Hello again, Weedpacket.
I utilized your 1st option and used preg_replace. I modified the left side of the [paragraph] then the right side. They are each done separately because next, I have to add the condition for when each is revised.
$string = $template;
$pattern1 = '/\^-\^(.*?)/';
$replacement1 = 'TEXT-LEFT';
$template1 = preg_replace($pattern1, $replacement1, $string);
$string = $template1;
$pattern2 = '/(.*?)\^--\^/';
$replacement2 = 'TEXT-RIGHT';
$template2 = preg_replace($pattern2, $replacement2, $string);
$template = $template2;
Thanks for your assistance!