Perpetual Energy Inc. Releases Year End 2010 Financial and Operating Results, Updates 2011 Capital Spending Program and Operational Activities and Confirms March 2011 Dividend

By Perpetual Energy Inc., PRNE
Monday, March 7, 2011

Please note all Dollars are Canadian

CALGARY, Alberta, March 8, 2011 - Perpetual Energy Inc. ("Perpetual" or the "Corporation") is pleased to
release its fourth quarter and year end 2010 financial and operating results.
Perpetual's natural gas price hedging program combined with strong operating
results led the Corporation to post strong funds flow for the year ending
2010 despite extremely weak natural gas prices related to high gas storage
levels and concerns about new supply.

Perpetual also confirms that its dividend to be paid on April 15, 2011 in
respect of income received by Perpetual for the month of March 2011, for
shareholders of record on March 22, 2011, will be $0.03 per share. The
ex-dividend date is March 18, 2011. The March 2010 dividend brings cumulative
dividends (including distributions paid since the inception of Perpetual's
predecessor, Paramount Energy Trust) to $14.414 per share. Perpetual reviews
dividends on a monthly basis. Future dividends are subject to change as
dictated by commodity price markets, operations, capital considerations and
future business development opportunities.

Until further notice, there will be no shares available under the Premium
Dividend(TM) and Dividend Reinvestment Plan (the "Plan"). At such time as the
Corporation elects to reinstate either or both components of the Plan,
shareholders that were enrolled at suspension and remain enrolled at
reinstatement will automatically resume participation in the Plan.

Perpetual's Board of Director's also today approved a $42 million capital
expenditure budget for the final three quarters of 2011 bringing the total
budget for the year to $90 million, including gas storage. Capital activity
for the remainder of the year will continue to be focused on oil and
liquids-rich projects including Wilrich drilling at Edson and Lloyd/Sparky
horizontal drilling in eastern Alberta.

A copy of Perpetual's audited consolidated financial statements and
related management's discussion and analysis ("MD&A") can be obtained through
the Corporation's website at and SEDAR at

2010 Annual Highlights

Corporate Activity

    - On June 30, 2010, the corporate conversion of Paramount Energy Trust
    into Perpetual Energy Inc. was completed. Trading of the common
    shares of Perpetual began on July 6, 2010.

    - Perpetual declared dividends of $75.8 million or $0.56 per Share in
    2010, representing a payout ratio of 33.2 percent of funds flow for
    the year.

    - Dividends for the fourth quarter of 2010 totaled $0.11 per
    Share, including $0.05 per Share paid on November 15, 2010,
    and $0.03 per Share paid on December 15, 2010 and January 17,
    2011. Perpetual's payout ratio was 23.1 percent for the quarter.


    - Perpetual reduced net bank debt by 20 percent from $270.8 million at
    December 31, 2009 to $214.5 million at December 31, 2010. Including
    Perpetual's convertible debentures of $234.9 million, total net debt
    dropped 10 percent from $501.0 million at December 31, 2009 to $449.4
    million at December 31, 2010.

    - Operating costs decreased 13 percent to what Perpetual believes to be
    a sustainable level of $1.64 per Mcfe, for an annual cost of $91.2
    million in 2010 as compared to $105.1 million ($1.83 per Mcfe) in
    2009, primarily due to lower repair and maintenance costs and higher
    processing income.

    - Funds flow increased three percent to $237.2 million in 2010 as
    compared to $231.3 million for 2009 due primarily to higher oil and
    NGL production and lower operating costs.

    - The Corporation's effective royalty rate for 2010 of 5.3 percent of
    revenues was 33 percent less than 2009 and lower than the
    Corporation's historical royalty rates due to lower AECO gas prices,
    realized gains on financial instruments and a recovery of $1.5
    million in royalties related to prior years.

    - The Corporation recorded a net loss of $28.5 million ($0.20 per basic
    and diluted Share) in 2010 as compared to net earnings of
    $13.6 million ($0.11 per basic and diluted Share) in 2009.

