Premier Oil Acquisition and Rights Issue

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25th March 2009

Premier today announces the proposed acquisition of ONSL for $505 million together with a rights issue of New Ordinary Shares to raise approximately £171 million (approximately $252 million) (the 'Rights Issue').

Premier has today also released its annual results for the year ended 31 December 2008, contained in a separate announcement.

Highlights

Premier has agreed to acquire ONSL, an oil and gas exploration and development company with interests in the UK North Sea, for $505 million in cash. The acquisition:
has a compelling strategic, operational and financial rationale and represents a significant step change for Premier will provide Premier with a complementary asset base in the North Sea, balancing the group by delivering critical mass in a second core area in addition to Asia will provide Premier with an additional 60 mmboe of 2P reserves and contingent resources at 31 December 2008 (of which 40 mmboe is expected to be bookable to 2P by Premier) and unrisked reserve potential of up to 385 mmboe across 15 exploration prospects will enhance Premier's current production, adding an estimated 13,700 boepd of working interest production in 2009 will provide Premier with significant North Sea operational capability via operatorship interests and an experienced operating team in Aberdeen has a purchase price equivalent to less than $8.50/bbl (without including any value for the significant tax losses being acquired) ONSL, the principal operating subsidiary of Oilexco Inc., with interests in significant producing fields including Balmoral, Brenda, Nelson and Nicol is:to be acquired out of administration subject to, amongst other conditions, approval of a Company Voluntary Arrangement by ONSL's unsecured creditors and Oilexco Inc. to be acquired free of bank debt and historical rig and FPSO commitments

Fully underwritten Rights Issue to raise £171 million (approximately $252 million):
4 New Ordinary Shares for every 9 Existing Ordinary Shares at 485 pence per share
40% discount to the theoretical ex-rights price, based on the Closing Price of 952 pence per share
Balance of Acquisition funded from new credit facilities and existing cash resources:
new credit facilities comprise $175 million 18-month acquisition bridge facility, $225 million 3-year revolving credit facility and $63 million and £60 million 3-year letter of credit facilities

Enlarged Group's balance sheet remains robust, with estimated $385 million liquidity at Completion, providing flexibility to execute the Enlarged Group's investment programme
Acquisition and Rights Issue conditional on, inter alia, approval of Premier's shareholders at an Extraordinary General Meeting
Transaction expected to complete in May 2009

Commenting on today's announcement, Sir David John KCMG, Chairman of Premier, said:

'This is the most exciting development in Premier's recent history and offers the potential to create substantial value for our shareholders. The acquisition contributes significantly to Premier's strategic objective of growing production and cash flow. We will also maintain our high-impact exploration programme and continue to review selected value adding acquisitions within core areas.'

Simon Lockett, Chief Executive, commented:

'The acquisition of ONSL significantly expands our presence in the North Sea. It secures an attractive, high growth North Sea focussed business and delivers synergies with our existing North Sea assets at a compelling valuation of less than $8.50 per barrel.

'ONSL's complementary asset base significantly enhances our near-term production profile and cash flow and gives our North Sea business critical mass alongside that of our existing Asian assets. I am also pleased to end the uncertainty around the administration process for the employees of ONSL, who will have a continued and vital role in the future of Premier.

'With our conservative financing strategy, ample liquidity and an exciting drilling programme ahead, I am confident in the continued success of the Premier group.'

A presentation to analysts and investors will be held at 11.00am today at the offices of Premier, 23 Lower Belgrave Street, London SW1W 0NR. A live webcast of this presentation will be available via Premier's website at www.premier-oil.com.

Deutsche Bank is acting as sole financial adviser, joint corporate broker and global co-ordinator to Premier in connection with the Acquisition and Rights Issue. Oriel is acting as joint corporate broker and co-lead manager to Premier in connection with the Acquisition and Rights Issue. Barclays Capital, HSBC and RBC Capital Markets are acting as joint bookrunners in connection with the Rights Issue. The new bank facilities have been provided by a syndicate of banks comprising Lloyds Bank, Bank of Tokyo Mitsubishi, Barclays Capital, HSBC and RBC Capital Markets.

