Premier Oil : Invitation for 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

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS OR IN ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

PREMIER OIL PLC

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

Invitation for early exchange of convertible bonds

11 January 2018

Premier today announces an invitation to convertible bondholders to accelerate the exchange of the outstanding convertible bonds (the 'Bonds') into ordinary shares of the Company. Further details of the formal invitation are set out below.

Rationale

The convertible bonds are capable of being exchanged at any time and are currently trading 'in-the-money'. With this invitation, the Company is seeking to accelerate the exchange of the Bonds into ordinary shares, which has several advantages for the Company, its shareholders and bondholders:

· The primary purpose is to reduce the Company's indebtedness: 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 will rebalance the Company's capital structure and should reduce hedging activity in the Company's ordinary shares: the Company's capital structure currently comprises shareholders' ordinary equity plus long term borrowings which include UK retail bonds, senior loan notes, bank debt and the Bonds. Accelerating the exchange of the Bonds will increase the equity base of the business whist reducing outstanding debt and associated hedging activity (short selling) by certain holders of the Bonds;

· The early exchange of any Bonds will lead to a smaller total number of ordinary shares being issued in respect of the Bonds than would be issued if all coupons were paid in ordinary shares and the Bond were held to and exchanged at maturity;

The invitation is open until 3pm (London time) on 16 January. A further announcement will be made shortly thereafter confirming the outcome of the invitation (which is at the discretion of the Company).

Enquiries:

Invitation to Holders to Offer to Exchange Outstanding US$235,245,000 Premier Oil Finance (Jersey) Limited 2.5% Guaranteed Convertible Bonds due 2022

Premier announces an invitation to holders of the outstanding Premier Oil Finance (Jersey) Limited 2.5% Guaranteed Convertible Bonds due 2022 (the 'Bonds'), to offer to exchange their Bonds (the 'Invitation') for (i) ordinary shares of the Offeror (the 'Ordinary Shares') comprising the relevant holder's entitlement under the terms and conditions of the Bonds (the 'Conditions') and (ii) a number of incentive shares (the 'Incentive Shares'), to be determined pursuant to an auction process.

The Bonds were issued by Premier Oil Finance (Jersey) Limited, a wholly-owned subsidiary of the Offeror on 1 November 2012 in an aggregate principal amount of US$245,324,000. As at the date of this announcement, the Bonds are trading 'in-the-money' and US$235,245,000 in aggregate principal amount of the Bonds remains outstanding. The current exchange price is £0.7471 per Ordinary Share and the fixed exchange rate is £1.00 = US$1.2280.

Invitation Terms

On the terms and subject to the conditions and invitation restrictions set out in the Invitation Term Sheet dated 11 January 2018, the Offeror invites holders to submit an invitation exchange notice (the 'Invitation Exchange Notice') specifying an incentive amount between US$30 - US$60 per US$1,000 in principal amount of the Bonds (the 'Offer Consideration'). This Offer Consideration range represents an Incentive Share amount of 22 - 44 Ordinary Shares per US$1,000 principal amount of the Bonds being offered for exchange.

After the Expiration Date (as detailed below), the Offeror will, in its sole discretion, determine the final Offer Consideration within the Offer Consideration range (the 'Final Offer Consideration'). Subject to applicable law, the Offeror intends to accept for exchange pursuant to the Invitation any and all Bonds offered for exchange at or below the Final Offer Consideration. The final aggregate principal amount of Bonds accepted for exchange pursuant to the Invitation, the Final Offer Consideration and number of Incentive Shares to be delivered per US$1,000 in principal amount of the Bonds being offered for exchange will be announced by the Offeror as soon as reasonably practicable after the Expiration Deadline.

A Bondholder whose offer to exchange its Bonds is accepted pursuant to the Invitation will receive Ordinary Shares comprising its entitlement in accordance with the Conditions following exercise of exchange rights as well as the Incentive Shares detailed above. Exchanging Bondholders will not be entitled to the Quarterly Payment (as defined in the Conditions) due to be paid on 27 January 2018.

