Extension of Timetable of Exchange Offer

PREMIER OIL FINANCE (JERSEY) LIMITED ANNOUNCES EXTENSION OF TIMETABLE OF EXCHANGE OFFER

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION TO ANY US PERSON (AS DEFINED IN REGULATION S ("REGULATION S") UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED ("SECURITIES ACT")) OR IN OR INTO THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE US VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (THE "UNITED STATES") OR TO ANY PERSON LOCATED OR RESIDENT IN ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT.

26 October 2012

On 19 October 2012, Premier Oil Finance (Jersey) Limited (the "Company") invited holders of its outstanding US$250,000,000 2.875 per cent. Guaranteed Convertible Bonds due 2014 (XS0304206161) (the "Existing Bonds") unconditionally and irrevocably guaranteed by Premier Oil plc (the "Guarantor") to offer to exchange any and all of their Existing Bonds for US$ denominated 2.5 per cent. Guaranteed Convertible Bonds due 2018 (the "Bonds") to be issued by the Company and to be unconditionally and irrevocably guaranteed by the Guarantor (the "Exchange Offer").

The Exchange Offer is made on the terms and subject to the conditions contained in the exchange offer memorandum dated 19 October 2012 (the "Exchange Offer Memorandum"). Capitalised terms used in this announcement and not otherwise defined have the meanings ascribed to them in the Exchange Offer Memorandum.

The Exchange Offer was due to expire at 5.00 pm (London time) on 25 October 2012.

EXTENSION OF THE TIMETABLE OF THE EXCHANGE OFFER

As of 5.00 pm (London time) on the 25 October 2012, Existing Bonds having an aggregate nominal amount of approximately US$245 million (representing circa 98 per cent. of the total aggregate nominal amount of Existing Bonds outstanding) were validly offered by Holders for exchange.

The Company has decided to extend the timetable of the Exchange Offer by one day to allow any remaining Holders who have not yet tendered to participate in the Exchange Offer. Accordingly, the Exchange Offer will now expire at 5.00 pm (London time) on 26 October 2012.

Following completion of the Exchange Offer, the Company is intending to exercise its right to redeem any outstanding Existing Bonds at par in accordance Condition 9(b) of the terms of the Existing Bonds.

The Settlement Date will remain on or about 1 November 2012.

The Company has engaged Barclays Bank PLC and RBC Europe Limited as Dealer Managers for the Exchange Offer. Deutsche Bank AG, London Branch is acting as the Exchange Agent.

Disclaimer

This announcement must be read in conjunction with the Exchange Offer Memorandum. No offer or invitation to acquire or exchange any securities is being made pursuant to this announcement. This announcement and the Exchange Offer Memorandum contain important information, which must be read carefully before any decision is made with respect to the Exchange Offer. In particular, Holders should read the section headed "Risk Factors and Other Considerations" in the Exchange Offer Memorandum. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax and financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Existing Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Exchange Offer. None of the Company, the Guarantor, any other Group company, the Dealer Managers or the Exchange Agent (or any person who controls, or is a director, officer, employee, agent or affiliate of, any such person) makes any recommendation as to whether Holders of Existing Bonds should offer any Existing Bonds for exchange pursuant to the Exchange Offer or expresses any opinion about the terms of the Exchange Offer and none of them has authorised any person to make any such recommendation. The Exchange Agent is acting as an agent of the Company in connection with the Exchange Offer and owes no duty to any Holder.

Offer and Distribution Restrictions

United States

The Exchange Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States or to, for the account or benefit of, US persons. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of this announcement and the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to US persons, and the Existing Bonds cannot be offered for exchange in the Exchange Offer by any such use, means, instrumentality or facilities or from within the United States or by US persons. Any purported offer of Existing Bonds for exchange resulting directly or indirectly from a violation of these restrictions will be invalid, and any purported offer of Existing Bonds for exchange made by a US person, a person located in the United States or any agent, fiduciary or other intermediary acting on a non‑discretionary basis for a principal giving instructions from within the United States or for a US person will be invalid and will not be accepted.

This announcement and the Exchange Offer Memorandum is not an offer of securities for sale in the United States or to US persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The Bonds and the Existing Bonds have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, US persons. The purpose of this announcement and the Exchange Offer Memorandum is limited to the Exchange Offer and this announcement and the Exchange Offer Memorandum may not be sent or given to a person in the United States or otherwise to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.

Each Holder participating in the Exchange Offer will represent that it is not located in the United States and is not participating in the Exchange Offer from the United States, that it is participating in the Exchange Offer in accordance with Regulation S under the Securities Act and that it is not a US person or it is acting on a non‑discretionary basis for a principal located outside the United States that is not giving an order to participate in the Exchange Offer from the United States and is not a US person.

As used herein, "United States" means United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and "US person" has the meaning given to such term in Regulation S under the Securities Act.

United Kingdom

The communication of this announcement and the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offer is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order")) or within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

France

The Exchange Offer is not being made, directly or indirectly, to the public in the Republic of France ("France"). Neither this announcement, nor the Exchange Offer Memorandum or any other document or material relating to the Exchange Offer has been or shall be distributed to the public in France and only (a) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (b) qualified investors (investisseurs qualifiés) other than individuals, in each case acting on their own account and all as defined in, and in accordance with, Articles L.411‑1, L.411‑2 and D.411‑1 to D.411‑3 of the French Code Monétaire et Financier are eligible to participate in the Exchange Offer. This announcement, the Exchange Offer Memorandum and any other such offering material have not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.

Italy

None of the Exchange Offer, this announcement, the Exchange Offer Memorandum or any other documents or materials relating to the Exchange Offer have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa (CONSOB). The Exchange Offer is being carried out in the Republic of Italy ("Italy") as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act") and article 35-bis, paragraph 4, of CONSOB Regulation No. 11971 of 14 May 1999, as amended ("CONSOB Regulation"). Holders can offer Existing Bonds through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of September 1, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Existing Bonds or this Exchange Offer.

General

The distribution of this announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and the Exchange Offer Memorandum comes are required by the Company, the Guarantor, the Dealer Managers and the Exchange Agent to inform themselves about and to observe any such restrictions.

No action has been or will be taken by the Company, the Guarantor, the Dealer Managers or the Exchange Agent in any jurisdiction in relation to the Exchange Offer that would permit a public offering of securities.

This announcement and the Exchange Offer Memorandum do not constitute an offer to sell or buy or the solicitation of an offer to sell or buy the Existing Bonds and/or Bonds, as applicable, and offers of Existing Bonds for exchange pursuant to the Exchange Offer will not be accepted, from Holders in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require an exchange offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Exchange Offer shall be deemed to be made by such Dealer Manager or affiliate (as the case may be) on behalf of the Company in such jurisdiction.