This document comprises a prospectus (the "Prospectus") prepared in accordance with the Prospectus Rules of the UK Financial Conduct Authority ("FCA") made under section 73A of the Financial Services and Markets Act 2000 ("FSMA"). The Prospectus has been approved by the FCA in accordance with section 87A of FSMA and made available to the public as required by Rule 3.2 of the Prospectus Rules.

The Directors, whose names appear on page 142 of this Prospectus, and the Issuer accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Directors and the Issuer (who have taken all reasonable care to ensure that such is the case) such information is in accordance with the facts and this Prospectus does not omit anything likely to affect the import of such information.

The distribution of this document into jurisdictions other than the UK may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. In particular, subject to certain exceptions, this document should not be distributed, forwarded to or transmitted in or into the United States. Any failure to comply with these restrictions may constitute a violation of the relevant laws in such jurisdiction.

The opportunity to subscribe for Equity Warrants or Synthetic Warrants is available to certain existing creditors only, namely the Scheme Creditors, the Schuldschein Lenders and the Existing Bilateral LC Creditors (together with the Convertible Bondholders, the "Creditors"). The arrangements pursuant to which Convertible Warrants will be issued involve the Convertible Bondholders only. No offer, or the solicitation of an offer, to subscribe for Equity Warrants or Synthetic Warrants is being made to any Shareholder who is not a Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor. No offer, or the solicitation of an offer, to enter into an arrangement pursuant to which the Convertible Warrants will be issued is being made to any Shareholder who is not a Convertible Bondholder. If a Creditor is also a Shareholder, the offer will be made to or involve it only in its capacity as a Scheme Creditor, Schuldschein Lender, Existing Bilateral LC Creditor or Convertible Bondholder.

Creditors should read the entire Prospectus and, in particular, the section headed Risk Factors for a discussion of certain factors that should be considered in connection with an investment in the Equity Warrants or Synthetic Warrants or the Convertible Warrants. Creditors should be aware that an investment in the Issuer involves a degree of risk and that, if certain of the risks described in the Prospectus occur, Creditors may find their investment materially adversely affected. Accordingly, an investment in the Equity Warrants, Synthetic Warrants or Convertible Warrants is only suitable for Creditors who are particularly knowledgeable in investment matters and who are able to bear the loss of the whole or part of their investment.

This document does not constitute or form part of an offer or arrangement to sell or issue, or a solicitation of an offer to accept, Equity Warrants, Synthetic Warrants, Warrant Shares, Convertible Warrants, Ordinary Shares issuable on exercise of the Convertible Warrants or any other securities, in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation

PREMIER OIL PLC

Proposed issue of up to 93,443,462 Equity Warrants and/or Synthetic Warrants in connection with the proposed Refinancing of the Premier Group pursuant to an agreement with its creditors.

No offer, or the solicitation of an offer, to buy or to subscribe for, Equity Warrants or Synthetic Warrants or an offer to enter into any arrangement pursuant to which Convertible Warrants will be issued is being made to any person in any jurisdiction to whom or in which jurisdiction such offer or solicitation is unlawful and, in particular, this Prospectus is not for distribution in the United States (subject to certain exceptions), Australia, Canada or Japan. The Issuer does not accept any legal responsibility for any violation by any person, whether or not a Creditor, of any such restrictions. No action has been, or will be, taken in any jurisdiction other than the UK that would permit a public offering of the Equity Warrants or Synthetic Warrants or Convertible Warrants, or the possession, circulation or distribution of the Prospectus or any other material relating to the Issuer, the Equity Warrants, Synthetic Warrants or Convertible Warrants in any jurisdiction where action for that purpose is required. The offer, sale and/or issue of the Equity Warrants, Synthetic Warrants or Convertible Warrants has not been, and will not be, qualified for sale under any applicable securities laws of the United States, Australia, Canada or Japan. Subject to certain exceptions, the Equity Warrants, Synthetic Warrants or Convertible Warrants may not be offered, sold or delivered within the United States, Australia, Canada or Japan, or to, or for the benefit of, any national, resident or citizen of Australia, Canada or Japan.

This figure is based on the issued share capital of the Issuer as at the Latest Practicable Date and is subject to change if the Issuer were to issue more Ordinary Shares prior to the Entitlement Calculation Date.

The Equity Warrants, the Synthetic Warrants, the Convertible Warrants, the Warrant Shares to be issued upon exercise of the Equity Warrants, and Ordinary Shares to be issued upon exercise of the Convertible Warrants, have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), or with any securities regulatory authority of any state or any other jurisdiction of the United States, and may not be offered, sold or resold (including in the case of Equity Warrants and Convertible Warrants, the Warrant Shares and Ordinary Shares (respectively) issuable upon exercise) in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Equity Warrants, Synthetic Warrants or Convertible Warrants in the United States.

The Equity Warrants (but not the Warrant Shares issuable upon exercise) and the Synthetic Warrants will be issued under the Schemes to Scheme Creditors in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. The Equity Warrants and the Synthetic Warrants to be issued to Schuldschein Lenders and Existing Bilateral LC Creditors, and the Convertible Warrants to be issued to Convertible Bondholders, will be issued in offshore transactions within the meaning of, and in reliance on, Regulation S under the US Securities Act ("Regulation S") or, in the case of Schuldschein Lenders, Existing Bilateral LC Creditors or Convertible Bondholders in the United States, then to Schuldschein Lenders, Existing Bilateral LC Creditors and Convertible Bondholders who are either qualified institutional buyers within the meaning of Rule 144A under the US Securities Act ("QIB") or institutional "accredited investors" within the meaning of clauses (1), (2), (3) or (7) of paragraph (a) of Rule 501 of Regulation D under the US Securities Act or are entities wholly owned by any person that is an "accredited investor" within the meaning of clauses (1), (2), (3) or (7) of paragraph (a) of Rule 501 of Regulation D ("IAI") in transactions exempt from, or not subject to, the registration requirements of the US Securities Act. Under the US Securities Act, persons (whether or not "US persons" within the meaning of Regulation S under the US Securities Act) who are or will be "affiliates" (within the meaning of the rules promulgated under the US Securities Act) of the Issuer will be subject to certain transfer restrictions relating to the Equity Warrants (and the Warrant Shares) and the Synthetic Warrants received in connection with the Schemes or otherwise and the Convertible Warrants (and the Ordinary Shares) received in connection with an amendment to the terms of the Convertible Bonds. Moreover, the transfer of Equity Warrants and Convertible Warrants will be permitted only (i) in offshore transactions within the meaning of, and in reliance on, Regulation S or (ii) to persons in the United States whom the transferor reasonably believes are either QIBs or IAIs in transactions exempt from, or not subject to, the registration requirements of the US Securities Act. The transfer of Synthetic Warrants by the Schuldschein Lenders and the Existing Bilateral LC Creditors will be permitted only (i) in the United States either pursuant to Rule 144 under the US Securities Act (if available), in a transaction not subject to the registration requirements of the US Securities Act or pursuant to another exemption from the registration requirements of the US Securities Act, and in any case, in accordance with all applicable state securities laws, or (ii) outside the United States in offshore transactions pursuant to Rule 903 or 904 of Regulation S. We urge Creditors resident in the United States to read the "Information for United States and other overseas Creditors" in the section on Important Information on pages 32 and 33 of this document.

Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors in the United States who elect to receive Equity Warrants or Synthetic Warrants, and Convertible Bondholders who elect to receive Convertible Warrants, but cannot make such US securities law representations as may be required by the Issuer and are unable to designate a recipient to hold Equity Warrants, Synthetic Warrants or Convertible Warrants on their behalf who is able to make such US securities law representations will not be eligible to receive Equity Warrants, Synthetic Warrants or Convertible Warrants but will have their Equity Warrants, Synthetic Warrants or Convertible Warrants placed in a holding period trust and sold in the market for their benefit at the expiry of the holding period.

RBC Europe Limited, who in the UK is authorised by the Prudential Regulation Authority and is regulated by the Prudential Regulation Authority and the FCA, is advising the Issuer and no one else and will not regard any person other than the Issuer (whether or not a recipient of this Prospectus) as their client in relation to the Offer and will not be responsible to anyone other than the Issuer for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer or any transaction, arrangement or other matter referred to in this Prospectus. Nothing in this disclaimer shall be interpreted as seeking to limit or exclude any responsibility or liability of RBC Europe Limited which arises under FSMA or the regulatory regime established thereunder.

Rothschild & Co. is advising the Issuer and no one else and will not regard any person other than the Issuer (whether or not a recipient of this Prospectus) as its client in relation to the Offer and will not be responsible to anyone other than the Issuer for providing the protections afforded to its clients nor for giving advice in relation to the Offer or any transaction, arrangement or other matter referred to in this Prospectus.

Creditors should rely only on the information contained in this Prospectus, including information incorporated into it by reference as set out in Appendix III (Information Incorporated by Reference). No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied on as having been authorised by the Issuer, the Directors, RBC Europe Limited or Rothschild & Co. In particular, the contents of the websites of the Issuer do not form part of this Prospectus and Creditors should not rely on them.

Any Warrant Shares to be issued on exercise of the Equity Warrants and any Ordinary Shares to be issued on exercise of the Convertible Warrants will rank equally in all respects with all other Ordinary Shares on issue, including for all dividends and other distributions declared, made or paid on the Ordinary Shares, after admission.

The date of this Prospectus is 30 May 2017.

iii

SUMMARY ... 1
RISK FACTORS ... 16
IMPORTANT INFORMATION ... 32
EXPECTED TIMETABLE OF PRINCIPAL EVENTS ... 37
PART I—INFORMATION ON THE REFINANCING ... 38
PART II—DESCRIPTION OF THE ISSUER AND THE GROUP ... 61
PART III—OPERATING AND FINANCIAL REVIEW OF THE ISSUER ... 101
PART IV—HISTORICAL FINANCIAL INFORMATION ... 102
PART V—CAPITALISATION AND INDEBTEDNESS ... 104
PART VI—INFORMATION ABOUT THE OFFER ... 106
PART VII—TERMS AND CONDITIONS OF THE EQUITY WARRANTS ... 111
PART VIII—TERMS AND CONDITIONS OF THE SYNTHETIC WARRANTS ... 118
PART IX—INFORMATION ABOUT THE WARRANT SHARES ... 124
PART X—TAXATION ... 128
PART XI—ADDITIONAL INFORMATION ... 133
APPENDIX I—DEFINITIONS ... 158
APPENDIX II—TECHNICAL TERMS ... 187
APPENDIX III—INFORMATION INCORPORATED BY REFERENCE ... 189

SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These elements are numbered in Sections A – E (A.1 – E.7).

This summary contains all the Elements required to be included in a summary for these types of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the types of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of “not applicable”.

Section A—Introduction and warnings
Element
A.1	Introduction and warnings	This summary must be read as an introduction to this Prospectus. Any decision to invest in the Equity Warrants or the Synthetic Warrants should be based on consideration of this Prospectus as a whole by the Scheme Creditors, the Schuldschein Lenders and the Existing Bilateral LC Creditors. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the EU Member States, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid the Scheme Creditors, the Schuldschein Lenders and the Existing Bilateral LC Creditors when considering whether to invest in such Equity Warrants or Synthetic Warrants.
A.2	Subsequent resale of securities or final placement of securities through financial intermediaries	Not applicable. Neither the Issuer nor any person responsible for drawing up this Prospectus has consented to the use of this Prospectus for subsequent sale or placement of securities by financial intermediaries.
Section B—Issuer
---	---	---
Element
B.1	Legal and commercial name	Premier Oil plc.
B.2	Domicile/ legal form/ legislation/ country of incorporation	The Issuer is a public limited company, incorporated in the United Kingdom with its registered office situated in Scotland. The Issuer operates under the Companies Act 2006.
B.3	Current operations/ principal activities and markets	The Group’s primary business is international oil and gas exploration and production activities. The Group has current interests in several countries around the world, with significant assets in the UK, the Falkland Islands, Indonesia, Vietnam, Pakistan and Latin America. The portfolio consists of oil and gas fields which are already producing, discovered fields not yet producing which are undergoing development planning and execution, and licences to explore for new oil and gas fields in prospective areas. The

Section B—Issuer
		Group’s average daily production on a working interest basis for the year ended 31 December 2016 was 71.4 KBOEPD and its net 2P reserves and 2C resources were 834.9 MMBOE.
The Issuer’s strategy is to grow shareholder value by investing in high quality production and development opportunities while maintaining exposure to upside value from successful exploration within a strict capital discipline framework. Execution of the Group’s strategy comprises four pillars: operating in a safe and responsible manner; focused on high quality assets with commercially advantaged positions; access to capital and financial liquidity; and attracting and retaining the right people.
The Group’s operations generated net losses of US$1,103.8 million during 2015. During 2016 the Group’s producing assets generated net profits of US$122.6 million (including a tax credit of US$522.0 million) representing an increase of US$1,226.4 million over 2015.
B.4a	Recent trends	Production
Premier delivered record production of 71.4 kboepd in 2016, in line with previously upgraded full year guidance of 68-73 kboepd and up 24 per cent. on the prior year (2015: 57.6 kboepd). Production for the four months to 30 April 2017 averaged 82.6 kboepd.
In the UK, production averaged 33.0 kboepd during 2016, double that of 2015, and over 45 kboepd for the four months to 30 April 2017. The step change in production was primarily due to the new contributions from the ex-E.ON portfolio and the Solan field. There was also high uptime and strong reservoir performance from a number of fields, most notably Huntington, Babbage and Wytch Farm, whilst Elgin-Franklin benefitted from an ongoing infill drilling programme. Higher than expected production from these assets was slightly offset by lower than anticipated production from Solan resulting from poorer than expected reservoir performance.
Premier’s operated South East Asia assets outperformed during 2016. High uptime of over 90 per cent., better than expected reservoir performance and a successful well intervention programme helped to mitigate natural decline from the Chim São field in Vietnam. Across the border in Indonesia, Premier’s operated Natuna Sea Block A secured an increased market share within its principal gas contract GSA1 of 44 per cent. (2015: 43 per cent.) against a contractual share of 41 per cent. and delivered record production under GSA2 of 94 BBtud during 2016. Natuna Sea Block A’s contractual share of GSA1 has increased to 47 per cent. for 2017 and for the period ended 30 April 2017 Premier increased its market share within GSA1 to 49%.
Production from Pakistan and Mauritania averaged 7.9 kboepd for the year. The decrease compared to the prior year reflects natural decline in all of the fields.
Development Projects
Work continues on the Group’s Catcher field development project, including the commissioning of the floating production, storage and offloading vessel. The project is on course to reach first oil in the fourth quarter of 2017. Forecast gross capex to first oil is now anticipated to be $1.3 billion, 19 per cent. lower than when sanctioned. Gross total project capex is forecast at $1.6 billion, a 29 per cent. reduction on the original sanctioned estimate. Elsewhere in the UK the Tolmount project is expected to provide the next phase of growth for Premier. The development concept was

Section B—Issuer
		selected in February 2017 and FEED has commenced. Development sanction is targeted for the first half of 2018.

Work also continues on the Group’s Sea Lion development project. In January 2016, Premier commenced FEED on its operated Sea Lion Phase 1 project with FEED contracts awarded to SBM Offshore for the FPSO, Subsea 7 for the subsea installation, NOV for the flexible flowlines and One Subsea for the subsea production system. Good progress was made on FEED during 2016 and the breakeven cost of the project reduced significantly over the course of the year from US$55/bbl to US$45/bbl while the capex to first oil was reduced from US$1.8 billion to US$1.5 billion. In August 2016, Premier secured approval from the Secretary of State for an extension to the Sea Lion Discovery Area licence to April 2020. The focus is now on securing an appropriate funding solution for the project, which may include an equity partner, with the aim of reducing Premier’s capital commitments to the development.

Commodity Prices
The price environment for crude oil and related products has been weak since late 2014. In 2015, the crude oil benchmark, Brent, ended the year at US$35.8/bbl, down 36 per cent. from the beginning of the year. Volatility in the oil markets persisted into the first half of 2016. Brent dropped to US$26/bbl in January 2016 but subsequently more than doubled to close the year at US$55/bbl. Whilst in February 2017 prices reached US$56/bbl, they fell to a low of US$48/bbl in early May 2017 and stood at US$53.31/bbl as at the Latest Practicable Date.

During the first quarter of 2016, UK gas prices were suppressed and traded around 30 pence/therm due to higher than normal seasonal temperatures and relatively high storage levels. Gas prices subsequently increased during the second quarter to around 35 pence/therm. In August 2016, UK gas prices fell to 23 pence/therm as a result of weak seasonal demand. Prices then rallied in September and remained strong for the remainder of the year due to increased gas demand from the continent as a result of a prolonged nuclear outage in France and concerns about a shortage of storage for the winter period. 2017 saw gas prices reach a 36 month high of 60.8 pence/therm in February due to cold weather and continued withdrawal issues at the Rough long-term storage facility before settling at around 40 pence/therm in April and May.

Industry Trends
2016 saw another significant decline in global capital expenditure as low commodity prices persisted and uncertainty over the duration of the downturn remained. Capital continued to be prioritised towards sanctioned expenditure and the preservation of balance sheets while the industry’s appetite to invest in new developments and exploration remained depressed. Reduced activity and on-going scrutiny of costs by the upstream sector continues to impact the oil service sector. Some smaller service companies have already gone out of business reducing optionality in certain supply chains but in particular the offshore subsea sector, where backlog is rolling off and activity is dominated by several large players.

Oversupply also persists in the drilling rig market, especially high-end deep water rigs, keeping prices depressed. Logistics and well service costs also remain low. It is evident that the easier cost savings, such as contractor rate cuts, have already been achieved and are difficult to push further with service sector margins already at historic low levels. Further material cost |

Section B—Issuer

Regulatory developments
From 1 April 2016, the Oil and Gas Authority replaced the Department of Energy and Climate Change (“DECC”) as the entity responsible for petroleum licensing and regulation of the upstream oil and gas sector in the UK. On 14 July 2016 the Department for Business, Energy and Industrial Strategy was created as the result of a merger between the DECC and the Department for Business, Innovation and Skills. On 1 October 2016, the OGA was granted greater regulatory powers, including some powers which had previously belonged to the Secretary of State of Energy and Climate Change. |
| B.5 | Group structure | The Issuer was incorporated in 2002 and is the parent company of the Group, which comprises its principal subsidiaries: (a) Premier Oil Group Limited and its subsidiaries, namely: (i) Premier Oil Holdings Limited; (ii) Premier Oil UK Limited; (iii) Premier Oil Overseas B.V.; (iv) Premier Oil (Vietnam) Limited; and (v) Premier Oil E&P Holdings Limited; and (b) Premier Oil Finance (Jersey) Limited. |
| B.6 | Notifiable interests | As at the Latest Practicable Date, the Issuer had received notification from the following institutions, in accordance with Chapter 5 of the DTRs, of their significant holdings of voting rights (3 per cent. or more) of the Issuer’s issued Ordinary Shares: |
| Shareholder | Date of notification to the stock exchange | Notified number of voting rights | Nature of holding |
| Bank of America Corporation | 22/05/2017 | 38,663,916 | 7.569% |
| Deutsche Bank AG | 09/05/2017 | 36,031,284 | 7.05% |
| Dimensional Fund Advisors LP | 18/05/2017 | 25,626,026 | 5.017% |
| Artemis Investment Management LLP | 13/05/2015 | 25,451,951 | 4.98% |
| Aviva plc & subsidiaries² | 27/04/2009 | 3,933,529 | 4.95% |
| Schroders plc | 12/01/2017 | 24,688,996 | 4.83% |
| AXA Investment Managers | 03/03/2017 | 23,907,981 | 4.68% |
| Ameriprise Financial, Inc. | 20/01/2012 | 24,666,346 | 4.66% |
| | All Ordinary Shares have the same voting rights. The Issuer is not aware of any person who, directly or indirectly, jointly or severally, exercises or immediately following the Refinancing could exercise control over the Issuer. |
| B.7 | Selected historical key financial information | The tables below set out the Group’s summary financial information for the years ended 31 December 2014, 31 December 2015 and 31 December 2016. This information has been extracted without material adjustment from the audited financial statements incorporated by reference into this Prospectus. |

² Interests shown for Aviva plc and its subsidiaries pre-date the share split in 2011.

Section B—Issuer

Table 1: Consolidated Income Statement and Consolidated Statement of Comprehensive Income

Year to 31 December
2014	2015	2016	USSm
Consolidated Income Statement
Sales revenues	1,629.4	1,067.2	983.4
Other operating income	—	31.9	(6.1)
Cost of sales	(986.2)	(661.0)	(767.1)
Impairment charge on oil and gas properties	(784.4)	(1,023.7)	(556.2)
Reduction in decommissioning estimates	—	—	75.7
Exploration expense	(51.2)	(95.4)	(48.0)
Pre-licence exploration costs	(20.3)	(13.6)	(10.4)
Excess of fair value over costs of acquisition	—	—	228.5
Costs related to the acquisition of subsidiaries	—	—	(21.6)
Profit on disposal of non-current assets	12.4	1.2	—
General and administration costs	(25.4)	(14.4)	(24.1)
Operating loss	(225.7)	(707.8)	(145.9)
Share of profit/(loss) in associate	1.9	(1.9)	1.8
Interest revenue, finance and other gains	57.1	40.7	13.2
Finance costs, other finance expenses and losses	(195.8)	(160.6)	(259.7)
Loss before tax	(362.5)	(829.6)	(390.6)
Tax	136.5	(241.1)	522.0
Profit/(loss) for the year from continuing operations	(226.0)	(1,070.7)	131.4
Discontinued operations
(Loss)/gain for the year from discontinued operations	15.7	(33.1)	(8.8)
Profit/(loss) after tax	(210.3)	(1,103.8)	122.6
Earnings/(loss) per share (cents)
From continuing operations
Basic	(43.3)	(209.6)	25.7
Diluted	(43.3)	(209.6)	25.4
From continuing and discontinued operations
Basic	(40.3)	(216.1)	24.0
Diluted	(40.3)	(216.1)	23.7
Consolidated Statement of Comprehensive Income
Profit/(loss) for the year	(210.3)	(1,103.8)	122.6
Cash flow hedges on commodity swaps
Gains/(losses) arising during the year	296.1	164.4	(38.3)
Less: reclassification adjustments for gains in the year	(46.0)	(278.9)	(92.4)
	250.1	(114.5)	(130.7)
Tax relating to components of other comprehensive income	(139.0)	76.0	56.1
Cash flow hedges on interest rate and foreign exchange swaps	15.5	19.8	3.3
Exchange differences on translation of foreign operations	(48.3)	(37.0)	3.0
Gains/(losses) on long-term employee benefit plans	(0.2)	(0.1)	0.2
Other comprehensive (expense)/income	78.1	(55.8)	(68.1)
Total comprehensive income/(expense) for the year	(132.2)	(1,159.6)	54.5


Table 2: Consolidated Balance Sheet
Year to 31 December
2014	2015	2016
US$m
Non-current assets:
Intangible exploration and evaluation assets	825.7	749.7
Property, plant and equipment	2,430.0	2,611.7
Goodwill	240.8	240.8
Investment in associate	7.6	5.3
Long-term employee benefit plan surplus	0.8	0.5
Long-term receivables	494.1	11.5
Deferred tax assets	971.7	871.6
	4,970.7	4,491.1
Current assets
Inventories	26.1	20.8
Trade and other receivables	468.9	274.4
Derivative financial instruments	273.4	118.3
Cash and cash equivalents	291.8	401.3
Asset held for sale	56.7	—
	1,116.9	814.8
Total assets	6,087.6	5,305.9
Current liabilities
Trade and other payables	(628.7)	(472.0)
Short term provisions	(14.1)	(24.8)
Derivative financial instruments	(48.1)	(2.2)
Short-term debt	(300.0)	—
Deferred income	—	(20.9)
Liabilities directly associated with asset held for sale	(1.8)	—
	(992.7)	(519.9)
Net current assets	124.2	294.9
Non-current liabilities
Long-term debt	(2,086.2)	(2,615.1)
Deferred tax liabilities	(254.2)	(193.3)
Deferred income	—	(87.6)
Derivative financial instruments	—	(74.3)
Long-term provisions	(882.3)	(1,080.9)
	(3,222.7)	(4,051.2)
Total liabilities	(4,215.4)	(4,571.1)
Net assets	1,872.2	734.8
Equity and reserves:
Share capital	106.7	106.7
Share premium account	275.4	275.4
Merger reserve	374.3	374.3
Retained earnings	1,142.3	46.3
Other reserves	(26.5)	(67.9)
	1,872.2	734.8

Section B—Issuer

Table 3: Condensed Consolidated Cash Flow Statement

	Year to 31 December
	2014	2015	2016
		US$m
Net cash from operating activities	924.3	809.5	431.4
Net cash used in investing activities	(1,383.2)	(850.5)	(859.3)
Net cash from financing activities	291.5	163.5	282.6
Currency translation differences relating to cash and cash equivalents	10.3	(13.0)	(0.1)
Net (decrease)/increase in cash and cash equivalents	(157.1)	109.5	(145.4)
Cash and cash equivalents at the beginning of the year	448.9	291.8	401.3
Cash and cash equivalents at the end of the year	291.8	401.3	255.9

The Group’s revenue during the period covered by the historical financial information has been impacted by the significant fall in oil prices that started during the second half of 2014. From year end 2014 to year end 2015, sales revenues fell from US$1,629.4 million to US$1,067.2 million. For the year ended 31 December 2016, sales revenues were US$983.4 million.

