2007 SUMMARY REVIEW GROWTH AND DEVELOPMENT

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1 2007 SUMMARY REVIEW GROWTH AND DEVELOPMENT

2 OUR STRATEGY IS TO ADD SIGNIFICANT VALUE PER SHARE THROUGH EXPLORATION AND APPRAISAL SUCCESS, DEVELOPMENT PROJECTS AND ASTUTE ASSET MANAGEMENT

3 2007 HIGHLIGHTS Production up 8 per cent to 35.8 kboepd (2006: 33.0 kboepd) Reserves increased by 39 per cent to 212 mmboe. Reserves and resources up 28 per cent to 369 mmboe. Reserve replacement of 460 per cent Material progress on major development projects commercialising past exploration successes and adding value to recent acquisitions New gas sales agreements in Singapore and Indonesia Successful acquisitions adding low cost barrels in UK and Indonesia New exploration and appraisal acreage acquired in Norway and Vietnam Operating cash flow up 10 per cent to US$269.5 million (2006: US$244.8 million) Operating profit up 35 per cent to US$219.4 million (2006: US$162.6 million) Low cost financing in place to fund development programme of ~US$1 billion in Strong balance sheet with cash resources of US$332.0 million Premier is extremely well placed to meet its stated production target of 50,000 boepd by end 2010 from existing assets. Our focus is turning to the next phase of growth through exploration, appraisal and acquisition. Simon Lockett, Chief Executive Officer From top to bottom: Simon Lockett, Chief Executive Officer Robin Allan, Director of Business Development Tony Durrant, Finance Director Neil Hawkings, Operations Director

4 CONTINUED GROWTH PREMIER S STRATEGY OF DELIVERING GROWTH BOTH FROM THE PRODUCTION BASE AND FROM HIGH POTENTIAL EXPLORATION IS BACKED BY A SOLID FINANCIAL POSITION. EXISTING CASH RESOURCES, BANK FACILITIES AND STRONG CASH FLOWS WILL ALLOW US TO FUND EXISTING AND NEW DEVELOPMENT PROJECTS FINANCIAL ACHIEVEMENTS Our year-end net cash position of US$79.0 million reflects strong cash generation and a disciplined approach to expenditure Value-adding acquisitions were funded from existing bank facilities and cash Our future development programme will be funded by existing low-cost financial resources 2007 Net cash US$ 79.0m 2007 Operating cash flow US$ 269.5m

5 A GROWING ASSET BASE SIGNIFICANT PROGRESS ON PROJECTS IN THE PORTFOLIO GIVES US CONFIDENCE THAT PREMIER WILL ACHIEVE ITS STATED PRODUCTION TARGET OF 50,000 BOEPD BY THE END OF Gas from Gajah Baru will be piped to the Sembgas facility in Singapore 1 INDONESIA Gajah Baru In the fourth quarter of 2007 Premier announced the signature of Heads of Agreement with Sembcorp Gas Pte Ltd for gas sales into the Singapore market, and with PT Perusahaan Listrik Negara and PT Universal Batam Energy for domestic gas sales into Batam. Development of the Gajah Baru field in the Natuna Sea will now commence with project sanction expected later this year and first gas planned for INDONESIA North Sumatra Block A A Gas Sale and Purchase Agreement (GSPA) was concluded in December The GSPA will govern the sale of gas from the Alur Rambong, Julu Rayeu, and Alur Siwah fields in North Sumatra to the PIM fertilizer plant on the northern Aceh coast. A field development plan has been submitted for approval. 3 Chim Sáo and Dua were drilled by the Ocean General and first production is on target for VIETNAM Chim Sáo Premier discovered oil on the Dua and Chim Sáo (formerly Blackbird) prospects in 2006 and Project development work has made good progress during Outline development plan approval, approval of the field development plan, and project sanction are all expected in First production from Chim Sáo is on target for UK Scott Equity in the Scott field was increased to per cent via acquisition during 2007, adding over 5,000 boepd to Premier s net production. An infill drilling programme was successfully completed in 2007, and a further campaign will commence during With higher oil prices and a strong production performance, payback of Premier s acquisition cost of US$53 million was achieved within the first six months.

