Exploration Investor Presentation January 2010
Forward looking statements This presentation may contain forward-looking statements and information that both represents management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements. January 2010 Page 1
Target and strategy Exploration is a fundamental part of Premier s growth strategy Target Build three quality businesses which deliver 100 kboepd from 400 mmbbls of reserves Strategy Attain 75 kboepd from 2P reserves of 265 mmboe Commercialise contingent resource base of 180 mmboe Add 200 mmboe of 2P reserves from exploration Make value-adding acquisitions in three core areas Maintain a conservative financing plan January 2010 Page 2
Exploration Targets Add 200 mmboe net reserves by 2015 Global Exploration: Forecast 2C resource additions (mmboe) 400 350 300 Success Case/NV Unrisked Success Case/NV Risked Unrisked Risked Cum risked additions 2009 Premier added 20 mmboe to 45 mmboe of net resources 5 exploration and 2 appraisal wells (excl Egypt; now sold) Exploration success rate: 40% Finding cost: $4/boe 250 200 150 100 50 0 2009 2010 2011 2012 2013 2014 2010-2012 Unrisked target resource: 800 mmboe Risked resource target: 100 mmboe 12 Exploration and appraisal wells planned in 2010 Material prospects targeted Drilling candidates from existing portfolio 2012 to 2014 Resource additions must come from success case follow on and/or new ventures January 2010 Page 3
Premier Petroleum basin focus The majority of the worlds petroleum resources are found in 3 basin types: Rift Basins: e.g. North Sea, SE Asia, onshore Africa and West Siberia Passive Margins: e.g. West Africa / SE Brazil, NW Australia and the Gulf of Mexico Fold-belts / Forelands: Columbia, Iran / Iraq and Pakistan Premier has a competitive advantage in value creating exploration of Rifts and Fold-belts / Forelands Premier will continue to explore the rift basins of SE Asia and the North Sea and will look to exploit its competitive advantages in selected rifts and fold-belt basins of Africa, the Middle East and Central Asia January 2010 Page 4
Exploration Historic performance Premier Discoveries 1986-2009* (net mmboe) 800 700 600 500 400 300 200 100 Annual discoveries Cumulative annual discoveries Premier began exploring in 1986, initially via entry into SE Asia To date Premier has discovered net 800 mmboe at an overall commercial success rate of 22% The commercial discoveries have been made in two basin types: 1) Rifts: Southeast Asia and Norway 2) Frontal Fold-belts: Pakistan The success rate in these basin types is ~40% Since 2000 the exploration success has been dominated by Rift Basin exploration in Asia and latterly in Norway 0 1985 1990 1995 2000 2005 2010 * Does not include Egypt January 2010 Page 5
Exploration strategy The goal is to deliver 200mmboe 2P reserves through the drill bit focussing on areas where we have demonstrated skills and expertise Near-term programme Asia: Nam Con Son Basin (Vietnam and Indonesia) North Sea: UK Central North Sea and Norwegian North Sea New Venture Activity Rift Basins: new acreage in the North Sea, Asia and potentially North/East Africa or Central Asia Frontal Fold-belt plays: new acreage in the Middle East or Central Asia January 2010 Page 6
Exploration outlook January 2010 Unrisked net potential of 350mmboe Asia Q1 Q2 2010 Q3 Q4 Vietnam 07/03 Seismic (contingent) 104/109-05 Seismic Indonesia Tuna Prospect A Prospect B Buton Lead B North Sea Norway PL374S (34/2,5) Blabaer Bredford Dolphin PL359 (16/1,4) Greater Luno Transocean Winner PL406 (8/3) Gardrofa Maersk Guardian PL378 Gnatcatcher PL378 Grosbeak Appraisal UK P815 Bugle Appraisal Transocean GSF Arctic IV P1430 Catcher Galaxy II (STC) P1620 Oates Middle East/Pakistan Pakistan Qadirpur Pirkoh-1 Firm Wells: Rig Contracted Firm Wells: Rig TBC Contingent Wells Seismic Programme All well timings are subject to revision for operational reasons January 2010 Page 7