To participate in the Invitation, holders must submit, or instruct a relevant intermediary to submit on their behalf, their valid Invitation Exchange Notice specifying the Offer Consideration and the principal amount of the Bonds offered for exchange by way of a SWIFT instruction via the International Central Securities Depositories (ICSDs) to Deutsche Bank AG, London Branch (the 'Agent') before the Expiration Deadline in accordance with the Invitation Term Sheet and the Invitation Exchange Notice.

If any Bondholder who wishes to participate in the Invitation has previously submitted a Share Issue Notice pursuant to the Conditions, such Share Issue Notice must be rescinded by the Bondholder (or relevant intermediary on its behalf) prior to the delivery of an Invitation Exchange Notice. Any such rescission should be communicated to the Agent via the ICSDs in accordance with such Bondholder's usual procedures. Any Share Issue Notice which has previously been submitted as aforesaid shall be treated by the Offeror as revocable, notwithstanding the terms thereof, solely if and to the extent that the relevant Bondholder wishes to participate in the Invitation.

Expected Timetable for the Invitation

Further Information regarding the Invitation

The Offeror may, in its discretion, extend, re-open, amend, waive any condition of, or terminate the Invitation at any time prior to the Announcement of Results, subject to applicable law.

All Invitation Exchange Notices delivered to the Agent will be irrevocable, except (i) if the relevant Bonds are not accepted for exchange pursuant to the Invitation and (ii) in the limited circumstances described in the Invitation Term Sheet.

Holders are advised to read the Invitation Term Sheet in its entirety prior to deciding on whether to participate in the Invitation.

The issue of Incentive Shares may result in an adjustment to the exercise price under the terms of the equity warrants issued by the Company (and to the equity growth fee payable under the terms of the synthetic warrants). The Company will provide notice to warrant holders in due course if an adjustment is required.

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

Any enquiries relating to the terms of the Invitation should be directed to:

IMPORTANT NOTICE

THIS PRESS RELEASE DOES NOT CONSTITUTE AN INVITATION TO PARTICIPATE IN THE INVITATION IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH INVITATION UNDER APPLICABLE SECURITIES LAWS. 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 THE AGENT TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

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, EXCHANGE OR SELL ANY BOND.

ANY DECISION RELATING TO THE BONDS PURSUANT TO THE INVITATION SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY YOU OF THE OFFEROR'S AND THE ISSUER'S PUBLICLY AVAILABLE INFORMATION. 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.

THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR BUY OR A SOLICITATION OF AN OFFER TO SELL OR BUY THE BONDS, AS APPLICABLE (AND OFFERS OF BONDS FOR EXCHANGE PURSUANT TO THE INVITATION WILL NOT BE ACCEPTED FROM BONDHOLDERS IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL). IN THOSE JURISDICTIONS WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE INVITATION TO BE MADE BY A LICENSED BROKER OR DEALER AND THE DEALER MANAGER OR ITS AFFILIATES IS SUCH A LICENSED BROKER OR DEALER IN SUCH JURISDICTIONS, THE INVITATION SHALL BE DEEMED TO BE MADE BY THE DEALER MANAGER OR SUCH AFFILIATE (AS THE CASE MAY BE) ON BEHALF OF THE OFFEROR IN SUCH JURISDICTIONS.

