Deferral of Financial Covenant Test

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PREMIER OIL PLC

("Premier" or "the Group")

Deferral of Financial Covenant Test

29 December 2016

As anticipated, Premier has received a monthly deferral in respect of the test of its financial covenants with the test for the 12 month period ending 31 December 2016 waived and replaced by a test for the 12 month period ending 31 January 2017. Premier expects to continue to receive monthly deferrals until the refinancing of its financial facilities currently being negotiated has been agreed.

Good progress is being made in finalising a long form term sheet in respect of the refinancing with the expectation that this will be circulated to all private lenders (Revolving Credit Facility, Term Loan, Schuldschein and US private placement notes) for credit approval in January. Negotiations are now underway with the advisers to an ad hoc committee of the Group's convertible bondholders. Premier intends to provide a further update in its Trading Statement on 12 January 2017.