Exploration Vietnam / Indonesia Nam Con Son An integrated play-based approach to exploration Premier equities 07/03: 30% and operator Tuna: 65% and operator, target equity 40% pre-drill Prospectivity 10-15 leads and prospects Cá Rồng Đó discovery May 2009 (10 mmbo to 70 mmbo gross resource) Cá Rồng Vang - P&A December 2009 Resource potential 30-100 mmbo per prospect 2010 Plan Fully interpret existing 3D Acquire 3D over central part of Block 7/03 Drill 2 Tuna prospects 2011 Plan Appraise Cá Rồng Đó discovery Drill further exploration wells in 07/03 January 2010 Page 8
Exploration Block 07/03 CRD discovery and CRV Amplitude analysis of 3D is potentially the key to unlocking the prize CRV CRD / CRD North East CRD Discovery NW SE Anomalies associated with Hydrocarbons Anomalies associated with Hydrocarbons? Gas above CRD Low amplitude area due to gas in overburden January 2010 Page 9
Exploration Tuna Regional prospectivity Plan to drill 2 prospects in Q3/Q4 2010 Singa / Kuda Laut Cacing Laut Gajah Laut Utara NW Base Muda SE MMU Arang Top Oil Expulsion Gabus Thermally Mature Source Thermally Mature Source Basement Numerous material drillable prospects being defined on new 3D January 2010 Page 10
Exploration North Sea Premier s rift basin expertise is being applied to the North Sea Active 2010 programme targeting 50-200 mmboe net to Premier: Prospect Gnatcatcher Gardrofa Greater Luno Blåbaer Bugle North Oates Catcher Potential (mmboe gross) 31-60 mmboe 15-115 mmboe 30-150 mmboe 15-75 mmboe 7-39 mmboe 25-107 mmboe 18-33 mmboe Preparing for 2011 drilling, e.g. Moth/Lacewing Greater Luno Bugle Appraisal Bream Oates Catcher Blåbaer Gnatcatcher Gardrofa Moth/Lacewing January 2010 Page 11
Exploration Huntington, Moth and Oates Building a new core area in the UK Central North Sea Rift basin Huntington Premier equity in Block 22/14b is 40% Concept selection process ongoing First production forecast for 2012 Unitization process underway Exploration focus is to Pre-Tertiary potential Moth Appraisal of Moth and potentially a deep pre- Cretaceous target (Lacewing) planned for 2011 Premier equity ~50% (BG operator) Oates Premier 50% equity and operator* Oates prospect has 25 mmboe to 107 mmboe potential Low to moderate risk * Subject to DECC approval January 2010 Page 12
Exploration UK Oates Oates (P1620) Premier 50% equity and operator Reserve estimate 25-65-107 mmboe Amplitude supported stratigraphic trap Low to moderate risk for oil and gas Drilling planned late Q2/Early Q3 2010 Follow up potential exists at Bowers (10-65 mmboe unrisked reserves) NW Oates SE Bowers Amplitude Bloom on Far Stacks Oates Forties Isopach Map January 2010 Page 13
Exploration Norway Blåbaer Blåbaer (PL374) Premier 15% equity Operated by BG Reserves estimate 15-30-75 mmboe Moderate risk for oil Well status: drilling Jordbaer project moving forward Blåbaer Jordbaer January 2010 Page 14
Exploration Norway Greater Luno Greater Luno (Pl 359) Premier 30% equity Operated by Lundin Targeting basement and possible Jurassic sandstones related to the Luno discovery (95 mmboe) on adjacent Lundin-operated block Estimated reserve range 30-150 mmboe Moderate risk for oil Drilling planned for Q1 2010 Greater Luno 16/4-5 Planned Well Location January 2010 Page 15
Exploration Norway Bream, Gardrofa Success at Gardrofa will lead to a new core area for Premier in Norway Bream (PL 406) Brent age oil discovered 1971, close to Yme Field In 2009,17/12-4 and its sidetracks wells appraised this discovery, testing 2,516 boepd Operated by BG, Premier equity 20% Estimated reserves 39-50-63 mmboe Plan of development under review 9/1-1 Gardrofa Prospect Well Location Gardrofa (PL407) Premier s first operated licence in Norway Premier equity 40% Untested trap flanking a Salt dome feature Estimated reserves 15-70-115 mmboe Moderate risk for oil Well planned for Q3 2010 January 2010 Page 16