    Production and Pricing

    - Daily average actual and deemed production was essentially unchanged
    year over year at 177.4 MMcfe/d in 2010 as compared to 177.6 MMcfe/d
    in 2009.

    - Daily average production decreased three percent to 152.6 MMcfe/d in
    2010 as a result of the full year effect of gas over bitumen shut-ins
    in late 2009, non-core asset dispositions and natural production
    declines, partially offset by the Edson acquisition and successful
    drilling activities during the year.

    - Due to successful Cardium, Wilrich and Mannville drilling programs in
    the second half of 2010, oil and NGL production increased 73 percent
    to 1,245 Bbl/d in 2010 as compared to 721 Bbl/d in 2009.

    - The Corporation's realized gas price including financial hedging and
    physical forward sales, increased marginally to $7.10 per Mcfe in
    2010 from $7.09 per Mcfe in 2009, as both average AECO gas prices and
    Perpetual's hedging gains were fairly constant from year to year.

    - Perpetual's hedging and risk management program continued to provide
    a measure of stability to realized prices and funds flow in 2010
    through the realization of $155.0 million in gains on financial
    instruments and $1.9 million in call option premiums.

    - The Corporation's realized gas price for the fourth quarter 2010 was
    $7.83 per Mcfe, a 33 percent increase from the comparable quarter in
    2009, driven by realized hedging gains of $49.4 million in the
    quarter as compared to $20.5 million in 2009.

    - Perpetual's realized oil & NGL price increased 10 percent to $68.29
    per bbl in 2010 from $61.91 per bbl in 2009.


    - In 2010, Perpetual added 71.8 Bcfe (12.0 MMboe) of proved and
    probable reserves, replacing 129% of its production.

    - After dispositions of 53.1 Bcfe (8.9 MMboe) and production of 55.9
    Bcfe (9.3 MMboe) in 2010, proved and probable reserves increased
    three percent from 471.6 Bcfe (78.6 MMboe) at year-end 2009 to 487.7
    Bcfe (81.3 MMboe) and proved reserves increased two percent to 250.4
    Bcfe (41.7 MMboe) at year-end 2010.

    - Including changes in future development capital ("FDC"), Perpetual
    realized finding and development costs ("F&D") of $1.69 per Mcfe
    ($10.14 per BOE) on a proved and probable reserve basis in 2010.

    - Perpetual's realized finding, development and acquisition costs
    ("FD&A"), including changes in FDC, was $2.16 per Mcfe ($12.96 per
    BOE) on a proved and probable basis.

    Exploration and Development Capital Activity

    - Exploration and development capital spending increased to $115.2
    million in 2010 from $57.4 million in 2009, as Perpetual accelerated
    drilling activities on high-impact resource plays in west central
    Alberta obtained through various acquisitions and grassroots
    exploration efforts.

    - Capital spending of $2.9 million was allocated to Perpetual's new
    ventures areas.

    - Eastern district expenditures of $39.4 million were concentrated on
    low-cost shallow gas recompletions to maintain production levels, the
    drilling and completion of nine gas and oil wells (7.5 net) in
    Birchwavy, facilities optimization projects designed to reduce
    production costs and evaluation of the Corporation's oilsands leases
    at Panny and Marten Hills.

    - West Central District capital spending totaled $59.1 million,
    directed primarily to Cardium and Wilrich delineation and

    - Perpetual drilled 70 gross wells (63.9 net) in 2010 as compared to 52
    gross (42.2 net) in 2009 with a 98 percent success rate. Drilling
    activity included 48 gross (44.3 net) natural gas wells, 14 gross
    (11.6 net) oil wells and 6 gross (6.0 net) wells at Perpetual's gas
    storage facility.

    - Land acquisitions totaled $13.8 million in 2010, a $10.3 million
    increase from 2009 levels. Acquisitions included several exploratory
    parcels in the Caroline, Waskahigan and Del Bonita areas of Alberta,
    as well as additional land purchases in the West Central district and
    minor maintenance acreage purchases in the Eastern district.