Premier made losses of US$210.3 million in 2014 and US$1,103.8 million in 2015. Premier returned to profit in 2016 with profits of US$122.6 million, including a tax credit of US$522.0 million. The largest driver of this was a tax credit of US$455.8 million due to recognition of UK tax losses and allowances in the period, driven by an anticipated increase in future profitability from the acquisition of the E.ON assets.

The Group’s capital investment from 1 January 2014 to 31 December 2016 principally related to the development of the Solan and Catcher fields.

Approval of the Solan Field Development Plan (“FDP”) was granted by DECC in April 2012. The FDP consisted of two producers and two injectors tied back to a platform with oil produced into a subsea storage tank and offloaded by shuttle tanker. The facilities were installed during 2014 with first oil achieved in April 2016. Average production for 2016 and year to date 2017 has been impacted by poorer than expected reservoir performance in the eastern part of the field which is limiting water injection and production rates from the second producing well.

The Catcher development concept was formally agreed by partners in December 2013 and government approval was received in June 2014. The development now entails 20 subsea wells on the Catcher, Varadero and Burgman fields which will be tied back to a leased floating production, storage and offloading unit. Development drilling activities started in July 2015 and all of the ten wells drilled thus far have met or exceeded pre-drill expectations in terms of reservoir quality and flow rates. The major elements of the subsea campaign were completed by year end 2016 with all of the subsea equipment installed.

The Group had cash, including gross joint venture cash balances, and undrawn bank facilities of US$645.9 million as at 31 December 2016. Combined with current cash flows, this effectively pre-finances the Group’s planned investment programme.

On 5 April 2017 the Issuer signed a share purchase agreement with Al-Haj Energy Limited for the sale of its Pakistan Business Unit for a cash consideration of US$65.6 million. A deposit was paid to the Issuer of

Section B—Issuer
		US$15 million with a further interim deposit of US$10 million due within 60 days. The transaction is subject to receipt of customary government and regulatory approvals and is expected to complete by year-end 2017. Save as described in this section, there has been no significant change in the financial or trading position of the Group since 31 December 2016, the date to which the Issuer’s last audited financial statements incorporated into this document by reference are prepared.
B.8	Selected key pro forma financial information	Not applicable. The Prospectus does not include pro forma financial information.
B.9	Profit forecasts and estimates	Not applicable. No profit forecasts or estimates have been made.
B.10	Audit report—qualifications	There are no qualifications in the auditors’ reports on the historical financial information.
B.11	Insufficient working capital	The Issuer is of the opinion that the working capital available to the Group is not sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus.
Section C—Issuer
---	---	---
C.1	Type and class of securities being offered	The Issuer is proposing, subject to certain conditions, to issue in aggregate up to 93,443,462 Equity Warrants and/or Synthetic Warrants.^{3}
C.2	Currency of issue	The Warrant Shares issued on conversion of the Equity Warrants and the Synthetic Equity Growth Fee shall be denominated in pounds sterling.
C.3	Number of Ordinary Shares issued and par value	As at the Latest Practicable Date, 510,824,261 Ordinary Shares were in issue (all of which are fully paid). The Ordinary Shares have a nominal value of 12.5 pence each.
C.5	Restrictions on transfer	The Equity Warrants and Synthetic Warrants will be freely transferable except that:
• transfers of Equity Warrants may not be effected after an exercise notice and investor letter have been received by CREST in respect of the relevant Equity Warrants;
• transfers of Equity Warrants and Synthetic Warrants will be subject to all applicable laws and regulations. Any alleged transfer in violation of such laws or regulations shall be void and ineffective and shall not operate to transfer any interest in the applicable Equity Warrants or Synthetic Warrants to the purported transferee. The Equity Warrants may only be transferred either (i) outside the United States in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S or (ii) to persons in the United States whom the transferor reasonably believes are either QIBs or IAIs in transactions exempt from or otherwise not subject to the registration requirements of the US Securities Act;

3 This figure is based on the issued share capital of the Issuer as at the Latest Practicable Date and is subject to change if the Issuer were to issue more Ordinary Shares prior to the Entitlement Calculation Date.

Section C—Issuer
		• Equity Warrants and Synthetic Warrants represented by a global warrant certificate must be transferred through CREST. Title will pass upon registration of the transfer in the CREST records;
• Equity Warrants and Synthetic Warrants represented by individual warrant certificates may be transferred upon surrender of the related individual warrant certificate or, if no individual warrant certificate is surrendered, upon evidence reasonably satisfactory to the Warrant Agent and the Issuer of the holder’s interest in the warrants, accompanied by a duly completed and endorsed form of transfer. These must be delivered to the specified office of the Warrant Agent (neither the Issuer nor the Warrant Agent shall be responsible for the payment of tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer); and
• all transfers of Equity Warrants and Synthetic Warrants are subject to the detailed regulations concerning such transfers set out in a separate warrant agency agreement.
As set out in C.11, neither the Equity Warrants nor the Synthetic Warrants will be listed.
C.7	Dividend policy	Premier did not pay a dividend for the financial years ended 31 December 2014, 2015 and 2016.
The Issuer’s policy is to reward Shareholders principally through share price growth and to utilise cash flow within the business.
In August 2015, the Group agreed with its lending group to modify its financial covenants until mid-2017. Under the terms of the agreement with its lending group, the Group is restricted from proposing a dividend to the extent that its projections indicate that its financial covenants will be above their pre-modified levels. Pursuant to the Refinancing, the Issuer will covenant that it shall not declare, make or pay any dividend or other distribution or redeem or repay any of its share capital (other than pursuant to the terms of the Group’s employee benefit trust and other employee incentivisation schemes).
C.8	Rights attaching to the Equity Warrants and Synthetic Warrants, including ranking and limitations to those rights	The Equity Warrants and Synthetic Warrants do not confer any voting rights in the Issuer, however the Equity Warrants confer the right to subscribe for Warrant Shares which shall rank equally with all other Ordinary Shares in issue.
Every Equity Warrant Holder shall have the right to subscribe at any time during the Exercise Period for Warrant Shares at the Exercise Price on the basis of one Warrant Share for every Equity Warrant held, subject to adjustment in accordance with the terms of the Share Warrant Deed Poll.
The Synthetic Warrants will confer on each Synthetic Warrant Holder the right to receive a payment in cash from or on behalf of the Issuer of a Proportionate Share of a fee equivalent of up to 15 per cent (reduced in accordance with ratio of Equity Warrants to Synthetic Warrants taken up) of the difference between £218,371,728.58 and the market capitalisation of the Issuer on the earliest of:
• the calendar quarter-end date on which the Gross Leverage Ratio of the Group falls below 3:1;
• the calendar quarter-end date on which the New Net Leverage Ratio of the Group falls below 2.5:1;
• the maturity date of the Senior Secured Debt Facilities; and

Section C—Issuer
		• the date on which the Senior Secured Debt Facilities are repaid or prepaid and cancelled in full.
The Issuer will make available to each Warrant Holder through its website (and will, upon the written request by any Warrant Holder, send or procure that there is sent to such Warrant Holder):
• a copy of the Issuer’s audited financial statements and interim accounts, in each case, no later than the time they are issued to holders of Ordinary Shares or announced via a regulatory news service; and
• a copy of every notice, circular or other document issued to the holders of Ordinary Shares concurrently with the issue of the same items to those holders.
Upon the written request of any Equity Warrant Holder, the Issuer will promptly inform such Equity Warrant Holder of the Exercise Price and the Specified Number of Ordinary Shares which would fall to be issued at that time in respect of one Equity Warrant.
C.11	Admission to trading	The Equity Warrants and Synthetic Warrants will not be admitted to trading on any market or exchange.
C.15	Relationship between the value of the investment in the Equity Warrants or Synthetic Warrants and the Ordinary Shares	As the Equity Warrants are convertible into Warrant Shares, the return on the Equity Warrants will depend on the performance of the Ordinary Shares as a whole. As the Synthetic Equity Growth fee depends on the performance of the Ordinary Shares, the value of the Synthetic Warrants will directly depend on the value of the Ordinary Shares.
Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors should be aware that there is a risk that the market price of the Ordinary Shares could fall beneath the Exercise Price of the Equity Warrants, which may make exercising the Equity Warrants unattractive. A fall in the market price of the Ordinary Shares may mean that the value of the Synthetic Equity Growth Fee is zero.
C.16	Expiration of the Equity Warrants and the Synthetic Warrants	The Equity Warrants will expire at 9.00 a.m. on 31 May 2022.
The Synthetic Warrants will expire upon payment of the Synthetic Equity Growth Fee.
C.17	Settlement procedures	(a) The Equity Warrants and Synthetic Warrants will, subject to (b) below, be represented by global warrant certificates. The global warrant certificates will be executed manually by or on behalf of the Issuer and authenticated manually by or on behalf of the Warrant Agent. The global warrant certificates will be deposited with, and registered in the name of, a common depositary on behalf of CREST. The Equity Warrants and Synthetic Warrants represented by the global warrant certificates will be issued by crediting the relevant person’s respective securities accounts within CREST.
(b) Individual warrant certificates will be issued at the election of one or more Warrant Holders either (i) upon initial issuance of the Equity Warrants or Synthetic Warrants; or (ii) in accordance with the terms of the global warrant certificates. The Warrant Agent will authenticate and deliver an individual warrant certificate: (i) to each Warrant Holder who elects to receive an individual warrant certificate upon initial issuance of the Equity Warrants or Synthetic Warrants; and (ii) if the relevant global warrant certificates becomes exchangeable (in whole or
		in whole or in part) the following: (i) the following Warrant Holders: (i) with the following Warrant No. 1: (i) with the following Warrant No. 2: (i) with the following Warrant No. 3: (i) with the following Warrant No. 4: (i) with the following Warrant No. 5: (i) with the following Warrant No. 6: (i) with the following Warrant No. 7: (i) with the following Warrant No. 8: (i) with the following Warrant No. 9: (i) with the following Warrant No. 10: (i) with the following Warrant No. 11: (i) with the following Warrant No. 12: (i) with the following Warrant No. 13: (i) with the following Warrant No. 14: (i) with the following Warrant No. 15: (i) with the following Warrant No. 16: (i) with the following Warrant No. 17: (i) with the following Warrant No. 18: (i) with the following Warrant No. 19: (i) with the following Warrant No. 20: (i) with the following Warrant No. 21: (i) with the following Warrant No. 22: (i) with the following Warrant No. 23: (i) with the following Warrant No. 24: (i) with the following Warrant No. 25: (i) with the following Warrant No. 26: (i) with the following Warrant No. 27: (i) with the following Warrant No. 28: (i) with the following Warrant No. 29: (i) with the following Warrant No. 30: (i) with the following Warrant No. 31: (i) with the following Warrant No. 32: (i) with the following Warrant No. 33: (i) with the following Warrant No. 34: (i) with the following Warrant No. 35: (i) with the following Warrant No. 36: (i) with the following Warrant No. 37: (i) with the following Warrant No. 38: (i) with the following Warrant No. 39: (i) with the following Warrant No. 40: (i) with the following Warrant No. 41: (i) with the following Warrant No. 42: (i) with the following Warrant No. 43: (i) with the following Warrant No. 44: (i) with the following Warrant No. 45: (i) with the following Warrant No. 46: (i) with the following Warrant No. 47: (i) with the following Warrant No. 48: (i) with the following Warrant No. 49: (i) with the following Warrant No. 50: (i) with the following Warrant No. 51: (i) with the following Warrant No. 52: (i) with the following Warrant No. 53: (i) with the following Warrant No. 54: (i) with the following Warrant No. 55: (i) with the following Warrant No. 56: (i) with the following Warrant No. 57: (i) with the following Warrant No. 58: (i) with the following Warrant No. 59: (i) with the following Warrant No. 60: (i) with the following Warrant No. 61: (i) with the following Warrant No. 62: (i) with the following Warrant No. 63: (i) with the following Warrant No. 64: (i) with the following Warrant No. 65: (i) with the following Warrant No. 66: (i) with the following Warrant No. 67: (i) with the following Warrant No. 68: (i) with

Section C—Issuer
		in part) for individual warrant certificates in accordance with its terms, to each relevant person designated by CREST in accordance with the terms of the Share Warrant Instrument or Synthetic Warrant Instruments and the relevant global warrant certificate.
C.18	Return on Equity Warrants and Synthetic Warrants	The return on Equity Warrants can be realised by either: (a) transferring Equity Warrants in exchange for valuable consideration (subject to applicable restrictions on transfer); or (b) exercising the Equity Warrants and receiving any dividends paid on or proceeds from selling the Warrant Shares.

The return on Synthetic Warrants can be realised by either (a) transferring Synthetic Warrants in exchange for valuable consideration (subject to applicable restrictions on transfer); or (b) on receipt of the Synthetic Equity Growth Fee. |
| C.19 | Exercise price | Subject to the occurrence of any Equity Adjustment Event, the Equity Warrants shall have an exercise price of 42.75 pence per share (the “Exercise Price”), being the closing price on the Reference Date of an Ordinary Share. The Synthetic Warrants are not exercisable. |
| C.20 | Description of the underlying share | The Warrant Shares shall be newly issued Ordinary Shares. The ISIN of the Ordinary Shares is GB00B43G0577. Information about the Ordinary Shares may be found on the Issuer’s website: www.premier-oil.com. |
| C.22 | Information about the underlying share | For a description of the underlying share see row C.20 immediately above.

The Warrant Shares will be in registered form, and capable of being held in certificated or uncertificated form. The Registrar will be responsible for maintaining the Issuer’s share register. Temporary documents of title will not be issued.

The Warrant Shares will be denominated in pounds sterling.

The Warrant Shares, when issued and fully paid, will be identical and rank pari passu with the Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the Ordinary Shares by reference to a record date on or after admission of the Warrant Shares to trading. All Shareholders are entitled to participate in the assets of the Issuer attributable to their Ordinary Shares on a winding-up of the Issuer or other return of capital attributable to the Ordinary Shares.

These rights will become exercisable once an Equity Warrant Holder has notified the Issuer of his intention to convert his Equity Warrants into Warrant Shares and once the Warrant Shares have been issued and fully paid. These rights are subject to the restrictions applicable to Ordinary Shares set out in the Articles.

Where Warrant Shares are to be issued through CREST, they will be delivered within two Business Days following the relevant exercise date of the Equity Warrants (or as soon as practicable thereafter but not later than seven Business Days from the relevant exercise date of the Equity Warrants). Where Warrant Shares are to be issued in certificated form, a certificate in respect thereof will be despatched within 21 days following the relevant exercise date of the Equity Warrants.

The Issuer will use all reasonable endeavours to procure that the Warrant Shares will be admitted to trading on the premium segment of the main market of the London Stock Exchange as soon as practicable (and in any event not later than seven Business Days) after the relevant exercise date of the Equity Warrants. |

Section C—Issuer
		The Warrant Shares will be freely transferable, except: • Any Shareholder may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Board may approve. The instrument of transfer must be executed by or on behalf of the transferor and (in the case of a partly-paid share) the transferee and the transferor will continue to be treated as the holder until the transferee’s name is entered in the register; • The Board may, without giving any reason, refuse to register the transfer of any shares which are not fully paid. The Board may also decline to register a transfer of certificated shares if the instrument of transfer: (i) is not properly stamped to show the payment of any applicable stamp duty and accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may reasonably require; (ii) is in respect of more than one class of share; and (iii) is to joint transferees and is in favour of more than four such transferees; • Furthermore, where a Shareholder holds over 0.25 per cent. of the existing shares in a particular class and has been served with a restriction notice the Board can refuse to register a transfer of any shares which are certificated shares unless they are satisfied that they have been transferred to an independent third party; • Any shares in the Issuer may be held in uncertificated form and these shares must be transferred through CREST. If according to the Articles or any relevant legislation the Issuer has the right to sell, transfer or otherwise deal with the CREST shares the Directors may require the holder of that share to change the CREST share to a certificated share; and • The Board may decline to register a transfer of CREST shares in the circumstances set out in the “uncertificated securities rules” (as defined in the Articles) and where, in the case of a transfer to joint holders, the number of joint holders to whom the uncertificated share is to be transferred exceeds four.
Section D—Risks
---	---	---
D.1	Key information on the key risks that are specific to the Issuer or its industry	• If the Refinancing does not proceed, the Group’s financial position would be materially adversely affected and there is a significant risk that companies within the Group would be placed into insolvency procedures. • The Refinancing is subject to a number of conditions that must be satisfied in order for it to proceed. • As the Refinancing will reduce the Group’s flexibility in conducting its operations, there is a risk this will adversely affect the Group’s business, prospects, results of operations and financial condition. • The decrease in the level of the Group’s leverage and net debt required pursuant to the terms of the Refinancing is dependent on certain factors and there is a risk that if these do not materialise, the agreed leverage and net debt levels will not be achieved. In addition, the size of the Group’s debt has important consequences over the longer term. • Further volatility or decreases in hydrocarbon prices may adversely affect the Group’s business, prospects, results of operations and

Section D—Risks
		financial condition and its ability to meet its financial covenants and other refinancing obligations.
• If the Group is unable to replace its proved plus probable reserves as it produces, the Group’s reserves will decline.
• Hydrocarbon exploration, development and production operations may be affected by operational hazards or other factors which may result in unforeseen liabilities and adversely affect future cash flows.
• Hedging activities may inadequately protect the Group from hydrocarbon price, exchange rate and interest rate volatility.
D.6	Key information on the key risks related to the Equity Warrants and/or the Synthetic Warrants	• The value of the Equity Warrants and/or Synthetic Warrants may go down as well as up.
• An active and liquid market for the Equity Warrants and/or the Synthetic Warrants may not develop.
• Any future share issues may dilute existing shareholders and may reduce the price of the Ordinary Shares.
Section E—Offer
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E.2b	Reasons for the offer and use of proceeds	As a result of the impact of lower oil prices on the Group’s financial performance and cost overruns on Solan there has, since 2014, been an increase in the leverage of the Group. As at 31 December 2015, the Existing Leverage Ratio was 3.30 and the Existing Interest Cover Ratio was 8.78. This increase in leverage caused the Group to obtain deferrals from creditors in respect of its leverage covenants for the testing periods ending 30 June 2016 and 31 December 2016. Accordingly, from June 2016 until February 2017, the Issuer, POUK and a sufficient majority of creditors as required under each of the RCF Facility Agreement, Existing Term Loan Facility Agreement, USPP Notes and the Schuldschein Loan Agreements entered into monthly deferrals in respect of certain financial covenants under each of those documents

Without these deferrals and the current deferrals under the Senior Lock-up Agreement, the Issuer would have breached the financial covenants contained in the USPP Notes, the Schuldschein Loan Agreement, the RCF Facility Agreement and the Existing Term Loan Facility Agreement in respect of the testing periods ending on 30 June 2016 and 31 December 2016. As a result, if the financial covenant deferrals were to lapse and the Issuer was unable to secure further deferrals of a similar nature, there would be an event of default under each of those facilities, which could in turn trigger cross-defaults into the other financing arrangements of the Group. In such circumstances, there is a risk that all of the Group’s outstanding debt under the Group’s financing arrangements would be accelerated such that the entirety of the Group’s debt would immediately fall due. If this were to occur, it is likely that the Group would have to enter into insolvency proceedings and counterparties to material contracts would seek to exercise termination rights under those contracts.

In order to address this issue, the Issuer has agreed the deferrals contained in the Senior Lock-up Agreement and has negotiated the terms of the Refinancing with its creditors, which includes the making of the Offer.

No proceeds will be raised from the issue of the Equity Warrants and Synthetic Warrants but the Issuer may receive proceeds from the exercise of the Equity Warrants if the Equity Warrant Holder elects, at its discretion, to |

Section E—Offer
		pay the Exercise Price to the Issuer in cash rather than by way of an adjustment to the Equity Warrant Holder’s entitlement to Warrant Shares.
E.3	Description of the terms and conditions of the offer	The Issuer is proposing, subject to certain conditions, to issue in aggregate up to 93,443,462 Equity Warrants and/or Synthetic Warrants through the Offer, with the exact proportions of each to be determined by the elections of the Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors to receive Equity Warrants or Synthetic Warrants. The Equity Warrants and Synthetic Warrants will be granted or paid (as applicable) to each Scheme Creditor, Schuldschein Lender and Existing Bilateral LC Creditor pro rata to the proportion which their commitments or in the case of USPP Holders, Retail Bondholders and Schuldschein Lenders, the outstanding principal amount under those Existing Finance Documents (which, in the case of the USPP Notes will include its Make-Whole Amount) as at the Refinancing Effective Date bears to the aggregate of commitments and participations under the Super Senior Secured RCF/LC Facilities and the Senior Secured Debt Facilities as at the Refinancing Effective Date. Scheme Creditors will be invited to elect to receive Equity Warrants, Synthetic Warrants or a mix of both by completing an Election Form. The Schuldschein Lenders and Existing Bilateral LC Creditors will be invited to make the same election in separate Schuldschein/Bilateral LC Investor Letters. If a Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor makes partial elections to receive a combination of Equity Warrants and Synthetic Warrants, appropriate adjustments will be made on the Refinancing Effective Date so that it receives the correct pro rata allocation of Equity Warrants and Synthetic Warrants. Each Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor may nominate an affiliate, related fund or third party to receive the Equity Warrants or Synthetic Warrants it is entitled to elect to receive. Scheme Creditors must submit an Election Form by the Forms Submission Deadline. After submitting an Election Form, Scheme Creditors will have until the Election Adjustment Deadline to change their election in respect of the Equity Warrants and the Synthetic Warrants using a form substantially the same as the Election Form. Schuldschein Lenders and Existing Bilateral LC Creditors must return Schuldschein/Bilateral LC Investor Letters by the Election Adjustment Deadline Date. The Offer is conditional on completion of the Refinancing, which requires: - Shareholders approving the Shareholder Resolution to be proposed at the General Meeting of the Issuer to be held at 9.00 a.m. on 15 June 2017; - Scheme Creditors approving the Schemes and such Schemes being subsequently sanctioned by the Court; - all other necessary parties (including the Schuldschein Lenders, Hedge Counterparties and Existing Bilateral LC Creditors) approving the Refinancing; - the Group obtaining the Convertible Bondholder Approvals; and - the delivery of conditions precedent that are customary for a secured financing transaction and/or within the control of the Group.

Section E—Offer
		If these conditions are not met, the Offer will not proceed and any applications made by the Scheme Creditors, Schuldschein Lenders or Existing Bilateral LC Creditors will be rejected unless the Issuer, in its discretion, waives one or more of the conditions.
E.4	Material/ conflicting interests	Not applicable. The Issuer does not consider that there are any interests, including conflicting interests, which are material to the Offer.
E.7	Expenses charged to the investor	Not applicable. No commissions, fees or expenses will be charged to Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors by the Issuer under the Offer.