PREMIER OIL plc
('Premier')

Proposed $505 million acquisition of Oilexco North Sea Limited ('ONSL') (in administration)
and rights issue to raise £171 million

25th March 2009

Premier today announces the proposed acquisition of ONSL for $505 million together with a rights issue of New Ordinary Shares to raise approximately £171 million (approximately $252 million) (the 'Rights Issue').

Premier has today also released its annual results for the year ended 31 December 2008, contained in a separate announcement.

1 Introduction

Premier (through its wholly owned subsidiary, POGL) has entered into an agreement to acquire ONSL, for a total cash consideration of $505 million (approximately £343 million). ONSL is the principal operating subsidiary of Oilexco Inc., an international oil and gas exploration and development company with interests in the UK North Sea, and will be acquired free of bank debt, historical rig and FPSO commitments.

The Board believes that the Acquisition represents an attractive opportunity for the Company to expand its presence in the North Sea in line with its stated strategy. The Acquisition secures an attractive, high growth North Sea focussed business and delivers synergies with Premier's existing North Sea assets, at a compelling valuation.

The Acquisition and associated fees and expenses will be funded by way of a Rights Issue to raise approximately £171 million (approximately $252 million), new credit facilities and Premier's existing cash resources.

The Acquisition is expected to proceed by way of an acquisition of all the issued share capital of ONSL (the 'Share Acquisition'). The Share Acquisition is conditional on the approval by ONSL's unsecured creditors and Oilexco Inc. of the terms of the Company Voluntary Arrangement and the passing of a 28 day objection period, and on the discharge by the court of the administration order over ONSL. If these conditions are not satisfied, Premier (through its wholly owned subsidiary POEL) will instead implement the Acquisition by way of a purchase of assets, acquiring the ONSL Assets on agreed terms, rather than acquiring ONSL itself. Both the Share Acquisition and the Asset Acquisition are conditional on Premier shareholder approval and on Admission.

2 Background to and reasons for the Acquisition and the Rights Issue

The Directors believe that the Acquisition is an opportunity with a compelling strategic, operational and financial rationale and will contribute significantly to the achievement of Premier's strategic objectives. The Acquisition will provide the Enlarged Group with a greater presence in the North Sea, strengthening the Group's existing operations in that area by adding a material package of assets comprising existing producing fields, development projects of existing discovered reserves and a portfolio of exploration prospects, together with high-quality UK operatorship capabilities.

The Directors believe that the Acquisition will represent a material step forward in Premier's development, in particular by:

Balancing the Enlarged Group by delivering critical mass in a second core area, the North Sea
Enhancing the Group's reserves, current production and cash flow
Offering significant overlap with Premier's existing North Sea assets and infrastructure
Strengthening exploration and appraisal portfolio with acquired North Sea acreage
Strengthening operational flexibility via significant equity and operatorship positions
Improving Premier's portfolio of potential development projects
Allowing Shareholders to benefit from a compelling acquisition valuation
Ensuring that the Enlarged Group retains a conservative financing structure that allows for future investment

Balancing the Enlarged Group by delivering critical mass in a second core area, the North Sea

The Acquisition balances the Enlarged Group, delivering critical mass in a second core area, the North Sea, in addition to Premier's South East Asia (Indonesia and Vietnam) business. The Acquisition also rebalances the Group's business mix between high impact Asian exploration and cash generative North Sea production. The enlarged North Sea business, with operations in Aberdeen and Stavanger, will be of a similar operational scale to Premier's Asian business operating from Jakarta and Ho Chi Minh City.

Enhancing the Group's reserves, current production and cash flow

ONSL's assets will add an additional 60 mmboe of 2P reserves and contingent resources (of which 40 mmboe is expected to be bookable to proved and probable ('2P') reserves by Premier) to Premier's 2P reserve and contingent resources base of 382.3 mmboe (2008 year end). In addition, ONSL's existing producing fields are forecast to add an estimated 13,700 boepd of working interest production in 2009 to Premier's existing production of 36,500 boepd (2008 average).

Given the cash generative nature of the assets to be acquired, the higher levels of near-term production are accretive to Premier's near-term operating cash flows. ONSL's producing cash flow profile is a good financial fit with Premier's current significant investment programme for its three Asian development projects.