    Acquisitions and Dispositions

    - Acquisition spending totaled $141.9 million, including the
    acquisition of oil and natural gas assets in the Edson area of west
    central Alberta ("Edson Acquisition") and an acquisition of shallow
    natural gas production in eastern Alberta for $16.6 million.

    - Disposition proceeds increased to $91.3 million, including the
    receipt of $7.1 million in shares of TriOil Resources Ltd., in 2010
    from $26.6 million in 2009. The current year total includes the
    disposal of shut-in gas over bitumen assets for $39.8 million, minor
    oil and gas property dispositions in Birchwavy East and Athabasca,
    and the sale of producing non-core assets in west central Alberta.

    - As part of the disposition agreements for the shut-in gas over
    bitumen assets, Perpetual will continue to receive the gas over
    bitumen financial solution royalty reductions related to the sold
    wells, although effective ownership of the natural gas reserves will
    be transferred to the buyers. As a result, Perpetual expects there
    will be no material impact on future funds flow as a result of this


    - Through the Edson Acquisition, Perpetual obtained lands prospective
    for the undeveloped Wilrich formation. Capital spending on this play
    in 2010 included the drilling of five wells (4.5 net) targeting
    liquids-rich gas, completion and tie-in of
    three wells and the expansion of a compressor station at Edson to
    increase processing capacity by 20 MMcf/d plus associated liquids of
    40 bbl/MMcf. The expanded infrastructure is expected to be operating
    at full capacity in March 2011.


    - As part of the Edson Acquisition, Perpetual negotiated a farm-in
    arrangement on 37 gross (31 net) sections of undeveloped Cardium
    rights in the Edson area of which 22 net sections are believed by
    Perpetual to be prospective for light oil. The farm-in includes a two
    well horizontal drilling and completion commitment, each earning 50
    percent of the vendor's net interest in four sections followed by a
    rolling option to earn the additional lands on the same basis. In
    2010 Perpetual drilled two Cardium wells (1.2 net) fulfilling its
    farm-in commitment.

    - Including the two well earning commitment, the Corporation drilled
    and completed five Cardium oil wells (3.2 net) during 2010 to
    delineate the potential for Cardium tight oil development on its
    lands at Carrot Creek and Edson.

    - Results from the five wells drilled in 2010 averaged the expected
    type curve for the tight oil play, with initial production rates
    averaging 125-150 boe/d. The top decile producer in Carrot Creek has
    been the focus of Perpetual's follow-up development activity in the
    first quarter of 2011, where four gross wells have been drilled and
    are currently undergoing completion operations.

    Elmworth Montney

    - The first and second wells of a three-well commitment were drilled by
    Perpetual's joint venture partner into the Montney formation at
    Elmworth, as part of a previously announced farm-out agreement. The
    first two wells were completed and flow-tested at approximately 7.5
    MMcf/d of raw natural gas with 20 bbl/MMcf of condensate with an
    additional estimated 25 to 45 bbl/MMcf of recoverable associated
    natural gas liquids per MMcf, depending on processing. The third well
    was rig released on January 11, 2011 and was completed later that
    month. Difficulties encountered during completion restricted the flow
    test but the extent of the resource was established as expected.

    - Perpetual established 14.5 Bcfe (2.4 MMboe) of proven and 32.1 Bcfe
    (5.3 MMboe) of proved and probable reserves at Elmworth net to
    Perpetual's interest. Using the GLJ January 1, 2011 price forecast,
    the net present value of the reserves discounted at 8 percent is
    estimated at $14.7 million for proved reserves and $43.6 million for
    total proved and probable reserves net to Perpetual, including
    recovery of future development capital ("FDC").

    Warwick Gas Storage ('WGSI")

    - Capital expenditures for the fourth quarter of 2010 of $11.2 million
    were incurred to finalize the construction and the final testing of
    the Corporation's gas storage facility at Warwick, Alberta ("WGSI
    Facility"). Full year 2010 expenditures totaled $57.6 million.