RISK FACTORS

The Offer and any investment in the Equity Warrants or Synthetic Warrants are subject to a high degree of risk. Any investment in the Equity Warrants or Synthetic Warrants is speculative. Each Scheme Creditor, Schuldschein Lender and Existing Bilateral LC Creditor should consider the investment in light of the its personal circumstances, including its appetite for risk, together with all of the information contained in this Prospectus including information incorporated by reference into this Prospectus as set out in Appendix III (Information Incorporated by Reference).

The Directors consider the following risks to be material for Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors in evaluating their investment into the Equity Warrants or the Synthetic Warrants. The occurrence of any of the events discussed below could materially adversely affect the Group's business, financial condition or results of operations.

Additional risks and uncertainties relating to the Group that are currently unknown to the Group, or that the Directors currently deem immaterial, may individually or cumulatively also have a material adverse effect on the Group's business, prospects, result of operations and financial condition. If any such risk, or any of the risks described below, should materialise, the value of the Equity Warrants or the Synthetic Warrants may decline or be lost completely. The order in which risks are presented does not necessarily indicate the likelihood of the risks materialising, their potential significance or the scope of any potential harm to the Group's business, prospects, results of operations and financial condition.

SECTION A: RISKS RELATING TO THE REFINANCING AND THE GROUP'S FINANCING ARRANGEMENTS

If the Refinancing does not proceed, the Group's financial position would be materially adversely affected and there is a significant risk that companies within the Group would be placed into insolvency procedures

If the Refinancing does not proceed then the Issuer and certain of its subsidiaries would in all likelihood be in default under the Existing Finance Documents. Without the financial covenant deferrals contained in the monthly waiver letters and subsequently the Senior Lock-up Agreement, the Issuer would have breached certain of the financial covenants contained in the USPP Notes, the Schuldschein Loan Agreement, the RCF Facility Agreement and the Existing Term Loan Facility Agreement in respect of the testing periods ending on 30 June 2016 and 31 December 2016. As a result, if the financial covenant deferrals were to lapse and the Issuer was unable to secure further deferrals of a similar nature, there would be an event of default under each of those facilities, which would in turn trigger cross-defaults into the other financing arrangements of the Group. In such circumstances, there is a risk that all of the Group's outstanding debt under the Group's financing arrangements would be accelerated such that the entirety of the Group's debt would immediately fall due. If this were to occur, it is likely that the Group would have to enter into an insolvency process and counterparties to material contracts would seek to exercise termination rights under those contracts.

If the Refinancing does not become effective and the Issuer is able to secure future financial covenant deferrals, there is a risk that the Issuer will not be able to repay its US$150,000,000 and £100,000,000 term loan facility under the Existing Term Loan Facility Agreement when it matures on 29 November 2017, in which case the events of default, acceleration, cross-default and insolvency described above could occur. If the Refinancing does not become effective and the Issuer does not secure future financial covenant deferrals, there is a risk that this term loan facility will become payable before 29 November 2017 as a consequence of the events of default and acceleration of the Group's debts described above.

As a result, if the Refinancing does not proceed, the ability of the Group to continue trading will depend upon the Group being able to negotiate an alternative refinancing proposal with its creditors and, if necessary, that proposal being approved by Shareholders. Whilst the Board would seek to negotiate such an alternative refinancing proposal with its creditors, there is no certainty that the creditors would engage with the Board in those circumstances. There would therefore be a significant risk of the Group entering into an insolvency process, which the Directors consider would likely result in no value being returned to Shareholders.

The Refinancing is subject to a number of conditions that must be satisfied in order for it to proceed

The Refinancing is subject to a number of conditions that remain outstanding as at the date of this document, including:

Shareholders approving the Shareholder Resolution;
Scheme Creditors approving the Schemes and such Schemes being subsequently sanctioned by the Court;

all other necessary parties (including the Schuldschein Lenders, Hedge Counterparties and Existing Bilateral LC Creditors) approving the Refinancing;
the Group obtaining the Convertible Bondholder Approvals; and
the delivery of conditions precedent that are customary for a secured financing transaction and/or within the control of the Group.

Each of the Schuldschein Lenders, Hedge Counterparties and Existing Bilateral LC Creditors and a sufficient majority of Convertible Bondholders to pass the Convertible Bondholder Approvals have entered into lock-up agreements whereby they have undertaken to support the Refinancing. The Schemes require approval from 75% by value and a majority in number of Scheme Creditors who vote. More than 75% of Scheme Creditors by value have entered into a lock-up agreement whereby they have undertaken to vote in favour of the Schemes. As the Retail Bondholders have not entered into a lock-up agreement and the Retail Bonds continue to trade, the Issuer cannot be assured that a majority of Scheme Creditors in number will vote in favour of the Schemes. In addition, the lock-up agreements can be terminated in the circumstances described in section 15 of Part XI (Additional Information).

If any of these conditions are not satisfied (or where possible waived) the Refinancing will not proceed. For the consequences of not proceeding, please refer to the Risk Factor entitled "If the Refinancing does not proceed, the Group's financial position would be materially adversely affected and there is a significant risk that companies within the Group would be placed into insolvency procedures".

As of the date of this document, approximately 95 per cent. by value of RCF Creditors, 100 per cent. by value of Existing Term Loan Creditors, 100 per cent. by value of USPP Holders and 100 per cent. of Schuldschein Lenders have entered into, or acceded to, the Senior Lock-Up Agreement pursuant to which the Scheme Creditors have agreed to attend the Scheme Meetings in person or by proxy and to vote in favour of the Schemes and the Schuldschein Lenders have undertaken to support the Refinancing.

The Hedge Counterparties and the Existing Bilateral LC Creditors have undertaken to support the Refinancing, having respectively entered into, or acceded to, separate lock-up agreements.

On 25 April 2017, the Group announced that more than 75 per cent. by value of Convertible Bondholders have entered into the Convertible Bondholder Lock-up Agreement, which is a sufficient majority to pass the Convertible Bondholder Resolutions.

Due to the diverse nature and number of the holdings of the Retail Bonds, it was not possible for the Scheme Companies to negotiate with the Retail Bondholders in advance of the announcements of the terms of the Refinancing. However, the Scheme Companies have appointed an adviser to advise them in respect of the Retail Bonds, which has confirmed that the terms of the Refinancing should be acceptable to the Retail Bondholders.

The long stop date for completion of the Refinancing, as set out in the Senior Lock-up Agreement, is 31 July 2017 or such later date as the relevant members of the Group and the relevant majority of participating senior creditors agree. If any of the conditions to the Refinancing becoming effective summarised above does not take place by the long stop date (as amended or extended), then the Refinancing will not proceed.

The lock-up agreements may be terminated in accordance with their terms on the occurrence of certain, specified events

The Senior Lock-up Agreement, Convertible Bondholder Lock-up Agreement, Hedging Lock-up Agreement and Existing Bilateral LC Lock-up Agreement contain customary termination provisions allowing for termination in certain, specified circumstances as described in section 15 (Material contracts) of Part XI (Additional Information) of this Prospectus.

In particular, creditors' participations under the Lock-up Agreements may be terminated if:

a sufficient majority of participating creditors determine that there has been a material adverse effect: (i) upon the ability of any Group company to implement or perform its obligations under the Refinancing; or (ii) on the consolidated financial position of the Group taken as a whole;
a Participating Company does not pay a participating creditor on the due date any amount payable under an Existing Finance Document or materially breaches the terms of the Lock-up Agreements; or
an insolvency event occurs in respect of a Participating Company.

Should a lock-up agreement terminate, the parties to it would not be obliged to support the Refinancing.

As the Refinancing will reduce the Group's flexibility in conducting its operations, there is a risk this will adversely affect the Group's business, prospects, results of operations and financial condition

If the Refinancing is completed, the Existing Finance Documents will contain customary restrictive covenants, restricting the ability of the Group, without the consent of the relevant majorities of its creditors, to, amongst other things: incur additional debt; make certain payments, including dividends and other distributions, with respect to outstanding share capital; repay or redeem subordinated debt or share capital; create or incur certain security; make certain acquisitions and investments or loans; sell, lease, or dispose of certain assets, including shares of any of the Issuer's subsidiaries; incur capital expenditure or expenditure on exploration and appraisal activities in excess of approved amounts; guarantee certain types of the Group's other indebtedness; expand into unrelated businesses; merge or consolidate with other entities; or make amendments to certain contracts or enter into hedging and certain other transactions outside of the Group's hedging strategy. Whilst the Group's creditors currently support the Group's strategy, their continued support will be required for the Group to implement it.

In particular, the Group will require the approval of the applicable majorities of creditors for any acquisition of companies or any interests in companies where the value in aggregate is over US$10,000,000 in any financial year of the Group. The Group will require the approval of the applicable majorities of creditors to carry out a disposal except where the higher of the fair market value and the net consideration receivable does not exceed US$10,000,000 and, when aggregated with the higher of the fair market value and net consideration receivable for any other disposal not otherwise permitted, does not exceed US$30,000,000 in any financial year of the Group. Agreed exceptions to this include the recently announced Pakistan disposal and any potential sale of the Group's stake in the ETS pipeline in the Southern North Sea.

The Group's compliance with these and other covenants may reduce its flexibility in conducting its operations, particularly by:

affecting the Group's ability to react to changes in market conditions, whether by increasing its vulnerability in relation to unfavourable economic conditions or by preventing it from profiting from an improvement in those conditions;
affecting the Group's ability to pursue business opportunities and activities that may be in its interest;
limiting the Group's ability to obtain certain additional financing in order to meet the Group's working capital requirements, make investments, or acquisitions or exploration and appraisal activities; and
forcing the Group to dedicate a significant portion of its cash flows to payment of the sums due in relation to its loans, thus reducing the Group's ability to utilise its cash flows for other purposes,

each of which, alone or in combination, could have a material adverse effect on the Group's business, prospects, results of operations and financial condition.

If the Group is not able to comply with the terms of its financing arrangements, its creditors could force the sale of an asset or assets through, among other things, the enforcement of security or through the Scheme Companies being put into an insolvency procedure.

The decrease in the level of the Group's leverage and net debt required pursuant to the terms of the Refinancing is dependent on certain factors and there is a risk that if these do not materialise, the agreed leverage and net debt levels will not be achieved. In addition, the size of the Group's indebtedness has important consequences over the longer term

If the Refinancing completes, the Group's leverage and net debt covenants will be revised. These covenants will require the Group to execute a business plan, which will include taking steps towards achieving milestones focussed on disposals and farm outs of assets. The decrease in the level of the Group's leverage and Covenanted Net Debt is also dependent, to some extent, on a recovery in the oil price. If the Group is not able to execute its business plan and/or a low oil price environment persists, the Group may not be able to achieve the deleveraging and net debt targets agreed with its creditors and this could mean that the Group does not comply with its revised financial covenants unless it takes remedial actions which may include any one or more of additional disposals, renegotiation of its debt or equity issuance. This could in turn trigger events of default under the Amended Finance Documents which may have an adverse effect on the Group's business, results of operations, prospects and financial condition.

In particular, under the reasonable worst case scenario in the Group's working capital projections the Group is forecast to breach both the New Net Leverage Ratio when it falls to 7:1 and the New Interest Cover Ratio when it increases to 1.9:1, when the Group's results to 30 June 2018 are delivered, which is expected to be in

the latter half of the third quarter of 2018, after the end of the 12 month period covered by the working capital statement at section 16 of Part XI (Additional Information) of this document. In addition, under the reasonable worst case scenario, the Group will breach its requirement to reduce Covenanted Net Debt to US$2.95 billion or less by 31 December 2018. The reasonable worst case scenario assumes that the Group is not able to execute its business plan and contemplates a combination of downside sensitivities including an oil price environment with prices below current forecasts, production delivery below current forecasts and a three month delay to the timing of first oil from the Catcher development beyond that currently expected.

If the Group is able to execute its business plan (including farm-outs and disposals of assets) and oil prices remain at or above current levels the Group is also expected to reduce its Covenanted Net Debt to less than US$2.95 billion by 31 December 2018. However, if either the Group is not able to deliver its business plan in full or if a low oil price environment persists, the Group may not be able to meet this covenant.

The size of the Group's indebtedness has important consequences over the longer term, including:

requiring the Scheme Companies to use a portion of their cash flows to service and prepay their debt obligations, thereby reducing financial flexibility and cash available to finance their operations;
requiring the Group to comply with financial covenants;
limiting the Scheme Companies' ability to borrow additional amounts for longer term working capital, capital expenditure or debt service requirements or their ability to refinance existing indebtedness; and
restricting the Issuer's ability to pay dividends or other distributions from retained earnings.

Changes to the Group's corporate structure might give rise to tax in some of the jurisdictions in which the Group operates

As described at section 2 of Part I (Information on the Refinancing) of this Prospectus, on completion of the Refinancing, a new holding company will be inserted immediately below the Issuer and above Premier Oil Group Limited to make available a new security package to its creditors. As a consequence of these changes being made to the Group's corporate structure, there is a theoretical risk that tax exposures could arise in some of the jurisdictions in which the Group operates. Whilst the Issuer is of the view that any such liabilities are unlikely to arise in practice, the risk that they may arise cannot be ruled out. If they arise, a successful claim by the tax authorities could adversely affect the Issuer's cash flows, which could in turn impair the Group's ability to make planned expenditures. This could adversely affect the Group's business, prospects, results of operations and financial condition.

SECTION B: RISKS RELATING TO THE OIL AND GAS INDUSTRY

Further volatility or decreases in hydrocarbon prices may adversely affect the Group's business, prospects, results of operations, financial condition and its ability to meet its refinancing obligations

The Group's business, prospects, results of operations and financial condition depend substantially upon prevailing hydrocarbon prices, which can be volatile and subject to fluctuations in response to a variety of factors beyond the Group's control. The price environment for crude oil and related products has been weak since late 2014. In 2015, the crude oil benchmark, Brent, ended the year at US$35.8/bbl, down 36 per cent. from the beginning of the year. Volatility in the oil markets persisted into the first half of 2016. Brent dropped to US$26/bbl in January 2016 but subsequently more than doubled to close the year at US$55/bbl. Whilst in February 2017 prices reached US$56/bbl, they fell to a low of US$48/bbl in early May 2017 and stood at US$53.31/bbl as at the Latest Practicable Date. During the first quarter of 2016, UK gas prices were suppressed and traded around 30 pence/therm due to higher than normal seasonal temperatures and relatively high storage levels. Gas prices subsequently increased during the second quarter to around 35 pence/therm. In August 2016, UK gas prices fell to 23 pence/therm as a result of weak seasonal demand. Prices then rallied in September and remained strong for the remainder of the year due to increased gas demand from the continent as a result of a prolonged nuclear outage in France and concerns about a shortage of storage for the winter period. 2017 saw gas prices reach a 36 month high of 60.8 pence/therm in February due to cold weather and continued withdrawal issues at the Rough long-term storage facility before settling at around 40 pence/therm in April and May.

A sustained period of hydrocarbon prices below the Group's current forecasts may adversely affect its ability to meet its financing obligations once the Refinancing is completed.

Factors influencing these fluctuations include:

global and regional supply and demand for hydrocarbons, the effects of expected future supply and demand and actions taken by consumers and producers of hydrocarbons in response to prevailing or expected supply and demand conditions;
geopolitical and macro-economic uncertainty;
changes in supply caused by political, economic and military developments in oil and gas producing nations, including the threat of terrorism;
weather conditions, natural disasters and environmental incidents;
availability of infrastructure for the storage and transportation of hydrocarbons;
competition from alternative fuels and energy sources, including relative prices and availability;
cost and availability of new production technologies;
the ability of OPEC members and other major oil producing nations to specify and maintain levels of production and prices;
actions by oil and gas importing nations to source more fuel and energy domestically;
governmental or regulatory action and in particular export restrictions, fuel duties and environmental regulation; and
speculative activities by investors in hydrocarbons and hydrocarbon derivatives on the world markets.

The material decline in hydrocarbon prices since 2014 is driven by a range of factors including the effects of an over-supplied market, driven primarily by the growth in unconventional output in North America and OPEC's, particularly Saudi Arabia's, initial decision not to cut production in November 2014 in order to try to stabilise the markets. Such declines can affect the Group's business assumptions and investment decisions. Lower hydrocarbon prices reduce the economic viability of the Group's unsanctioned projects. This results in reduced future revenues, impairs the Group's ability to make planned expenditures and could materially adversely affect the Group's business, prospects, results of operations and financial condition. Furthermore, a sustained period of hydrocarbon prices below the Group's current forecasts may adversely affect its ability to meet its financing obligations once the Refinancing is completed.

On 30 November 2016, OPEC announced that it would cut oil production by 1.2 million barrels of oil per day from January 2017. Other non-OPEC countries, including Russia, have followed suit and oil prices subsequently increased. However, prices have since fallen back below levels reached following OPEC's announcement, to a low of US$48/bbl in early May 2017. It is unclear how long this apparent production discipline will persist, and if oil prices rise so does the propensity for US unconventional output to increase.

The links between economic activities in different markets and sectors are complex and depend not only on direct drivers such as the balance of trade and investment between countries, but also on domestic monetary, fiscal and other policy responses to address macroeconomic conditions. Therefore the Group is uncertain as to how prevailing macroeconomic conditions will feed into hydrocarbon prices and the Group's business, prospects, results of operations and financial condition and the timing of this impact.

The Group seeks to mitigate the risk of further volatility or decreases in hydrocarbon prices by maintaining oil and gas price hedging in accordance with is hedging strategy. Please refer to the factor entitled "Hedging activities may inadequately protect the Group from hydrocarbon price, exchange rate and interest rate volatility".

If the Group is unable to replace its proved plus probable reserves as it produces, the Group's reserves will decline

Future oil and gas production will depend on the Group's access to new reserves through exploration and appraisal; negotiations with governments; and acquisitions and farm ins. Insufficient activity or success in these areas or restrictions on these activities arising as a result of the terms of the refinancing may limit the Group's replacement of reserves and future oil and gas production growth, which, in turn, could have an adverse effect on the business, prospects, results of operations and financial position of the Group.

Group exploration and appraisal activities are capital intensive and the results are inherently uncertain. They may involve unprofitable efforts, not only by drilling dry wells, but also wells that discover hydrocarbons, but are of insufficient volume or in poor-quality reservoirs that cannot support commercial development. Appraisal

and development activities may also be subject to delays in obtaining governmental approvals or consents, insufficient access to storage or transportation facilities or other constraints that may variously increase the Group's costs of operations.

The Group holds exploration licences worldwide and within these there is an ongoing evaluation process whereby identified exploration opportunities are progressed. Exploration activities are currently underway in the UK (Ravenspurn North Deep), Brazil (Ceará Basin) and Mexico (Sureste Basin). There is a risk that the Group will incur significant exploration costs, with no assurance that such expenditure will result in the discovery of commercially producible hydrocarbons. If such activities prove unsuccessful over a prolonged period, the Group may have to reduce the number of its exploration programmes, which could adversely affect the Group's replacement of reserves and long term oil and gas production growth.

The Group faces uncertainty as to the estimation of reserves, resources and production profiles and these may prove inaccurate

The estimation of oil and gas reserves, and their anticipated production profiles, involves subjective judgments and determinations based on available geological, technical, contractual and economic information. They are not exact determinations and may change based on new information from production or drilling activities or changes in economic factors, as well as from developments such as acquisitions and disposals, new discoveries and extensions of existing fields and the application of improved recovery techniques. Many of these factors will be beyond the control of the Group. Published reserve estimates are also subject to correction for errors in the application of published rules and guidance.

The reserves, resources and production profile data contained in this document are estimates only and should not be construed as representing exact quantities. They are based on production data, prices, costs, ownership, geophysical, geological and engineering data, and other information assembled by the Group. The estimates may prove to be incorrect and potential investors should not place undue reliance on the forward-looking statements contained in this document concerning the Group's reserves and resources or production levels.

If the assumptions upon which the estimates of the Group's hydrocarbon reserves, resources or production profiles have been based prove to be incorrect, the Group may be unable to recover and produce the estimated levels or quality of hydrocarbons set out in this Prospectus and the Group's business, prospects, results of operations and financial condition could be materially adversely affected. In turn, this may adversely affect the Group's ability to meet its refinancing obligations once the Refinancing is completed.

Hydrocarbon exploration, development and production operations may be affected by operational hazards or other factors which may result in unforeseen liabilities and adversely affect future cash flows

The delivery of production plans depends on the successful continuation of existing field production operations and the development of key projects. Both of these involve risks normally incidental to such activities including:

loss of well control, resulting in formation fluids' influx into the wellbore which can potentially, if uncontrolled, lead to blowouts;
uncontrollable flows of oil, gas or well fluids;
explosions or fires;
equipment damage or failure;
natural disasters;
geological uncertainties;
adverse weather conditions;
pollution and other environmental risks;
hazards inherent to marine operations, including capsizing, sinking, grounding and vessel collision;
availability of technology and engineering capacity;
availability of skilled resources;
maintaining project schedules and managing costs; and
technical, fiscal, regulatory, political and other conditions.

Such potential obstacles may impair continuation of the Group’s existing field production and delivery of key projects and, in turn, the Group’s operational performance, cash flows and financial position (including the financial impact from failure to fulfil contractual commitments related to project delivery).

Operational hazards could lead to unforeseen increases in the actual costs incurred to drill and operate wells and possibly require curtailment, delay or cancellation of such operations, which in turn would have an adverse impact on production and profits. Occurrence of these hazards could also lead to environmental damage, including biodiversity loss or habitat destruction, injury to persons and other species and loss of life. These events could also cause substantial damage to the Group’s property and the Group’s reputation and put at risk some or all of the Group’s interests in licences, and could result in fines, penalties and criminal sanctions against the Group and its management, and other governmental and third party claims. Moreover, should these risks materialise, the Group may incur legal defence costs, remedial costs and substantial losses, including those due to injury or loss of life, human health risks, severe damage to or destruction of property, natural resources and equipment, environmental damage, unplanned production outages, clean up responsibilities, regulatory investigation and penalties, increased public interest in the Group’s performance and suspension of operations. Similar hazards and impacts from third party operations may also result in increased regulatory costs and operational restrictions impacting the Group’s operations.

In addition, marketing demands, which tend to be seasonal, may reduce or delay production from wells. The marketability and price of oil and gas that may be acquired or discovered by the Group will be affected by numerous factors beyond the control of the Group. The ability of the Group to market its oil or gas may also depend upon its ability to acquire space in tankers and pipelines that deliver oil or gas to commercial markets. Such factors could result in disruptions or changes to the Group’s existing production and projects and, in turn, the Group’s operational performance and financial position.

The hydrocarbons supply chain sector has undergone contraction which may affect the Group’s ability to source capital equipment from third party contractors

The supply chain sector has undergone contraction during the ongoing downturn in the oil and gas industry, resulting in significant impairment to delivery capacity, and a number of bankruptcies and cessation of businesses. Potential adverse impacts include loss of competition in the supply chain market (hence the Group’s reduced ability to control costs through competitive tendering) and failure by the supply chain companies to deliver project-critical goods and services to contractual schedule, cost and quality requirements. The Group contracts or leases, services and capital equipment (including, for example, all the drilling rigs and heavy lift vehicles used by the Group) from third party contractors and providers. Such services and equipment can be scarce and may not be readily available at the times and places required.

In addition, the costs of third party services and equipment may rise. Scarcity of equipment and services and increased prices may, in particular, result from any significant increase in regional exploration and development activities which in turn may be the consequence of increased prices for oil or gas. The scarcity of such equipment and services, as well as their potentially high cost, could delay, restrict or lower the profitability and viability of the Group’s projects and therefore have a material adverse effect on the Group’s business, prospects, results of operations and financial condition.

Business acquisitions and farm-ins may give rise to integration and other issues

As with other companies in the hydrocarbons industry, the Group increases oil and gas reserves through strategic business acquisitions and farm-ins. Risks commonly associated with acquisitions of companies or businesses or farm-ins include the potential difficulty and/or delay in procuring third party consents required, the difficulty of integrating the operations and personnel of the acquired business, problems with minority shareholders in acquired companies or with other field participants or co-venturers, the difficulty of securing the services of suitably qualified personnel to manage the acquired businesses or interests, the potential disruption of the Group’s own business and the possibility that indemnification agreements with the sellers may be unenforceable or insufficient to cover potential liabilities. Furthermore, the value of any business the Group acquires or invests in or farm-in that it makes may be less than the amount it pays. Any of these matters could have a material adverse impact on the Group’s business, prospects, results of operations or financial condition.