Offering significant overlap with Premier's existing North Sea assets and infrastructure

Premier has been active in the UK North Sea since 1971. The Acquisition is in line with Premier's stated strategy of acquiring additional high quality assets in existing core areas. ONSL's attractive, high growth North Sea focussed E&P assets are complementary to, and bring synergies with, Premier's existing Scott and Moth area interests in the Central North Sea area. The Acquisition also provides the group with an experienced operating team located in Aberdeen.

Strengthening exploration and appraisal portfolio with acquired North Sea acreage

Upside potential has been identified by ONSL from exploration and appraisal activity conducted by ONSL to date, with around 15 exploration prospects identified in the acreage surrounding ONSL's existing assets with unrisked reserve potential of up to 385 mmboe, as estimated by Oilexco Inc.

Strengthening operational flexibility via significant equity and operatorship positions

The addition of ONSL's assets to Premier's portfolio will bring significant equity stakes and pre-existing operatorships in UK assets, along with an experienced operating team in Aberdeen with UK-operated development and production competencies. These operatorship and equity positions will provide flexibility for Premier to control the pace and timing of operated capital expenditure programmes in response to varying economic and market conditions. In particular, the Directors believe the Acquisition will allow Premier to participate more effectively in the ongoing consolidation of North Sea assets that Premier believes provides a good opportunity to create value for Shareholders.

Improving Premier's portfolio of potential development projects

The Acquisition enhances Premier's development portfolio through the addition of ONSL's development base in the Balmoral area with a significant number of future potential developments. The Acquisition also adds Huntington to Premier's pre-development portfolio, and appraisal upside in the Moth and Scott area (Bugle, Blackhorse and Kildare). ONSL's principal developments (Huntington and Moth) are considered by the Directors to be economic at oil and gas prices of around $40/bbl and 32p/therm. The Enlarged Group will also hold a position in field infrastructure at Scott which will facilitate the developments in that area and also provide a strong platform for developing other assets in neighbouring acreage. This will provide a source of future tariff and cost sharing in the Central North Sea area through combining ONSL's interests in the Balmoral complex with Premier's interest in the Scott field infrastructure.

Allowing Shareholders to benefit from a compelling acquisition valuation

The Acquisition will secure a significant package of North Sea assets at a compelling valuation of less than $8.50/bbl, before (in the case of the Share Acquisition) adjustment for ONSL's substantial unutilised brought forward tax losses of approximately $1 billion. The Directors believe that there are limited opportunities available of this scale in the North Sea and that the Acquisition allows Premier to take advantage of asset valuations at this stage in the oil price cycle. The Acquisition has a highly attractive purchase price of $505 million, compared to the net asset value of 2P reserves (as estimated by independent experts RISC) of approximately $876 million. The pre-administration enterprise value of Oilexco Inc. was $2.7 billion as at 30 September 2008.

Ensuring that the Enlarged Group retains a conservative financing structure that allows for future investment

The Directors believe that the combination of the Acquisition and the Rights Issue leaves the Enlarged Group conservatively financed, with a robust balance sheet and an estimated $385 million of liquidity in the form of cash and facilities remaining available to draw down at Completion. With cash flow from the ONSL assets arising from current production and the Group's new bank facilities having been successfully negotiated, the Directors believe that Premier has the flexibility to execute both its existing forward development and exploration programme and that of the Enlarged Group. The value within the acquired ONSL portfolio will be underpinned by hedging in line with Premier's current policy.

Strategy of the Enlarged Group

Post completion, Premier's strategy will remain unchanged: to grow production and cash flow, with a medium-term production target of 75,000 boepd; to maintain the Group's high-impact exploration programme within disciplined spending limits; and to focus on selected value adding acquisitions within core areas.

In the short-term, the Premier management team will concentrate on the integration of ONSL, with interim arrangements in place between today and Completion, and intends to maintain ONSL's operatorship capabilities. Premier intends to continue to execute the Group's current Asian portfolio investment programme, where development projects are proceeding. Premier's forthcoming exploration programme will continue as previously announced.

