Drilling Update

PREMIER OIL plc

("Premier" or "the Company")

Appraisal drilling programme - Grosbeak

Premier notes that the Norwegian Petroleum Directorate's has today issued the following press release:

"Wintershall Norge ASA, operator of production licence 378, has concluded the drilling of appraisal wells 35/12-4 S and 35/12-4 A in the 35/12-2 Grosbeak oil and gas discovery.

The Grosbeak discovery was proven in 2009 in the Sognefjord formation and in the Brent Group in Upper and Middle Jurassic reservoir rock.

The appraisal wells were drilled approximately 2.5 kilometres northeast of the 35/12-2 Grosbeak discovery well and approximately 10 kilometres northeast of the Fram field.

The purpose of the 35/12-4 S and 35/12-4 A wells was to delineate the 35/12-2 Grosbeak discovery.

Well 35/12-4 S was drilled in the south-eastern part of the structure and encountered an oil column of 40 metres in the Brent Group (Ness formation) in Middle Jurassic reservoir rock. The reservoir quality was better than expected. A successful formation test has been conducted in the well. The production rate was 800 standard cubic metres (Sm3) of oil with associated gas per flow day through a 44/64 inch nozzle opening. Maximum production rate was estimated at 1250 Sm3/ per flow day.

Well 35/12-4 A was drilled at the top Brent Group to study the north-eastern part of the Grosbeak structure. The upper part of the Ness formation consisted of thin alternating layers of sandstone and carbon, but no hydrocarbons.

The results from the wells will be included in the ongoing assessment of Grosbeak and the licensees will assess whether the discovery should be developed together with other discoveries in the area.

Comprehensive data acquisition and sampling have been carried out. Evaluations and analyses will be conducted to establish the size and extent of the discovery. Further delineation is likely to be necessary.

Wells 35/12-4 S and 35/12-4 A are the third and fourth exploration wells in production licence 378. The production licence was awarded in APA 2005.

Appraisal wells 35/12-4 S and 35/12-4 A were drilled to a vertical depth of 3585 and 3413 metres below sea level. Well 35/12-4 S was terminated in the Statfjord formation in Lower Jurassic rock and well 35/12-4 A was terminated in the Rannoch formation in Middle Jurassic rock. Both wells have been plugged and abandoned. The water depth is 359 metres."

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