Environmental legislation or campaigns against the production and use of fossil fuels may have material adverse effects on the hydrocarbons industry

Continued political attention to environmental issues including the role of human activity in climate change and potential mitigation through regulation could have a material impact on the hydrocarbon industry. International

agreements, national and regional legislation, and regulatory and fiscal measures to limit greenhouse emissions are currently in various stages of discussion or implementation. Popular reaction to ecological incidents such as the Deepwater Horizon oil spill in the Gulf of Mexico in 2010 has coincided with the imposition of tougher fines and penalties.

Such legislation or regulatory initiatives could have a material adverse effect by diminishing the demand for oil, increasing the industry's cost structure or causing disruption to operations by regulators. Significant liability could be imposed on the Group in the event of environmental damage caused by previous owners of properties purchased or used by the Group or on account of any breaches by it of environmental laws or regulations.

The industry may be subject to activism from environmental campaigners, which could affect its reputation, disrupt operations or development programmes or otherwise negatively impact business.

Potential health, safety, environment and security "HSES" risks may materialise

Hydrocarbons producers are exposed to a wide range of HSES risks. These include:

major process safety incidents or operational accidents;
failure to comply with approved policies and local regulation;
effects of natural disasters and pandemics;
social unrest;
civil war and terrorism;
exposure to general operational hazards;
personal health and safety; and
crime.

The consequences of such risks materialising can be injuries, loss of life, environmental harm and disruption to business activities. Depending on cause and severity, the materialisation of such risks may give rise to liabilities and may materially affect a producer's reputation, business, prospects, results of operations and financial condition.

In addition, failure by the Group to comply with applicable legal requirements or recognised international standards may give rise to significant liabilities. HSES laws and regulations may over time become more complex and stringent or the subject of increasingly strict interpretation or enforcement. The terms of licences may include more stringent HSES requirements. The obtaining of exploration, development or production licences and permits may become more difficult or be the subject of delay by reason of governmental, regional or local environmental consultation, approvals or other considerations or requirements. These factors may lead to delayed or reduced exploration, development or production activity as well as to increased costs.

As a result of the UK's vote to withdraw from the European Union, macroeconomic instability may affect the hydrocarbons industry

On 23 June 2016, a majority of voters in the UK voted in favour of the UK's withdrawal from the EU. Whilst the referendum was advisory, the UK Government triggered Article 50 of the Lisbon Treaty on 29 March 2017, and so initiated a negotiation period on the terms of withdrawal that could last two years or more. This timetable is uncertain. The terms and manner of the UK's exit from and future relationship with the EU remain subject to negotiation. The future applicability and treatment of EU derived laws and regulations also remains uncertain, and there could be significant changes to the fiscal, monetary and regulatory landscape in the UK. Furthermore, this uncertainty might have a negative effect on UK, European and global market conditions and economic activity, which could have an adverse effect on the Group's financial condition and prospects. There is also a risk that, as a majority in Scotland voted to remain in the EU, a second referendum on Scotland's independence from the UK will be held. Should Scotland vote to leave the United Kingdom, there may be further economic uncertainty and the rights of companies incorporated in Scotland (such as the Issuer) relating to their UK operations may be affected.

The hydrocarbons industry is highly competitive and the Group may be unable to compete effectively

The Group operates in a very challenging business environment and faces intense competition in respect of access to:

exploration acreage and production licences, or interests in such licences;
producing hydrocarbon assets;
oil and gas markets;
scarce equipment and associated services;
skilled technical and managerial personnel;
bank lending and other forms of finance; and
leading technologies.

Competitors include companies with, in many cases, greater financial resources, local contacts, staff and facilities than those of the Group. Competitors with greater financial resources may be better able to diversify and absorb increased regulatory or legal burdens. They may also be better prepared to withstand sustained periods of low oil prices.

Competition for exploration and production licences as well as other regional investment or acquisition opportunities may increase in the future. This may lead to increased costs in the pursuit of the Group's activities and reduced available growth opportunities. Any failure by the Group to compete effectively could adversely affect the Group's business, prospects, results of operations and financial condition.

The Group's operations depend on the continued employment of executive management, senior management and other skilled employees who have relevant oil and gas experience. The inability to attract or failure to retain such personnel would lead to a loss of the institutional and operational expertise required to deliver the Group's strategy, projects and continuing operations.

The Group may be unable to take advantage of technological developments in the hydrocarbons industry as they arise

The discovery, development and production of hydrocarbons is characterised by rapid and significant technological advancements and the introduction of new technologies. As the Group's competitors use or develop new technologies, the Group may be placed at a competitive disadvantage or be required to implement those new technologies at substantial costs, particularly if those technologies are developed and licensed by its competitors. If one or more of the Group's current technologies became obsolete, failure to adopt the disruptive technology may cause the Group's business, prospects, results of operations and financial position to materially suffer. Any new technology that the Group implements may have unforeseen consequences for the Group or the industry as a whole.

Technological advances in other industries could impact the Group's financial performance

Continued technological advances in other industries and markets could negatively affect the Group's business, prospects, results of operations and financial condition. Increased use of alternative industrial technologies (e.g. renewable energies and battery storage) and demand for the consumer goods which use them (e.g. electric cars) may reduce demand for hydrocarbons. If alternative technologies become more efficient, the cost of goods produced using these technologies may decrease relative to the cost of goods produced using hydrocarbons. As the development of one alternative technology may increase the effectiveness of other alternative technologies, a small number of developments may adversely affect the competitiveness of hydrocarbons.

SECTION C: RISKS RELATING TO THE ISSUER AND THE GROUP

If the Refinancing proceeds, the Group may still have insufficient cash flows and access to liquidity to meet its debt obligations and its expenditure requirements

The Group requires significant cash flows and liquidity to meet its debt obligations and to finance its planned operations. The Group also requires capital expenditure to fund its exploration, appraisal, development and, in due course, decommissioning projects. The Group's cash flows can be affected by a variety of factors including changes in the Group's production and resulting operating income, changes in working capital and expenditure requirements, acquisition or disposal of assets, the ability to access short term credit or draw down from

existing credit facilities, debt service obligations and taxation changes. Failure to generate sufficient cash flow and to maintain sufficient liquidity would affect the Group's ability to meet its:

existing debt obligations, which could in turn lead to non-payment and events of default under the Group's debt facilities;
capital expenditure programmes required to maintain existing fields and fund the Group's development projects such as Catcher, Tolmount and Sea Lion as well as its exploration programmes, which could lead to a decline in the Group's replacement of reserves and future production; and
obligations to respond to cash calls issued by operators pursuant to the Group's joint operating agreements, which could give rise to liabilities under those agreements.

Under the reasonable worst case scenario in the Group's working capital projections, if the Refinancing proceeds the Group is not forecast to have a cash or liquidity shortfall during the 12 month period following the date of this document. Beyond this 12 month period, access to that liquidity could be impacted by the financial covenant breaches forecast under the reasonable worst case scenario at 30 June 2018 described in section 16 of Part XI (Additional Information).

The Group may face interruptions or delays in the availability of infrastructure, including pipelines and storage facilities, on which its exploration and production activities are dependent; production performance may also differ from that forecast

The Group's production activities are dependent upon the continued availability of oil and gas pipelines and transportation systems, many of which are shared with third party producers and/or operated by third parties. For example, gas produced from the Group's offshore gas fields in Indonesia is exported to Singapore via the West Natuna Transportation System ("WNTS"), which is the only means of exporting gas from these fields. Similar shared infrastructure risks are also faced by the Group's production assets in the mature Central and Southern North Sea basins. Such interruptions, delays or performance differences could result in disruptions or changes to the Group's existing production and projects, lower production and increased costs, and may have an adverse effect on the Group's business, prospects, results of operations and financial condition. The production performance of the reservoirs and wells may also be different from that forecast due to normal geological or mechanical uncertainties.

The Group may not be able to take forward development projects required to convert its reserves and resources into production and may face delays or cost overruns in executing development projects

The Group's ability to implement development projects such as the Sea Lion development in the Falkland Islands and the Tolmount development in the UK is subject to a number of factors, including the availability of financing on acceptable terms, the consent of its creditors and (in appropriate cases) its ability to reduce its exposure to development costs and risk by farming down part of its interest or through other appropriate means. Failure to sanction or implement development projects would mean that the Group was unable to realise the value of its reserves by converting them into production. The Group's development projects may also be subject to delays or cost overruns that could result in them being less profitable than forecast, generating cash later than expected or requiring additional expenditure. In the case of projects that are expected to result in significant production, such as the Catcher development in the UK, delays in completing the project could have a material impact on the Group's production, cash flow and profitability, and its ability to execute its business plan in order to achieve the deleveraging targets agreed with its creditors and comply with its financial covenants.

Political, security, economic, legal, regulatory and social uncertainties and changes to the Group's relationships with governments, regulators and communities where it operates may affect the Group's business in key territories in which it operates

The Group operates and may in the future operate in some countries where political, security, economic, legal, regulatory and social transition is taking place. Changes in politics, laws and regulations in the countries in which the Group operates could affect the Group's operations and earnings. Such circumstances include:

forced divestment of assets;
limits on production or cost recovery;
import and export restrictions;
changes to legislation due to climate change;

international conflicts including war;
civil unrest and local security concerns that threaten the safe operation of the Group’s facilities;
price controls;
lack of predictability and adverse changes to the operational, legal or fiscal regime, including changes in oil or gas pricing or taxation policy, suspension of projects or the renegotiation or nullification of existing concession contracts;
uncertain implementation of legislation and difficulties in ascertaining (or enforcing) the Group’s legal obligations and rights;
adverse retrospective amendment of contractual rights;
excessive local content requirements;
expropriation and nationalisation of property; and
environmental regulations.

It is difficult to predict the timing or severity of these occurrences or their potential effect. If such risks materialise they could affect the employees, reputation, business, prospects, operational performance and financial condition of the Group.

To maintain the Group’s licences to operate and its ability to secure access to new reserves and resources, it is important that the Group maintains strong and positive relationships with the governments and communities in the countries where its business is conducted. The Group’s values and policies govern how the Group conducts its affairs. Failure, real or perceived, to follow these values and policies, or the materialisation of any of the risk factors described in this Prospectus, could harm the Group’s reputation, which could, in turn, impact the Group’s licence to operate, financing and access to new opportunities.

The Group’s operations in the Falkland Islands may be disrupted if a future Argentine government restarts a dispute with the UK about the Islands’ sovereignty. In such a scenario, potential joint venture partners and supply chain contractors with significant business interests in Argentina, or Latin America more broadly, may be less willing to cooperate with the Group.

Certain countries in which the Group has, or may in the future have, operations also have potential issues relating to transportation, telecommunications and financial services infrastructures that may present logistical challenges not usually present whilst doing business in more developed countries.

The timing and costs of the Group’s decommissioning arrangements are uncertain

The Group has obligations in respect of the decommissioning of some of the fields in which the Group has licence interests and related infrastructure. The Group is expected to assume additional decommissioning obligations in relation to its future operations. These obligations derive from legislation and regulatory requirements concerning the decommissioning of wells and production facilities. The oil and gas industry currently has little experience of decommissioning petroleum infrastructure on the UK Continental Shelf (“UKCS”) and it is difficult to forecast accurately the costs that the Group will incur in satisfying its decommissioning obligations. The Group’s accounts make provision for decommissioning costs but there can be no assurance that the cost of decommissioning will not exceed the value of such provision. When decommissioning liabilities for a field crystallise, the Group will be severally liable for them with other former or current partners in the field. If other partners default on their obligations, the Group’s liabilities could be increased significantly. Any significant increase in the actual or estimated decommissioning costs that the Group incurs may adversely affect its financial condition and prospects. This risk may also materialise from the Group’s assets in Mauritania, from which the Group has decided to cease production and has accordingly submitted field decommissioning plans to the Mauritanian government for finalisation, or from the Group’s assets in Asia if the payments it has made into escrow do not cover the committed decommissioning costs.

The Group is party to various decommissioning security arrangements relating to certain oil and gas fields in the United Kingdom which require the Group, among other things, to make provision for its share of the anticipated future decommissioning costs relating to these fields. To date the highest amounts of decommissioning security have been posted in respect of the Balmoral, Wytch Farm, Huntington, Glamis, Johnston, Caledonia, Kyle, Ravenspurn North and Caister fields. The requirement to post security is dependent on the forecast cash flows from a field. Factors impacting such forecasts such as production and commodity prices can impact the timing and quantum of such requirements. The various decommissioning security

arrangements to which the Group is party typically permit the Group to make provision for decommissioning security in the form of letters of credit, bank guarantees or similar and in some cases cash. Under the various decommissioning security arrangements, the letters of credit, bank guarantees or similar security are required to be provided by banks which meet certain credit rating thresholds and other criteria. Market-related and other developments affecting the credit ratings of banks over the last few years have reduced the number of banks which meet these applicable credit rating requirements. Further developments of this sort may mean that banks which have issued letters of credit to satisfy the Group's decommissioning security obligations in the past will cease to meet the applicable credit rating requirements and that those banks that continue to meet these requirements will not be willing to continue to issue letters of credit or bank guarantees for amounts greater than their existing commitments or to take on the letter of credit and/or bank guarantee commitments of banks who no longer meet these requirements or will only be willing to do so on more onerous terms for the Group. If these developments continue or worsen, or if the Group does not have sufficient letter of credit facilities available for it to enable it to meet these decommissioning obligations, it may not be possible or it may be more difficult and/or costly for the Group to obtain or maintain letters of credit or bank guarantees which meet the requirements under these decommissioning security arrangements or to obtain new letters of credit or bank guarantees to replace letters of credit or bank guarantees from banks which have ceased to meet the requirements of the decommissioning security arrangements and in these circumstances the Group may be required to make provision for some or all of its decommissioning liabilities using cash. If such risks materialise they would affect the Group's business, prospects, financial position and results of operations.

The actions of the Group's joint ventures and partners may be outside of the Group's control

Oil and gas operations globally are typically conducted in joint ventures. Some of the Group's major projects are operated by a partner in the relevant joint venture. The ability of the Group to influence its partners will sometimes be limited due to its percentage ownership in non-operated development and production operations. Non-alignment on various strategic decisions in joint ventures may result in operational or production inefficiencies or delay. Default by a partner may result in the Group bearing a disproportionate share of the risk or liabilities associated with the relevant asset(s).

The Group's insurance and indemnities may not adequately cover all risks and expenses

The Group may be subject to substantial liability claims due to the inherently hazardous nature of its business or for acts and omissions of supply chain contractors or subcontractors, operators or joint venture partners. Any indemnities the Group may receive from such parties may be difficult to enforce if they lack adequate resources. Some potential risks (such as terrorism risks in some jurisdictions) are not readily insurable or insurance against such risks is not available to the Group at an acceptable price. There can be no assurance that the proceeds of insurance applicable to covered risks will be adequate to cover expenses relating to losses or liabilities or in certain circumstances such proceeds will be available to the Group rather than its creditors. Accordingly, the Group may suffer material losses from uninsurable or uninsured risks or insufficient insurance coverage.

The Group's ability to operate depends on satisfying licensing and other regulatory requirements

Countries in which the Group currently operates or may operate are subject to licences, regulations and approvals of governmental authorities, including those relating to the exploration, development, operation, production, marketing, pricing, transportation and storage of oil and gas, taxation, environmental, and health and safety matters (including with regard to eventual decommissioning of production assets).

The Group has limited control over whether or not necessary approvals or licences (or renewals thereof) are granted, the timing of obtaining (or renewing) such licences or approvals, the terms on which they are granted or the tax regime to which the Group or the assets in which the Group has interests will be subject. As a result, the Group may have limited control over the nature and timing of exploration and development of oil and gas fields in which the Group has or seeks interests. There can also be no assurance that the Group will not in the future incur decommissioning charges since local or national governments may require decommissioning to be carried out in circumstances where there is no express obligation to do so, particularly in case of future licence renewals.

The Group has a number of assets on the UKCS which are territorially within the United Kingdom. Accordingly the Group must engage constructively with the Oil & Gas Authority and the Department for Business, Energy and Industrial Strategy, which was formed in July 2016. Failure to develop a good working relationship with these regulatory bodies could impede the Group's efforts to comply with the UK regulatory

regime which in turn could result in penalties, a negative reputational impact and impediments to the Group's UK operations. This could result in adverse effects on the Group's business prospects and financial condition.

It is possible that in the future the Group may be unable or unwilling to comply with the terms or requirements of a licence in circumstances that entitle the relevant authority to suspend or withdraw the terms of such licence. Moreover, some of the exploration and production licences which are held by the Group may expire before the end of what the Group estimates to be the productive life of the licensed fields. There can be no assurance that extensions will be granted in relation to such licences. Any failure to receive such extensions or any premature termination, suspension or withdrawal of licences may have a material adverse effect on the Group's reserves, business, results of operations and prospects.

The Group may be subject to currency fluctuations and exchange controls

The Group operates in a number of different countries and territories throughout the world. The Group is subject to risks from changes in currency values and exchange controls. Changes in currency values and exchange controls could have an adverse effect on the Group's results of operations and financial position. The Group hedges its exchange rate risk as described in the following risk factor.

Hedging activities may inadequately protect the Group from hydrocarbon price, exchange rate and interest rate volatility

The Group seeks to mitigate the impact of volatility in hydrocarbon prices and currency exchange rates by maintaining oil and gas price and foreign exchange hedging to underpin its financial strength and protect its capacity to fund its future developments and operations. Oil and gas hedging can be undertaken with swaps, collar options, reverse collars and hedges embedded in long-term crude offtake agreements. Oil is hedged using Dated Brent oil price options. Indonesian gas is hedged using HSFO Singapore Fuel Oil 180cst futures. The Group seeks to mitigate the impact of exchange rate volatility by selling US dollars and purchasing GBP forward up to six months based on forecast expenditure. The Group seeks to mitigate exposure to interest rate volatility through the interest rate swap market by converting a portion of the Group's floating rate debt to fixed rate. However no assurance can be given that the Group's hedging policy will sufficiently protect the Group from volatility in commodity prices, exchange rates or interest rates or that the Group will be able to put hedging in place with counterparties on acceptable terms in order to successfully implement its hedging policy. Furthermore the hedging policy could adversely affect the Group due to a range of reasons including mismatch between the hedging instrument and risk for which protection is sought, mismatch between the nominal amount or duration of the hedging instrument and the related liability, default on obligation by the hedge counterparty, adjustment of the value of the derivatives, and the high level of transaction costs and subsequent exposure to financial risk. If the Group is unable to hedge its hydrocarbon price or foreign exchange risks effectively or experiences a loss as a result of its hedging activities, this could have a material adverse effect on its business prospects and financial condition.

The Group has agreed to carry out its commodity hedging in respect of its producing assets in accordance with a hedging strategy agreed with creditors in respect of the Existing Term Loan, the Existing RCF, the USPP Notes, the Schuldschein Loans, the Bilateral LC Facilities and the Hedging Transactions. The hedging strategy operates as a framework such that the Group is permitted to hedge its production up to the levels set out in the strategy but it is not obliged to do so. These hedging levels include a maximum of 70% of forecast entitlement oil production for 12 months, up to 50% of UK gas production for 18 months and up to 25% of HSFO (linked to Indonesian gas production) for 18 months. In addition, the Group has agreed to use reasonable endeavours to hedge a minimum of 20 per cent. of oil volumes (excluding production from Solan and Catcher) at US$50/bbl or above on a 12 month rolling basis so long as the Issuer (acting reasonably) considers that the terms available for such hedging are commercially acceptable. Should oil prices remain consistently below US$50/bbl, there is a risk that such hedging will be unavailable to the Group or that it may be available only at a commercially unacceptable cost.

The Group may be unable to implement successfully the Refinancing or its business strategy

There can be no certainty that the Group will be able to implement successfully the Refinancing or its business strategy. No representation is or can be made as to the future performance of the Group and there can be no assurance that the Group will achieve its objectives. The Group's ability to implement the Refinancing and its business strategy may be adversely affected by factors that the Scheme Companies cannot currently foresee, such as unanticipated costs and expenses, technological change, severe economic downturn, the level of interest rates, foreign exchange risks, governmental policy, inflation rates, industry conditions, fluctuations in oil and gas prices or other changes in economic, political, judicial, administrative, taxation or regulatory factors (some

of which are discussed in more detail in this section). All of these factors may necessitate changes to the Refinancing or the business strategy described in this Prospectus or adversely affect the Group's business, its results of operations and financial condition.

Potential litigation may adversely affect the Group's activities

The Group faces the risk of potential litigation in connection with its business. For example, the previous Argentine government (led by Cristina Fernández de Kirchner from 2007 to 2015) stated that it intended to initiate administrative, civil and penal action against the Group (and others) in relation to its activities in the Falkland Islands. The Argentine government did not however commence any proceedings against the Group. In the 2015 elections, the Kirchner administration was voted out and the new administration has so far appeared to be much more open to constructive dialogue with the UK. But the risk remains that any future nationalist administration may return to a more confrontational approach as to sovereignty.

The Group may be subject to labour disturbances

Labour disturbances, such as work stoppages or lock-outs, which may involve third party contractors, suppliers and customers, may occur in the future. Such disturbances could have a material adverse impact on the Group's production and development activities in the periods during which they occur. The Group or its contractors may be unable to influence acceptable collective bargaining agreements or future restructuring agreements or may become subject to material cost increases or additional work rules imposed by such agreements. If occurrence of the foregoing are material, they could adversely affect the Group's business, prospects, financial condition and results of operations.

The Scheme Companies' performance is dependent on the performance of their subsidiaries

The Scheme Companies' results of operations and financial condition are dependent on the trading performance of members of the Group and upon the level of distributions, interest payments and loan repayments, if any, received from the Group's operating subsidiaries, any amounts received on asset disposals and the level of cash balances. Certain of the Group's operating subsidiaries are and may, from time to time, be subject to restrictions on their ability to make distributions and loans including as a result of restrictive covenants in loan agreements, foreign exchange and other regulatory restrictions and agreements with the other shareholders of such subsidiaries.

SECTION D: RISKS RELATING TO THE EQUITY WARRANTS

The market price of the Ordinary Shares may fluctuate and may decline below the Exercise Price specified in the Equity Warrants

The market price of the Ordinary Shares may experience significant volatility for the reasons given in Section F (Risks relating to the Ordinary Shares) of this Part. As a result the Ordinary Shares may trade at prices significantly below the Exercise Price for the Warrant Shares specified in the Equity Warrants. Should this occur before the Equity Warrants have been exercised, the Equity Warrants may decline in value to zero and Equity Warrant Holders may decide not to redeem the Equity Warrants for Warrant Shares. No assurance can be given that following exercise of the Equity Warrants, the Equity Warrant Holders will be able to sell the Warrant Shares at a price equal to or greater than the Exercise Price.

An active and liquid market for the Equity Warrants may not develop

Before the issue of the Equity Warrants there has not been a market for the Equity Warrants, nor will the Equity Warrants be admitted to trading or listed on any market for securities. The Issuer cannot predict the extent to which investor interest will lead to the development of an active and liquid market for the Equity Warrants. Market-makers are under no obligation to make a market for the Equity Warrants and may discontinue any market-making activities undertaken by them at any time. In addition, the Equity Warrants will be subject to restrictions on transfer and to restrictions on their holders' ability to exercise them, as further described in Part VII (Terms and Conditions of the Equity Warrants) of this Prospectus. The transfer restrictions and restrictions on exercise of the Equity Warrants could have an adverse impact on the price of the Equity Warrants and the ability of Equity Warrant Holders to sell their securities.

The tax treatment of the Equity Warrants could change following publication of this Prospectus

The information contained in Part X (Taxation) of this Prospectus may be made obsolete by changes to tax legislation enacted following the Latest Practicable Date. In this event the tax treatment of the Equity Warrants in the hands of the Equity Warrant Holders will not be as described in that Part.

