rd march 2006 - premieroil.prod-mid-euw3.investis.com

2005 Preliminary Results Presentation 23rd March 2006

| 2005 Preliminary Results Presentation

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.


Preliminary results presentation

Strategy & Outlook Simon Lockett

Projects Update Robin Allan

Financial Highlights Tony Durrant


Strategy & outlook


Premier’s business strategy

• Targeting 50,000 boepd in medium term

• Reorganised business

• Build on quality prospect inventory for 2007 and beyond

• Minimum of 4 high impact wells per annum within disciplined spend

Strategy

• Acquisitions focus on core areas

• Exciting 2006 exploration programme, already delivering results

• Portfolio of new and incremental development projects

• Rising production in 2006

Progress


Asia – building on our Natuna Sea position

20004000

8000

Asia Production(boepd)

0

6000

1000012000

18000

2006 2007 2008 2009

1400016000

Potential new projectsBooked reserves

• Use technical and commercial expertise from operations in the Natuna Sea to deliver new exploration opportunities and production projects across the region.

2005 2006• Vietnam prospect delivery • Lembu-Peteng and Macan Tutul• Indonesia HSE performance • Vietnam high-impact wells• West Lobe project progress • Singapore gas sales progressing

• Ratna


West Africa – building a new core business

• Develop a pipeline of high impact drillable prospects and capitalise on Mauritania position

2005 2006• Congo and SADR acreage acquisitions • Guinea Bissau drilling• Chinguetti development complete • Chinguetti Phase 2• Tiof, Tevet and Banda appraised • Tiof development decision

• Progress Government of Mauritania issues

2000

3000

5000

West Africa Production(boepd)

0


4000

7000

2006 2007 2008 2009

6000

1000


North Sea – returning to growth

2000

4000

8000

North Sea Production(boepd)

0

6000

16000

2006 2007 2008 2009

14000

10000

12000


• Build on Norway position by seeking out high impact exploration opportunities and maximise the value from existing UK producing assets

2005 2006• Norway acreage additions • UK exploration - Peveril• Kyle offtake reconfiguration • Frøy development progress• Wytch Farm infill drilling • Wytch Farm EOR


Middle East & Pakistan –enhancing the Pakistan gas business

20004000

8000

Pakistan Production(boepd)

0

6000

1000012000

18000

2006 2007 2008 2009


1400016000

• Capitalise on a leading position in Pakistan’s rapidly growing gas market, and build a position in Egypt & the Middle East

2005 2006• Al Amir discovery • Al Amir appraisal• Zamzama 2 sanction • Indus E exploration (Anne)• Bhit/Qadirpur additional sales progress • Bhit/Qadirpur plant upgrades


5 Year production potential

Production Profile by Region(boepd)

2006

60000

0

70000

2007 2008 2009 2010

50000

40000

30000

20000

10000

South AsiaM/East & PakistanWest AfricaNorth Sea

Production Profile(boepd)

2006

60000

0

70000

2007 2008 2009 2010

50000

40000

30000

20000

10000

(NB: Only includes discovered hydrocarbons (no exploration success assumed or acquisitions))



Operational highlights

• Production ahead of budget at 33,300 boepd

• Developments on track in 2006

• Further gas sales progressed

• Resource base increased to 232 mmboe

• Successful exploration and appraisal year

• World class HSE performance

Strong gas demand in Pakistan, Indonesia offsets UK decline. Rising profile in 2006.

West Natuna (West Lobe) expected 3Q 2006Chinguetti onstream in February 2006.

Zamzama phase 2 signed.Good progress in Pakistan and West Natuna.

Net additions from discoveries and new licence awards.New acreage added for future exploration.

5 successes from 10 wells in 2005.Excellent start to 2006 in 2 operated wells.

5 years of continuous improvement as an Operator


Projects update


Asia – building on our Natuna Sea position

• Indonesia drilling update

• Singapore gas sales & associated development

• Vietnam high-impact wells

• Ratna progress

20004000

8000

Asia Production(boepd)

0

6000

18000

2006 2007 2008 2009

14000

1000012000


16000


Indonesia drilling update


Macan Tutul-1


Natuna Sea Block A PSC

2006 success in - Macan Tutul-1- Lembu Peteng-1


Lembu Peteng-1



Lembu Peteng-1Ibu Lembu-1



Singapore gas sales & associated development


Singapore gas sales & associated development

Gas Sales• Excellent demand in 2005• Progressing GSA2 negotiations

Anoa West Lobe• On schedule and on budget• First gas in Q3 2006


Vietnam high-impact wells


Blocks 12E & W Operator – Premier• Dua• Blackbird• Swan • Falcon, Peacock and Quit:

follow-on prospects

Dua Structure

Proposed12E-CS-1X

Blackbird Structure

Quit

Peacock

Falcon

Swan

Dua

Blackbird



Existing Well 12E-LX-1Xoff-structure

Premier 12E-CS-1XPlanned at crest

12E-LX-1XThick sands with residual oil;

drilled close to mapped contact

Oil Water Contact

Blackbird Prospect



Dua-1X

12-A-1X

Dua-1XDiscovery

Dua-2X

PremierDua-4X

Dua-1X (1974)Flowed 1500 bopd from (damaged)

Lower Miocene ‘Dua’ Sands

5km

Confirming Dua oil



Ratna progress


West Africa


West Africa – building a new core business

2000

3000

5000

West Africa Production(boepd)

0


4000

7000

2006 2007 2008 2009

6000

1000

• Congo high impact exploration

• S.A.D.R. high impact exploration

• Guinea Bissau high-impact wells

• Mauritania – Chinguetti onstream, next steps


Congo high impact exploration


Block Marine IX

Highly prospective block, with significant reserve potential.