Exploration challenges 1. Access to new opportunities in themes of choice 2. Maintaining exploration focus/discipline 3. Managing the natural tension between growth ambitions and the production/development of existing resources 4. Building a geoscience organisation for the future January 2010 Page 17
Exploration strategy The goal is to deliver 200mmboe 2P reserves through the drill bit focussing on areas where we have demonstrated skills and expertise Near-term programme Asia: Nam Con Son Basin (Vietnam and Indonesia) North Sea: UK Central North Sea and Norwegian North Sea New Venture Activity Rift Basins: new acreage in the North Sea, Asia and potentially North/East Africa or Central Asia Frontal Fold-belt plays: new acreage in the Middle East or Central Asia January 2010 Page 18
Look forward End 2010 Stable production from established assets Development drilling commenced on key projects in Indonesia and Vietnam New project approvals e.g. Dua, Bream, Bugle, Fife, Frøy Twelve well exploration programme completed 10-20 prospects brought to drillable status for 2011/2012 programme End 2012 Significantly increased reserve base Run-rate production of 75 kboepd with related cash flow expansion Follow-on portfolio of development projects to add 10-15 kboepd Fully evaluated Nam Con Son basin opportunity Replenished exploration portfolio in areas of existing geological knowledge January 2010 Page 19
Appendix January 2010 Page 20
Exploration Norway Grosbeak, Gnatcatcher Gnatcatcher/Grosbeak (PL 378) Premier 20% equity (non-operated) Successful Grosbeak well completed in July 2009 Close to nearby infrastructure Oil in Middle Jurassic sandstones Estimated reserves 30-90-170 mmboe Gnatcatcher resource estimate 31-40-60 mmboe Moderate to High risk for oil Q3 2010 Gnatcatcher Exploration well and Q4 probable Grosbeak appraisal Gnatcatcher SW NE January 2010 Page 21
Exploration UK Bugle North Bugle North (P815) Premier 41% equity, likely to move to 50% Nexen operator Nearfield exploration opportunity Gross reserves estimate 7-17-39 mmboe Adjacent Bugle discovery flowed 7,398 bopd and 9.06 mmscfd gas Drilling planned for Q1 2010 January 2010 Page 22
Exploration UK Moth Moth (P1181) 50% equity in 23/21 57.5% operated equity in 23/22b 70% operated equity in 7/7d and 7/10a Moth discovery max flow rate 24.4 mmscfd gas and 2460 bopd Appraisal of Moth and potentially a deep pre- Cretaceous target (Lacewing) are under evaluation Drilling planned 2011 January 2010 Page 23
Exploration UK Catcher Blocks 28/9 & 10c Catcher (P1430) Premier equity 50% Encore operator Reserves estimates 18-25-33 mmboe Low risk for gas Drilling planned Q2 2010 Top Cromarty depth Map W Catcher E Phase Change Top Cromarty Balder Chalk 2 Km 2 Km January 2010 Page 24
Exploration Indonesia Buton Buton PSC Premier equity 30% Japex operator Lead B reserve estimates 35-100-300 mmboe High risk for oil Prospect maturation ongoing Drilling planned Q4 2010/Q1 2011 NW Lead B B SE 0 5000 meters January 2010 Page 25
Premier Oil a snapshot 2009 Production by type 2009 Commodity price exposure Production by region (kboepd) 2009 2013 39% 61% 62% 38% 16.0 17.2 15.5 21.0 44.2 77.4 Oil Gas Direct oil price linked Regulated gas pricing 11.0 North Sea / West Africa Asia Middle East-Pakistan 41.0 Reserves and resources by category (mmboe, at 30 June 2009) Reserves by region (mmboe, at 30 June 2009) Reserves and resources by region (mmboe, at 30 June 2009) Reserves and resources (mmboe) 181 121 49 59 53 158 500 400 2C reserves 2P reserves 181 446 265 446 300 200 265 144 157 235 100 In production In development Contingent resources North Sea / West Africa Asia Middle East-Pakistan North Sea / West Africa Asia Middle East-Pakistan 0 2005 2006 2007 2008 Proforma 30/6/09 January 2010 Page 26
January www.premier-oil.com 2010 Page 27 January 2010