A plain-cash valuation · Paramount Resources Ltd. (TSX: POU)
How much cash does Paramount really make, and what is a share of it worth?
Paramount Resources is a Calgary company producing natural gas, condensate and oil in Alberta and northeast British Columbia, with its growth now centred on the Willesden Green Duvernay and Sinclair Montney plays. In January 2025 it sold its Karr, Wapiti and Zama properties to Ovintiv for about $3.3 billion and handed shareholders a $15.00 per share special distribution, so today's company is much smaller than the one in most of this history: sales volumes averaged 42,238 barrels of oil equivalent a day in 2025 against 98,490 in 2024. Management is now spending heavily to more than double volumes to over 100,000 by the end of 2027. This page counts only the cash that was actually left over each year, after every bill was paid and every well was drilled, then asks the only question that matters to an owner: what is one share worth, and how does that compare with the price? The rules come from the calculations economists and engineers use to decide whether a project is worth building, applied to a whole company.
figures to FY2025 · price C$31.31 (close of 28 August 2026) · all figures Canadian dollarsWhat Paramount really earned, and what you are assuming it will earn
Solid bars are reported history: the real cash left each year after every bill was paid and every well was drilled. Negative years are when the owners put cash in; positive years are when it came back out. Striped bars are your projection.
Table view: every year, C$ millions
| Year | Status | Real cash left | Per share |
|---|---|---|---|
| 2020 | reported | −99.0 | −$0.74 |
| 2021 | reported | 236.5 | $1.66 |
| 2022 | reported | 389.4 | $2.65 |
| 2023 | reported | 202.9 | $1.37 |
| 2024 | reported | −26.6 | −$0.18 |
| 2025 | reported | −372.7 | −$2.54 |
| 2026 | projected | 98.8 | $0.68 |
| 2027 | projected | 113.6 | $0.78 |
| 2028 | projected | 130.6 | $0.90 |
| 2029 | projected | 150.2 | $1.03 |
| 2030 | projected | 172.8 | $1.18 |
| 2031 | projected | 198.7 | $1.36 |
| 2032 | projected | 228.5 | $1.57 |
| 2033 | projected | 262.8 | $1.80 |
| 2034 | projected | 302.2 | $2.07 |
| 2035 | projected | 347.5 | $2.38 |
| 2036 | projected | 347.5 | $2.38 |
| 2037 | projected | 347.5 | $2.38 |
| 2038 | projected | 347.5 | $2.38 |
| 2039 | projected | 347.5 | $2.38 |
| 2040 | projected | 347.5 | $2.38 |
| 2041 | projected | 347.5 | $2.38 |
| 2042 | projected | 347.5 | $2.38 |
| 2043 | projected | 347.5 | $2.38 |
| 2044 | projected | 347.5 | $2.38 |
| 2045 | projected | 347.5 | $2.38 |
| 2046 | projected | 347.5 | $2.38 |
| 2047 | projected | 347.5 | $2.38 |
| 2048 | projected | 347.5 | $2.38 |
| 2049 | projected | 347.5 | $2.38 |
| 2050 | projected | 347.5 | $2.38 |
| 2051 | projected | 347.5 | $2.38 |
| 2052 | projected | 347.5 | $2.38 |
| 2053 | projected | 347.5 | $2.38 |
| 2054 | projected | 347.5 | $2.38 |
| 2055 | projected | 347.5 | $2.38 |
If you bought one share today
The red bar is what you pay. Yellow years pay you back, including the return you asked for. Green years are pure profit on top. If there is no green, you paid more than the cash is worth.
At these settings you never get C$31.31 back with a 9.0% return within 30 years. Buying at C$31.31 loses you $12.06 a share in today's dollars.
What a share is worth under different assumptions
Your required return down the side, ten-year growth across the top. Your current setting is outlined; the dashed cells are within 10% of today's price. Blue means worth more than C$31.31, red means worth less.
Growth after year 10, the well life, the starting point and the switches above all carry through. Every cell is the same arithmetic as the big number at the top.