Premier 58.5% – Operator

Frida ProspectFrida Prospect

Kitina150 m bbls

Moho110 m bbls

N’Kossa280 m bbls



Top Lower Albiandepth map with

Miocene channeldepth overlay

Tertiary Channel

2.0

1.0

3.0

4.0

Frida Prospect



S.A.D.R. high impact exploration


Guinea Bissau high-impact wells


Total mean un-risked reservesin the top prospects is

>1.5 billion barrels (gross)

A $50/bbl oil price economics generates $7 NPV/bbl 135 mbbls

100 mbbls

180 mbbls

80 mbbls

151 mbbls

Espinafre70 mbbls

Sinapa-1 Sinapa-2,2z175 mbbls

30 mbbls 230 mbbls

110 mmbbls

Eirozes250m bbls

300 mmbbls

190 mbbls



North

Eirozes-1Proposed Well

(WD= 120 metres)

Eirozes Prospect: mean reserves 250 MM bbls

TopAlbianSand

Salt

South



Espinafre Prospect: mean reserves 70 MM bbls

North

Top Albian Sand

Salt

South

Espinafre-1Proposed Well

(WD= 34 metres)



Mauritania – Chinguetti onstream, next steps


Mauritania – Chinguetti onstream, next steps

Jalakk

Tiof SW

N’Dor

Bogue S

Fantar SW

Kibaro

Awatt

Colin

EquivalentNorth Sea block

Tevet-2 / Tevet Deep 2005 Cretaceous discovery

Labeidna 2005 Miocene discovery



20004000

8000

North Sea Production(boepd)

0

6000

16000

2006 2007 2008 2009

14000

1000012000


• Norway acreage additions

• Frøy development progress

• UK progress – Wytch Farm & Kyle


Norway acreage additions

Reprocessing 3D34/2, 34/5 – 15%

Reprocess 3D34/4 (N) – 30%

Reprocess 3D35/12, 36/10 – 40%

Reprocess 3D16/1 (E), 16/4- 30%

100 sq.km 3D aqFrøy Area – 50%

2005 APA Round: Awarded 5 E&P

Work programme commitment level low, ALL work programmes targeting 2007 drilling.


Frøy development progress

• STOIIP 239 MMstb

• Historical Production38 MMstb

• Future resources20-40 m bbls

• Target development approval – early 2007

• Planned first oilmid-2009

Frøy Field


Kyle• Offtake reconfigured to a single FPSO• Targeting un-tapped Palaeocene reserves

UK progress – Wytch Farm & Kyle

Wytch Farm• Infill drilling continues• Key projects are:

– Low-salinity water injection EOR– 98/7 development


Middle East & Pakistan

• Bhit & Zamzama progress

• Qadirpur & Kadanwari progress

• Egypt - Al Amir appraisal

• Pakistan – Anne high impact exploration

20004000

8000

Production(boepd)

0

6000

18000

2006 2007 2008 2009

14000

1000012000


16000


Pakistan – Bhit & Zamzama progress


Zamzama• Phase 2 approved in 2005 – work in progressBhit - Badhra• GSA to increase rates close to completion• Seismic recently acquired to evaluate Badhra upside

Pakistan – Bhit & Zamzama progress


Kadanwari• High gas prices and strong offtake• 2006 drilling to exploit reservoir upside

and utilise plant capacity

Qadirpur• Further plant expansion to proceed• GSA to increase rates being negotiated• Possible power plant to sell further gas• Deeper reservoir to be drilled

Pakistan – Qadirpur & Kadanwari progress


Egypt - Al Amir appraisal


South Gharib Fm

Al Amir-2

Egypt - Al Amir appraisal

Zone-1 top oil

Zone-2

Zone-3 Zone-4


Pakistan – Anne high impact exploration


Pakistan – Anne high impact exploration

The Anne well is being drilled down-flank to target best channel

package and to confirm an economic

oil volume.

