Premier Oil

Capex

Planned spend on exploration and appraisal drilling and seismic in 2008 is US$110.0 million pre-tax (post-tax and recoveries: US$75.0 million).

Future Plans

Development Assets
• Major development projects progressing as planned to build Premier’s production to 50,000 boepd by end 2010.
• Chim Sao (Vietnam), Alur Siwah and Gajah Baru (Indonesia) expected to reach project sanction this year and on-stream in 2010.

Drilling Update
• Programme of approximately 18 development wells and up to 12 exploration and appraisal wells planned for 2008;
• Forward programme:
- Up to 24-month Vietnam campaign expected to commence in mid-March 2008;
- Monte Cristo-1 well in Philippines expected to spud 1Q 2008;
- Bream appraisal well in Norway expected to spud during March or April 2008;
- Significant development well programme in Pakistan includes accessing a number of deeper exploration prospects;
- Qadirpur deep testing programme scheduled for April 2008.
- Infill drilling at Wytch Farm, Scott and Chinguetti

Production

Working interest production for 2007 averaged 35,750 boepd. Comparable production from 2006 was 33,000 boepd. Production comprised 34 per cent liquids and 66 per cent gas, with Pakistan and Indonesia accounting for 36 per cent and 34 per cent of the total respectively, the UK 28 per cent and West Africa the remainder. On an entitlement basis, group production for the year was 31,450 boepd (2006: 28,900 boepd).

Working interest production for 2006 averaged 33,000 boepd. Comparable production from 2005 was 33,300 boepd. Production comprised 33 per cent liquids and 67 per cent gas, with Pakistan and Indonesia each accounting for around 37 per cent and 35 per cent of the total respectively, the UK 21 per cent and West Africa the remainder. On an entitlement basis, group production for the year was 28,900 boepd (2005:.28,700 boepd).

Reserves

Booked reserve additions and revisions include an increase in booked reserves in Indonesia West Natuna Sea Block A resulting from an additional Gas Sales Agreement (GSA), and the North Sumatra Block A gas development for which a GSA has been signed with the PIM Fertilizer Plant. Significant reserve additions also included the acquisition of the Scott field interest. There were reserves increases on the Kakap field in Indonesia and the Zamzama field in Pakistan. In the UK, a reduction in Wytch Farm reserves was offset by increased reserves on the Kyle field. Contingent resource bookings have increased to include the Banda gas discovery in Mauritania, the Kuala Langsa gas discovery in North Sumatra Block A, and the Bream discovery in Norway and include the Chim Sáo oil field in Vietnam where an Outline Development Plan was submitted. These volumes, together with others in the process of being commercialised, give increased total reserves and contingent resources of 369 mmboe (2006: 289 mmboe).

At year-end, reserves comprised 18 per cent liquids and 82 per cent gas. The equivalent volume on an entitlement basis amounted to 183 mmboe (2006: 132 mmboe).

2006 year-end oil and gas proven and probable booked reserves amounted to 165 million barrels of oil equivalent (mmboe), including 13 mmboe acquired with the Scott field interest subsequent to year-end (2005: 164 mmboe). Following our successful exploration activity during the year, and the completion of the two acquisitions in North Sumatra, total reserves and resources, which include discoveries not yet booked pending commercialisation, have increased to an estimated 289 mmboe (2005: 232 mmboe).

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