Refinancing heads of terms agreed

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

Premier Oil plc

"Premier", the "Company" or the "Group"

Refinancing heads of terms agreed with a subset of creditors

 20 August 2020

Premier is pleased to announce that it has agreed heads of terms for a long-term refinancing of the Group's debt facilities with a subset of its creditors representing over 45 per cent of the Group's debt facilities.

The key terms of the proposed refinancing are as follows:

§ Premier's $2.9 billion of gross committed debt facilities including Letters of Credit and the mark to market liability of cross currency swaps used to hedge the historic currency and interest rates exposure to be refinanced with non-amortising facilities, extending the Group's credit maturities from May 2021 to March 2025

§ Covenant profile to be reset to provide sufficient headroom in a prolonged lower commodity price environment

§ Harmonised interest rate of 8.34 per cent[1] to be applied to Premier's cash credit facilities from the refinancing effective date

§ An equity raise of $230 million to fund the proposed BP Acquisitions as previously disclosed and to pay transaction costs

§ A further $300 million of new equity concurrently raised to reduce debt of which $205 million will be underwritten by Premier's senior creditors who would convert existing debt into equity to the extent that the $300 million is not raised from existing shareholders in a pre-emptive offer or from new investors

§ The proposed refinancing will be conditional on total take-up under the equity raise being not less than $325 million (excluding the underwriting by creditors)

The equity issuance as part of the proposed refinancing will require shareholder approval and the publication of an approved prospectus. The sale of any shares acquired as part of the partial equitisation will be restricted for 12 months following the refinancing becoming effective.

Creditors will be asked to irrevocably undertake to vote in favour of the terms of the proposed refinancing and, following receipt of the requisite number of undertakings, it is anticipated that the refinancing of the Group's debt facilities and cross-currency swaps will be implemented via court-sanctioned Restructuring Plans.

The proposed refinancing remains subject to a number of matters including, among other things, finalisation of a detailed term sheet for credit committee approvals, the $325 million minimum equity take-up, and long-form documentation.

Completion of the BP Acquisitions and the refinancing is anticipated to take place during Q4 2020.

Enquiries

Premier Oil 020 7824 1116

Tony Durrant, CEO

Richard Rose, Finance Director

Camarco 020 3757 4983

Billy Clegg

Georgia Edmonds

The information contained within this announcement is deemed by Premier to constitute inside information as stipulated under the Market Abuse Regulation. By the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of Premier is Andy Gibb (Group General Counsel).

Forward-looking statements

Certain statements in this announcement are forward-looking statements. In some cases, these forward looking statements can be identified by the use of forward-looking terminology including the terms "believes", "expects", "estimates", "anticipates", "intends", "may", "will" or "should" or in each case, their negative, or other variations or comparable terminology. These forward-looking statements reflect Premier's current expectations concerning future events and speak only as of the date of this announcement. There can be no assurance that outcomes, results and events contemplated by these forward-looking statements will in fact occur.

LEI: 213800YPC42DYBKVPF97