(i.e. attic likely to besub-commercial)

Anne-1 EW


Exploration – 2006 exploration well plans

Guinea Bissau: Eirozes-1Espinafre-1

Mauritania : Dore-1 (dry): Colin-1: Kibaro-1

Gabon : Themis-1

Egypt : Al Amir-2 AppraisalPakistan : Anne-1

Indonesia : Tupai-1 : Ganesha-1: Macan Tutul (gas discovery): Lembu Peteng-1: Lukah-1

Vietnam : Blackbird-1 : Dua

India : Masimpur-3

UK : Peveril

West Africa 2006JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Asia

North Sea

M/East & Pakistan

Appraisal wells

Exploration wells

Rigs contracted for all wells except marked

High impact wells


2005 Financial Highlights


Financial highlights

• Operating profit up 112%

• Profit after tax up 75%

• Healthy cashflow

• Strong balance sheet

• Share buy back initiated

$125.7m(2004: $59.3m)

$38.6m(2004: $22.1m)

$118.9m(2004: $109.6m)

Net debt $26.2m

£10 million programme

Rising oil and gas prices, stable production

Rising profits offset by higher taxation charge

Cashflow covers all operating and capital expenditures at current prices

Significant cash inflow in January 2006

Average purchase cost of £5.55 per share


Income Statement

Working Interest Production (mboepd)Entitlement Interest Production (mboepd)Realised oil price ($/bbl)Realised gas price ($/mcf)

Sales and other operating revenuesCost of salesExploration expensePre licence exploration costsGeneral and administration costsOperating profit Interest income and exchange gainsInterest and other finance expenseProfit before taxationTaxationProfit after tax

Earnings per share - basic (cents)Earnings per share - diluted (cents)

Prepared in accordance with IFRS

Year to31 Dec 2005

Year to31 Dec 2004

33.328.7

48.383.82

$m359

(176)(21)(17)(20)126

6(7)

125(86)

39

47.046.6

34.731.5

29.923.24

$m252

(135)(28)(13)(17)

592

(8)54

(32)22

26.826.1

Highlights

Underlying operating costs steady at <US$6 per barrelReduced dry hole costs

Low interest charges with strong balance sheetFull year of profit oil and gas in IndonesiaFull utilisation of past losses in Pakistan

Based on 82.1million shares

Includes one-off costs of US$3 million

Rising gas prices (especially in Singapore)

Full benefit of current high prices in 2006

Targeting 10% increase by year-end 2006


Cashflow

Net cash flow from operationsNet interest TaxationOperating cash flowCapital expenditurePre licence exploration costsNet share issues/(purchases)Other movementsMovement in net cash

Opening net cash/(debt)Closing net cash/(debt)

Prepared in accordance with IFRS

Year to31 Dec 2004

$m

Year to31 Dec 2005

$m

207(2)

(86)119

(133)(17)(20)

6(45)

19(26)

165-

(55)110(92)(12)

2(2)6

1319

Exploration spend covered 2.3 X

Buy back of ordinary shares (£10 million) and purchase of shares for ESOP trust

2005 2004

Development

133 92

Exploration 51 46

82 34Acquisitions 13


Gas pricing – improving economics

Brent & HSFO Prices(Index)

90

210

190

170

150

130

110

2004 2005 ‘06

PKP Gas Prices($/mmbtu)

150

7

25 40 60

5

4

3

2

1

6

5510 20 30 35 45 50

KadanwariBhitQadirpurZamzamaPKP

BrentHSFO

2005: US$7.90 per mscf (2004: US$4.96 per mscf)2005: US$2.20 per mscf (2004: US$2.13 per mscf)


10% Increase in Total Resources

100

140

Reserves/Resources(mmboe)

Openingreserves/resources

Production Net Revisions Resourceadditions

Closingreserves/resources

80

0

Unbooked resources movementBooked reserves movementUnbooked resourcesBooked reserves

120

180160

200

• Booked reserves independently reviewed• Resource additions include Dua & Froy. • No resources yet booked for Banda or Swan discoveries

Divestment

220240

604020

210

232


Future Field Capex by Region($ million)

140

0

180

100

80

60

40

20

West AfricaSouth AsiaM. East & PakistanNorth Sea

120

160

Future Field Capex($ million)

2006

140

0

180

2007 2008 2009

100

80

60

40

20

120

160Potential new projectsBooked reserves

Potential future field Capex

2006 2007 2008 2009


Exploration spend

• Targeted at around $50m per annum

• Pre-licence exploration costs estimated at additional $10m per annum

• Will require active portfolio management in current environment to meet target– Attractive farm-in offers under consideration

10

20

40

Exploration Spend($M)

0

30

60

2003 2004 2005 2006 E

50


Financial outlook

• Balance sheet effectively ungeared

• Strong and stable cashflows will fund planned capital programme at $50/bbl– including annual exploration spend at $50m

• Hedging programme through 2010 with floors around $40/bbl protects downside

• Corporate credit facility of $275m largely undrawn

• Financially strong to fund new development projects and acquisitions


Summary

• Exciting year ahead

• Close out gas sales contracts in Indonesia/Pakistan

• Actively target acquisitions in core areas

• High impact exploration in Guinea Bissau & Vietnam

| 2005 Preliminary Results Presentationwww.premier-oil.com March 2006

rd march 2006 - premieroil.prod-mid-euw3.investis.com

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