6 2 Gas from North Sumatra Block A will power the PIM fertilizer plant 4 An infill drilling programme will commence on Scott in 2008

7 EXPLOITING OUR STRONG POSITION ASIA > THE FULL RANGE OF EXPLORATION, DEVELOPMENT AND PRODUCTION ACTIVITIES > STRATEGY We seek to maximise the potential of our Natuna Sea, North Sumatra and Nam Con Son Basin assets, bringing relationships, knowledge and technical skills to bear and developing new business opportunities in related technical or geographical areas

8 > 2007 HIGHLIGHTS AND ACHIEVEMENTS Acquisition of additional equity in North Sumatra Block A Agreements signed for gas sales from North Sumatra Block A and further gas sales from Natuna Sea Block A PSCs signed for new exploration blocks in Indonesia (Tuna and Buton) and a PSC awarded in Vietnam (Block /05) Completion of farm-in on Block 07/03 (Vietnam) allowing Premier to assume operatorship with 45 per cent interest Rig secured for drilling on Block 12W for up to 24 months Following successful Chim Sáo drilling in early 2007, progressing combined Chim Sáo/Dua project towards development approval We are continuing to build our portfolio across the exploration, development and production spectrum in the areas where we have deep knowledge. This is delivering long-term growth to the business. Barry O Donnell Asia Regional Manager THAILAND VIETNAM > OUTLOOK Approval of Chim Sáo oil development plans targeted for the second quarter of 2008 Block 12W Block 07/03 Completion of gas sales agreements on Natuna Sea Block A, formal government approval of field development plans and award of major construction contracts expected in 2008 Approval of North Sumatra Block A gas development plans and award of major construction projects expected in 2008 North Sumatra Block A MALAYSIA Kuala Lumpur Anoa Kakap Kakap N Kakap S West Natuna Block A Tuna Exploration prospects on Block 12W to be drilled in the second and third quarter of 2008 Dumai SINGAPORE Seismic and other technical work to be progressed for 2009 drilling programmes in Vietnam and Indonesia SUMATRA I N D O N E S I A Premier interests Gas fields Oil & gas fields Pipeline

9 EXTENDING OUR FOOTPRINT MIDDLE EAST PAKISTAN > RELATIONSHIP SKILLS AND NEW VENTURE INITIATIVES > STRATEGY Building on our well-established and successful position in Pakistan s rapidly growing gas market we are also seeking to extend our footprint into the hydrocarbon-prolific areas of the Middle East and North Africa through partnerships and business development activities

10 > 2007 HIGHLIGHTS AND ACHIEVEMENTS De-merger of Pakistan interests from Premier-KUFPEC Pakistan joint venture Continued production growth leading to record Pakistan production in excess of 12,600 boepd net to Premier Successful drilling of K-18 well on Kadanwari and deeper prospect on Qadirpur New production from Badhra Conclusion of joint venture agreements with Emirates International Investment Company LLC (EIIC) for activities across the region > OUTLOOK Testing of deep Qadirpur gas discovery Production enhancement and expansion projects at Qadirpur, Bhit and Kadanwari New high calorific value gas production from Zamzama Phase 2 project Pursuit of opportunities across the Middle East and North Africa with our Abu Dhabi-based joint venture partner Premier remains committed to deriving full value from its world class assets in Pakistan and extending its growth potential both in country and across the region. Zaffar Chida Pakistan Country Manager Premier interests Gas producing fields AFGHANISTAN Islamabad Lahore P A K I S TA N Quetta Zarghun South Qadirpur IRAN Kadanwari Zamzama Bhit Badhra Sukkur INDIA Karachi

11 RETURNING TO GROWTH NORTH SEA > SELECTIVE ACQUISITIONS AND OPTIMISATION OF OUR EXISTING RESERVE BASE > STRATEGY We will grow our position in the North Sea through participation in new licensing rounds and an active exploration programme in Norway and the UK. This includes the development of discoveries already held in the portfolio. In the UK we seek to maximise output from our current production base and will acquire additional assets in the areas which we know well > 2007 HIGHLIGHTS AND ACHIEVEMENTS Completed acquisition of per cent equity in the Scott field for US$53 million, adding over 5,000 boepd to Premier s net production Significant rise in Kyle field production following successful completion of gas lift project Award of five licences in the Norwegian APA Licensing Round in January 2007