Premier will continue to operate a conservative financing strategy, maintaining adequate levels of liquidity in cash and undrawn facilities. The Group also plans to access longer-term debt facilities in due course and will enter into hedging arrangements for acquired production in line with current Premier policy, while considering selected asset sales from the combined Premier and ONSL portfolios.

3 Information on ONSL

ONSL is an oil and gas exploration and production company active in the United Kingdom, with its producing properties located in the UK Central North Sea. ONSL is a wholly owned subsidiary of Oilexco Inc. and began operating in the North Sea in 2003.

ONSL has a balanced portfolio of offshore UK Central North Sea assets including producing fields (the Balmoral area and Nelson), fields able to be brought onstream in the medium term (Shelley, Huntington) and potentially commercial discoveries (Bugle, Blackhorse, Kildare and Moth) which remain subject to further appraisal. ONSL has material stakes in, and operates, the majority of the 37 offshore licences which it holds. The table in Appendix A sets out details of the principal assets owned by ONSL, all of which are located within the United Kingdom.

ONSL's total production for the year ending 31 December 2009 is expected by Premier to be approximately 13,700 boepd. As at 31 December 2008 ONSL had total 2P reserves and contingent resources of approximately 60 mmboe, of which 40 mmboe is expected to be bookable as 2P by Premier.

A Mineral Expert's Report on ONSL has been prepared by RISC and will be reproduced in full in the Prospectus to be published in due course.

ONSL was placed into administration by its lending banks on 7 January 2009 as a result of the inability of ONSL's parent company, Oilexco Inc., to secure a refinancing of ONSL's business. Ernst & Young LLP, who are acting as administrators to ONSL, have continued to operate the business since the date of entry into administration and the ONSL business has continued to generate positive current cash flow from ongoing operations.

It is Premier's intention following Completion to integrate ONSL's employees, all of whom are based in Aberdeen, with its existing North Sea operations.

ONSL's gross assets as at 31 December 2007 (the most recent date for which audited financial statements for ONSL have been prepared) were $986.8 million, and the loss before tax attributable to those assets, for the year ended 31 December 2007, was $(121.2) million. These figures reflect ONSL's restated financial statements based on Premier's accounting policies.

4 The Acquisition

POGL (a wholly owned subsidiary of Premier) has entered into a conditional agreement (the 'Share Acquisition Agreement') to acquire the entire issued share capital of ONSL in a transaction which values ONSL at approximately $505 million.

The Share Acquisition is subject to the approval by ONSL's unsecured creditors and Oilexco Inc. of the CVA, and on the court discharging the administration order over ONSL. While the Directors believe that these conditions will be satisfied and the Share Acquisition will proceed to Completion, POEL (another wholly owned subsidiary of Premier) has entered into a further conditional agreement with the Administrators (the 'Asset Acquisition Agreement'), to acquire the ONSL Assets for cash consideration of approximately $415 million (approximately £282 million) if the conditions above are not satisfied. The difference of $90 million (approximately £61 million) in the amounts payable under the two Acquisition Agreements reflects the fact that Premier will not have the benefit of the existing tax losses carried forward within ONSL under the Asset Acquisition.

In view of its size relative to that of Premier, the Acquisition constitutes a Class 1 transaction and accordingly is conditional on Shareholder approval. The Acquisition is also conditional upon Admission. Resolutions to approve the Acquisition and grant the authorities required to implement the Rights Issue will be proposed at an Extraordinary General Meeting of the Company expected to be held in April 2009.

Certain equity stakeholders in a small number of ONSL's operating assets have pre-emption rights over ONSL's stakes in those assets should the Asset Acquisition proceed. In addition, if the Acquisition proceeds by way of Share Acquisition, the Bugle/Blackhorse asset (governed by P815 Licence) is also subject to a right of pre-emption under the relevant joint venture agreements, although this is not material to the transaction as a whole. The Acquisition is not conditional on the waiver of such pre-emption rights, and therefore Premier has no guarantee that if the Acquisition proceeds it will obtain ownership of all or any of the pre-emption assets. However, the payments to be made by POGL or POEL will be reduced if any pre-emption rights are exercised.

The Acquisition has been agreed with an effective date of 28 February 2009 such that certain cash flows accruing between that date and Completion are for the account of Premier. As with any purchase from administrators or receivers, the Acquisition will be on a no warranty and indemnity basis (including as to title).