The value of the Equity Warrants may go down as well as up. As the Equity Warrants are convertible into Warrant Shares, the value of the Equity Warrants will depend on the value of the Ordinary Shares as a whole. Therefore the Equity Warrants are exposed to the risks relating to the Ordinary Shares described in Section F below.

SECTION E: RISKS RELATING TO THE SYNTHETIC WARRANTS

An active and liquid market for the Synthetic Warrants may not develop

Before the issue of the Synthetic Warrants there has not been a market for the Synthetic Warrants. Nor will the Synthetic Warrants be admitted to trading on any market for listed securities. The Issuer cannot predict the extent to which investor interest will lead to the development of an active and liquid market for the Synthetic Warrants. Market-makers are under no obligation to make a market for the Synthetic Warrants and may discontinue any market-making activities undertaken by them at any time.

The tax treatment of the Synthetic Warrants could change following publication of this Prospectus

The information contained in Part X (Taxation) of this Prospectus may be made obsolete by changes to tax legislation enacted following the Latest Practicable Date. In this event the tax treatment of the Synthetic Warrants in the hands of the Synthetic Warrant Holders will not be as described in that Part.

The value of the Synthetic Warrants may go down as well as up. As the value of the Synthetic Equity Growth Fee depends on the performance of the Ordinary Shares, the value of the Synthetic Warrants will depend on the value of the Ordinary Shares. Therefore the Synthetic Warrants are exposed to the risks relating to the Ordinary Shares described in Section F below.

SECTION F: RISKS RELATING TO THE ORDINARY SHARES

The value of the Ordinary Shares may go down as well as up

Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors should be aware that the value of an investment in the Issuer may go down as well as up. The market value of the Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors, including:

changes in market sentiment regarding the Ordinary Shares;
any regulatory changes affecting the Group's operations;
variations in the Issuer's and the Group's operating results;
business developments of the Group, its competitors, or the hydrocarbons industry;
the operating and share price performance of other companies in the industries and markets in which the Group operates;
the use of investment strategies by the investment community, such as shorting;
speculation about the Issuer's and the Group's business in the press, media or investment community.

Stock markets have from time to time experienced significant price and volume fluctuations that have affected market prices for securities and which may be unrelated to the Group's operating performance or prospects. Investors should not rely on the Issuer's results to date as an indication of future performance. Furthermore, the Issuer's and the Group's operating results and prospects from time to time may be below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the Ordinary Shares. The market value of the Ordinary Shares can fluctuate and may not always reflect the underlying asset value or prospects of the Issuer and the Group.

There is no guarantee that there will be an active trading market for the Ordinary Shares

Admission of the Ordinary Shares to trading should not be taken as implying that there will be a liquid market for the Ordinary Shares and there is no guarantee that there will be an active trading market after admission. If

an active trading market is not maintained, the liquidity and trading price of the Ordinary Shares may be adversely affected.

Any future share issues may dilute existing shareholdings

In addition to Ordinary Shares issued in connection with the Refinancing and Ordinary Shares issued to executives and employees under the Issuer's share option schemes, the Issuer may decide to offer additional Ordinary Shares in the future. If existing shareholders do not take up any additional offering of Ordinary Shares or are ineligible to participate in such an offering, their percentage ownership and voting interests in the Issuer would be reduced.

Any future share issues may reduce the price of Ordinary Shares and make it more difficult for Shareholders to sell their Ordinary Shares at a price they deem appropriate

An additional offering or significant sales of Ordinary Shares by major shareholders, or the perception or any announcement that such an additional offering or sales could occur, could adversely affect the market price of the outstanding Ordinary Shares as a whole and may make it more difficult for Shareholders to sell their Ordinary Shares at a time and price which they deem appropriate.

The Issuer's ability to pay dividends on the Ordinary Shares will depend on the availability of distributable financial reserves and will be restricted by covenants under the Group's financing arrangements

The ability of the Issuer to pay dividends on the Ordinary Shares is a function of its profitability, cash flow and the extent to which, as a matter of law, it has available to it sufficient distributable financial reserves out of which any proposed dividend may be paid. The Issuer's ability to pay dividends to its shareholders is also dependent upon receipt by it of dividends and other distributions from its subsidiaries. The ability of its subsidiaries to pay dividends is subject to local legal and regulatory requirements and other restrictions which may limit the payment of dividends and distributions to the Issuer and thus the ability of the Issuer to pay dividends or distributions to its shareholders.

The Issuer is currently, and will continue to be irrespective of whether the Refinancing succeeds, subject to customary restrictive covenants which will restrict its ability to pay dividends. Pursuant to the Refinancing, the Issuer will covenant that it shall not declare, make or pay any dividend or other distribution or redeem or repay any of its share capital (other than pursuant to the terms of the Group's employee benefit trust and other employee incentivisation schemes).

The Issuer can give no assurances that it will be able to pay a dividend going forward and at present has no plans to pay a dividend.

Exchange rate fluctuations may impact the price of Ordinary Shares or the value of any dividends paid

The Issuer will use all reasonable endeavours to ensure that the Warrant Shares will be admitted to trading on the London Stock Exchange and to listing on the Official List as soon as practicable following their issue. Any dividends to be announced in respect of such shares will be quoted in pounds sterling. Investments in Ordinary Shares or derivatives thereof by an investor in a jurisdiction whose principal currency is not pounds sterling exposes the investor to foreign currency rate risk. Any depreciation of pounds sterling will reduce the value of the investment in foreign currency terms and may adversely impact the value of any dividends declared.

IMPORTANT INFORMATION

1. General

Investors should rely only on the information in this Prospectus or incorporated into it by reference as set out in Appendix III (Information Incorporated by Reference). No person has been authorised to give any information or to make any representations in connection with the Offer other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Issuer or the Directors. Without prejudice to any obligation of the Issuer to publish a supplementary prospectus pursuant to section 87G of FSMA and Rule 3.4.1 of the Prospectus Rules, neither the delivery of this Prospectus nor any sale made under this Prospectus shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Issuer or of the Group taken as a whole since the date hereof or that the information contained herein is correct as of any time subsequent to the earlier of the date hereof and any earlier specified date with respect to such information.

The Issuer will update the information provided in this Prospectus by means of a supplement to it if a significant new factor that may affect the evaluation by prospective investors of the Offer occurs prior to or on the Election Adjustment Deadline or if it is noted that this Prospectus contains any mistake or substantial inaccuracy. The Prospectus and any supplement thereto will be subject to approval by the FCA and will be made public in accordance with the Prospectus Rules. If a supplement to this Prospectus is published prior to or on the Election Adjustment Deadline, investors shall have the right to withdraw their subscriptions and/or purchases made prior to the publication of such supplement. Such withdrawal must be done within the time limits set out in the supplement (if any) (which shall not be shorter than two clear business days after publication of such supplement).

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to any investment in the Equity Warrants, Synthetic Warrants or Warrant Shares and each Convertible Bondholder should do so in relation to any investment in the Convertible Warrants. Each prospective investor should consult with such advisers as needed to make its investment decision and to determine whether it is legally permitted to hold shares under applicable legal investment or similar laws or regulations and each Convertible Bondholder should do so in relation to any investment in the Convertible Warrants. Investors should be aware that they may be required to bear the financial risks of an investment in the Equity Warrants, Synthetic Warrants or Warrant Shares for an indefinite period of time and each Convertible Bondholder should be aware of the same in relation to any investment in the Convertible Warrants.

Prior to making any decision whether to invest in the Equity Warrants, Synthetic Warrants or Warrant Shares, prospective investors should read this Prospectus in its entirety and, in particular, the section headed Risk Factors. In making an investment decision, prospective investors must rely upon their own examination of the Issuer and the terms of this Prospectus, including the risks involved. Any decision to invest in the Equity Warrants, Synthetic Warrants or Warrant Shares should be based solely on the Prospectus.

Investors who invest in the Equity Warrants, Synthetic Warrants or Warrant Shares will be deemed to have acknowledged that: (i) they have relied solely on the information contained in this Prospectus, including information incorporated into it by reference; and (ii) no person has been authorised to give any information or to make any representation concerning the Group or the Equity Warrants, Synthetic Warrants or Warrant Shares (other than as contained in this Prospectus) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Issuer or the Directors.

None of the Issuer, the Directors or any of their representatives is making any representation to any offeree or investor in the Equity Warrants, Synthetic Warrants or Warrant Shares regarding the legality of an investment by such offeree or investor.

The offer to the Convertible Bondholders to participate in in an arrangement pursuant to which the Convertible Warrants will be issued will be made by means of a consent solicitation document. The Convertible Bondholders should read the consent solicitation document in its entirety prior to making any decision whether to invest in the Convertible Warrants. In making an investment decision, the Convertible Bondholders must rely upon their own examination of the Issuer and the terms of the consent solicitation document, including the risks involved.

2. Information for United States and other overseas Creditors

The information disclosed in this Prospectus is not the same as that which would have been disclosed if this Prospectus had been prepared for the purpose of complying with the registration requirements of the US

Securities Act or in accordance with the laws and regulations of any state or other jurisdiction of the United States. The Schemes and the Convertible Bondholder Approvals relate to the securities of non-US companies and the Schemes will be governed by the laws of Scotland. Neither the proxy solicitation nor the tender offer rules under the US Exchange Act, or the disclosure requirements of the US Securities Act, will apply to the Schemes or the Convertible Bondholder Approvals. Moreover, the consolidated financial statements of the Group have been prepared in accordance with IFRS as adopted by the European Commission for use in the European Union. None of the financial information included in, incorporated by reference or referred to herein was prepared in accordance with generally accepted accounting principles in the US or audited in accordance with auditing standards generally accepted in the US or auditing standards of the Public Company Accounting Oversight Board (United States).

It may be difficult for Creditors located in the United States to enforce their rights and any claims they may have arising under US federal securities laws, since the Issuer and POUK are organised outside the United States and all of their respective officers and directors are residents of countries outside the United States. Creditors located in the United States may be unable to bring a legal action against the Issuer or POUK or their respective officers or directors in a foreign court for violations of the US securities laws.

Overseas Creditors should consult their own legal and tax advisers with respect to the legal and tax consequences of the receipt of the Equity Warrants, Synthetic Warrants or Convertible Warrants in their particular circumstances.

The Equity Warrants, the Synthetic Warrants, the Warrant Shares, the Convertible Warrants and any Ordinary Shares issuable on the exercise of the Convertible Warrants, have not been, and will not be, registered under the US Securities Act, or with any securities regulatory authority of any state or any other jurisdiction of the United States, and may not be offered, sold or resold (including in the case of Equity Warrants and Convertible Warrants, the Warrant Shares and Ordinary Shares issuable upon exercise) in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.

The Equity Warrants (but not the Warrant Shares issuable upon the exercise of Equity Warrants) and the Synthetic Warrants will be issued under the Schemes in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Section 3(a)(10) of the US Securities Act exempts from the registration requirements of the US Securities Act securities issued in exchange for one or more bona fide outstanding securities, claims or property interests where the terms and conditions of the issuance and exchange have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of the issuance and exchange at which all persons to whom the securities will be issued have the right to appear. For the purpose of qualifying for the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10), the Court has been advised that its sanctioning of the Schemes will be relied upon as an approval of the Schemes following a hearing on its fairness to security holders at which hearing all such security holders are entitled to attend in person or through counsel to support or oppose the sanctioning of the Schemes and with respect to which notification has been given to all such security holders. The exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) of the US Securities Act does not exempt the issuance of securities issuable upon the exercise of securities that were previously issued in reliance on Section 3(a)(10) of the US Securities Act.

The Equity Warrants and the Synthetic Warrants to be issued to Schuldschein Lenders and the Existing Bilateral LC Creditors, and the Convertible Warrants to be issued to the Convertible Bondholders, will be issued in offshore transactions within the meaning of, and in reliance on, Regulation S or, in the case of Schuldschein Lenders, Existing Bilateral LC Creditors and Convertible Bondholders in the United States, then to Schuldschein Lenders, Convertible Bondholders and the Existing Bilateral LC Creditors who are either QIBs or IAIs in transactions exempt from, or not subject to, the registration requirements of the US Securities Act.

In addition, the Equity Warrants, the Synthetic Warrants and the Convertible Warrants have not been, and will not be, registered under the securities laws of any state or other jurisdiction of the United States and, accordingly, will only be issued to the extent that exemptions from the registration or qualification requirements of state "blue sky" securities laws are available.

In certain circumstances, the US Securities Act imposes restrictions on the resale in the United States of the Equity Warrants, the Synthetic Warrants and the Convertible Warrants received pursuant to the Schemes, in reliance on Regulation S or in other transactions. The restrictions on resale imposed by Rule 144 under the US Securities Act will depend on whether the recipients of the Equity Warrants, the Synthetic Warrants and the Convertible Warrants are "affiliates" of the Issuer or have been affiliates of the Issuer within 90 days prior to the proposed sale. Any transfers of Equity Warrants, Synthetic Warrants and/or Convertible Warrants by

affiliates of the Issuer will be subject to the registration requirements of the US Securities Act absent an exemption therefrom. For the purposes of the US Securities Act, an “affiliate” of the Issuer is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Issuer. “Control” means the possession, direct or indirect, of the power to direct or cause direction of the management and policies of an issuer, whether through the ownership of voting securities, by contract or otherwise. Whether a person is an affiliate of a company for the purposes of the US Securities Act depends on the circumstances.

The Warrant Shares issuable upon exercise of the Equity Warrants and the Ordinary Shares issuable upon exercise of the Convertible Warrants will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and certain restrictions are being imposed on the receipt of Equity Warrants and Convertible Warrants and on the subsequent transfer of Equity Warrants and Convertible Warrants. Because Warrant Shares or Ordinary Shares will only be issuable to holders of Equity Warrants and Convertible Warrants (as applicable) that at the time of exercise of their Equity Warrants or Convertible Warrants are able to make the US Certifications, namely that they are either (a) in the United States and are either QIBs or IAIs, or (b) located outside the United States (within the meaning of Regulation S), the Equity Warrants and Convertible Warrants are only being made available to Eligible Persons. In addition, Equity Warrants and Convertible Warrants may only be transferred (i) outside the United States in reliance on Regulation S or (ii) to persons in the United States whom the transferor reasonably believes are either QIBs or IAIs in transactions exempt from, or not subject to, the registration requirements of the US Securities Act.

Additionally, the Synthetic Warrants issued to Schuldschein Lenders and the Existing Bilateral LC Creditors may only be transferred (i) in the United States either pursuant to Rule 144 under the US Securities Act (if available), in a transaction not subject to the registration requirements of the US Securities Act or pursuant to another exemption from the registration requirements of the US Securities Act, and in any case, in accordance with all applicable state securities laws, or (ii) outside the United States in offshore transactions pursuant to Rule 903 or 904 of Regulation S.

Accordingly:

Only Eligible Persons will be eligible to receive the Equity Warrants, the Synthetic Warrants or the Convertible Warrants.
All Creditors who (i) are Disqualified Persons as at the Refinancing Effective Date or (ii) have not designated a Nominated Recipient who is an Eligible Person who is able to receive the Equity Warrants, the Synthetic Warrants or the Convertible Warrants in place of the relevant Creditor will have such Equity Warrants, Synthetic Warrants or Convertible Warrants transferred to the Holding Period Trustee to be held on trust for their benefit until the Holding Period Expiry Date.
Holders of Equity Warrants or Convertible Warrants: Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors holding Equity Warrants and Convertible Bondholders holding Convertible Warrants, and other persons who, following the implementation of the Refinancing, acquire Equity Warrants or Convertible Warrants may resell such Equity Warrants or Convertible Warrants only (i) outside the United States in reliance on Regulation S or (ii) to persons in the United States whom the transferor reasonably believes are either QIBs or IAIs in transactions exempt from, or not subject to, the registration requirements under the US Securities Act. Moreover, any holder of Equity Warrants or Convertible Warrants will be required to make the US Certifications at the time of exercise of the Equity Warrants or Convertible Warrants. Any Warrant Shares issued upon exercise of Equity Warrants or Ordinary Shares issued upon exercise of Convertible Warrants will not be registered under the US Securities Act and may not be offered, sold or resold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.
Holders of Synthetic Warrants: Scheme Creditors holding Synthetic Warrants, and other persons who, following the Refinancing Effective Date, acquire Synthetic Warrants from Scheme Creditors, in each case who are not affiliates of the Issuer at the time of, and during the 90 days prior to any proposed resale may freely resell the Synthetic Warrants received pursuant to the Schemes in the United States. Any holder of Synthetic Warrants who is or becomes an affiliate of the Issuer may not resell the Synthetic Warrants received pursuant to the Schemes or otherwise in the United States except in transactions permitted by the resale provisions of Rule 144 promulgated under the US Securities Act or pursuant to another available exemption from the registration requirements of the US Securities Act. The Schuldschein Lenders and the Bilateral LC Banks holding Synthetic Warrants may transfer the Synthetic Warrants only (i) in the United States either pursuant to Rule 144 under the US Securities Act (if available), in a transaction not subject to

the registration requirements of the US Securities Act or pursuant to another exemption from the registration requirements of the US Securities Act, and in any case, in accordance with all applicable state securities laws, or (ii) outside the United States in offshore transactions pursuant to Rule 903 or 904 of Regulation S.

Each Scheme Creditor, Schuldschein Letter or Existing Bilateral LC Creditor who receives either Equity Warrants or Synthetic Warrants and any Convertible Bondholder who receives Convertible Warrants will be deemed to have made or will be required to execute an investor letter containing, certain warranties and representations to the Issuer and Premier Oil UK regarding their eligibility to receive either Equity Warrants, Synthetic Warrants or Convertible Warrants, including the US Certifications.

3. Presentation of financial information

Part IV (Historical Financial Information) of this Prospectus cross-refers to the Group's consolidated historical financial information, including audited consolidated financial statements for the years ended 31 December 2014, 2015 and 2016. All of these financial statements have been prepared in accordance with the requirements of the PD Regulation and the Listing Rules and in accordance with IFRS as adopted by the EU.

There are no qualifications in the auditors' reports on the historical financial information. The audit opinions received for each of the financial years ended 31 December 2015 and 2016 included an emphasis of matter to highlight the following:

In respect of the 2015 audit report, the auditors emphasised that there was a risk of a covenant breach on the Group's debt facilities in respect of the testing period ending 30 June 2016. Whilst the auditors concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements was appropriate, there was a material uncertainty which may have given rise to significant doubt over the Issuer's and the Group's ability to continue as a going concern; and
In respect of the 2016 audit report, the auditors emphasised that there was a risk of a covenant breach on the Group's debt facilities in respect of the next testing period which, as part of the lender discussions outlined below, which had been deferred on a rolling one month basis and was due to be tested for the 12 month period ending 31 March 2017. Whilst the auditors concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements was appropriate, the risk that the Refinancing will not be approved by the Group's lenders and shareholders or that the covenant test will not continue to be deferred until approval is received constitutes a material uncertainty that may cast significant doubt over the Issuer's and the Group's ability to continue as a going concern.

4. Rounding

Percentages and certain amounts included in this Prospectus have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be the precise sum of the figures that precede them.

5. Currencies

Unless otherwise indicated in this Prospectus, all references to:

"pounds sterling" or "£" or "pence" are to the lawful currency of the UK;
"US dollars", "dollars", "US$", "$" or "cents" are to the lawful currency of the United States; and
"euro" or "€" are to the lawful currency of the European Union (as adopted by certain Member States).

Unless otherwise indicated, the financial information contained in this Prospectus has been expressed in US dollars. The Group presents its financial statements in US dollars.

6. Forward-looking statements

This Prospectus incorporates by reference or contains certain statements that are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will", "would", "could", "target" or "should" or, in each case, their negative or other variations or comparable terminology, but all statements other than statements of historical fact may be forward-looking statements. These forward-looking statements appear in a number of places throughout this

Prospectus and the information incorporated by reference into this Prospectus and include statements regarding the intentions, beliefs or current expectations of the Directors, or the Issuer concerning, among other things, the operating results, financial condition, prospects, growth, leverage, strategies and dividend policy of the Issuer, and the industry in which it operates.

Investors should specifically consider the factors identified in this Prospectus, which could cause actual results to differ, before making an investment decision. Forward-looking statements are not guarantees of future performance, and such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Issuer or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on beliefs, expectations and assumptions of the Directors and other members of senior management regarding the Issuer's present and future business strategies and the environment in which the Issuer or the Group will operate in the future. Although the Directors and other members of senior management believe that these beliefs and assumptions are reasonable, by their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Issuer's control. The Issuer's actual operating results, financial condition, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this Prospectus and/or the information incorporated by reference into this Prospectus. In addition, even if the operating results, financial condition and dividend policy of the Issuer and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this Prospectus and/or the information incorporated by reference into this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to, general economic and business conditions, industry trends, competition, changes in government and other regulation, including in relation to the environment, health and safety and taxation, labour relations and work stoppages, changes in political and economic stability and changes in business strategy or development plans and other risks. Such risks, uncertainties and other factors are set out more fully in the section headed Risk Factors.

These forward-looking statements speak only as at the date of this Prospectus. Except as required by the FCA, the London Stock Exchange or applicable law (including as may be required by the FCA's Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules), the Issuer expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Prospectus, whether as a result of any change in events, conditions or circumstances or otherwise on which any such statement is based.

7. Profit forecasts

No statement in this Prospectus is intended as a profit forecast or a profit estimate and no statement in this Prospectus should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share.

8. Third party information

The Issuer confirms that all third party information contained in this Prospectus has been accurately reproduced and, as far as the Issuer is aware and is able to ascertain from information published by that party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Where third party information is cited in this Prospectus, the source of such information is identified.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the dates and times in the table below is indicative only and may be adjusted by the Issuer, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, to creditors by way of an announcement issued via a RIS provider.

Event	Time and/or date (all dates in 2017)
Latest time for lodging General Meeting forms of proxy	9 am on 13 June 2017
General Meeting	9 am on 15 June 2017
Latest time for blocking CDIs relating to the Retail Bonds in CREST through submission of “transfer-to-escrow” instructions for the purposes of delivery of Forms of Proxy containing Voting Instructions for the purposes of the Scheme Meetings	1:30 pm on 20 June 2017
Latest time for blocking Retail Bonds in the Clearing Systems for the purposes of delivery of Forms of Proxy containing Voting Instructions for the purpose of the Scheme Meetings	5 pm on 21 June 2017
Forms Submission Deadline: latest time for submitting Scheme Forms of Proxy or Account Holder Letters for the Scheme Meeting with the Information Agent	5 pm on 22 June 2017
Record Time	11 am on 22 June 2017
Issuer Scheme Senior Meeting	11 am on 26 June 2017
POUK Scheme Senior Meeting	11:15 am on 26 June 2017
Issuer Scheme Super Senior Meeting	11:30 am on 26 June 2017
POUK Scheme Super Senior Meeting	11:45 am on 26 June 2017
Court Hearing to sanction the Schemes	9 am on 18 July 2017
Schemes Effective Time	19 July 2017
Election Adjustment Deadline	9.30 am on 21 July 2017
Entitlement Calculation Date	24 July 2017
Refinancing Effective Date	28 July 2017

Unless otherwise stated, all references in this Prospectus to times are to London time.

The Scheme Meetings will be held at the offices of Slaughter and May, One Bunhill Row, London, England, EC1Y 8YY on 26 June 2017. The General Meeting will be held at 9.00 a.m. on 15 June 2017. The dates given are based on current expectations and may be subject to change.

PART I—INFORMATION ON THE REFINANCING

BACKGROUND TO AND REASONS FOR THE REFINANCING

Overview of the Group's business

The Group’s primary business is international oil and gas exploration and production activities. The Group has current interests in several countries around the world, with significant assets in the UK, the Falkland Islands, Indonesia, Vietnam, and Latin America. The portfolio consists of oil and gas fields which are already producing, discovered fields not yet producing which are undergoing development planning and execution, and licences to explore for new oil and gas fields in prospective areas.

The Group is organised into five business units: the UK, the Falkland Islands, Pakistan and Mauritania, Indonesia, and Vietnam, with the exploration teams reporting directly to a central exploration function.

