Premier Oil : Results of early exchange of convertible bonds

This announcement has been determined to contain certain inside information. Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain

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PREMIER OIL PLC

('Premier', 'the Company' or the 'Offeror')

Results of Invitation for early exchange of convertible bonds

17 January 2018

Premier is pleased to report, further to its earlier announcement, the final results from its successful invitation to convertible bondholders to accelerate the exchange of the outstanding convertible bonds (the 'Bonds') into ordinary shares of the Company (the 'Invitation').

87.5 per cent or US$205.79 million of the US$235.2 million convertible bonds outstanding have been accepted for early conversion.

The incentive amount for the exchange has been fixed at US$50 per US$1,000 of the Bonds compared to the invitation range of US$30-60 per US$1,000. The dilution as a result of the incentive shares represents less than 1 per cent of the enlarged share capital of the Company.

Rationale for the Invitation

At the time of launch of the Invitation, the convertible bonds were capable of being exchanged at any time and were trading 'in-the-money'. With this Invitation, the Company has accelerated the exchange of the Bonds into ordinary shares of the Company ('Ordinary Shares'), which has several advantages for the Company, its shareholders and bondholders:

· It reduces the Company's indebtedness by US$205.79 million: the early exchange of the Bonds along with the recent non-core disposals of Wytch Farm, Pakistan, and its interest in the ETS pipeline and the start of production at Catcher, will assist the Company to reduce debt and to impact positively the Company's forward financial covenants;

· It rebalances the Company's capital structure and should reduce hedging activity in the Company's Ordinary Shares: accelerating the exchange of the Bonds increases the equity base of the business whilst reducing outstanding debt and associated hedging activity (short selling) by certain holders of the Bonds;

· The early exchange of the Bonds means that approximately 1,125 Ordinary Shares will be issued for each US$1,000 in principal amount of the Bonds. This compares to approximately 1,171 Ordinary Shares that would have been issued for each US$1,000 in principal amount if all coupons were paid in Ordinary Shares¹ and the Bonds were held to and exchanged at maturity;

Tony Durrant, Chief Executive, commented:

'Against a background of rising oil prices and strong corporate performance, we believe that the accelerated conversion programme offers the benefits of further debt reduction and increased stability in our capital base.'

1. Estimated number of Ordinary Shares to be issued for coupon payments in relation to each US$1,000 in principal amount of the Bonds (if held to maturity) is calculated based on the Reference Price at launch of the Invitation on 11 January 2018

Enquiries:

Result of the Invitation

Following expiration of the Invitation at 3p.m. (London time) on 16 January 2018, the Final Offer Consideration has been fixed at US$50 per US$1,000 in principal amount of the Bonds. The Company has accepted for exchange US$205.79 million in aggregate principal amount of the Bonds in accordance with the terms and conditions set out in the Invitation Term Sheet dated 11 January 2018. In total, 231,882,091 Ordinary Shares are expected to be issued (representing 43.6 % of the issued share capital of the Company), which comprises (i) 224,303,748 Ordinary Shares comprising the relevant holder's entitlement under the Conditions and (ii) 7,578,343 Incentive Shares.

Of the aggregate principal amount of US$235.2 million of Bonds outstanding prior to the Invitation, 87.5 per cent were accepted by the Company for exchange pursuant to the Invitation. Following settlement of the Invitation, US$29.46 million in principal amount of the Bonds are expected to remain outstanding.

Application has been made by the Company to the United Kingdom Financial Conduct Authority and the London Stock Exchange for the Ordinary Shares to be issued on exchange to be listed on the Official List and admitted to trading on the Main Market of the London Stock Exchange. The new Ordinary Shares to be issued will rank pari passu with the existing Ordinary Shares. Listing and admission of the Ordinary Shares, and delivery of the Ordinary Shares to exchanging holders pursuant to the Invitation, is expected to occur on 19 January 2018.

Following the issue and delivery of the Ordinary Shares pursuant to the Invitation, the total number of Ordinary Shares and voting rights in the Company will be 764,282,574. The Company does not hold any Ordinary Shares in treasury. The above figure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Rules and Transparency Guidance and the articles of association of the Company.

The Company wishes to confirm that the issue of Incentive Shares will result in an adjustment to the exercise price under the terms of the equity warrants issued by the Company. The exercise price will be adjusted from £0.4275 to £0.4180 and this adjustment will apply to all exercise notices received on or after 22 January 2018.

Jefferies International Limited acted as sole Dealer Manager in relation to the Invitation.

Words and expressions used in this press release and not defined herein shall have the same meaning as provided in the Invitation Term Sheet.

IMPORTANT NOTICE

THE DISTRIBUTION OF THIS PRESS RELEASE IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. PERSONS INTO WHOSE POSSESSION THIS PRESS RELEASE COMES ARE REQUIRED BY EACH OF THE OFFEROR, PREMIER OIL FINANCE (JERSEY) LIMITED (THE 'ISSUER'), THE DEALER MANAGER AND DEUTSCHE BANK AG, LONDON BRANCH (THE 'AGENT') TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS. THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR BUY OR A SOLICITATION OF AN OFFER TO SELL OR BUY THE BONDS OR ANY OTHER SECURITIES.

THIS PRESS RELEASE IS DIRECTED EXCLUSIVELY TO MARKET PROFESSIONALS AND INSTITUTIONAL INVESTORS AND IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE RELIED UPON IN SUBSTITUTION FOR THE EXERCISE OF INDEPENDENT JUDGEMENT. IT IS NOT INTENDED AS INVESTMENT ADVICE AND UNDER NO CIRCUMSTANCES IS IT TO BE USED OR CONSIDERED AS AN OFFER TO BUY ANY BOND NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY BOND.

NONE OF THE DEALER MANAGER, THE AGENT NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKES ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS PRESS RELEASE OR THE OFFEROR'S OR ISSUER'S PUBLICLY AVAILABLE INFORMATION.

THE DEALER MANAGER AND THE AGENT ARE ACTING ON BEHALF OF THE OFFEROR AND NO ONE ELSE IN CONNECTION WITH THE INVITATION AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE DEALER MANAGER OR THE AGENT, OR FOR PROVIDING ADVICE IN RELATION TO THE INVITATION. NEITHER THE DEALER MANAGER NOR THE AGENT OWES ANY DUTY TO ANY HOLDER OF THE BONDS.