The total consideration payable to Oilexco Inc. under the Share Acquisition Agreement is $1. However, POGL will also fund the payment by ONSL of a settlement amount of $505 million (the ''Settlement Amount'') to compromise certain debts and liabilities owed to ONSL's secured and unsecured creditors. Adjustments will be made to the Settlement Amount to account for certain payables and receivables and other items.

The consideration payable by Premier under the Asset Acquisition Agreement is $415 million. Appropriate adjustments will be made to this consideration to account for certain payables and receivables and other items.

The Share Acquisition Agreement and the Asset Acquisition Agreement contain a break fee of $5.05 million, being 1% of the Settlement Amount, in favour of ONSL. The break fee is payable if (i) the Resolutions are not passed by Shareholders at the EGM; or (ii) Admission does not take place by 14 June 2009.

Under the terms of the Share Acquisition Agreement and the Asset Acquisition Agreement, if ONSL's interest in one or more of the Balmoral interest, the Brenda interest, the Nicol interest or the Huntingdon interest is forfeited, revoked or terminated, or notice of forfeiture, revocation, termination is given before Completion, POGL or POEL may terminate the Share Acquisition Agreement or the Asset Acquisition Agreement at its discretion.

The Company has agreed to guarantee the obligations of POGL and POEL under the Acquisition.

5 Financing the Acquisition

The Acquisition and associated fees and expenses (which are estimated to be approximately $38 million) will be funded by way of:

the Rights Issue;
new credit facilities comprising a $175 million 18 month acquisition bridge facility, a $225 million 3-year revolving credit facility and $63 million and £60 million 3-year letter of credit facilities (which are conditional on completion of the Acquisition); and
Premier's existing cash resources.

The Directors believe that the Enlarged Group's balance sheet remains robust, with an estimated $385 million of liquidity in the form of cash and facilities remaining available to draw down at Completion, and will provide the flexibility to execute both Premier's existing planned investment programme and that of the Enlarged Group.

Further details of the new credit facilities will be set out in the Prospectus to be published in due course.

6 Summary of the Rights Issue

Under the terms of the Rights Issue, assuming no options or Convertible Bonds are exercised or converted prior to the Record Date, 35.3 million New Ordinary Shares will be offered by way of rights to Qualifying Shareholders, raising approximately £171 million. The Rights Issue Price of 485 pence per New Ordinary Share represents a discount of approximately 49% to the Closing Price, and approximately 40% to the theoretical ex-rights price of 808 pence based on the Closing Price.

The Rights Issue is being made on the following basis:

4 New Ordinary Shares for every 9 Ordinary Shares

held on the Record Date on the terms and conditions to be set out in the Prospectus. The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with Existing Ordinary Shares, including the right to receive in full all dividends and other distributions (if any) thereafter declared, paid or made on the Ordinary Shares. The Rights Issue is conditional upon:

both the Share Acquisition Agreement and the Asset Acquisition Agreement not having been terminated, and the Acquisition not ceasing to be capable of Completion in accordance with the terms of the Acquisition Agreements prior to Admission;
the passing of the Resolutions at the Extraordinary General Meeting;
Admission taking place by not later than 8.00 a.m. on 21 April 2009 (or such later time and/or date as the Underwriters and the Company may agree, being not later than 8.00 a.m. on 6 May 2009); and
the Underwriting Agreement having become unconditional in all respects (save for the conditions relating to Admission) and not having been terminated in accordance with its terms.

The Rights Issue is not conditional on Completion of the Acquisition. However if, before Admission, the Acquisition Agreements have both been terminated or the conditions to the Acquisition cease to be capable of satisfaction, the Rights Issue will not proceed.

In the unlikely event that the Rights Issue proceeds but Completion does not take place, the Directors' current intention is that the net proceeds of the Rights Issue will be invested in cash or money-market funds on a short-term basis while the Directors consider how best to return the proceeds of the Rights Issue (after the deduction of acquisition and transaction costs) to Shareholders. Any such return of capital may have tax implications for Shareholders.

The Rights Issue has been fully underwritten by the Underwriters. Details of the underwriting will be set out in the Prospectus to be published in due course.