The Group’s strategy comprises four main elements:

Operating in a safe and responsible manner. The Group has a proven track record of operating across the cycle from exploration through development to production with particular focus on offshore projects. The Group seeks to leverage its operating capabilities to maximise value from its assets and to position itself to take advantage of future opportunities. The Group aims to deliver operational excellence in all its activities in a safe and responsible manner.
Focus on high quality assets with commercially advantaged positions. The Group seeks to find, develop and operate high quality assets in parts of the world where the Group has a strategic or operational advantage. In the UK North Sea, the Group has a strong business unit and considerable tax assets. The Group is also a key player in the gas market in South East Asia and has a dominant position in the North Falklands Basin with access to a substantial undeveloped resource base.
Access to capital and financial liquidity. The Group aims to maintain sufficient liquidity to underpin the Group’s capital investment programme and its ability to access new opportunities for future growth. The Group seeks to maintain a disciplined approach to spending each year and where necessary will seek farm-in partners for drilling programmes and development projects to maintain this discipline.
Attracting and retaining the right people. The Group employs highly capable in-house operating teams at an asset and country level supported by functional experts with a track record of project delivery. The Group’s aim is to ensure that the organisation is appropriately sized with the right calibre of people to achieve the Group’s strategic initiatives.

Due to the nature of the Group’s business, its financial performance is dependent, to a great extent, on the oil price environment.

The crude oil market since 2014

The price environment for crude oil and related products has been weak since late 2014. In 2015, the crude oil benchmark, Brent, ended the year at US$35.8/bbl, down 36 per cent. from the beginning of the year. Volatility in the oil markets persisted into the first half of 2016. Whilst in February 2017 prices reached US$56/bbl, they fell to a low of US$48/bbl in early May 2017 and stood at US$53.31/bbl as at the Latest Practicable Date.

The weakness in oil prices compared to recent years was driven by the continued effects of an over supplied market, arising from the growth in unconventional output in North America and by OPEC’s, particularly Saudi Arabia’s, decision not to cut production to try to stabilise markets in November 2014. In addition, the second half of 2015 saw concerns over the effect on global supply from the easing of Iranian sanctions and the impact of slowing growth in China. On 30 November 2016, OPEC announced that it would be cutting oil production by 1.2 million barrels of oil per day from January 2017. Several other non-OPEC countries (including Russia) followed suit and oil prices subsequently increased. However, prices have since fallen back below levels reached following OPEC’s announcement, to a low of US$48/bbl in early May 2017. It is unclear how long this apparent production discipline will persist, and if oil prices rise so does the propensity for US unconventional output to increase.

With a significant amount of the Group’s production either directly or indirectly linked to the oil price, a fall in the commodity price affects the Group’s revenues and cash flow and the value of its underlying assets.

To mitigate the effects of the low oil price environment, the Group has undertaken several cost saving initiatives, including optimising work programmes, reducing discretionary spend, sharing services with other operators and re-negotiating supplier contracts. These initiatives, helped by the weaker sterling exchange rate,

led to significant savings in operating costs and capital commitments in 2015 and 2016. The Group has historically benefitted from hedging which provided some protection from the impact of lower oil prices in 2015 and 2016. The Group has currently hedged 43 per cent. of its budgeted 2017 oil entitlement production through a mixture of swaps, options and fixed price term sales at an average price of US$51/bbl as at 30 April 2017 and approximately 42 per cent. of its budgeted 2017 UK gas entitlement production through fixed price term sales at an average price of 49.6 pence/therm.

Impact on the Group's financial performance

In respect of the financial years ended 31 December 2014, 31 December 2015 and 31 December 2016, the Group reported:

	2016	2015	2014
Revenue	US$983.4 million	US$1,067.2 million	US$1,629.4 million
Cash flows from operations, post-tax, pre-interest	US$431.4 million	US$809.5 million	US$924.3 million
Profit/loss after tax	US$122.6 million (profit)	US$1,103.8 million (loss)	US$210.3 million (loss)

The fall in operating cash flow over the period of 2014 to 2016 is mainly due to lower realised oil prices, including a reduction in the value of the Group's oil hedges settled in 2016, partially offset by the positive contribution in production volumes following the acquisition of the E.ON assets and first oil from Solan.

A substantial part of the increase in post-tax losses between 2014 and 2015 is due to impairment charges of US$583.5 million (post-tax) principally on the carrying value of the Solan field. The impairment charges included the impact of the lower oil price assumptions used in balance sheet tests at the year-end, and in the case of Solan, lower reserves and higher development costs than originally budgeted.

The Group returned to profit in 2016, driven in part by the completion of the value-enhancing E.ON acquisition and also by the recognition of a deferred tax asset in respect of brought forward UK tax losses and allowances offsetting further impairments on Solan. The Group reported Accounting Net Debt of approximately US$2.77 billion as at 31 December 2016, marginally down from Q3 2016, with cash, including gross joint venture cash balances and undrawn facilities on hand of approximately US$646 million.

As at 30 April 2017, the Accounting Net Debt of the Group was approximately US$2.79 billion and it had cash, including gross joint venture cash balances and undrawn facilities on hand of approximately US$584 million. As at 30 April 2017, the Group's unaudited Covenanted Net Debt was approximately US$3.23 billion. The difference between Accounting Net Debt and Covenanted Net Debt of approximately US$440 million is principally due to the inclusion of outstanding issued LCs and the exclusion of partners' shares of gross joint venture cash balances in calculating Covenanted Net Debt.

As a result of the impact of lower oil prices on the Group's financial performance, and the cost overrun and delays on the Solan development, there has was an increase in the leverage of the Group. As at 31 December 2015, leverage measured on the Existing Leverage Ratio was 3.30:1 and the Existing Interest Cover Ratio was 8.78:1. This increase in leverage has caused the Group to obtain deferrals from its creditors in respect of its leverage covenants in respect of the testing periods ending 30 June 2016 and 31 December 2016. Accordingly, from June 2016 until February 2017, the Issuer, POUK and a sufficient majority of creditors as required under each of the RCF Facility Agreement, Existing Term Loan Facility Agreement, USPP Notes and the Schuldschein Loan Agreements entered into monthly deferrals in respect of certain financial covenants under each of those documents. This deferral process is further described in the "The Monthly Deferrals and the Supplemental Agreements" section below.

Copies of the Group's consolidated financial accounts for the financial years ended 31 December 2014, 2015 and 2016 can be found in Part IV (Historical Financial Information). Since 31 December 2016, the Group announced (on 5 April 2017) that it had signed a share purchase agreement in respect of the sale of its Pakistan Business to Al-Haj Energy Ltd. This sale is in line with the Group's strategy to dispose of assets and the proceeds from the sale will be used to reduce the Group's net debt. No other material transactions have occurred since 31 December 2016.

The Group's existing indebtedness under the Existing Finance Documents, the Hedging Agreements, the Existing Wytch Farm Bilateral LC Facilities, the Existing Nelson Bilateral LC Facility Agreement and Convertible Bonds

The Group's principal financing arrangements, all of which are unsecured, referred to in this document as the Existing Scheme Finance Documents, can be broadly summarised as follows:

The RCF Facility Agreement: a US$2,500,000,000 English law governed revolving credit facility (up to US$1,000,000,000 of which may be designated as up to four letter of credit sub-facilities), with a leverage determined, variable interest rate of LIBOR (or EURIBOR where a loan is in Euros) plus up to 3.5 per cent. per annum. The current interest rate (being LIBOR plus 3.5 per cent. per annum) reflects the top of the leverage grid. The facilities under the RCF Facility Agreement are currently scheduled to mature in July 2019. The original borrowers under the RCF Facility Agreement are POUK, Premier Oil Holdings Limited and Premier Oil Exploration and Production Limited. However, as at the date of this Prospectus, POUK is the sole borrower of funds and has drawn US$1.835 billion.

Currently, two sub-facilities have been designated for the purpose of the issue of letters of credit under the RCF Facility Agreement. The Group is from time to time required to issue letters of credit in respect of decommissioning liabilities relating to certain of the Group's UK assets; these are typically held on trust by independent professional trustees under the terms of decommissioning security agreements, each of which specifies the minimum rating requirements for the issuers of letters of credit under that particular security agreement. The Group can designate the various sub-facilities with the (different) minimum credit ratings that are required for letters of credit to be issued under that sub-facility.

The Group has allocated US$400,000,000 of the commitments under the RCF Facilities to sub-facility A (of which US$316.4 million was drawn as at the Latest Practicable Date) and US$50,000,000 of the commitments under the RCF Facilities to sub-facility B (under which no drawings have been made). Following the issue of a letter of credit under either of these sub-facilities under the RCF Facility Agreement, the relevant borrower must, within three business days of demand, reimburse any lender under that letter of credit on its behalf for payments made under that letter of credit.

All amounts advanced under the RCF Facility Agreement are guaranteed by the Issuer and the other Existing Guarantors.

The Existing Term Loan Facility Agreement: a US$150,000,000 and £100,000,000 English law governed term loan facility, with a leverage determined, variable interest rate of LIBOR plus up to 3.25 per cent. per annum in respect of the US$150,000,000 loan and LIBOR plus up to 3.1 per cent. per annum in respect of the £100,000,000 loan. The current interest rates (being, respectively, LIBOR plus 3.25 per cent. per annum and LIBOR plus 3.1 per cent. per annum) reflect the top of the leverage grid. The Existing Term Loan Facility Agreement is currently scheduled to mature in November 2017. Both the US$150,000,000 and £100,000,000 loans have been fully drawn. As at the date of this Prospectus, POUK is the sole borrower of funds under the Existing Term Loan Facility Agreement.

All amounts advanced under the Existing Term Loan Facility Agreement are guaranteed by the Issuer and the other Existing Guarantors.

The 2011 Notes: the following three tranches of English law governed notes issued by POUK under the 2011 USPP Note Agreement:
the €75,000,000 5.32% series A senior notes due 9 June 2018 (of which €35,000,000 in principal amount is outstanding);
the US$70,000,000 5.11% series B senior notes due 9 June 2018 (of which US$13,000,000 in principal amount is outstanding); and
the US$174,000,000 5.78% series C senior notes due 9 June 2021 (of which US$128,000,000 in principal amount is outstanding).

By virtue of a first amendment agreement dated 19 August 2015 and a supplemental agreement dated 3 October 2016, the 2011 Notes accrue interest at a rate of 0.75 per cent. per annum higher than the original interest rate in respect of the relevant notes. Under the current financing arrangements, this elevated interest rate in respect of each series of the 2011 Notes would revert to the original rate after 31 December 2017 if POUK obtains a senior unsecured long-term indebtedness credit rating in respect of that series of the 2011 Notes of BBB-/Baa3/BBB(low) or better (which, in present circumstances, is unlikely). In addition, there is also a leverage determined variable annual fee of up to 1.6 per cent. per

annum of the outstanding principal amount in respect of the 2011 Notes, which currently stands at 1.6 per cent. per annum, which is the top of the leverage grid. All indebtedness of POUK under the 2011 Notes is guaranteed by the Issuer and the other Existing Guarantors.

The 2011 USPP Note Agreement contains rights for the holders of the 2011 Notes to receive a Make-Whole Amount in certain circumstances, including: (i) on optional prepayment by POUK as issuer of the 2011 Notes; and (ii) acceleration by the USPP Holders following an event of default.

The 2012 Notes: the following four tranches of English law governed notes issued by POUK under the 2012 USPP Note Agreement:
the €25,000,000 4.58% series A senior notes due 15 March 2019 (of which €25,000,000 in principal amount is outstanding);
the US$70,000,000 4.67% series B senior notes due 15 March 2019 (of which US$35,000,000 in principal amount is outstanding);
the US$94,000,000 5.29% series C senior notes due 15 March 2022 (of which US$84,000,000 in principal amount is outstanding); and
the US$38,000,000 5.44% series D senior notes due 15 March 2024 (of which US$38,000,000 in principal amount is outstanding).

By virtue of a first amendment agreement dated 19 August 2015 and a supplemental agreement dated 3 October 2016, the 2012 Notes accrue interest at a rate of 0.75 per cent. per annum higher than the original interest rate in respect of the relevant notes. Under the current financing arrangements, this elevated interest rate in respect of each series of the 2012 Notes would revert to the original rate after 31 December 2017 if POUK obtains a senior unsecured long-term indebtedness credit rating in respect of that series of the 2012 Notes of BBB-/Baa3/BBB(low) or better (which, in present circumstances, is unlikely). In addition, there is also a leverage determined, variable annual fee of up to 1.6 per cent. per annum of the outstanding principal amount in respect of the 2012 Notes, which currently stands at 1.6 per cent. per annum, which is at the top of the leverage grid. All indebtedness of POUK under the 2012 Notes is guaranteed by the Issuer and the other Existing Guarantors.

As with the 2011 Notes, the 2012 USPP Note Agreement contains rights for the holders of the 2012 Notes to receive a Make-Whole Amount in similar circumstances, and with the same purpose, as the Make-Whole Amount under the 2011 USPP Note Agreement. As at the Latest Practicable Date, the aggregate Make-Whole Amount in respect of the 2011 Notes and the 2012 Notes was approximately US$43 million.

The Retail Bonds: English law governed bonds issued by the Issuer in a total principal amount of £150,000,000, maturing in December 2020. The interest rate in respect of the Retail Bonds is a fixed rate of 5 per cent. per annum. All indebtedness of the Issuer under the Retail Bonds is guaranteed by POUK and the other Existing Guarantors.

In addition to the Retail Bonds themselves, there exist certain depository interests representing indirect interests in the Retail Bonds held in CREST (referred to as the "CDIs"), which are legally distinct securities from the Retail Bonds and are governed by English law. The CDIs entitle a CDI Holder to the same economic rights in respect of the Retail Bonds as a Retail Bondholder.

The RCF Facility Agreement, the Existing Term Loan Facility Agreement, the USPP Note Agreements and the Schuldschein Loan Agreements (summarised below) contain similar financial covenants, entailing an Existing Leverage Ratio covenant and an Existing Interest Cover Ratio covenant. The Retail Bondholders do not benefit from any financial covenants. Covenants applicable to the Retail Bonds are also considerably less restrictive on the Group than those applicable under the RCF Facility Agreement, the Existing Term Loan Facility Agreement, the USPP Notes and the Schuldschein Loan Agreements. However, Retail Bondholders do have the benefit of cross-default provisions, which could be breached in the event that amounts borrowed under the other Existing Finance Documents become due and payable as a result of an event of default under the terms of the other Existing Finance Documents.

Creditors under the Existing Scheme Finance Documents are requested to cast votes in the Schemes.

The Group's indebtedness under the other finance documents

In addition to the Existing Scheme Finance Documents, the Group is party to other finance documents, described below:

The Schuldschein Loan Agreements: three German law governed, assignable loan agreements, namely:
the agreement initially entered into between, amongst others, the Issuer, POUK (as borrower) and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$50,000,000 floating rate loan due 30 September 2020, and dated 25 September 2013;
the agreement initially entered into between, amongst others, the Issuer, POUK (as borrower) and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$60,000,000 floating rate loan due 1 October 2018, and dated 25 September 2013; and
the agreement initially entered into between, amongst others, the Issuer, POUK (as borrower) and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$20,000,000 floating rate loan due 30 October 2018, and dated 28 October 2013.

These loans have leverage determined, variable interest rates. The September 2020 US$50,000,000 Schuldschein Loan Agreement currently accrues interest at the rate of LIBOR plus 4.35 per cent., while the other two Schuldschein Loan Agreements currently accrue interest at the rates of LIBOR plus 4.15 per cent. The current interest rates reflect the top of the leverage grid in each case. All amounts arising under the Schuldschein Loan Agreements are guaranteed by the Existing Guarantors.

Unlike the Existing Scheme Finance Documents, the Schuldschein Loan Agreements are governed by German law rather than English law and are subject to the jurisdiction of the Frankfurt courts. For this reason, the Schuldschein Loan Agreements will not form part of the Schemes but will be separately amended as part of the Refinancing.

The Convertible Bonds: English law governed convertible bonds issued by the Convertible Bond Issuer with a total principal amount of US$245,324,000, maturing in July 2018. The interest rate in respect of the Convertible Bonds is a fixed rate of 2.5 per cent. per annum.

The Convertible Bondholders have the right to convert each US$1000 of principal amount of their holding into one fully paid preference share in the Convertible Bond Issuer. The holder of such a preference share can require the Convertible Bond Issuer to exchange a preference share for such number of Ordinary Shares (credited as fully paid) as determined by reference to the applicable exchange price, which is currently £4.21.

The Convertible Bondholders have the benefit of a guarantee from the Issuer only. The obligations of the Convertible Bond Issuer (as issuer) and the Issuer (as guarantor) under the Convertible Bond are structurally subordinated to the guarantees provided by subsidiaries of the Issuer (other than the Convertible Bond Issuer), which guarantee the indebtedness owed to the Scheme Creditors and other lenders to the Group. The Convertible Bonds will not form part of the Schemes but will be amended as part of the Refinancing pursuant to the Convertible Bondholder Approvals.

The Hedging Transactions: as at the Latest Practicable Date the Group has entered into certain:
commodity swaps and options with BNP Paribas, The Bank of Nova Scotia, DNB Bank ASA, Lloyds Bank plc, Citigroup Global Markets Limited and ING Bank N.V.;
interest rate swaps with Wells Fargo Securities International Limited, Commonwealth Bank of Australia, ABN AMRO Bank N.V., The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, DBS Bank Ltd, ING Bank N.V., Bank of Montreal, DnB Bank ASA London Branch, HSBC Bank plc, Lloyds Bank plc, Barclays Bank PLC and MUFG Securities EMEA plc;
cross currency swaps with Lloyds Bank plc, MUFG Securities EMEA plc, Wells Fargo Securities International Limited, Deutsche Bank AG, London Branch, HSBC Bank plc and Commonwealth Bank of Australia; and
foreign exchange forwards with Commonwealth Bank of Australia, Deutsche Bank AG, London Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd.

All of the banks listed above are also RCF Creditors.

The Hedge Counterparties will not participate in the Schemes but certain amendments are being made to the Hedging Agreements as part of the Refinancing, which each of the Hedge Counterparties have agreed

to implement. In particular, amendments are being made to the cross currency swaps to reflect the adjusted maturity and revised pricing of the indebtedness under the Existing Scheme Finance Documents and the other financing arrangements to which the cross currency swaps relate. The pricing of the cross currency swaps is being amended to compensate for these changes.

The ISDA documentation in respect of the Hedging Agreements requires all Existing Guarantors that have acceded to the RCF Facility Agreement as guarantors to also accede to the Hedging Agreements as guarantors.

The Existing Wytch Farm Bilateral LC Facilities: the Group has entered into a number of bilateral facilities with the Existing Bilateral LC Creditors:
an uncommitted revolving bond, guarantee and standby letter of credit facility under an uncommitted revolving bond facility letter dated 28 July 2011 (and countersigned on 1 August 2011) between Premier Oil Group Limited and DBS Bank Ltd under which letters of credit in the aggregate amount of £10,891,532 have been issued and are currently outstanding;
an uncommitted LC facility entered into pursuant to a facility letter between the Issuer and HSBC Bank plc dated 19 March 2014 (and countersigned on 7 April 2014) under which a letter of credit in the amount of £7,550,052 has been issued and is currently outstanding;
an uncommitted standby credit facility pursuant to the facility letter dated 8 December 2011 (and countersigned on 8 December 2011) between Premier Oil Holdings Limited, POUK and Royal Bank of Canada under which a letter of credit in the amount of £5,606,633 has been issued and is currently outstanding; and
an uncommitted revolving bond facility pursuant to the uncommitted revolving bond facility letter dated 27 February 2013 (which was signed on 11 March 2013 and countersigned on 2 May 2013) between POUK and United Overseas Bank Limited under which a letter of credit in the amount of £5,606,633 has been issued and is currently outstanding.

All of the Existing Bilateral LC Creditors are also RCF Creditors.

The Existing Bilateral LC Creditors will not participate in the Schemes but certain amendments will be made to the Existing Wytch Farm Bilateral LC Facilities as part of the Refinancing, which each of the Existing Bilateral LC Creditors have agreed to implement. In particular, the Existing Bilateral LC Creditors have agreed to convert the currently uncommitted bilateral LC facilities into committed LC facilities and a syndicated loan agreement with a maturity date of 31 May 2021 (the "New Wytch Farm LC Facilities"). The Existing Bilateral LC Creditors will receive a pricing increase and a guarantee and security package equivalent to that offered to the Super Senior Scheme Creditors. The New Wytch Farm LC Facilities will be utilised to provide letters of credit in connection with the decommissioning liabilities for the Wytch Farm field.

The Existing Nelson Bilateral LC Facility Agreement: in addition to the above, £4,380,000 of the LC facility with DBS Bank Ltd is used in connection with the decommissioning liabilities for the Nelson (the "Existing Nelson Bilateral LC Facility Agreement"). The Existing Nelson Bilateral LC Facility Agreement will be amended separately from the Existing Wytch Farm Bilateral LC Facilities and will form part of the Senior Secured Debt Facilities (the "Amended and Restated Nelson Bilateral LC Facility Agreement Agreement"). The Amended and Restated Nelson Bilateral LC Facility Agreement will also be converted from an uncommitted LC facility into a committed LC facility with a maturity date of 31 May 2021.

Diagram of the current structure and existing financial arrangements

A simplified diagram showing the Group's financing arrangements is set out below:

Various Group companies are guarantors under the Existing Scheme Finance Documents, the Schuldschein Loan Agreements and the Hedging Agreements.

The Monthly Deferrals and the Supplemental Agreements

The RCF Facility Agreement, the Existing Term Loan Facility Agreement, the USPP Note Agreements and the Schuldschein Loan Agreements contain net debt to EBITDAX and EBITDAX to net interest payable financial covenants, each of which is currently assessed in respect of 12 month historic testing periods ending 30 June and 31 December respectively. EBITDAX measures earnings before interest, taxes, depreciation, amortisation, impairment, exploration spend and reduction in decommissioning estimates, and is a customary measure of a company's operating performance in the oil and gas industry.

In August 2015, the continued low oil price environment caused the Group to seek to modify the financial covenants contained in the Existing Scheme Finance Documents (other than the Retail Bonds) and the Schuldschein Loan Agreements. The financial covenants were amended as follows:

the net debt to EBITDAX cover ratio (the "Existing Leverage Ratio") was increased to 4.75:1 in respect of each of the testing periods up to, and including, the testing period ending 31 December 2016 and to 4.5:1 in respect of the testing period ending 30 June 2017, before returning to its pre-modified level of 3:1 in respect of the testing period ending 31 December 2017 and the testing periods thereafter; and
the Existing Interest Cover Ratio was reduced to 3:1 in respect of each of the testing periods up to, and including, the testing period ending 30 June 2017, before returning to its pre-modified level of 4:1 in respect of the testing period ending 31 December 2017 and the testing periods thereafter.

In the first half of 2016, forecasts showed a possibility that the Group would not comply with the Existing Leverage Ratio and the Existing Interest Cover Ratio in respect of the 12 month testing period ending 30 June 2016. The Group's financial statements for the testing period ending 30 June 2016 subsequently showed that the Group would have breached the Existing Leverage Ratio, but not the Existing Interest Cover Ratio, if a deferral (as described below) had not been obtained.

Accordingly, in June 2016, a sufficient majority of creditors as required under each of the RCF Facility Agreement, the Existing Term Loan Facility Agreement, the USPP Note Agreements and the Schuldschein

Loan Agreements agreed to defer testing of the Existing Leverage Ratio and the Existing Interest Cover Ratio in respect of the 12 month testing period ending 30 June 2016, on the condition that the Group comply with equivalent financial covenants in respect of the 12 month test period ending 31 July 2016.

From June 2016 until February 2017 inclusive, a new deferral was obtained every month, in each case replacing the Existing Leverage Ratio and the Existing Interest Cover Ratio in respect of the 12 month period ending 30 June 2016 with equivalent financial covenants for the 12 month testing period ending on the last date of the subsequent month. In December 2016, a new deferral was also granted in respect of the testing of the Existing Leverage Ratio and the Existing Interest Cover Ratio in respect of the 12 month testing period ending 31 December 2016 on the same conditions. The deferrals entered into between June 2016 and February 2017 as described above are referred to hereinafter as the “Monthly Deferrals”. The Monthly Deferrals were superseded and replaced by the deferrals contained in the Senior Lock-up Agreement when it became fully effective on 14 March 2017.