UNITED STATES

THE INVITATION IS NOT BEING MADE AND WILL NOT BE MADE DIRECTLY OR INDIRECTLY IN OR INTO, OR BY USE OF THE MAILS OF, OR BY ANY MEANS OR INSTRUMENTALITY OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF, THE UNITED STATES. THIS INCLUDES, BUT IS NOT LIMITED TO, FACSIMILE TRANSMISSION, ELECTRONIC MAIL, TELEX, TELEPHONE AND THE INTERNET. ACCORDINGLY, COPIES OF THIS PRESS RELEASE AND ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE INVITATION ARE NOT BEING, AND MUST NOT BE, DIRECTLY OR INDIRECTLY MAILED OR OTHERWISE TRANSMITTED, DISTRIBUTED OR FORWARDED IN OR INTO THE UNITED STATES OR TO ANY PERSONS LOCATED OR RESIDENT IN THE UNITED STATES AND BONDS CANNOT BE OFFERED FOR EXCHANGE PURSUANT TO THE INVITATION BY ANY SUCH USE, MEANS, INSTRUMENTS OR FACILITIES OR FROM WITHIN THE UNITED STATES OR BY PERSONS LOCATED OR RESIDENT IN THE UNITED STATES, AS DEFINED IN REGULATION S OF THE U.S. SECURITIES ACT OF 1933 ('REGULATION S' AND THE 'SECURITIES ACT'). FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY RESULT IN A VIOLATION OF APPLICABLE LAWS AND ANY PURPORTED OFFER OF BONDS FOR EXCHANGE RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS WILL BE INVALID AND OFFERS OF BONDS FOR EXCHANGE MADE BY A PERSON LOCATED IN THE UNITED STATES OR ANY AGENT, FIDUCIARY OR OTHER INTERMEDIARY ACTING ON A NON-DISCRETIONARY BASIS FOR A NOMINEE GIVING INSTRUCTIONS FROM WITHIN THE UNITED STATES WILL NOT BE ACCEPTED.

THIS PRESS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE OR AN INVITATION TO OFFER OR SELL SECURITIES IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE PURPOSE OF THIS PRESS RELEASE IS LIMITED TO THE INVITATION AND THIS PRESS RELEASE MAY NOT BE SENT OR GIVEN TO A PERSON IN THE UNITED STATES. EACH HOLDER OF BONDS PARTICIPATING IN THE INVITATION WILL REPRESENT THAT IT IS NOT LOCATED IN THE UNITED STATES AND IS NOT PARTICIPATING IN THE INVITATION FROM THE UNITED STATES, OR IT IS ACTING ON A NON-DISCRETIONARY BASIS FOR A PRINCIPAL LOCATED OUTSIDE THE UNITED STATES THAT IS NOT GIVING AN ORDER TO PARTICIPATE IN THE INVITATION FROM THE UNITED STATES.

FOR THE PURPOSES OF THIS AND THE ABOVE TWO PARAGRAPHS, 'UNITED STATES' MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA.

UNITED KINGDOM

THE COMMUNICATION OF THIS PRESS RELEASE BY THE OFFEROR AND ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE INVITATION IS NOT BEING MADE, AND SUCH DOCUMENTS AND/OR MATERIALS HAVE NOT BEEN APPROVED, BY AN AUTHORISED PERSON FOR THE PURPOSES OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (THE 'FSMA'). ACCORDINGLY, SUCH DOCUMENTS AND/OR MATERIALS ARE NOT BEING DISTRIBUTED TO, AND MUST NOT BE PASSED ON TO, THE GENERAL PUBLIC IN THE UNITED KINGDOM. THE COMMUNICATION OF SUCH DOCUMENTS AND/OR MATERIALS IS EXEMPT FROM THE RESTRICTION ON FINANCIAL PROMOTIONS UNDER SECTION 21 OF THE FSMA ON THE BASIS THAT IT IS ONLY DIRECTED AT AND MAY ONLY BE COMMUNICATED TO (1) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS, BEING INVESTMENT PROFESSIONALS AS DEFINED IN ARTICLE 19 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'FPO'); (2) PERSONS WHO FALL WITHIN ARTICLE 49 OF THE FPO; OR (3) ANY OTHER PERSONS TO WHOM THESE DOCUMENTS AND/OR MATERIALS MAY LAWFULLY BE COMMUNICATED. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PRESS RELEASE RELATES IS AVAILABLE ONLY TO SUCH PERSONS OR WILL BE ENGAGED IN ONLY WITH SUCH PERSONS AND OTHER PERSONS SHOULD NOT RELY ON IT.

