Interim Management Statement

PREMIER OIL plc

("Premier" or "the Company")

Interim Management Statement

16 May 2013

Premier today provides its Interim Management Statement for the period 1 January to 16 May 2013. This statement is issued ahead of Premier's Annual General Meeting, which is being held at The Institute of Directors, 116 Pall Mall, London SW1Y 5ED at 11.00, Friday 7 June.

Highlights

·; Production for 1H 2013 is expected to be in the range of 58-60 kboepd (1H 2012: 58.4 kboepd); full year production guidance is maintained at 65-70 kboepd.

·; The Huntington field achieved first oil on 12 April and is expected to be producing at full capacity once the gas compression systems have been fully commissioned.

·; The Premier-operated Dua, Solan, Anoa Phase 4, Pelikan and Naga projects remain on track for first oil/gas in 2013/2014.

·; Submission of the Catcher and Sea Lion field development plans for governments' approvals are planned for 2H 2013 and mid-2014 respectively, as previously guided.

·; All four exploration wells drilled year-to-date have been successful, with a significant oil discovery made at Luno II on the western margin of the Utsira High and near field successes in the UK, Indonesia and Pakistan.

·; The high impact Lacewing well is currently drilling in the UK North Sea while the play opening Ca Voi well offshore Vietnam is expected to spud in early June.

·; Strong financial position retained, with cash and undrawn committed facilities of $1.1 billion.

·; As separately announced today, Premier was awarded three deep water blocks (two operated) in Brazil's 11th Round in 14 May.

Simon Lockett, Chief Executive, commented:

"We are delighted with the progress achieved across our portfolio year-to-date. We have seen a strong start to our 2013 exploration drilling programme and continue to work hard to optimise production and progress new projects while increasing the materiality of our future exploration activity."

Enquiries

Premier Oil plc Tel: 020 7730 1111

Simon Lockett

Tony Durrant

Pelham Bell Pottinger Tel: 020 7861 3232

Gavin Davis

Production operations

Production averaged 58.0 kboepd for the first four months of the year. Average production for the year is forecast to be 65-70 kboepd, in line with previous guidance.

Production from the UK fields year-to-date was impacted by the temporary shutdown of the Balmoral FPV for various maintenance works, although the planned summer shutdown period is now expected to be reduced accordingly. Strong production was achieved from Wytch Farm which continues to produce above expectations as a result of increased infill drilling and workovers. Meanwhile, the newly onstream Huntington field is producing in line with expectations and is anticipated to ramp up to 25-30 kboepd gross once the commissioning of the gas compression systems has been completed by month-end.

The Anoa field on Natuna Sea Block A in Indonesia continues to deliver over its 36.9 per cent contractual share of GSA1 at around 45 per cent. Strong deliverability from the nearby Gajah Baru field will help to cover contractual commitments during the planned Anoa Phase 4 shutdown this summer. Elsewhere in Asia, oil production from Chim Sao continues to generate a very high percentage of the project's cash flows with the average price of oil cargoes sold in excess of $7.50/bbl over Brent. However production rates, in particular of gas, have been impacted by the FPSO power issues and discussions with the FPSO contractor around upgrades to the power systems are ongoing.

Pakistan has achieved strong production over the first four months of the year with the natural decline in the fields more than offset by the new wells brought onstream at the Kadanwari and Badhra fields at the end of 2012. Additional new wells at Kadanwari, including the recently successful K-32 exploration well, are expected to be tied into production facilities by year-end.

Development projects

First gas from the non-operated Rochelle field in the UK North Sea remains targeted for Q2/Q3 this year. The West Rochelle producer well has reached target depth and will now be tied back to the manifold.

The Premier-operated Solan, Dua, Anoa Phase 4, Pelikan and Naga projects continue to make good progress and remain on schedule for first oil/gas in 2013/14. The final phase of construction to complete the Anoa phase 4 project is scheduled to commence shortly at the Anoa field on the Natuna Sea Block A. Pelikan and Naga development drilling, also on Natuna Block A, is expected to commence in Q1 2014. In Vietnam, the Dua production and pigging flowlines have been laid successfully ahead of future tie-in to the Chim Sao FPSO. At the West of Shetland Solan field in the UK North Sea the first phase of development drilling, which comprises the drilling of the two water injectors and the upper hole sections of the producers, has commenced.

On the Premier-operated Catcher project, the shortlist of contractors for the leased FPSO tender are progressing detailed engineering work. Premier remains on track to submit the FDP for the Catcher project to DECC during 2H 2013. Meanwhile, the Falkland Islands Sea Lion project continues to progress with some 60 separate studies underway as part of the pre-FEED engineering phase to further refine the development concept. Premier expects to move into the FEED phase in 2H 2013 ahead of submission of the FDP to the Falklands government in mid-2014, as previously guided.

Exploration and appraisal activity

All of Premier's exploration wells drilled year-to-date have been successful. In Norway, the Luno II well on the south western flank of the Utsira High resulted in a significant oil discovery with further drilling planned for later this year. The Bonneville well and its sidetrack discovered oil within the Catcher licence in the UK and these discoveries are planned be tied back to the future Catcher development. In Indonesia, the Matang-1 well discovered gas and was successfully tested with a flow rate of 25 mmscfd. Most recently, the K-32 exploration well in Pakistan discovered gas in the F-sand, the primary target, and was successfully tested. The production test achieved a flow rate of 22.2 mmscfd through a 64/64 inch choke and will now be tied-in to the Kadanwari facility.

Forthcoming exploration wells include the high impact Lacewing well which was spudded on 7 May and is expected to reach the Triassic reservoir target in late June. The play opening Ca Voi well in Block 121 offshore Vietnam is expected to spud in early June and is the first of a five well exploration and appraisal drilling programme using the Ocean General rig in Asia. In addition, the 3D seismic over the inboard play on our acreage in Kenya has been received in-house and is being interpreted ahead of exploration drilling in either late 2013 or, and more likely, 2014.

Prospect maturation continues in advance of further high impact exploration drilling in 2014 and 2015. This includes further drilling on the Lama play in the Natuna Sea Block A in Indonesia, the drilling of the Myrhauk prospect on the eastern margin of the Mandal High in Norway and exploration drilling on our acreage in the North Falkland Basin.

New Ventures and portfolio management

Premier was awarded three deep water blocks (two operated) in Brazil's 11th Round on 14 May 2013 in Rio de Janeiro (see separate press release for further details).

As part of ongoing portfolio management, Premier has relinquished a number of licences in the UK North Sea that are considered non-material to the group's future exploration programme.

Finance

Capital expenditure for full year 2013 is expected to be in line with previous guidance of around $1.2 billion.

As at 30 April, net debt is estimated at $1.2 billion. Cash and undrawn committed facilities were $1.1 billion together with bilateral uncommitted facilities of a further $220 million.

Future announcements

Premier's 2013 Half Year Results will be announced on Thursday 22 August 2013. A Trading and Operations Update is planned for Thursday 11 July 2013.