Separately, the Issuer, POUK and the other Existing Guarantors entered into (i) supplemental agreements with the lenders under the RCF Facility Agreement dated 2 June 2016, 3 October 2016 and 28 December 2016 (the “RCF Supplemental Agreements”); and (ii) supplemental agreements with the lenders under the Existing Term Loan Facility Agreement dated 2 June 2016, 3 October 2016 and 28 December 2016 (the “Existing Term Loan Supplemental Agreements”, and, together with the RCF Supplemental Agreements, the “Supplemental Agreements”). The Supplemental Agreements waived certain provisions of the RCF Facility Agreement and the Existing Term Loan Facility Agreement in order to allow the Group to enter into discussions with its creditors on the terms of the Refinancing. The RCF Supplemental Agreements also allowed POUK to continue borrowing under the RCF Facility Agreement, subject to certain conditions.

Negotiations on the terms of the Refinancing

On 15 March 2016, the Scheme Companies convened a meeting of the RCF Creditors and the Existing Term Loan Creditors (with the USPP Holders attending by conference call) to give notice of the various challenges facing the Group, including its potential inability to comply with its financial covenants and its requirement for continued access to its revolving credit and letter of credit facilities. At this meeting, the Group requested that the RCF Creditors and Existing Term Loan Creditors appoint a coordinating committee. On 29 April 2016, the CoCom of RCF Creditors and Existing Term Loan Creditors was established, comprising Barclays Bank PLC, BNP Paribas, Commonwealth Bank of Australia, DNB (UK) Limited, Lloyds Bank plc, Mizuho Bank, Ltd. and The Royal Bank of Scotland plc in connection with the informal negotiations regarding the terms of the Refinancing. Separately, the USPP Holders and the Schuldschein Lenders each appointed advisers to negotiate the terms of the Refinancing and the Schuldschein Lenders acceded to the CoCom arrangements.

Slaughter and May has acted as legal adviser, Talbot Hughes McKillop LLP has acted as restructuring adviser and Rothschild & Co has acted as financial and restructuring adviser to each of the Scheme Companies (and have neither advised, nor do they advise, any Scheme Creditor) in relation to the Refinancing. The CoCom appointed FTI Consulting LLP and Allen & Overy LLP to act as financial adviser and legal adviser respectively to the CoCom in respect of the Refinancing. The USPP Holders appointed PricewaterhouseCoopers LLP and Akin Gump LLP as financial adviser and legal adviser respectively in relation to the Refinancing. The Schuldschein Lenders appointed Clifford Chance LLP as legal adviser to advise them in respect of the Refinancing.

On 2 June 2016, the Group entered into discussions with the CoCom, the advisers to the USPP Holders and the advisers to the Schuldschein Lenders regarding the terms of the Refinancing. As part of these negotiations, the Group shared information and data with the above parties regarding certain of its operations and its material assets, and its future strategy, and which has not (and will not) be disclosed to the Retail Bondholders due to its commercial sensitivity and the fact that, if so disclosed on a confidential basis, it would impact on the ability of the Retail Bondholders to trade their holdings. In line with this exchange of information, in early 2017, a financial plan (the “Agreed Investment Case”), which was based on certain assumptions regarding future oil prices, UK gas prices and exchange rates, was presented to the RCF Creditors, the Existing Term Loan Creditors, the USPP Holders and the Schuldschein Lenders and their advisers. The Agreed Investment Case incorporates the Group’s strategy for the optimisation of existing assets, investment in (among other things) Sea Lion and Tolmount, and the disposal or farm down of certain of the Group’s assets. The output from this process (developed over the period from June 2016 to April 2017) has informed discussions with the CoCom, the advisers to the USPP Holders and the advisers to the Schuldschein Lenders regarding the reduction of the Group’s indebtedness over the period to May 2021 and the terms of the Refinancing, including the revised financial covenants which the Group will be subject to (and which are described in greater detail in Section 2

below (Overview of the Refinancing—Part A: Proposals concerning the Scheme Creditors—Deleveraging the Group.)

In addition, from November 2016, the Group entered into negotiations with advisers to an ad hoc committee of the Convertible Bondholders regarding the amendments proposed to the Convertible Bonds as part of the Refinancing. The ad hoc committee of Convertible Bondholders has appointed Moelis & Company as financial adviser and Willkie Farr & Gallagher LLP as legal adviser.

Term Sheets and Lock-up Agreements

On 3 February 2017 the Group announced that it had agreed terms in relation to a long form term sheet with the CoCom and the representatives of the USPP Holders and the Schuldschein Lenders, subject to the credit approvals of the relevant institutions.

On 1 March 2017, the Group announced that it had agreed key terms with all members of the ad hoc committee of Convertible Bondholders holding 47 per cent. of the Convertible Bonds in relation to the Convertible Bond Restructuring. The Convertible Bondholder Lock-up Agreement was signed and dated on 28 February 2017. On 25 April 2017, the Group announced that more than 75 per cent. by value of Convertible Bondholders have entered into the Convertible Bondholder Lock-up Agreement, which is a sufficient majority to pass the Convertible Bondholder Resolutions.

The Senior Lock-up Agreement was signed and dated on 8 March 2017. On 9 March 2017, the Group announced that 87 per cent. by value of the RCF Creditors, Existing Term Loan Creditors and USPP Holders and nine out of ten Schuldschein Lenders had entered into the Senior Lock-up Agreement. The final Schuldschein Lender entered into the Senior Lock-up Agreement on 14 March 2017.

The Existing Bilateral LC Lock-up Agreement was signed and dated on 8 March 2017.

The Hedging Lock-up Agreement was signed and dated on 9 March 2017.

All of the Lock-up Agreements became fully effective on 14 March 2017.

The remaining long form documentation required to implement the Refinancing has now been finalised and is an agreed form.

A summary of the terms of the Lock-up Agreements and the support for the Refinancing from the Scheme Creditors, the Schuldschein Lenders, the Convertible Bondholders, the Hedge Counterparties and the Existing Bilateral LC Creditors is set out in section 15 of Part XI (Additional Information) of this Prospectus.

2. OVERVIEW OF THE REFINANCING

The terms of the Refinancing were negotiated with the input of the CoCom and representatives of the Scheme Creditors, Schuldschein Lenders and Convertible Bondholders (as summarised above). Broadly, the terms of the Refinancing can be divided into five sets of commercial proposals:

The Schemes: Part A of this section provides an overview of the terms of the Refinancing regarding the Scheme Creditors.
The proposals in relation to the Schuldschein Loans: Part B of this section provides an overview of the terms of the Refinancing as regards the Schuldschein Lenders.
The proposals in relation to the Existing Wytch Farm Bilateral LC Facilities and the Existing Nelson Bilateral LC Facility Agreement: Part C of this section provides an overview of the terms of the Refinancing as regards the Existing Bilateral LC Creditors.
The proposals in relation to the Hedging Transactions: Part D of this section provides an overview of the terms of the Refinancing as regards the Hedge Counterparties.
The Convertible Bond Restructuring: Part E of this section provides an overview of the terms of the Refinancing regarding the Convertible Bondholders (the "Convertible Bond Restructuring").

PART A: PROPOSALS CONCERNING THE SCHEME CREDITORS

The Scheme Companies' objectives for the Refinancing

The Refinancing addresses the following matters of importance to the Group:

Preserving the Group’s debt facilities: the Group will continue to retain access to the Existing Finance Documents, the Hedging Agreements, the Existing Wyth Farm Bilateral LC Facilities and the Existing Nelson Bilateral LC Facility Agreement (as well as the Convertible Bonds) following the Refinancing on revised terms summarised below. As part of this, the Group will have access to approximately US$719 million of facilities under the Super Senior Secured RCF/LC Facilities for general corporate purposes of which US$370.3 million was drawn as at the Latest Practicable Date.
Resetting the financial covenants: revised financial covenant levels will give the Group greater financial flexibility over the medium term. The amendments to the financial covenants will include:
a New Net Leverage Ratio set at 8.5:1 until 31 December 2017, reducing quarterly to 5:1 by the end of 2018, before returning to 3:1 in 2019; and
a New Interest Cover Ratio which will increase from 1.5:1 for testing periods falling in 2017 to 3:1 from 31 March 2019 onwards.
Resetting maturities to 2021: currently, the earliest maturity date of the Group’s debt obligations is in respect of the Term Loan, which matures in November 2017. The Refinancing includes a reset of the maturity date of indebtedness due under each of the Existing Scheme Finance Documents to 31 May 2021.

Summary of benefits for the Scheme Creditors

The key benefits of the Refinancing for Scheme Creditors are as follows:

Improved creditor economics: all Scheme Creditors will receive an amendment fee of 100bps, an increase in interest rate of 150bps, a choice of Equity Warrants and/or Synthetic Warrants, which will enable Scheme Creditors to participate in any increase in equity value of the Group following the Refinancing, and a Supplemental PIK Fee, which will be triggered if the Group has not reduced its level of Covenanted Net Debt to US$2.95 billion or less by 31 December 2018. As at 31 December 2016, the Covenanted Net Debt of the Group was approximately US$3.155 billion. Any interest accrued under the Existing Scheme Finance Documents is to be paid on the Refinancing Effective Date, such payment to be calculated as if the interest rate described above applied from the date of the Pre-Schemes Letter. In addition, a ‘make whole’ amount of approximately US$43 million will be crystallised and capitalised through the issue of the USPP Make-Whole Notes. The USPP Make-Whole Notes will also receive the amendment fee and the increased interest rate outlined above. In addition, holders of the USPP Make-Whole Notes will be entitled to a fee equal to a sum calculated as if it were the interest that would have accrued on the USPP Make-Whole Notes had they been issued on the date of the Pre-Schemes Letter.
Increased guarantor coverage: the current pool of guarantors consisting of the Existing Guarantors will be increased to include any new Guarantor not already an Existing Guarantor. Accordingly, Scheme Creditors will benefit from increased guarantor coverage throughout the Group.
New security: Scheme Creditors, all of whose rights are currently unsecured, will receive the benefit of the New Security, which is likely to result in a reduced risk of value leakage and provide an increased recovery in any subsequent insolvency of the Group.
Priority and Equalisation: the lenders under the Super Senior Secured RCF/LC Facilities, the New Wyth Farm LC Facilities and the Hedge Counterparties (in respect of the Super Senior Secured Hedging Liabilities) and certain other Scheme Creditors who elect to participate in the undrawn Super Senior Secured RCF/LC Facilities (together, the “Super Senior Creditors”) will also have the benefit of priority over the Senior Scheme Creditors in respect of such facilities. The Super Senior Secured RCF/LC Facilities will be stapled to the senior indebtedness under the amended and restated RCF and the holders of such debit will vote as one group. The Intercreditor Agreement will also contain equalisation arrangements whereby Senior Scheme Creditors, Schuldschein Lenders, DBS Bank Ltd in respect of the Existing Nelson Bilateral LC Facility Agreement and Hedge Counterparties in respect of the Senior Secured Hedging Liabilities (together the “Senior Creditors”) agree to (i) make payments to Super Senior Creditors if on a future enforcement those Super Senior Creditors have undischarged claims against the Group and any such Senior Creditors have had a reduction in their exposure and (ii) to one another to

ensure their reductions in exposure are proportionate compared to their exposures at the Reference Date. The Intercreditor Agreement will also contain arrangements for the sharing of recoveries between the Super Senior Creditors in certain circumstances.

Milestones: the Group will have to comply with certain milestones aimed at achieving significant deleveraging.
Covenants aimed at deleveraging the Group: the Scheme Creditors (except the Retail Bondholders, due to the less extensive covenants under the existing Retail Bonds) will benefit from revised covenants, which will include the above net debt, leverage and interest cover covenants and minimum liquidity covenants as well as operating a semi-annual cash sweep.
Creditor reserve matters and covenant protection: As part of the covenant package referred to above, Scheme Creditors (other than the Retail Bondholders for the reason described above) will benefit from certain creditor reserve matters, including (i) annual approval of the Group's Expenditure Budget (ii) final sanction of capital expenditure in excess of certain thresholds and (iii) certain approval rights in respect of acquisitions and disposals. The general covenants, representations and events of default will provide greater protection for Scheme Creditors (other than the Retail Bondholders) compared to the Existing Scheme Finance Documents.

Terms of the Schemes aimed at achieving the desired objectives and benefits of the Refinancing

The following paragraphs will describe the terms of the Refinancing, which are aimed at achieving the objectives and the benefits summarised above. It should be noted that the summaries below are intended as an overview and are not exhaustive or complete.

Revised capital structure

Pursuant to the Refinancing, the following changes in the Group's capital structure will be made:

Super Senior Secured Facilities and Senior Secured Debt Facilities: as part of the RCF Supplemental Agreements, which allowed the Group to continue drawing under the RCF between the Reference Date (which was the date of the Bank meeting) and the date of the Refinancing, the Group undertook to use reasonable endeavours to facilitate discussions between the Scheme Creditors and the Schuldschein Lenders in relation to super priority being given to such new drawings. As a result of these discussions, it is proposed that any new drawings after the Reference Date together with unutilised commitments as at the Refinancing Effective Date will form a separate tranche of debt which will rank senior to indebtedness owed to the other Scheme Creditors and the Schuldschein Lenders under the other Amended Finance Documents. Such super senior facilities comprising total commitments of US$719 million will constitute the Super Senior Secured RCF/LC Facilities. In addition, the Existing Wytch Farm Bilateral LC Facilities will be converted into a committed letter of credit facility of £34.4 million, which will benefit from the same priority and, together with the Super Senior Secured RCF/LC Facilities will comprise the Super Senior Secured Facilities. The indebtedness owed to other Scheme Creditors, DBS Bank Ltd. under the Existing Nelson Bilateral LC Facility Agreement and the Schuldschein Lenders will constitute the Senior Secured Facilities. Both the Super Senior Secured Debt Facilities and the Senior Secured Debt Facilities will retain priority over the Convertible Bonds.
Participation in the unutilised commitments under the Super Senior Secured RCF/LC Facilities: for fairness of treatment amongst Scheme Creditors, all Scheme Creditors will be able to elect whether to participate in future utilisations under the Super Senior Secured RCF/LC Facilities (subject to meeting certain eligibility criteria). RCF Creditors (with respect to their advances made after the Reference Date and their unutilised commitments at the date of calculation) will automatically participate in the Super Senior Secured RCF/LC Facilities, but their participations will be scaled back pro rata to the extent other Scheme Creditors elect to participate in the undrawn Super Senior Secured RCF/LC Facilities.
New Intercreditor Agreement: the Intercreditor Agreement will regulate the relationships between the various creditor groups. The Intercreditor Agreement will also bind the Convertible Bondholders, who will be contractually subordinated and will regulate payments and enforcement by all parties.

Adjusting maturities

Pursuant to the Refinancing, the terms of the Existing Finance Documents will be amended and restated.

In summary, the terms of the Existing Scheme Finance Documents will be amended and restated to, amongst other things, reset the maturity date of indebtedness due under each of the Existing Scheme Finance Documents to 31 May 2021.

The following table outlines the current maturities in respect of each Existing Scheme Finance Document and the reset maturity dates following the amendments made by the Refinancing:

Existing maturity date	Reset maturity date
RCF . . . . . . 7 July 2019	31 May 2021
Term Loan . . . 29 November 2017	31 May 2021
2011 Notes . . . (a) the €75,000,000 5.32% series A senior notes (of which €35,000,000 in principal amount is outstanding) are due 9 June 2018;
(b) the US$70,000,000 5.11% series B senior notes (of which US$13,000,000 in principal amount is outstanding) are due 9 June 2018; and
(c) the US$174,000,000 5.78% series C senior notes (of which US$128,000,000 in principal amount is outstanding) are due 9 June 2021.	31 May 2021
2012 Notes . . . (a) the €25,000,000 4.58% series A senior notes (of which €25,000,000 in principal amount is outstanding) are due 15 March 2019;
(b) the US$70,000,000 4.67% series B senior notes (of which US$35,000,000 in principal amount is outstanding) are due 15 March 2019;
(c) the US$94,000,000 5.29% series C senior notes (of which US$84,000,000 in principal amount is outstanding) are due 15 March 2022; and
(d) the US$38,000,000 5.44% series D senior notes (of which US$38,000,000 in principal amount is outstanding) are due 15 March 2024.	31 May 2021
Retail Bonds . . 11 December 2020	31 May 2021

Deleveraging the Group

A central focus for the Group in the current environment is to allow the Group to retain access to its debt facilities while seeking to decrease its leverage. This objective is reflected in the revised financial covenants relating to the Super Senior Secured RCF/LC Facility Agreement, the Senior Secured RCF/LC Facility Agreement, the Amended and Restated Term Loan Facility Agreement, the Converted Facility Agreement, the New Wyth Farm LC Facility Agreement, the Amended and Restated Nelson Bilateral LC Facility Agreement and the Amended USPP Notes, which are as follows:

a New Net Leverage Ratio set for each testing period at 8.5:1 on or before 31 December 2017, reducing quarterly to 8.25:1 on 31 March 2018, 7:1 on 30 June 2018, 5.75:1 on 30 September 2018 and 5:1 on 31 December 2018, before returning to 3:1 from 31 March 2019;
a New Interest Cover Ratio increasing from 1.5:1 for testing periods falling in 2017, to 1.6:1 on 31 March 2018, 1.9:1 on 30 June 2018, 2.3:1 on 30 September 2018, 2.6:1 on 31 December 2018 and 3:1 from 31 March 2019 onwards; and
minimum liquidity of not less than US$75 million (to be tested on 31 March, 30 June, 30 September and 31 December each year on an 18 month forward-looking basis).

In addition to these financial covenants, the Group will undertake to Scheme Creditors in respect of the Senior Secured Debt Facilities (other than the Amended Retail Bonds which will retain their existing limited covenants) and the Super Senior Secured RCF/LC Facilities:

that Covenanted Net Debt as at 31 December 2018 will not exceed US$2.95 billion; and
that it will take necessary steps towards achieving milestones including focusing on the disposal of certain assets.

In addition, the Group will be required to operate a semi-annual excess cash sweep where cash and available headroom (excluding headroom in respect of letters of credit) exceeds US$250 million, the first such sweep to be effective as of 31 December 2017. The amounts raised under this cash sweep will be used to repay and cancel debt due under the Super Senior Secured Facilities and the Senior Secured Debt Facilities.

As noted above in section 1 (Background to and reasons for the Refinancing) of this Part, the covenants in respect of the Retail Bonds are significantly less restrictive than those in respect of the other Existing Finance Documents. The covenants and milestones that are being revised and introduced as part of the Refinancing do not apply to the Retail Bonds.

Improved creditor economics

The Group has agreed to increase the interest payable under each of the Existing Scheme Finance Documents by 150bps. The increase in margin or coupon will be applicable from 15 May 2017, being the date of the Pre-Schemes Letter. In addition, the leverage grids on which the interest payable on the Existing Scheme Finance Documents is calculated will be removed and the 150 bps margin increase will be applied to pricing at the top of the leverage grid.
The following table outlines the current interest rates in respect of each Existing Scheme Finance Document and the revised interest rates following the amendments made by the Refinancing:

	Existing interest rate (including an elevated Existing Leverage Ratio fee where appropriate)	Adjusted interest rate
RCF	LIBOR (or EURIBOR) + 3.5 per cent.	LIBOR + 5 per cent.
RCF letter of credit sub-facility	3.5 per cent.	5 per cent.
Term Loan (GBP facility)	LIBOR + 3.1 per cent.	LIBOR + 4.6 per cent.
Term Loan (USD facility)	LIBOR + 3.25 per cent.	LIBOR + 4.75 per cent.
2011 USPP (€75,000,000 5.32% series A senior notes due 9 June 2018 (of which €35,000,000 in principal amount is outstanding))	7.67 per cent.	9.17 per cent.
2011 USPP (US$70,000,000 5.11% series B senior notes due 9 June 2018 (of which US$13,000,000 in principal amount is outstanding))	7.46 per cent.	8.96 per cent.
2011 USPP (US$174,000,000 5.78% series C senior notes due 9 June 2021 (of which US$128,000,000 in principal amount is outstanding))	8.13 per cent.	9.63 per cent.
2012 USPP (€25,000,000 4.58% series A senior notes due 15 March 2019 (of which €25,000,000 in principal amount is outstanding))	6.93 per cent.	8.43 per cent.
2012 USPP (US$70,000,000 4.67% series B senior notes due 15 March 2019 (of which US$35,000,000 in principal amount is outstanding))	7.02 per cent.	8.52 per cent.
2012 USPP (US$94,000,000 5.29% series C senior notes due 15 March 2022 (of which US$84,000,000 in principal amount is outstanding))	7.64 per cent.	9.14 per cent.
2012 USPP (US$38,000,000 5.44% series D senior notes due 15 March 2024 (of which US$38,000,000 in principal amount is outstanding))	7.79 per cent.	9.29 per cent.
Retail Bonds	5 per cent.	6.5 per cent.

Accrued interest under the Existing Scheme Finance Documents will be paid on the Refinancing Effective Date and such accrued interest will be calculated as if the adjusted interest rate applied from 15 May 2017.
A 100bps amendment fee will be paid to all Scheme Creditors for entry into the Refinancing.
The Make-Whole Amount in respect of the USPP Notes will be crystallised and capitalised on the Refinancing Effective Date and shall form part of the outstanding principal of the USPP Notes for the purposes of interest and fee calculations (the “USPP Make-Whole Notes”). The holders of the USPP Make-Whole Notes will receive a fee equal to a sum calculated as if it were the interest that would have accrued on the USPP Make-Whole Notes had they been issued on 15 May 2017, being the date of the Pre-Schemes Letter. The holders of the USPP Make-Whole Notes will also receive the amendment fee, the choice of Equity Warrants and/or Synthetic Warrants, the increase in interest rates outlined above and the Supplemental PIK Fee.

Equity Warrants and Synthetic Warrants

As part of the Refinancing, Scheme Creditors will be offered the choice of receiving a pro rata share of:

Equity Warrants: warrants equivalent to up to 15 per cent. of the issued share capital of the Issuer on a Fully Diluted Basis; with an exercise price of 42.75 pence, and freely tradable (subject to certain restrictions) and exercisable from their issuance until 31 May 2022. The Equity Warrants will be afforded customary anti-dilution protection in respect of their value (“Customary Anti-Dilution Protections”) including, among other things, protection against any Equity Adjustment Events, but shall not be secured nor have any priority ranking as debt;
Synthetic Warrants: synthetic share warrants representing, in aggregate, a fee equivalent to up to 15 per cent., on a Fully Diluted Basis, of the difference between £218,371,728.58 (being the value of the issued share capital of Premier on the Reference Date, on the basis of a value of 42.75 pence per Ordinary Share) and the market capitalisation of the Issuer on the earliest of: (a) the calendar quarter-end date on which the Gross Leverage Ratio of the Group falls below 3:1; (b) the calendar quarter-end date on which the New Net Leverage Ratio of the Group falls below 2.5:1; (c) the maturity date of the Senior Secured Debt Facilities; and (d) the date on which the Senior Secured Debt Facilities are repaid or prepaid and cancelled in full. The Synthetic Warrants will be secured and will rank pari passu with the indebtedness giving rise to the entitlement to the Synthetic Warrants, in the form of the Super Senior Synthetic Warrants and the Senior Synthetic Warrants; or
a combination of Equity Warrants and Synthetic Warrants.

Creditors’ entitlements to Equity Warrants will be reduced by their take up of Synthetic Warrants and vice versa. Therefore, take up of the Synthetic Warrants will reduce the number of Ordinary Shares capable of being issued on exercise of the Equity Warrants. The Equity Warrants and the Synthetic Warrants are being granted to creditors as consideration for the variation of the terms of the Group’s financing arrangements.

If all Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors elect to receive Equity Warrants and to pay the Exercise Price in cash, the Warrant Shares issued upon exercise will represent 15 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis. This would reduce to 6 per cent. if all Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors elect to receive Equity Warrants and to exercise them cashlessly, that is, by a reduction in the number of Warrant Shares issuable on exercise. The Synthetic Warrants have been designed according to the requirements and input of certain Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors with whom the terms of the Refinancing were negotiated, as an alternative to the Equity Warrants. The number of Equity Warrants and Synthetic Warrants issued on the Refinancing Effective Date will be determined by the elections of Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors.

