontal wells (3.0 net) are expected to be drilled and
completed prior to year end. An expansion of the compression and gathering
system from 10 MMcf/d to 30 MMcf/d has been initiated to accommodate the
anticipated production growth. Perpetual anticipates that the volumes from
the new wells will be placed on production later in 2010 once the facility
construction is completed. A total of 40 gross (33 net) horizontal locations
have been identified for further development at Edson.

Elmworth Montney

Through grass roots exploration efforts and successful Crown lands sale
purchases in late 2008, Perpetual acquired material exposure to the Montney
liquids-rich gas play developing at Elmworth in West Central Alberta. To
manage operational and technical risk, in 2009 Perpetual entered into a joint
venture arrangement with an industry partner whereby the partner would fund
and operate three wells to evaluate the lands to earn a 50 percent working
interest. Under the terms of the farmout agreement, three horizontal wells
were to be drilled and completed on the lands by March 31, 2011 at no cost
to Perpetual. As of November 5, 2010, one horizontal well (0.5 net) is
drilled and undergoing completion operations and a second horizontal well
(0.5 net) is drilling in the lateral section. A multi-stage fracture
stimulation has been conducted recently on the first well and during clean
up the well was flowing at 7.5 MMcf/d of raw gas and associated hydrocarbon
liquids. Further testing will be done in the fourth quarter to determine the
ultimate deliverability and nature of the gas to liquids ratio. A third well
(0.4 net) is expected to be spud prior to year end. In total at Elmworth,
the Company has 78 sections of Montney rights, with 120 gross (60 net)
horizontal locations identified on the north and east land blocks which
comprise 40 gross sections. Additional exploration activities beyond those
currently planned will be required to evaluate the prospectivity of the
remaining 38 sections of land on the Company's western land block.

Warwick Gas Storage Inc. ("WGSI")

The Warwick gas storage facility construction is proceeding as planned.
The WGSI facility is fully operational for natural gas injection, which
commenced on May 1, 2010 at rates of up to 175 MMcf/d of third party natural
gas. Withdrawal will commence as scheduled in the fourth quarter of 2010.

Gas Price Management

Perpetual closely monitors the market drivers with respect to natural
gas prices and proactively manages the Corporation's forward price exposure.
As current and forward gas prices have reached what the Company believes to
be unsustainably low levels over the past several weeks the Company has bought
back a portion of its forward sale positions, crystallizing gains related to
in-the-money hedges for future periods. To date in 2010, Perpetual has
realized hedging gains of $143 million through the settlement and
crystallization of forward positions and the sale of forward call options.
The current mark-to-market value of Perpetual's net open hedging transactions
is approximately $17 million.

Perpetual's financial and physical natural gas forward sales arrangements
at November 3, 2010 are as follows:

    Financial hedges and physical forward sales contracts
               Volumes
                    at       % of          Futures
    Type of     AECO(1)     2010E   Price  Market(2)
     Contract    (GJ/d)  Volume(3)  ($/GJ)  ($/GJ)                      Term
    -------------------------------------------------------------------------
    Financial   17,500               7.52                      December 2010
    Physical    10,000               7.75                      December 2010
    -------------------------------------------------------------------------
    Period
     Total      27,500         14    7.54   3.52               December 2010
    -------------------------------------------------------------------------
    Physical    10,000               7.75               January - March 2011
    -------------------------------------------------------------------------
    Period
     Total      10,000          5    7.75   3.57        January - March 2011
    -------------------------------------------------------------------------
    Financial   12,500          7    5.21   3.52        April - October 2011
    -------------------------------------------------------------------------
    Financial   22,500         12    5.33   4.23  November 2011 - March 2012
    -------------------------------------------------------------------------

    (1) Additional "call" option contracts outstanding are as presented in
        Perpetual's management's discussion and analysis ("MD&A") for the
        three and six months ended June 30, 2010.
    (2) Futures price reflects forward market prices as at November 3, 2010.
    (3) Calculated using 2010 estimated production of 192,000 GJ/d, including
        actual and gas over bitumen deemed production.

