SecProbe.io

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								December 22, 2005

Mr. Cameron R. Sebastian
Vice President, Finance and Chief Financial Officer
Paramount Energy Trust
500, 630 - 4th Avenue, S.W.
Calgary, Alberta, Canada	T2P 0J9

	Re:	Paramount Energy Trust
		Form 40-F for the Fiscal Year Ended December 31, 2004
Filed November 30, 2005
File No. 333-98233

Dear Mr. Sebastian:

      We have reviewed your Form 40-F for the fiscal year ended
December 31, 2004, and have the following comments.  We have
limited
our review of your filing to those issues we have addressed in our
comments.  Where indicated, we think you should revise your
document
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 40-F for the Fiscal Year Ended December 31, 2004

General

1. Please include page numbers in all filings and exhibits to
facilitate communications.

Disclosure Controls and Procedures

2. You state that your chief executive officer and chief financial
officer concluded that your disclosure controls and procedures
"...
were effective, save for one exception outlined in the next
paragraph."  Given the exception noted, it remains unclear whether
your chief executive officer and chief financial officer concluded
that your disclosure controls and procedures were effective.
Please
revise your disclosure to state the conclusion reached by your
chief
executive officer and chief financial officer as to whether or not
your disclosure controls and procedures are effective.  For
example,
if true, you can state that your disclosure controls and
procedures
were effective, including consideration of the identified matter,
so
long as you provide appropriate disclosure explaining how the
disclosure controls and procedures were determined to be effective
in
light of the identified matter.  Or, if true, you can state that
given the identified matter, your disclosure controls and
procedures
are not effective.

Exhibit 99.2

Auditors` Report

3. The audit report included with your filing is not sufficient,
as
the auditor is not identified and there is no indication that the
report has been signed.  Please obtain and file an audit opinion
that
complies with Article 2-02 of Regulation S-X.

Note 2 - Basis of Presentation and Accounting Policies

b) Petroleum and Natural Gas Operations

4. We note your disclosure that depletion and depreciation of
petroleum and natural gas properties are provided on the unit-of-
production method, based on estimated proven recoverable reserves.
For U.S. GAAP purposes, SFAS 19 requires that depletion of
capitalized exploratory drilling and development costs be computed
on
the basis of proved developed reserves, and that depletion of
acquisition costs of proved properties be computed on the basis of
total proved reserves.  As the term recoverable reserves is not
defined within U.S. GAAP, please address the resulting difference
in
depreciation and depletion of your oil and gas properties in your
"Reconciliation of Financial Statements to Accounting Principles
Generally Accepted in the United States," in Exhibit 99.2.  If you
believe the difference is not material, provide us an analysis
supporting your conclusion.

Note 5 - Property, Plant and Equipment

5. You disclose that the costs related to the shut-in gas over
bitumen reserves are not currently being depleted.  As you
identify
the reserves related to such properties as proved in your
"Statement
of Reserves Data and Other Oil and Gas Information," on page 11 of
Exhibit 99.1, explain to us why you excluded such costs and
reserves
from your depletion calculations.  Please cite all Canadian and
U.S.
accounting literature you relied upon in reaching your conclusion.

Exhibit 99.4

Evaluation of Disclosure Controls and Procedures

6. You state that your chief executive officer and chief financial
officer concluded your "...disclosure controls and procedures were
effective."  This is contrary to the disclosure you included in
your
Form 40-F noted above, where you state "...disclosure controls and
procedures were effective, save for one exception..."  Please
revise
your disclosures, where necessary, to be consistent.

Exhibit 99.11

Consent of KPMG LLP

7. It appears that the auditors` consent applies only to their
audit
report associated with your financial statements, and not to their
audit report related to your supplemental note,  "Reconciliation
of
Financial Statements to Accounting Principles Generally Accepted
in
the United States," included in Exhibit 99.3.  Please obtain and
file
a consent that complies with General Instruction D(9) of Form 40-
F.

Form 6-K Filed August 15, 2005

Notes to Consolidated Financial Statements

Note 2 - Change in Accounting Policy

8. We note that you determine the fair value of incentive rights
issued under your Unit Incentive Plan using a "modified" Black-
Scholes option pricing model.  Please explain to us what specific
modifications you make to the model, and why you believe this
model
is appropriate in valuing the incentive rights, given the
uncertainty
in determining the strike price.

Closing Comments

       Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments and provides any
requested information.  Detailed letters greatly facilitate our
review.  Please understand that we may have additional comments
after
reviewing your responses to our comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Mark A. Wojciechowski, at (202) 551-3759, if
you have questions regarding comments on the financial statements
and
related matters.  Please contact me, at (202) 551-3686, with any
other questions.

								Sincerely,

								Karl Hiller
								Branch Chief
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Mr. Cameron R. Sebastian
Paramount Energy Trust
December 22, 2005
Page 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

   DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010

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