Exploration Update

PREMIER OIL plc

("Premier" or "the Company")

Exploration Update

1 February 2010

North Sea

Norway (PL378)

As announced today by the Norwegian Petroleum Directorate, the Gnatcatcher 35/12-3S well was drilled to a vertical depth of 2,729 metres below sea level, intersecting several good reservoir layers but encountering only minor hydrocarbon shows in the Upper Jurassic. The well has been plugged and abandoned. The Songa Delta rig is waiting on weather in order to be moved to a third party location before returning in the second quarter of 2011 to drill an appraisal well on the Grosbeak discovery on PL378.

Norwegian Licence Awards

Premier is pleased to announce the award of two further exploration licences in the Norwegian North Sea recent APA 2010 bidding round.

The licence awards are as follows:

Block 2/6 is located in the eastern margin of the Mandal High and the northern part of the Søgne Basin. The work commitment consists of reprocessing existing seismic data. Premier will operate the licence with 60% equity.

Block 35/12 (part) is an extension to the Production Licence 378 and is located in the western part of the 35/12 block, south of the recent Grosbeak discovery. The Licence will be operated by Wintershall Norge.

UK (Block 28/9)

Due to the lack of a sufficiently long weather window, a decision was taken by the joint venture to change the order of drilling in the Catcher Area exploration programme. The Catcher North well was spudded at 08.00 hours on Monday 24 January 2011. The well is expected to take approximately 20 days, subject to weather and operational requirements. The main objective of the well is to appraise the Tay and Cromarty reservoirs to the north of the Catcher discovery made in June 2010. The joint venture still intend to drill the Burgman and Carnaby prospects during the first quarter of 2011.

Middle East and Pakistan

Egypt

The Cherry well on the North Red Sea Block 1 concession has reached 2,198 metres against an expected total depth of 5,151 metres measured depth (MD). The Cherry prospect is targeting the Cretaceous (Nubian) play and has a pre-drill range of 50-120-300 mmboe. The current situation in Egypt is being monitored.

Pakistan

The K-25 sidetrack well adjacent to the Kadanwari field has intersected a 13 metre net gas pay in the target E-sand reservoir, which is in line with pre-drill expectations. The well will be tied into the Kadanwari facility by early April 2011.

Asia

Vietnam

The Ocean General rig is expected to arrive on location to drill the Cá Rồng Đo (CRD) well within the next week, subject to weather. The objective of the well is to define the resource associated with the earlier discovery in 2009, currently estimated at a mid-point of 60 mmboe. Following the CRD well, the rig will then move on to drill two wells on the Tuna block in Indonesia.

Simon Lockett, Chief Executive Officer, commented:

"While the result of Gnatcatcher was disappointing, we are looking forward to returning to the block for appraisal of the earlier Grosbeak discovery in the second quarter. We are also pleased with the award of two further Norwegian licences, the successful K-25ST well in Pakistan and in particular with the resumption of the Catcher programme in the UK."

Enquiries

Premier Oil plc 020 7730 1111

Simon Lockett

Tony Durrant

Pelham Bell Pottinger 020 7861 3232

Gavin Davis

Henry Lerwill