Three honest answers from the same cash
Three answers from the same accounts and the same arithmetic, at your required return, long-run growth and well life. The gap between them is the growth you choose to believe in, and nothing else.
From the reported figures to the cash in the bank, FY2025
Reported profit is an accountant's number, and the "cash flow" companies quote usually leaves the drilling out. Here the reported figures are worked down to the cash that was actually left after every bill and every well. Figures in C$ millions.
| FY2025, C$ millions | |
|---|---|
| Profit, as reported (the headline number) | 1,288.7 |
| Cash generated by operations, as reported | 417.3 |
| + Interest paid, put back | 2.5 |
| − Rent on leases | −4.0 |
| − Every dollar spent on wells and plants | −788.5 |
| = Real cash left for owners | −372.7 |
| Per share (146.8M diluted) | −$2.54 |
| For comparison: dividends paid in 2025 | 2,248.5 |
| For comparison: buybacks in 2025 | 193.6 |
| For comparison: assets bought and sold, net | −3,795.9 |
What we take out, and why
- Depreciation, depletion and every other paper charge: accountants spread the cost of past drilling over years. We ignore that and count the cash actually spent on wells and plants in the year it went out, so nothing is counted twice.
- Interest paid: put back. Interest is the price of borrowed money, and your required return already charges for the price of money, so every company is judged the same way whether it borrows or not.
- Rent on leases: small and short leases are treated as a cost of producing, like fuel.
- Every dollar spent on wells and plants: taken out in full, including the drilling that grows production. That spending buys the future cash the dials project, so it is counted where it happens.
What 6 years of accounts say
Every line the model uses, every year, with the latest year highlighted. Dividends and buybacks are shown as money leaving for owners.
Every year, C$ millions
| C$ millions | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Profit, as reported | −22.7 | 236.9 | 680.6 | 470.2 | 335.9 | 1,288.7 |
| Cash generated by operations, as reported | 80.9 | 482.1 | 1,049.6 | 938.2 | 815.3 | 417.3 |
| + Interest paid, put back | 47.8 | 36.7 | 2.1 | 0.9 | 4.2 | 2.5 |
| − Rent on leases | −7.5 | −7.7 | −7.3 | −4.1 | −3.9 | −4.0 |
| − Spent on wells and plants | −220.2 | −274.6 | −655.0 | −732.1 | −842.2 | −788.5 |
| = Real cash left for owners | −99.0 | 236.5 | 389.4 | 202.9 | −26.6 | −372.7 |
| Real cash per share, C$ | −$0.74 | $1.66 | $2.65 | $1.37 | −$0.18 | −$2.54 |
| Assets bought and sold, net | 0.0 | −170.7 | −119.1 | −377.3 | −126.8 | −3,795.9 |
| Dividends paid | 0.0 | −27.4 | −160.4 | −355.4 | −248.2 | −2,248.5 |
| Buybacks | −4.1 | −13.5 | −17.2 | −10.4 | −51.8 | −193.6 |
| Debt after cash, year end | 859.6 | 406.8 | 174.9 | −19.7 | 199.5 | −705.3 |
| Shares, millions (diluted average) | 133.3 | 142.8 | 147.0 | 148.3 | 149.2 | 146.8 |
| Production, barrels of oil equivalent a day | 68,340 | 82,001 | 88,672 | 96,393 | 98,490 | 42,238 |
How the maths works, and what to be careful about
The words on this page
- Real cash (true cash)
- What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.
- Required return
- The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.
- Well life (reserve life)
- How long the wells keep producing. After the life you choose, nothing is counted. At 2025 sales volumes of 42,238 Boe/d, year-end 2025 proved reserves of 200 million Boe last about 13 years and proved plus probable of 522 million about 34, shown capped at the model's 30 year limit.
- What a share is worth
- Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, plus an investment portfolio, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.