The New Ordinary Shares will represent approximately 31% of the enlarged issued share capital of the Company following the Rights Issue (assuming no options are exercised under the Premier Share Option Schemes and no Convertible Bonds are converted into Ordinary Shares).

The Rights Issue will result in dilution of 31% if existing Shareholders do not take up any of their rights under the Rights Issue. As a result of the Rights Issue, an adjustment will be made to the price at which the Convertible Bonds can be converted.

Further details of the Rights Issue will be set out in the Prospectus to be published in due course.

7 Current trading and prospects of Premier and ONSL

Premier

Despite volatile markets and the sharp downturn in economic activity, the Directors consider that the Group is in a strong position to maintain its growth profile. Already in 2009, the Group has progressed a number of critical contracts which are now at the centre of its development projects. Premier is about to embark on an extensive exploration and appraisal campaign, which has the potential to have a material impact on the Group.

The quality of the Group's producing assets, underpinned by its financial position, secures its forward cash flows and allows it to progress its exploration and development programmes that could bring very significant upside.

ONSL

Since being placed into administration on 7 January 2009, ONSL's administrators, Ernst & Young, have continued to operate the business on a going concern basis. Whilst new capital investment has been restricted post appointment of the Administrators, the fields on producing licence interests have continued to produce hydrocarbons, and (with the exception of a short planned shutdown on the Balmoral, Brenda and Nicol fields) production and operations have continued. Working interest production for the period from 7 January 2009 (when ONSL was placed into administration) to 23 March 2009 (being the latest practicable date prior to the date of this announcement), averaged 12,200 boepd. In 2009, the Directors intend to bring on line a second producing well on the Nicol field and add a further producing well to the Brenda field. The Directors believe that there are strong prospects for ONSL's assets under Premier's ownership.

8 Extraordinary General Meeting

A notice convening the Extraordinary General Meeting of the Company will be published in due course with the Prospectus. The purpose of the Extraordinary General Meeting will be to seek Shareholders' approval of the Resolutions in connection with the Acquisition and the Rights Issue. The full text of the Resolutions will be set out in the notice convening the Extraordinary General Meeting.

9 Financial advice

The Board has received financial advice from Deutsche Bank in relation to the Acquisition. In providing its financial advice to the Board, Deutsche Bank has taken into account the Board's assessment of the commercial merits of the Acquisition.

10 Recommendation and voting intentions

The Board considers that the Acquisition and Rights Issue, and each of the Resolutions, are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board intends to recommend that Shareholders vote in favour of each of the Resolutions, as the Directors intend to do in respect of their own beneficial shareholdings held at the time of the Extraordinary General Meeting, amounting to 133,502 Ordinary Shares in aggregate as at the date of this announcement (representing approximately 0.17% of Premier's existing issued share capital).

11 Directors' intentions in relation to the Rights Issue

Each of the Directors intends to take up in full his rights to acquire New Ordinary Shares under the Rights Issue in respect of his own beneficial shareholdings held at the time of the Extraordinary General Meeting.

Further details in relation to the Acquisition and Rights Issue will be set out in the Prospectus which is expected to be published and sent to Shareholders on or around 3 April 2009, together with a notice convening the Extraordinary General Meeting.


Deutsche Bank is acting as sole financial adviser, global co-ordinator, joint sponsor, joint bookrunner, underwriter and joint corporate broker to Premier in connection with the Acquisition and Rights Issue.

Oriel is acting as joint sponsor, joint corporate broker, co-lead manager and underwriter (in association with Scotiabank Europe) to Premier in connection with the Acquisition and Rights Issue.

Barclays Capital, HSBC and RBC Capital Markets are acting as joint bookrunners and underwriters in connection with the Rights Issue.

The new bank facilities have been provided by a syndicate of banks comprising Lloyds Bank, Bank of Tokyo Mitsubishi, Barclays Capital, HSBC and RBC Capital Markets.