    - Including seismic, land, drilling and other development expenditures
    in 2009, the construction and testing of Perpetual's gas storage
    facility came to a total cost of $68 million and was fully
    operational for commercial injection in May 2010 and for withdrawal
    purposes on January 1, 2011.

    - The WGSI Facility generated operating funds flow of $6.6 million in
    2010, which is expected to increase as the cycle capacity is
    increased in 2011 and future years. WGSI provides a complementary
    diversified cash flow stream to the Corporation's existing oil and
    natural gas assets.

    Subsequent Events

    - On February 23, 2011, Perpetual announced the sale of its Mitsue
    area, a minor, non-core shallow gas property in northeast Alberta,
    for $9.0 million. At December 31, 2010 Perpetual had 3.7 Bcfe (3.1
    Bcf gas and 0.1 MMbbl oil) proved and probable reserves recorded for
    this asset. The production impact of this sale is 2.0 MMcfe/d. The
    effective date of this sale is December 1, 2010.

    - On March 1, 2011 Perpetual announced its intention to issue $150
    million of seven-year Senior Unsecured Notes ("the Notes"). The
    Notes will be direct senior unsecured obligations of Perpetual
    ranking pari passu with all other present and future unsecured and
    unsubordinated indebtedness of the Corporation. Net proceeds from the
    Notes offering will be used to repay existing indebtedness under
    Perpetual's existing credit facility. Additional benefits to
    Perpetual include significant extension of the term of a portion of
    its total debt and reduced exposure of its credit capacity to
    commodity prices, particularly near term weakness in gas prices. Pro
    forma for the Notes offering, Perpetual expects to be drawn
    approximately $70 million on its credit facility and approximately 70
    percent of Perpetual's total outstanding debt will have a term
    extending beyond 2014. Closing is expected to occur on or about March
    15, 2011 following a limited marketing process and determination of


In November 2010, Perpetual's Board of Directors approved a $48 million
capital budget for the first quarter of 2011. Capital expenditures were
directed principally toward the advancement of Perpetual's large-scope
resource-style opportunities including:

    - The completion of two gross (1.5 net) horizontal wells and the
    drilling and completion of three gross (3.0 net) wells targeting the
    liquids-rich Wilrich formation in the Edson area of west central

    - The drilling of four gross(3.0 net) horizontal wells targeting oil
    in the Cardium formation at Carrot Creek;

    - Tie-in operations for the Elmworth Montney play to establish
    production from the Montney;

    - The drilling of seven oilsands evaluation wells at Hoole, Liege and
    Clyde in northeast Alberta;

    - The drilling of two vertical wells and one horizontal well to test
    potential cold flow heavy oil production at Panny; and

    - Detailed core and fracture stimulation analysis for development of
    the Viking/Colorado shale pilot program in eastern Alberta scheduled
    for the fourth quarter of 2011.

First quarter capital spending also incorporated the drilling of two
gross (2.0 net) heavy oil wells at Mannville in eastern Alberta, four gross
(4.0)drills and approximately 50 recompletions undertaken in various areas of
Perpetual's conventional asset base, in addition to development expenditures
to increase working gas capacity at the WGSI Facility.

The Corporation's Board of Directors has approved a capital spending
budget of $42 million for the remainder of 2011 for an annual total capital
expenditure budget of $90 million, including gas storage. Capital activity
for the remainder of the year will continue to be focused on oil and
liquids-rich projects including:

    - The drilling and completion of two additional gross (2.0 net) wells
    targeting the Wilrich in the Edson area;

    - The drilling and completion an additional 25-30 (25-30 met)
    horizontal heavy oil wells targeting the Lloyd and Sparky formation
    at Mannville in eastern Alberta; and

    - Completion of detailed core work and fracture stimulation modeling
    work and commencement of the Viking/Colorado shale pilot program in
    eastern Alberta and;

    - The drilling of up to two additional gas storage wells at WGSI.

