Calgary-based Paramount Resources Ltd.'s shares tumbled on news Friday that it will sell its oilsands leases and shut-in and producing natural gas rights in the Surmont area of northeastern Alberta to MEG Energy Corp. for C$301.7 million (US$284.2 million).

By mid afternoon, Paramount's share price had fallen more than 8%, down C$2.18, to C$24.47.

MEG, whose business focuses on oilsands development in Alberta, will pay for the deal half in cash and half in its common shares.

Paramount also entered into five separate agreements with undisclosed buyers to sell about 860 boe/d for C$30.5 million. No other details on the agreements were disclosed.

Both transactions are scheduled to close by the end of June.

With the equity investment in MEG, Paramount said it will continue to participate in the potential development of steam-assisted Athabasca oilsands, principally at Surmont and Christina Lake, AB, without any additional capital commitments. MEG is 17% owned by CNOOC Ltd., the Chinese state-controlled oil company.

Paramount has five core producing areas around Alberta, Northeast British Columbia/Northwest Territories, and the Saskatchewan/Montana/North Dakota areas. Besides oilsands development, Paramount's primary exploration activities are centered around coalbed methane gas in Alberta and the Colville Lake development of the Mackenzie Delta. Last year Paramount spun off its Far North exploration assets in the Mackenzie River Valley to finance its exploration prospects there (see Daily GPI, Oct. 23, 2006).

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