2011-06-28-2011-06-20

To acquire 17.715% interest in Wytch Farm Field in the U.K. North Sea as preemptive option, gaining 2,300 BOE/d, 12.5 MMBOE 2P & 3C.

Premier Oil Plc, London, (London: PMO) plans to acquire 17.715% interest in Wytch Farm Field in the U.K. North Sea from BP Plc, London, (London, NYSE: BP) as part of a preemptive purchase for US$96 million.

Premier will also pay further payments of up to approximately C$14.4 million in aggregate if the Secretary of State for Energy and Climate Change approves a field development in respect of the Beacon discovery within block 98/7a and/or in accordance with an agreed methodology relating to the average oil price between 2011 and 2013.

BP announced in May that it planned to sell 68% interest in a portfolio of onshore and offshore assets in Dorset, which includes Wytch Farm, Wareham, Beacon and Kimmeridge fields in the North Sea, to privately held, London-based Perenco UK Ltd. for up to $610MM in cash. Premier retained the certain preemption rights in the event of a sale to a third party.

The acquisition will increase Premier's interest in Wytch Farm from 12.38% to an aggregate 30.1%. The acquired assets include approximately 2,300 gross barrels per day. Proved and probable reserves and contingent resources are approximately 12.5 million barrels as Jan. 1. The field is currently producing approximately 13,000 gross barrels equivalent per day.

Premier will support the transition of operatorship to Perenco UK which will on completion hold a 50.1% interest in the Wytch Farm assets.

Premier chief executive Simon Lockett says, "We are pleased to have this opportunity to increase our equity stake in one of our quality core producing assets to over 30%. In addition, it allows us to make efficient use of Premier's large existing pool of tax allowances."

Deutsche Bank AG is financial advisor to Premier.