12 34/2 Premier interests Oil producing fields 34/5 36/10 35/8, 35/9 35/12 31/3 32/1 Frøy Area NORWAY Scott, 16/1(part), 16/4 Telford 15/24a 17/8,9,11,12 14/25a 15/25f 18/7,10 18/11 8/3 22/2a St Fergus 9/1 Cruden Bay 21/7b 23/22b SCOTLAND 20/10b, 20/15a Kyle 21/6a, 21/11b Angus Flora Fife Fergus 39/2b 39/7 > OUTLOOK Infill well programmes planned on the Scott, Telford, and Wytch Farm fields Submission of development plans for the Frøy field expected during 2008 Bream appraisal well planned for the second quarter of 2008 First operated exploration programme in Norway will commence in 2008 with first well to be drilled in 2009 IRELAND UK WALES ENGLAND NETHERLANDS Wareham Wytch Farm FRANCE BELGIUM Since its expansion into Norway, the North Sea business has made excellent progress towards building a balanced portfolio of exploration and development projects as well as our existing production assets in the UK. We are looking forward to our programme of exploration and appraisal drilling in the UK and Norway this year, as well as continuing our efforts to maximise output from our current producing assets across the region. Nigel Wilson North Sea Regional Manager

13 HIGH-IMPACT EXPLORATION WEST AFRICA > TECHNICAL CAPABILITIES AND COMMERCIAL DEAL-MAKING We use our technical skills to assess high-impact opportunities, including deep water potential, and our commercial skills to optimise the group s exposure to drilling opportunities. Steve Bottomley West Africa Regional Manager SADR MAURITANIA Premier interests Oil & gas fields A F R I C A > STRATEGY The West African Business Unit will seek to deliver a programme of high-impact exploration opportunities, which on success will deliver material increases in asset value over time. Critical to this programme will be our profile and businessgovernment relationships, backed by technical skills in the region > 2007 HIGHLIGHTS AND ACHIEVEMENTS CONGO Detailed evaluation of deep water exploration acreage in Congo and identification of high-potential prospects Strategic exit from Dussafu Block in Gabon ATLANTIC OCEAN > OUTLOOK Planning and execution of two well high-impact programme in Congo Optimisation of Chinguetti production and other future development potential in Mauritania Evaluation of new venture proposals in the region with a view to building a pipeline of future high-impact opportunities

14 TECHNICAL EXPERTISE > THE CORE WORK OF OUR GEOLOGISTS AND ENGINEERS IS TO APPLY SCIENCE TO SECURE THE OPTIMUM DISCOVERY AND EXTRACTION OF OIL AND GAS Our professionals use the latest technological tools to keep us at the forefront of the industry and we employ the best available specialists in all of the projects that we undertake. Before drilling, we assess the risks from every angle, and fully evaluate the hydrocarbon potential. We manage our portfolio to ensure that our focus is on the best prospects. For our development projects, we consider all the possible options, including appropriate new technology, and assess the range of possible outcomes before selecting the optimal design. We place great value on the imagination and creativity of our geologists, geophysicists and engineers. This enables us to work in previously overlooked areas, so that, armed with new scientific concepts, innovative technologies and state-of-the-art equipment, we can operate in such areas more successfully than in the past.

15 SOCIAL PERFORMANCE > PREMIER ASPIRES TO BE AN INDUSTRY LEADER IN SOCIAL PERFORMANCE, WHICH COVERS THE AREAS OF SOCIAL RESPONSIBILITY, HEALTH AND SAFETY, AND ENVIRONMENTAL IMPACT Our stated policy is to ensure that the risks and impacts of our activities are reduced to as low as reasonably practicable at all times. We set targets with reference to our historical performance, the performance of our peer group and standards set by external agencies. We publish a Social Performance Report every two years, and from now on in intermediate years we will prepare a Communication on Progress. These will be available on our website > 2007 HIGHLIGHTS AND ACHIEVEMENTS Among our local infrastructure initiatives, Premier sponsored construction of two community halls, two kindergarten buildings and a clean water supply to five villages in Indonesia, as well as four bridges in Vietnam. We also supported various health-related training programmes and farming projects and donated emergency equipment to the Cachar district in India during severe flooding Premier again exceeded its internal target of lost time injury and restricted workday case frequency. This target has been consistently reduced for the last five years Our global drilling function is certified to ISO and OHSAS and successfully underwent a number of assessments and surveillance audits. ISO and OHSAS are internationally recognised standards to which a company s environmental and health and safety management system may be certified We reduced our greenhouse gas emissions in tonnes per thousand tonnes of production from 232 in 2006 to 171 in 2007 > OUTLOOK As we progress the development of new operated production projects in Vietnam and Indonesia we will continue to target the highest standards of performance with respect to social responsibility, health and safety and environmental impact

16 Premier Oil plc 23 Lower Belgrave Street London SW1W 0NR United Kingdom Telephone: +44 (0) Facsimile: +44 (0)