Incorporating production additions from these capital expenditures, the
following table shows Perpetual's estimate of key measures for 2011 based on
its current hedging portfolio and cost estimates under several different full
year 2011 AECO gas price assumptions and an average realized price of $88 per
bbl of oil and NGL sales, incorporating the non-core property disposition
closed in February 2011 for proceeds of $9 million and completion of the
Corporation's offering of $150 million of Senior Notes in March 2011.

                     Average full year AECO monthly index gas price ($/GJ)(3)
    Funds flow outlook                                 $3.00   $4.00   $5.00
    Natural gas production (MMcf/d)                      135     135     135
    Oil and NGL production (bbl/d)                     1,800   1,800   1,800
    Realized price  ($/Mcfe)                            4.13    5.09    6.04
    Funds flow(1) ($ millions)                            56     101     141
      Per Share(1) ($/Share/month)                     0.032   0.057   0.079
    Payout ratio(1)(4) (%)                                95      53      38
    Ending net bank debt ($ millions)                    145     100      60
    Ending net bank debt to funds flow
     ratio(2) (times)                                    2.6     1.0     0.4
    Ending total net debt ($ millions)                   526     482     442
    Ending total net debt to funds flow
     ratio(2)(times)                                     9.4     4.8     3.1
    (1) These are non-GAAP measures; see "Significant accounting policies
        and non-GAAP measures" in management's discussion and analysis.
    (2) Calculated as long-term bank debt net of working capital
        (excluding financial instrument assets and liabilities) divided by
        annualized funds flow. Total net debt includes net bank debt,
        convertible debentures and medium term notes.
    (3) Average AECO settled and forward price for 2011 as at March 7, 2011
        was $3.44 per GJ.
    (4) Estimated payout ratio assumes a dividend rate of $0.03 per month per
        Share for January through December 2011.

Share for January through December 2011.

Below is a table that shows sensitivities of Perpetual's 2011 estimated
funds flow to operational changes and changes in the business environment:

                                        Impact on funds flow per Common Share
    Funds flow sensitivity
     analysis ($ per Share)

                                            Change       Annual      Monthly
    Business Environment
    Natural gas price at AECO        $0.25 per Mcf        0.075        0.006
    Interest rate on bank debt                  1%        0.008        0.001
    Production volume                     5 MMcf/d        0.043        0.004
    Operating costs                 $0.10 per Mcfe        0.036        0.003
    Cash general and
     administrative expenses        $0.10 per Mcfe        0.036        0.003

The Corporation's outlook and sensitivities assume operating costs of
$1.70 per Mcfe, cash general and administrative expenses of $0.65 per Mcfe,
an interest rate on bank debt of 3.8 percent and incorporate the
Corporation's financial and physical forward sales portfolio at March 7,
. The Corporation's outlook and sensitivities vary substantially with
natural gas prices. The current settled and forward market at March 7, 2011
for natural gas at AECO is an average price of $3.64 per Mcf for full year

Forward-Looking Information

Certain information regarding Perpetual in this news release including
management's assessment of future plans and operations and including the
information contained under the heading "Outlook and Sensitivities" above may
constitute forward-looking statements under applicable securities laws. The
forward looking information includes, without limitation, statements
regarding expected access to capital markets; potential reinstatement of the
Premium Dividend(TM) and Dividend Reinvestment Plan; forecast production,
production capability, operations, funds flows, and timing thereof; expected
future funds flows generated by the gas storage facility; forecast and
realized commodity prices; forecast, funding and allocation of capital
expenditures; anticipated operating cost sustainability; projected use of
funds flow; planned drilling and development and the results thereof;
estimated payout ratios; expected levels of indebtedness under the credit
facility; anticipated closing date and use of proceeds of the Notes; expected
benefits of the Notes to Perpetual; marketing and transportation; reserve
estimates; and estimated funds flow sensitivity. 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,
and those included in reports on file with Canadian securities
regulatory authorities which may be accessed through the SEDAR website
( and at Perpetual's website
( 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 laws.

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 management's discussion and analysis.

