PERPETUAL ENERGY INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following is management’s discussion and analysis (“MD&A”) of Perpetual Energy Inc’s
(“Perpetual” or the “Corporation”) operating and financial results for the three and six months ended
June 30, 2010 as well as information and estimates concerning the Company’s future outlook based on
currently available information. This discussion should be read in conjunction with the Company’s
interim consolidated financial statements and accompanying notes for the three and six months ended
June 30, 2010 and 2009 as well as the audited consolidated financial statements and accompanying notes
and MD&A of Paramount Energy Trust (the “Trust”) for the years ended December 31, 2009 and 2008.
Readers are referred to the advisories regarding forecasts, assumptions and other forward-looking
information contained in the “Forward Looking Information” section of this MD&A. The date of this
MD&A is August 9, 2010.
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. For natural gas, gigajoules (“GJ”) are
converted to Mcf at a conversion ratio of 1.0546 GJ: 1 Mcf.
On June 30, 2010, Perpetual announced that the Corporation had completed the previously announced plan of
arrangement (the "Arrangement") involving Perpetual, the Trust and Paramount Energy Operating Corp. pursuant
to which the Trust converted into the Corporation. Unitholders of the Trust voted in favor of the Arrangement at
the Annual General and Special Meeting of Trust Unitholders held on June 17, 2010. Former Unitholders of the
Trust received common shares of Perpetual in consideration for the cancellation of their Trust Units of the Trust