As a result of the above activities, Perpetual's net bank debt currently
stands at approximately $225 million.

Additional Information

Perpetual will be releasing its Third Quarter 2010 Financial and
Operating Results on Monday November 8, 2010. A webcast and conference call
is scheduled for Tuesday November 9, 2010 at 9:00 am MTN. Participation
details will follow.

Forward-Looking Information

Certain information regarding Perpetual in this news release including
management's assessment of future plans and operations may constitute
forward-looking statements under applicable securities laws. The forward
looking information includes, without limitation, statements regarding
estimated production and timing and growth thereof, potential value
associated with Cardium development, potential cost savings associated with
mutli-well pad drilling and monobore well designs, the number and timing of
wells expected to be drilled, the timing of well testing, exploration
activities, commodity prices, and gas price management. Various assumptions
were used in drawing the conclusions or making the forecasts and projections
contained in the forward-looking information contained in this press release,
which assumptions are based on management analysis of historical trends,
experience, current conditions and expected future developments pertaining to
Perpetual and the industry in which it operates as well as certain
assumptions regarding the matters outlined above. Forward-looking
information is based on current expectations, estimates and projections that
involve a number of risks, which could cause actual results to vary and in
some instances to differ materially from those anticipated by Perpetual
and described in the forward-looking information contained in this press
release. Undue reliance should not be placed on forward-looking information,
which is not a guarantee of performance and is subject to a number of risks
or uncertainties, including without limitation those described under "Risk
Factors" in Paramount Energy Trust's MD&A for the year ended December 31,
2009 and those included in reports on file with Canadian securities
regulatory authorities which may be accessed through the SEDAR website
(www.sedar.com) and at Perpetual's website
(www.perpetualenergyinc.com). Readers are cautioned that the
foregoing list of risk factors is not exhaustive. Forward-looking information
is based on the estimates and opinions of Perpetual's management at the time
the information is released and Perpetual disclaims any intent or obligation
to update publicly any such forward-looking information, whether as a result
of new information, future events or otherwise, other than as expressly
required by applicable securities law.

Non-GAAP Measures

This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
Non-GAAP Measures" section of Paramount Energy Trust's MD&A for the year
ended December 31, 2009.

Mcf equivalent (Mcfe) may be misleading, particularly if used in
isolation. In accordance with National Instrument 51-101 ("NI 51-101"), an
Mcfe conversion ratio for oil of 1 Bbl: 6 Mcf has been used, which is based
on an energy equivalency conversion method primarily applicable at the
burner tip and does not necessarily represent a value equivalency at the
wellhead.

Perpetual Energy Inc. is a natural gas-focused Canadian energy company.
Perpetual's shares and Convertible Debentures are listed on the Toronto Stock
Exchange under the symbols "PMT", "PMT.DB.C", "PMT.DB.D" and "PMT.DB.E".
Further information with respect to Perpetual can be found at its website at
www.perpetualenergyinc.com.

The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.

Contact: Perpetual Energy Inc., Suite 3200, 605 - 5 Avenue SW Calgary,
Alberta, Canada, T2P 3H5, Telephone: +1-403-269-4400, Fax: +1-403-269-4444,
Email: info@perpetualenergyinc.com; Susan L. Riddell Rose, President and
Chief Executive Officer, Cameron R. Sebastian, Vice President, Finance and
Chief Financial Officer, Sue M. Showers, Investor Relations and
Communications Advisor

Contact: Perpetual Energy Inc., Suite 3200, 605 - 5 Avenue SW Calgary, Alberta, Canada, T2P 3H5, Telephone: +1-403-269-4400, Fax: +1-403-269-4444, Email:
info at perpetualenergyinc.com; Susan L. Riddell Rose, President and Chief Executive Officer, Cameron R. Sebastian, Vice President, Finance and Chief Financial Officer, Sue M. Showers, Investor Relations and Communications Advisor