Conference Call and Webcast

Perpetual will be hosting a conference call and webcast at 10:30 a.m.,
Mountain Time
, Tuesday March 8, 2011 to review this information. Interested
parties are invited to take part in the conference call by dialing one of the
following telephone numbers 10 minutes before the start time:

Toronto and area - 1-647-427-7450; outside Toronto - 1-888-231-8191. For
a replay of this call please dial: Toronto and area - 1-416-849-0833; outside
Toronto - 1-800-642-1687, passcode 43089067 until Tuesday March 15, 2010. To
participate in the live webcast please visit or The webcast will be archived shortly
following the presentation.

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 symbol "PMT", "PMT.DB.C", "PMT.DB.D" and "PMT.DB.E",
respectively. Further information with respect to Perpetual can be found at
its website at .

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

                            Three months ended                    Year ended
                                   December 31                   December 31
    ($CDN thousands,
     except volume
     and per Common                          %                             %
     Share amounts)    2010       2009  change       2010       2009  change
    Revenue(1)(2)   111,150     78,852      41    417,093    418,323       -
    Funds flow(2)    70,509     39,409      79    237,165    231,347       3
      Per Common
       Share(2)(3)     0.48       0.32      50       1.69       1.96     (14)
    Cash flow
     provided by
     activities      80,210     36,446     120    240,126    228,352       5
      Per Common
       Share(3)        0.54       0.29      86       1.71       1.93     (11)
    Net earnings
     (loss)         (19,874)   (11,287)     76    (28,546)    14,393    (298)
       Per Common
        Share(3)      (0.13)     (0.09)     44      (0.20)      0.12    (266)
     declared        16,273     18,810     (13)    78,628     75,838       4
      Per Common
       Share(4)        0.11       0.15     (27)      0.56       0.64     (13)
     ratio (%)(2)      23.1       47.7     (52)      33.2       32.8       1
    Total assets  1,038,206  1,065,305      (3) 1,038,206  1,065,305      (3)
    Net bank and
     other debt
     (2)(5)         214,546    270,843     (21)   214,546    270,843     (21)
     measured at
     amount         234,897    230,168       2    234,897    230,168       2
    Total net
     debt(2)(5)     449,443    501,011     (10)   449,443    501,011     (10)
     equity         253,143    253,879       -    253,143    253,879       -
       development   38,158      4,512     743    115,202     57,371     201
      Gas Storage    11,171      5,595     100     57,587     10,800     433
       net of
       dispositions (34,253)   (10,016)    242     50,653    103,885     (51)
      Other             332        377     (12)       707        649       9
      Net capital
       expenditures  15,408        468   3,192    224,149    172,705      30
    End of period   148,284    126,224      17    148,284    126,224      17
     average        147,742    125,064      18    140,624    118,181      19
    Diluted         147,742    126,149      17    140,624    119,266      18
    March 1, 2010   148,302                       148,302
      Average daily
       natural gas
       (MMcf/d)       135.9      139.8      (3)     145.1      153.4      (5)
      Average daily
       oil and
       natural gas
       (bbl/d)        1,535      1,014      51      1,245        721      73
      Average daily
       (MMcfe/d)      145.1      145.9      (1)     152.6      157.7      (3)
        Per Common
         Share)(3)     0.98       1.17     (16)      1.09       1.33     (18)
      Gas over
       bitumen deemed
       (MMcf/d)(7)     24.2       24.6      (2)      24.8       19.9      25
      Average daily
       (actual and
       deemed -
       MMcfe/d)(6)(7) 169.3      170.5      (1)     177.4      177.6       -
        Per Common
         Share (cubic
         Share)(3)     1.15       1.36     (15)      1.26       1.50     (16)
    Average  prices
      Natural Gas -
       ($/Mcf)(8)      3.87       3.94      (2)      4.17       4.12       1
      Natural Gas -
       ($/Mcf)(8)      7.83       5.53      42       7.10       7.09       -
      Oil and NGL
       ($/bbl)        75.88      67.33      13      68.29      61.91      10
    RESERVES (Bcfe)
    Company interest
     - proved(9)(10)  250.4      244.4       2      250.4      244.4       2