Enquiries

Premier Oil plc Tel: 020 7730 1111
Simon Lockett
Tony Durrant

Deutsche Bank Tel: 020 7545 8000
Alan Brown
Andrew Congleton
Martin Pengelley

Oriel Tel: 020 7710 7600
David Arch
Natalie Fortescue

Pelham PR
James Henderson Tel: 020 7337 1501 / 07774 444 163
Gavin Davis Tel: 020 7337 1515 / 07910 104 660
Evgeniy Chuikov Tel: 020 7337 1513 / 07894 608 606

Deutsche Bank is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business. Deutsche Bank is acting for Premier and no one else in connection with the Acquisition and the Rights Issue and will not be responsible to anyone other than Premier for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the Acquisition, the Rights Issue or any matters referred to in this announcement.

Oriel, which is authorised and regulated in the UK by the Financial Services Authority, is acting for Premier and no one else in connection with the Acquisition and the Rights Issue and will not be responsible to anyone other than Premier for providing the protections afforded to clients of Oriel nor for providing advice in connection with the Acquisition, the Rights Issue or any matters referred to in this announcement.

Barclays Capital, HSBC and Royal Bank of Canada Europe (which trades as RBC Capital Markets), which are authorised and regulated in the UK by the Financial Services Authority, are acting for Premier and no one else in connection with the Rights Issue and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Rights Issue and will not be responsible to anyone other than Premier for providing the protections afforded to their respective clients or for providing advice in relation to the Rights Issue or any matters referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Deutsche Bank, Barclays Capital, HSBC, Oriel and RBC Capital Markets by the Financial Services and Markets Act 2000, none of Deutsche Bank, Barclays Capital, HSBC, Oriel nor RBC Capital Markets accepts any responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with Premier, the nil paid rights, the fully paid rights or the New Ordinary Shares or the Rights Issue. Each of Deutsche Bank, Barclays Capital, HSBC, Oriel and RBC Capital Markets accordingly disclaim all and any liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any such statement.

This announcement is not for release, publication or distribution (directly or indirectly) in or into Australia, Canada, the Dubai International Financial Centre, New Zealand, the Republic of South Africa, the State of Israel or the United States of America or any other jurisdiction in which the distribution or release would be unlawful (the 'Excluded Territories'). It does not constitute an offer of securities for sale any where in the world, including in or into the Excluded Territories.

This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of Premier or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities. Neither the issue of this announcement nor any part of its contents constitutes an offer to sell or invitation to purchase any securities of Premier or any other entity or any persons holding securities of Premier and no information set out in this announcement or referred to in other written or oral information is intended to form the basis of any contract of sale, investment decision or any decision to purchase any securities in it. An investment decision must be made solely on the basis of the Prospectus. Copies of the Prospectus will be available from the registered office of Premier. The Prospectus will include a description of risk factors relevant to Premier.

The securities described in this announcement, when and if offered, will not be registered under the United States Securities Act of 1933, as amended (the 'Securities Act'), or any state or foreign securities laws and may not be offered or sold within the United Sates or to, or for the account or benefit of, US persons absent registration or applicable exemption from registration thereunder.

This announcement does not constitute an offer of nil paid rights, fully paid rights, Ordinary Shares or provisional allotment letters to any Shareholder with a registered address in, or who is resident in, the Excluded Territories. This announcement does not constitute an offer to sell or a solicitation of an offer to buy Ordinary Shares or to take up entitlements to nil paid rights in any jurisdiction in which such offer or solicitation is unlawful.

The distribution of this announcement, the Prospectus and/or the provisional allotment letters and/or the transfer or offering of nil paid rights, the fully paid rights, and the New Ordinary Shares into jurisdictions other than that United Kingdom is or may be restricted by law. Persons into whose possession this announcement or any such document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The contents of this announcement must not be construed as legal, business, tax or investment advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser, tax adviser or independent financial adviser for legal, financial, tax or investment advice.

The price and value of securities can go up as well as down. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom, or, if you are not, from another appropriately authorised independent financial adviser.

Neither the content of Premier's website (or any other website) nor the content of any website accessible from hyperlinks on Premier's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.

This announcement contains or incorporates by reference 'forward-looking statements' regarding the belief or current expectations of Premier, its directors and other members of its senior management about Premier's businesses and the transactions described in this announcement. Generally, words such as ''may'', ''could'', ''will'', ''expect'', ''intend'', ''estimate'', ''anticipate'', ''believe'', ''plan'', ''seek'', ''continue'' or similar expressions identify forward-looking statements.