FRANCE

THE INVITATION IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, TO THE PUBLIC IN THE REPUBLIC OF FRANCE ('FRANCE'). NEITHER THIS PRESS RELEASE NOR ANY OTHER DOCUMENT OR MATERIAL RELATING TO THE INVITATION HAS BEEN OR SHALL BE DISTRIBUTED TO THE PUBLIC IN FRANCE AND ONLY: (I) PROVIDERS OF INVESTMENT SERVICES RELATING TO PORTFOLIO MANAGEMENT FOR THE ACCOUNT OF THIRD PARTIES (PERSONNES FOURNISSANT LE SERVICE D'INVESTISSEMENT DE GESTION DE PORTEFEUILLE POUR COMPTE DE TIERS); AND/OR (II) QUALIFIED INVESTORS (INVESTISSEURS QUALIFIÉS), ACTING FOR THEIR OWN ACCOUNT, ALL AS DEFINED IN, AND IN ACCORDANCE WITH, ARTICLES L.411-1, L.411-2 AND D.411-1 OF THE FRENCH CODE MONÉTAIRE ET FINANCIER ARE ELIGIBLE TO PARTICIPATE IN THE INVITATION. THIS PRESS RELEASE HAS NOT BEEN SUBMITTED FOR CLEARANCE TO THE AUTORITÉ DES MARCHÉS FINANCIERS.

ITALY

NONE OF THE INVITATION, THIS PRESS RELEASE OR ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE INVITATION HAVE BEEN SUBMITTED TO THE CLEARANCE PROCEDURES OF THE COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB) PURSUANT TO ITALIAN LAWS AND REGULATIONS. THE INVITATION IS BEING CARRIED OUT IN THE REPUBLIC OF ITALY ('ITALY') AS AN EXEMPTED OFFER PURSUANT TO ARTICLE 101-BIS, PARAGRAPH 3-BIS OF THE LEGISLATIVE DECREE NO. 58 OF 24 FEBRUARY 1998, AS AMENDED (THE FINANCIAL SERVICES ACT) AND ARTICLE 35-BIS, PARAGRAPH 3 OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED (THE 'ISSUERS' REGULATION').

ACCORDINGLY, THE INVITATION IS ONLY ADDRESSED TO HOLDERS OF BONDS LOCATED IN THE REPUBLIC OF ITALY WHO ARE 'QUALIFIED INVESTORS' (INVESTITORI QUALIFICATI) AS DEFINED PURSUANT TO AND WITHIN THE MEANING OF ARTICLE 100 OF THE FINANCIAL SERVICES ACT AND ARTICLE 34-TER, PARAGRAPH 1, LETTER B) OF THE ISSUERS' REGULATION.

HOLDERS OR BENEFICIAL OWNERS OF THE BONDS MAY OFFER THEIR BONDS FOR EXCHANGE PURSUANT TO THE INVITATION THROUGH AUTHORISED PERSONS (SUCH AS INVESTMENT FIRMS, BANKS OR FINANCIAL INTERMEDIARIES PERMITTED TO CONDUCT SUCH ACTIVITIES IN ITALY IN ACCORDANCE WITH THE FINANCIAL SERVICES ACT, CONSOB REGULATION NO. 16190 OF 29 OCTOBER 2007, AS AMENDED FROM TIME TO TIME, AND LEGISLATIVE DECREE NO. 385 OF SEPTEMBER 1, 1993, AS AMENDED) AND IN COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS OR WITH REQUIREMENTS IMPOSED BY CONSOB OR ANY OTHER ITALIAN AUTHORITY. EACH INTERMEDIARY MUST COMPLY WITH THE APPLICABLE LAWS AND REGULATIONS CONCERNING INFORMATION DUTIES VIS-À-VIS ITS CLIENTS IN CONNECTION WITH THE BONDS OR THE INVITATION.