    Company interest
     - proved and
     (9)(10)(11)      487.7      471.6       3      487.7      471.6       3
    Per Common Share
     (Mcfe/Share)(12)  3.29       3.74     (12)      3.29       3.74     (12)
    Estimated present
     value before
     tax ($ millions)
      Proved          710.4      834.6     (15)     710.4      834.6     (15)
      Proved and
       probable     1,201.1    1,387.3     (13)   1,201.1    1,387.3     (13)
    LAND (thousands
     of net acres)
    Total land
     holdings         3,421      3,759      (9)     3,421      3,759      (9)
     land holdings    1,905      2,093      (9)     1,905      2,093      (9)
    DRILLING (wells
      Gas             3/2.4      3/2.5    -/(4)   48/44.3    46/36.2    4/22
      Oil             3/1.0      2/2.0  50/(50)   14/11.6      2/2.0 600/480
      Gas Storage       -/-      4/4.0   (100)/     6/6.0      4/4.0   50/50
      Service         1/1.0        -/- 100/100      1/1.0        -/- 100/100
      Dry               -/-        -/-     -/-      1/1.0        -/- 100/100
      Total           7/4.4      9/8.5    (22)/   70/63.9    52/42.2   35/51
    Success Rate    100/100    100/100     -/-      99/98    100/100  (1)/(2)
    (1) Revenue includes realized gains and losses on financial instruments
        and call option premiums received.
    (2) This is a non-GAAP measure; please refer to "Significant accounting
        policies and non-GAAP measures" included in the MD&A.
    (3) Based on weighted average Common Shares outstanding for the period.
    (4) Based on Common Shares outstanding at each dividend date.
    (5) Net debt is measured as at the end of the period and includes net
        working capital (deficiency), excluding short-term financial
        instrument assets and liabilities related to the Corporation's
        hedging activities and the current portion of convertible
        debentures. Total net debt includes convertible debentures,
        measured at principal amount.
    (6) Production amounts are based on the Corporation's interest before
        deduction of royalties.
    (7) Deemed production describes all gas shut-in or denied production
        pursuant to a decision report, corresponding order or general
        bulletin of the Alberta Energy and Utilities Board ("AEUB"), or
        through correspondence in relation to an AEUB ID 99-1 application.
        This deemed production is not actual gas sales but represents
        shut-in gas that is the basis of the gas over bitumen ("GOB")
        financial solution received monthly from the Alberta Crown as a
        reduction of other royalties payable. See "Gas over bitumen royalty
        adjustments" in the MD&A.
    (8) Perpetual's commodity hedging strategy employs both financial
        forward contracts and physical natural gas delivery contracts at
        fixed prices or price collars. In calculating the Corporation's
        natural gas price before financial and physical hedging, Perpetual
        assumes all natural gas sales based on physical delivery fixed-price
        or price collar contracts during the period were instead sold at AECO
        monthly index.
    (9) As evaluated by McDaniel & Associates Consultants Ltd. ("McDaniel")
        and GLJ Petroleum Consultants Ltd. ("GLJ") in accordance with
        National Instrument 51-101. See "Reserves" included in the MD&A.
    (10) Reserves are presented on a company interest basis, including
         working interest and royalty interest volumes but before royalty
    (11) Discounted at five percent using McDaniel and GLJ forecast pricing.
         Reserves at various other discount rates are located in the
         "Reserves" section of the MD&A. Estimated present value amounts
         should not be taken to represent an estimate of fair market value.
    (12) Based on Common Shares outstanding at period end.

    (12) Based on Common Shares outstanding at period end.

For further information: For further information: 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);
Susan L. Riddell Rose, President and Chief Executive Officer; Cameron R.
, Vice President, Finance and Chief Financial Officer; Sue M.
, Investor Relations and Communications Advisor

For further information: For further information: 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);
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

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