These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Premier and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include the effects of continued or increasing volatility in international financial markets, economic conditions both internationally and in individual markets in which Premier operates, and other factors affecting the level of Premier's business activities and the costs and availability of financing for Premier's activities.

Any forward-looking statement contained in this announcement based on past or current trends and/or activities of Premier should not be taken as a re-announcement that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of Premier for the current year or future years will necessarily match or exceed the historical or published earnings of Premier.

Each forward-looking statement speaks only as of the date of the particular statement. Premier expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Premier's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Appendix A
ONSL Licence Interests

Licence, Block, Operator, Equity (%), Field

  1. P032(5)
  2. P077
    • 22/12a
    • Shell
    • 50.00%
    • Nelson(2)
  3. P087(4)
    • 22/7
    • ONSL
    • 46.50%
    • Nelson(2)
  4. P101(6)
    • 23/21 (Moth earn-in area)
    • BG
    • 50.00%
  5. P1042
  6. P1043
    • 15/25c
    • ONSL
    • 100.00%

P1089
* 14/28a, 14/29b
* ONSL
* 45.00%
P1095
* 16/21b
* Maersk
* 50.00%

  1. P110(6)
    • 22/14a, 22/14aF1
    • ONSL
    • 25.04%
  2. P1104
    • 21/4b
    • Maersk
    • 45.00%
  3. P1114
  4. P1157
    • 15/25e, 15/26e
    • ONSL
    • 100.00%
  5. P1181
    • 23/22b
    • Premier
    • 32.50%
  6. P119
    • 15/29a
    • ONSL
    • 60.00%
  7. P1220
    • 21/23a
    • ONSL
    • 65.00%

P1260
* 22/2b
* ONSL
* 100.00%
P1295
* 14/23b
* ONSL
* 45.00%
P1298(7)
* 15/26b
* Nexen
* 50.00%(4)

  1. P1420
    • 22/13b
    • ONSL
    • 72.70%
  2. P1430
    • 28/9, 28/10c
    • ONSL
    • 50.00%
  3. P1431
    • 29/6b
    • ONSL
    • 100.00%
  4. P1457
    • 13/20, 14/16, 14/17a, 14/21b, 14/22b
    • ONSL
    • 55.00%
  5. P1466
    • 15/24c, 15/25f
    • Premier
    • 75.00%
  6. P1467
    • 15/25d
    • Maersk
    • 50.00%
  7. P1498
    • 13/14, 13/15
    • ONSL
    • 55.00%
  8. P1555
    • 22/3a
    • ONSL
    • 100.00%
  9. P185(4)
    • 15/22
    • Nexen
    • 40.00%
  10. P201(4)
    • 16/21a (including 16/21aF1, 16/21aF2, 16/21b)
    • ONSL
    • 85.00%
    • Balmoral(1)
    • Glamis,
    • Stirling(3)

P213(8)
16/26UPF2
ONSL
100.00%

P233(9)
15/25a
ONSL
70.00%
Nicol
P295(5)
30/16
Maersk
6.45%

P300
14/26a
BG
70.00%

  1. P344(4)(7)
    • 16/21b (including 16/21bF1), 16/21b, 16/21c (including 16/21cF1)
    • ONSL
    • 44.20%, 55.00%, 44.20%
    • Balmoral Oil Field (1),
    • Northern,
    • Stirling(3)

P489
15/23b
Nexen
50.00%

P640
15/24b
ConocoPhillips
50.00%

P811(4)
13/30b
BG
70.00%

P815(5)(7)
15/23d, 15/23e
Nexen
41.00%

Notes:

  • (1) Unitised share of 78.11%
  • (2) Unitised share of 1.67%
  • (3) Unitised share of 68.68%
  • (4) Subject to pre-emption in the case of the Asset Acquisition Agreement
  • (5) Subject to pre-emption in the case of the Asset Acquisition Agreement and the Share Acquisition Agreement
  • (6) Outstanding earn-in interests
  • (7) Conditional farm-out obligations
  • (8) Outstanding earn-in interests under a sale and purchase agreement
  • (9) Conditional earn-in obligations

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