Interim Management Statement

PREMIER OIL plc

("Premier" or "the Company")

Interim Management Statement

23 October 2013

Premier today provides its Interim Management Statement for the period 1 January to 23 October 2013. The next Premier Trading and Operations Update will be provided on 16 January 2014. Premier's Preliminary Results for 2013 will be announced on 27 February 2014.

Highlights

§ 2013 production guidance is now 57-59 kboepd following gas export issues at Chim Sáo and the CATS pipeline system in UK; these issues are due to be resolved shortly.

§ Year-end exit rate expected at around 65 kboepd.

§ Key milestones on Premier-operated Dua, Pelikan, Naga and Solan projects completed for first oil/gas in 2014.

§ Catcher, Bream, Sea Lion projects progressing to key decision gates.

§ Asset sales and exploration portfolio rationalisation under way.

§ Announced farm-ins to Falkland Islands and Kenyan acreage will complete shortly.

§ New debt financings completed or underway at attractive rates in advance of principal bank facility refinancing due by Q1 2015.

Simon Lockett, Chief Executive, commented:

"While our oil production is currently restricted by gas export issues in both Vietnam and the UK, this has limited impact on the long term value of those fields. Plans are in place to address these issues. In the meantime, we continue to make good progress on our operated development portfolio, on realising value from pre-development assets and on upgrading the potential of our exploration programme."

Enquiries

Premier Oil plc Tel: 020 7730 1111

Simon Lockett

Tony Durrant

Pelham Bell Pottinger Tel: 020 7861 3232

Gavin Davis

Henry Lerwill

Production operations

Production averaged 56.8 kboepd for the first nine months of the year (2012: 57.7 kboepd).

In the UK, the primary hydrocarbon blanketing system on Huntington was commissioned in August and production reached rates of 32,000 boepd (gross). However, production from the field has been constrained since mid-September 2013 following operational issues on the BP-operated CATS gas export pipeline. The operator of Huntington is working closely with BP to address the issues and production restrictions are hoped to be lifted progressively from early November. Production is currently averaging 12,000 bopd (gross). Production from Wytch Farm and Scott continued to be strong following successful workover programmes. On B-Block, the Brenda D3 well is expected back online in November and a number of wells have been reinstated at Balmoral following a successful DSV intervention campaign. The Banff FPSO is scheduled back on location during Q1 2014, allowing Kyle production to restart during Q2/3.

In Vietnam the Chim Sáo field recently reached a milestone of $2bn of oil revenues. Gas export is interrupted following damage to a flange connecting the Chim Sáo export pipeline to the Nam Con Son Pipeline (NCSP). The leak was quickly and successfully made safe. Execution of the repair is under way and, subject to weather, a return to gas export is planned for November.

In Indonesia, Block A continued to deliver above its 36.9 per cent contractual share of GSA1 at around 39% year to date. The Anoa Phase 4 compression project was completed on budget at a capital cost of around 60 cents/mscf. All three trains have been successfully tested and are now fully operational, adding a further 15 per cent export capacity to the Anoa facilities.

In Pakistan, the producing portfolio continues to perform well with especially good performance from Bhit/Badhra and Kadanwari fields.

Development projects

The initial development wells for the Solan field reached reservoir depth on prognosis and early indications from pressure data suggests good reservoir connectivity. Jacket, topsides and subsea tank construction are progressing and first oil remains on track for Q4 2014. Negotiations on the Catcher FPSO bids tendered in August are progressing with two contractors and the subsea EPCI bids are due in late October. On the Rochelle field, final development work was largely completed during the Scott field planned shutdown and first gas is expected later this week.

The Pelikan and Naga wellhead platforms were successfully installed offshore Indonesia and good progress is being made on the subsea installation and tie-in. First gas from both fields remains on track for the second half of 2014. Meanwhile at Dua, installation of two out of the three subsea structures has been completed and both flowlines installed, tested and tied into those structures. The umbilical and risers have also been pulled into the FPSO and the umbilical laid and tied into the manifold subsea structure.

Work continues on the Sea Lion FPSO development option to enable it to move into FEED in early 2014 whilst a contract to study the TLP development option in more detail was let and is progressing.

In Norway subsurface and drilling optimisation for the Bream project started in August, and concept selection is scheduled for December, ahead of development plan submission in 2014. In Mauritania, tenders for umbilicals, sub-sea and on-shore facilities have been received for the Banda project and are currently being evaluated.

Exploration and appraisal

In 2014, a number of exploration wells are planned to be drilled targeting in excess of 200 mmboe of net unrisked reserves. This programme will be firmed up in conjunction with other operators and partners as the 2014 joint venture budgets are agreed.

* Rig to be confirmed

Portfolio management

In October Premier announced it had agreed to increase its equity in licences PL004a and PL004c situated in the North Falkland Basin. The licences include the Isobel/Elaine and Jayne East prospects which will be integrated into the exploration drilling programme for late 2014/2015. Negotiations for a shared drilling programme are progressing well and are expected to reach a conclusion by year-end.

More recently Premier farmed in to Block 2B, onshore Kenya, which will target the exploration potential of the Southern Anza Rift Basin. The forward plan is to drill the Pearl-1 well in late 2014 which will target both Tertiary and late Cretaceous reservoirs.

Rationalisation of the existing exploration portfolio is under way with around 20 licences, mainly in the North Sea, in the process of being farmed out or being relinquished.

Following successful sales of CRD and Grosbeak discoveries earlier this year, additional asset sales are under review.

Finance

Capital expenditure for the full-year 2013 is expected to be around US$1 billion, including exploration expenditure of around US$220 million.

Premier's total debt facilities (including letters of credit) at 30 September 2013 were over US$2.9 billion while net debt stood at around US$1.4 billion. Cash and undrawn facilities are approximately US$1 billion. In advance of the principal bank facility refinancing due by Q1 2015, Premier has secured new loan note facilities of approximately US$150 million, with new banks and asset managers, comprised of both fixed and floating rate notes with both five and seven years maturities. The Group is also in advanced negotiations with two UK clearing banks for a new GBP-based term loan of around £200 million with a term of at least four years, and is considering various sources of additional funding via the international bond markets.

Outstanding forward sales for 2013 of Dated Brent oil amounted to 0.9 mmbbls at an average price of US$106/bbl and of High Sulphur Fuel Oil (which underpins Singapore gas prices) an amount of 36,000 MT at an average price of US$648/MT. Forward sales for 2014 of Dated Brent amount to 3.03 mmbbls at an average price of US$102/bbl and of HSFO Sing 180 an amount of 147,000 MT at an average price of US$610/MT.