- Where the default growth comes from
- The 15% default follows the company's guidance path: 46,000 to 51,000 Boe/d in 2026 against 42,238 in 2025, 60,000 to 65,000 in 2027, and more than 100,000 Boe/d by the end of 2027.
The arithmetic, step by step
- Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
- Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
- Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
- Turn it into a share value. Add up the shrunk cash; take off net debt of C$−424M; take off the C$374M cost of cleaning up the wells if that switch is on; add an investment portfolio (about C$141M) if that switch is on; divide by 145.9M shares.
- Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.
Where the numbers come from
- The aggregator's free statements carry only the 2020 to 2025 fiscal years, short of the model's preferred ten, so the starting cash selector defaults to the five-year average.
- Paramount sold its Karr, Wapiti and Zama properties to Ovintiv on 31 January 2025 for roughly $3.3 billion, so this history spans two very different companies: the pre-sale producer at nearly 100,000 Boe/d and the smaller rebuild that followed. Recent true cash is negative because capital spending on the rebuild currently runs well ahead of operating cash flow.
- The 2023 and 2025 dividend figures are the audited cash flow statements' dividends and distributions lines, which include special payouts the aggregator books outside its dividend line: 2023 combines $212.5 million of regular monthly dividends with a $142.9 million special dividend of $1.00 per share, and 2025 combines $100.5 million of regular dividends with the $2,148 million special distribution of $15.00 per share paid on 14 February 2025 ($12.00 return of capital plus a $3.00 special dividend).
- Acquisitions net of dispositions is built from the aggregator's property sale rows; Paramount's deals in this period were sales, and no 2020 figure was carried, so that year shows zero.
- Lease payments are the lease liabilities principal repayments line in the financing section of the audited statements, $7.5 million in 2020 declining to $4.0 million in 2025; lease liabilities outstanding were $25.5 million at year-end 2025, so the effect on true cash is small.
- Net debt here counts lease liabilities as debt, so it equals total debt plus lease liabilities minus cash; Paramount's own net cash measure at year-end 2025 ($672.8 million) nets some other items and so differs from the $705 million shown here.
- Share repurchases follow the aggregator's cash flow line, which combines bid purchases with shares bought for the company's restricted share unit trust; the audited 2025 statements show $156.7 million purchased under the bid plus $36.9 million for the trust, matching the $193.6 million carried here.
- The current net cash figure is built from the Q2 2026 interim balance sheet: $449.0 million of cash, no debt drawn and $24.7 million of lease liabilities. It excludes the $66.8 million AKITA stake held at 30 June 2026 because those shares were distributed to shareholders on 16 July 2026. The share count is the 145.9 million common shares outstanding at 5 August 2026 per the Q2 2026 report.
- Analyst targets: average C$37.10 across 10 analysts (stockanalysis.com, 30 August 2026).
For the technically minded
The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.
Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.
Sources
- Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). Chapters used: 3, 4, 5, 6, 10, 12, 13, 19 and 20.
- stockanalysis.com standardized statements for TSX:POU (income, cash flow, balance sheet) (30 August 2026)
- stockanalysis.com quote page for TSX:POU (price and share count) (28 August 2026)
- stockanalysis.com analyst forecast page for TSX:POU (30 August 2026)
- Paramount 2025 annual results package including the audited consolidated financial statements for 2025 and 2024 (cash flow, interest paid, leases, dividends, decommissioning) (3 March 2026)
- Paramount 2023 annual results package including the audited consolidated financial statements for 2023 and 2022 (6 March 2024)
- Paramount 2021 annual results package including the audited consolidated financial statements for 2021 and 2020 (2 March 2022)
- Paramount second quarter 2026 report including the unaudited interim statements (net cash, investments, share count) (6 August 2026)
- Paramount fourth quarter and annual 2025 results (production, reserves, guidance, decommissioning) (3 March 2026)
- Paramount closing of asset sale and declaration of special distribution (31 January 2025)
- Paramount 2023 annual results (production history) (6 March 2024)
- Paramount 2021 annual results (production history) (2 March 2022)