The Equity Warrants and Synthetic Warrants will be granted or paid (as applicable) to each Scheme Creditor, Schuldschein Lender and Existing Bilateral LC Creditor pro rata to the proportion which their commitments or in the case of USPP Holders, Retail Bondholders and Schuldschein Lenders, the outstanding principal amount under those Existing Finance Documents (which, in the case of the USPP Notes will include its Make-Whole Amount) as at the Refinancing Effective Date bears to the aggregate of commitments and participations under the Super Senior Secured Facilities and the Senior Secured Debt Facilities as at the Refinancing Effective Date.

The Issuer will issue Equity Warrants on the Refinancing Effective Date to Scheme Creditors (and to CDI Holders as Nominated Recipients in respect of CIN’s entitlements) who have elected to receive (or, if applicable, have designated a Nominated Recipient to receive) Equity Warrants and on whose behalf an

Election Form containing the US Certifications has been delivered to and received by the Issuer before the Forms Submission Deadline (or, to the extent applicable, their Nominated Recipients).

The Issuer will issue Synthetic Warrants on the Refinancing Effective Date to each Scheme Creditor (and CDI Holders as Nominated Recipients in respect of CIN's entitlements as a Scheme Creditor) who has elected to receive (or, if applicable, has designated a Nominated Recipient to receive) Synthetic Warrants and on whose behalf an Election Form has been delivered to and received by the Issuer before the Forms Submission Deadline (or, to the extent applicable, their Nominated Recipient).

After submitting an Election Form, Scheme Creditors will have until the Election Adjustment Deadline to change their election in respect of the Equity Warrants and the Synthetic Warrants.

Scheme Creditors (and CDI Holders through instructions given to CIN):

who have elected to receive Equity Warrants but who are Disqualified Persons (and have not designated a Nominated Recipient who is an Eligible Person); or
who have indicated that they do not wish the Equity Warrants or the Synthetic Warrants to be issued in their name or that of a Nominated Recipient,

will have their entitlement to the Equity Warrants or the Synthetic Warrants transferred to the Holding Period Trustee. The Holding Period Trustee will hold such Equity Warrants or Synthetic Warrants on trust for the relevant Scheme Creditor or CDI Holder.

Scheme Creditors will also receive their Equity Warrants and/or Synthetic Warrants on the Refinancing Effective Date if they have submitted a valid election (contained in an Election Form) in respect of their entitlement to the Equity Warrants and/or Synthetic Warrants between the Forms Submission Deadline and the Election Adjustment Deadline and the Issuer exercises its discretion to issue the relevant Equity Warrants or Synthetic Warrants to that Scheme Creditor.

A Scheme Creditor or a CDI Holder will be an "Unadmitted Scheme Creditor" or an "Unadmitted CDI Holder" (as applicable) if it does not submit an Election Form before the Forms Submission Deadline, subject to the Issuer's discretion to admit Election Forms submitted after the Forms Submission Deadline but before the Election Adjustment Deadline.

Unadmitted Scheme Creditors and Unadmitted CDI Holders will have up to 12 months from the Refinancing Effective Date to provide an Election Form to elect to receive Synthetic Warrants. Unadmitted Scheme Creditors and Unadmitted CDI Holders are not eligible to receive Equity Warrants. Unadmitted Scheme Creditors and Unadmitted CDI Holders will not receive any Synthetic Warrants unless they provide such evidence as the Information Agent and the Issuer may reasonably require proving that they were a Scheme Creditor or a CDI Holder at the Record Time. Unadmitted Scheme Creditors and Unadmitted CDI Holders that do not provide an Election Form within the 12 month period following the Refinancing Effective Date will not be entitled to receive their Synthetic Warrants. For Unadmitted Scheme Creditors and Unadmitted CDI Holders that do provide an Election Form within the 12-month period following the Refinancing Effective date, the Issuer will issue Synthetic Warrants once a month, on a date to be determined by the Issuer, to those Unadmitted Scheme Creditors and Unadmitted CDI Holders that have provided their Election Forms and other required evidence in the previous monthly period.

During the Holding Period, any Scheme Creditor, CDI Holder or Nominated Recipient whose Trust Securities are held by the Holding Period Trustee in the Holding Period Trust may:

deliver an Election Form to the Holding Period Trustee and request that the Holding Period Trustee transfer the relevant Trust Securities to it (or its Nominated Recipient(s)) provided that if the Trust Securities comprise of Equity Warrants, such Scheme Creditor or CDI Holder or Nominated Recipient is an Eligible Person; or
request in writing that the Holding Period Trustee, through an independent broker, or any other reputable institution with relevant experience, sell the relevant Scheme Creditor's, CDI Holder's or Nominated Recipient's Trust Securities and any other related trust property on Arm's Length Terms and deliver the proceeds (net of any taxes, withholding, deductions, commissions, other fees or other costs or any other expenses) to the Scheme Creditor, CDI Holder or Nominated Recipient, as applicable.

Equity Warrants may only be transferred outside the United States or to persons in the US who are QIBs or IAIs.

Due to the requirements of the Clearing Systems, the Nominated Recipients of any Retail Bondholders will be required to hold their Equity Warrants and/or Synthetic Warrants in the same account in the Clearing System as the relevant Scheme Creditor.

Scheme Creditors, CDI Holders, Nominated Recipients and any other holders of Equity Warrants or, if they have transferred their Equity Warrants, the transferee, will also be required to make the US Certifications upon any exercise of the Equity Warrants.

Supplemental PIK Fee: if the Group delivers a compliance certificate in respect of the relevant financial period ending on 31 December 2018 which states that its Covenanted Net Debt exceeds US$2.95 billion as at 31 December 2018, PIK interest will be charged on each Scheme Creditor’s commitments under the Super Senior Secured RCF/LC Facilities and each Scheme Creditor’s commitments under the Senior Secured Debt Facilities (whether drawn or undrawn) outstanding as at 31 December 2018 (accruing retrospectively from 30 June 2016 on a simple, non-compound and daily basis). The relevant interest rate for these purposes will be determined by reference to the amount of Covenanted Net Debt as set out in the compliance certificate required to be delivered in respect of the financial period ending on 31 December 2018 as follows:
where Covenanted Net Debt is greater than US$2.95 billion but lower than US$3.05 billion, 1.75 per cent. per annum;
where Covenanted Net Debt is greater than or equal to US$3.05 billion but lower than US$3.15 billion: 2 per cent. per annum; and
where Covenanted Net Debt is greater than or equal to US$3.15 billion: 2.25 per cent. per annum.

If Covenanted Net Debt falls below US$2.95 billion after 31 December 2018, then the Supplemental PIK Fee shall only accrue up to, and including, the date on which a compliance certificate evidencing that net debt is equal to or below US$2.95 billion is delivered, notwithstanding that Covenanted Net Debt may or subsequently does become equal to or exceed US$2.95 billion. As at 31 December 2016, the Group’s Covenanted Net Debt was approximately US$3.155 billion.

The Supplemental PIK Fee payable to Scheme Creditors under the Super Senior Secured RCF/LC Facilities and the Senior Secured Debt Facilities shall be crystallised as a fee on the date on which a compliance certificate evidencing that Covenanted Net Debt is below US$2.95 billion is delivered and shall be payable on the earlier of the maturity of the Super Senior Secured RCF/LC Facilities or the Senior Secured Debt Facilities (as applicable) and the date on which the Super Senior Secured RCF/LC Facilities or the Senior Secured Debt Facilities (as applicable) are repaid or prepaid and cancelled in full, and shall accrue cash interest at the same rate as the Super Senior Secured RCF/LC Facilities and the Senior Secured Debt Facilities.

The Supplemental PIK Fee payable to Scheme Creditors under the Super Senior Secured RCF/LC Facilities and the Senior Secured Debt Facilities (and any applicable interest thereon) shall rank pari passu with the Super Senior Secured RCF/LC Facilities or Senior Secured Debt Facilities (as applicable).

New Security

Amounts owed to Scheme Creditors under the Amended Finance Documents will have the benefit of comprehensive fixed and floating security granted by the New Obligors (the “New Security”).

The New Security will comprise:

security over the issued share capital of all active subsidiaries within the Group;
an English law debenture to be entered into by each New (other than the Brazilian Guarantor) granting (among other things): (i) a first legal mortgage over certain freehold or leasehold property in England and Wales; (ii) assignments in respect of material contracts governed by English law (other than certain UK licence documents), the Group’s key insurance policies, hedging assets, intercompany loan agreements and intra-Group service agreements; (iii) fixed charges in respect of licences in the jurisdiction of England and Wales, intellectual property, plant and machinery, goodwill, certain mandatory prepayment bank accounts and all intercompany receivables; and (iv) a floating charge over all other bank accounts (except certain assets held by a member of the Group on behalf of joint operating partners, where the terms of the applicable joint operating agreement prohibit those assets from being secured) and other present and future assets which are not at any time subject to an effective fixed charge or assignment. Each of the Brazilian Guarantor and Premier Oil Exploration and Production Mexico S.A. de C.V. will enter into an English law debenture on identical terms but documented as a separate agreement; and

if any New Obligor has any material assets in any jurisdiction other than England and Wales, security equivalent to that provided in the English law debenture (to the extent possible) shall be provided under local law security documents. These will include:
Scots law governed bond and floating charges granted over all present and future assets (including Scottish licences);
a Falkland islands governed debenture granted over all present and future assets (including Falkland Island licenses and bank accounts);
a Singaporean law debenture granted over all present and future assets (including Singapore bank accounts);
a Dutch law governed omnibus security granted over all present and future assets (including Dutch bank accounts) and Dutch law governed share pledges granted over certain Dutch subsidiaries in the Group);
Indonesian law governed account pledges and an Indonesian law governed fiducia security agreement over receivables;
Vietnamese law governed mortgages granted over bank accounts and entitlements;
Brazilian law governed fiduciary assignments granted over shares, intercompany loans and bank accounts;
a Mexican law governed floating lien pledge granted over all assets (including Mexican bank accounts) and a Mexican law governed stock pledge granted over shares;
a German law governed security assignment over claims and receivables;
Jersey law governed security assignment agreements granted over shares; and
a British Virgin Islands law governed equitable mortgage granted over shares.

In addition to the above, it has been agreed that a newly incorporated English company (“NewCo”) will be inserted into the group structure above Premier Oil Group Limited. This is to provide creditors with a single point of enforcement over an English company within the holding company structure. Security will be created over the shares in NewCo and NewCo will grant floating security over all of its assets.

PART B: PROPOSALS CONCERNING THE SCHULDSCHEIN LOANS

The Refinancing as it concerns the Schuldschein Lenders will be on similar terms (except with regard to the differences listed below) to the proposals concerning the Scheme Creditors described in Part A above, although it will be implemented by the Schuldschein Lenders entering into the Converted Amendment Agreement in respect of the Schuldschein Loans pursuant to the steps described in the Restructuring Implementation Deed (as summarised below in Part F (Implementation of the Refinancing)).

The Schuldschein Lenders will not participate in the Schemes since the Schuldschein Loan Agreements are governed by German law and are subject to the Frankfurt courts’ exclusive jurisdiction. Accordingly, it is not clear the Court has jurisdiction to sanction a scheme in respect of the Schuldschein Loan Agreements.

Schuldschein Lenders will benefit from the same guarantor and security package, the same covenants and milestones as Scheme Creditors and will be entitled to the Equity Warrants and Synthetic Warrants and the Supplemental PIK Fee. The maturity date of the Schuldschein Loan Agreements will also be extended to 31 May 2021 (consistent with the debt owed to the Scheme Creditors).

In addition, Schuldschein Lenders will be entitled to the following:

Amendment fee: Schuldschein Lenders will receive a higher amendment fee of 150 bps (in contrast to the 100 bps fee given to Scheme Creditors). This higher fee forms part of the consideration for the Schuldschein Lenders agreeing to the conversion of the Schuldschein Loan Agreements into an English law governed term loan facility and the loss of their bilateral rights.
Increase in margin: Schuldschein Lenders will receive an increased margin of 250 bps (in contrast to the 150 bps increase given to Scheme Creditors). This increased margin uplift forms part of the consideration for the Schuldschein Lenders agreeing to the conversion of the Schuldschein Loan Agreements into an English law governed term loan facility and the loss of their bilateral rights. It will also apply to interest

which accrued under the Schuldschein Loan Agreements from 15 May 2017, being the date of the Pre-Schemes Letter, up to the Refinancing Effective Date.

The following table outlines the current interest rates in respect of each of the Schuldschein Loan Agreements and the revised interest rates following the amendments made by the Refinancing:

	Existing interest rate	Adjusted interest rate
Schuldschein (US$60,000,000)	LIBOR + 4.15 per cent.	LIBOR + 6.65 per cent.
Schuldschein (US$20,000,000)	LIBOR + 4.15 per cent.	LIBOR + 6.65 per cent.
Schuldschein (US$50,000,000)	LIBOR + 4.35 per cent.	LIBOR + 6.85 per cent.

Equity Warrants and Synthetic Warrants: Schuldschein Lenders will also be entitled to elect to receive Equity Warrants or Synthetic Warrants (or a combination of the two). Schuldschein Lenders will make such elections in a separate investor letter appended to the Converted Amendment Agreement. The mechanism for the distribution of Equity Warrants and Synthetic Warrants to Schuldschein Lenders is broadly the same as that for Scheme Creditors. However, a key difference is that Schuldschein Lenders will be required to confirm either (a) their Non-US Status, or (b) that they are either a QIB or an IAI, in order to receive both Equity Warrants and Synthetic Warrants.

PART C: PROPOSALS CONCERNING THE EXISTING WYTCH FARM BILATERAL LC FACILITIES AND THE EXISTING NELSON BILATERAL LC FACILITY AGREEMENT

Certain of the terms applicable to the Scheme Creditors and the Schuldschein Lenders will also apply to the Existing Bilateral LC Creditors, namely:

Resetting maturities to 2021: the Existing Wytch Farm Bilateral LC Facilities and the Existing Nelson Bilateral LC Facility Agreement will be converted into separate committed LC facilities with a maturity date of 31 May 2021;
Super Senior Secured Facilities: all commitments under the Existing Wytch Farm Bilateral LC Facilities as at the Refinancing Effective Date will form part of the Super Senior Secured Facilities and will receive priority in terms of payment and security accordingly;
Senior Secured Debt Facilities: the Existing Nelson Bilateral LC Facility Agreement will form part of the Senior Secured Debt Facilities and will receive priority in terms of payment and security accordingly;
Equity Warrants and Synthetic Warrants: the Existing Bilateral LC Creditors will be given a choice of Equity Warrants and Synthetic Warrants on the same terms as the Scheme Creditors and the Schuldschein Lenders;
Supplemental PIK Fee: the Existing Bilateral LC Creditors will be entitled to the Supplemental PIK Fee on their commitments that form part of the Super Senior Secured Facilities and the Senior Secured Debt Facilities respectively, on the same terms as the Scheme Creditors; and
Increase in margin: the margin in respect of the New Wytch Farm LC Facilities and the Amended and Restated Nelson Bilateral LC Facility Agreement respectively will be set at the same rate as the margin applicable to the Super Senior Secured RCF/LC Facilities and Senior RCF Facility, namely at 500 bps.

PART D: PROPOSALS CONCERNING THE HEDGING TRANSACTIONS

Save as described below, the Group's Hedging Transactions (covering interest rate swaps, commodity hedges, foreign exchange hedging and cross-currency swaps) will remain in place following the Refinancing. The Hedge Counterparties will become parties to the Intercreditor Agreement, under which increases in net exposure since the Reference Date will be given super-priority ranking alongside the Super Senior Secured Facilities as part of the Super Senior Secured Hedging Liabilities (defined below). All other hedging liabilities owing to the Hedge Counterparties will otherwise rank pari passu with the Senior Secured Debt Facilities as part of the Senior Secured Hedging Liabilities.

It is proposed that the Group's cross-currency swaps be extended and amended in the following ways:

Termination date and final exchange date: the termination date in respect of each cross-currency swap will be extended to 31 May 2021.
Increase in interest: the margin in respect of each cross currency swap will be set at a rate which reflects the increased margin or coupon on the underlying instrument plus a credit spread. Accordingly, the pricing in respect of each cross currency swap will be set at a rate which reflects the increased margin or coupon

on the underlying instrument plus a credit spread. This revised margin will also reflect any execution charges and the prevailing market rate at the time the swaps are extended.

Partial close-out: if a member of the Group makes a prepayment or repayment of any underlying debt instrument to which a cross-currency swap relates, the relevant Group company and each Hedge Counterparty in respect of the cross-currency swap will close out or terminate the relevant cross-currency swap in full or part on a pro rata basis to reflect the prepayment or repayment of the relevant underlying debt instruments.

The Super Senior Secured Hedging Liabilities will comprise the amount by which, at any time:

(a) the net mark-to-market liabilities owed by members of the Group to that Hedge Counterparty in respect of Hedging Transactions (taking into account existing Hedging Transactions under the Hedging Agreements, Hedging Transactions entered into on or after the Reference Date and Hedging Transactions entered into after the Refinancing Effective Date in accordance with the strategy in respect of the Hedging Agreements after the Refinancing Effective Date (as applicable)) between that Hedge Counterparty and any member of the Group (after taking into account any cross-transactional netting or set-off applicable to the relevant hedging transactions of that Hedge Counterparty) at that time;

Exceed

(b) the net mark-to-market liabilities owed by members of the Group to that Hedge Counterparty in respect of the existing Hedging Transactions under the Hedging Agreements of that Hedge Counterparty (after taking into account any cross-transactional netting or set-off applicable to the relevant existing hedging transactions of that Hedge Counterparty) as at opening of business on 15 March 2016.

The terms of the cross-currency swap entered into with Deutsche Bank AG will not be amended through the same process as the other cross-currency swaps. Rather, the extension of the date of exchange of the final exchange amount will be effected by entering into a foreign exchange forward transaction promptly following the Refinancing Effective Date for a notional amount equal to the outstanding notional amount of the Deutsche Bank AG cross-currency swap in respect of the period from the original cross-currency swap termination date to 31 May 2021.

PART E: THE CONVERTIBLE BONDHOLDER RESTRUCTURING

In connection with the amendments summarised above in Parts A-D, as part of the Refinancing the Group is proposing the following terms to the Convertible Bondholders:

Resetting the maturity date of the Convertible Bonds: the maturity date for the Convertible Bonds will be reset from 27 July 2018 to 31 May 2022.
Improved conversion price: the price at which the Convertible Bonds may be converted will be reduced to 74.71 pence. This represents a 20 per cent. premium on the arithmetical average of the volume weighted average price of Ordinary Shares over the period from 1 March to 22 March 2017 (inclusive) (the "VWAP Period"). The conversion price will be based on a new fixed USD to GBP exchange rate of US$1.2280 = £1, being the simple average of the exchange rates quoted by Bloomberg (page GBP USD currency) at or around 4 p.m. GMT for each dealing day in the VWAP Period.
Adjustment of the conversion price: the conversion price in respect of the Convertible Bonds will be adjusted for any rights issues or warrant issues or other events that occur subsequent to the Refinancing Effective Date as currently provided for in the Convertible Bond Trust Deed and in the articles of the Convertible Bond Issuer. There will be no adjustment to the conversion price as a consequence of:
the issue of Equity Warrants or Convertible Warrants or any adjustment to the subscription price under the Equity Warrants or Convertible Warrants or number of Ordinary Shares to be issued pursuant thereto, in each case pursuant to the terms of the Equity Warrants or Convertible Warrants as at the Refinancing Effective Date; or
the issuance of Ordinary Shares as described in "Issue of Ordinary Shares and cash interest alternative" below.
Conversion at the option of the Convertible Bond Issuer: the Convertible Bond Issuer will have the option to require the conversion of Convertible Bonds at the conversion price if on each of not less than 25 dealing days ending not earlier than 14 days prior to the date upon which the relevant notice of redemption is given to the Convertible Bondholders, the value of the Ordinary Shares is equal to or greater

than 140 per cent. of the conversion price. The Convertible Bond Issuer will not be able to exercise this option in the one year period immediately following the Refinancing Effective Date.

Issue of Ordinary Shares and cash interest alternative: on 27 January, 27 April, 27 July and 27 October each year (or the next following business day), the Convertible Bondholders will have the right to receive, at the election of the Convertible Bond Issuer, one of:
Ordinary Shares with a value equal to the cash interest otherwise applicable under the Convertible Bond Trust Deed, as determined in accordance with the prevailing USD to GBP exchange rate;
the proceeds of sale of Ordinary Shares with a value equal to the cash interest otherwise applicable under the Convertible Bond Trust Deed, as determined on the basis of the prevailing USD to GBP exchange rate; or
cash interest as currently provided for in the Convertible Bond Trust Deed, as regulated by the terms of the Intercreditor Agreement. The Intercreditor Agreement prohibits the payment of cash interest under the Convertible Bonds without creditor approval.
Convertible Warrants: Convertible Bondholders will be allocated Convertible Warrants representing 3 per cent. of the Issuer's issued share capital on a Fully Diluted Basis, with an exercise price of 42.75 pence, on the following basis:
if the Convertible Bond Restructuring is implemented through the Convertible Bondholder Resolutions (as is expected to be the case), all Convertible Bondholders as at the Refinancing Effective Date will be entitled to Convertible Warrants equivalent to 3 per cent. of the Issuer's issued share capital on a Fully Diluted Basis; and
if the Convertible Bond Restructuring is implemented through a CVA, by way of a lock-up fee, only those Convertible Bondholders who were Participating Convertible Bondholders immediately prior to the first Convertible Bondholder Meeting will be entitled to receive a pro rata share of Convertible Warrants equivalent to 3 per cent. of the Issuer's issued share capital on a Fully Diluted Basis multiplied by the proportion that the aggregate of the Participating Convertible Bondholders' Convertible Bonds represents compared to the total principal amount outstanding of the Convertible Bonds (each as at the point immediately preceding the first Convertible Bondholder Meeting); and
holders of the Convertible Warrants will be afforded Customary Anti-Dilution Protections on terms substantially equivalent to those afforded to the Equity Warrants in respect of their value but shall not be secured or have any priority ranking as debt.
Intercreditor terms: the terms of the Convertible Bonds are to be regulated by the Intercreditor Agreement, which provide for certain restrictions, including:
Ranking and priority: the Intercreditor Agreement will provide that the Convertible Bonds will rank behind the Super Senior Secured Facilities, the Super Senior Secured Hedging Liabilities, the Senior Secured Debt Facilities and the Senior Secured Hedging Liabilities;
Enforcement: no steps are to be taken to enforce the Convertible Bonds whilst the Super Senior Secured Facilities, the Senior Secured Debt Facilities, the Super Senior Secured Hedging Liabilities or the Senior Secured Hedging Liabilities are outstanding except for accelerating and proving claims in the event that a liquidator or administrator (or an analogous officer under any other relevant jurisdiction) is appointed in respect of the Issuer or the Convertible Bond Issuer; and
Permitted payments: no payments are to be made in respect of the Convertible Bonds unless such payment is a scheduled payment of interest or principal or a redemption in connection with the mandatory prepayment right described below in each case, only to the extent that there is no default, acceleration or distribution event in respect of the Super Senior Secured Facilities, the Super Senior Secured Hedging Liabilities, the Senior Secured Debt Facilities and/or the Senior Secured Hedging Liabilities.
Anti-layering: Convertible Bondholders will benefit from a requirement that all debt incurred by the Issuer and the Convertible Bond Issuer that is subordinated to the Super Senior Secured Facilities and the Senior Secured Debt Facilities (other than intercompany debt of the Issuer or the Convertible Bond Issuer over which the Scheme Creditors and Schuldschein Lenders will be taking security) will also be subordinated to the Convertible Bonds in accordance with the terms of the Intercreditor Agreement.

Consent to the terms of the Refinancing: Convertible Bondholders will be required to consent to the terms of the Refinancing through the Convertible Bondholder Approvals. The Convertible Bondholder Approvals are a condition precedent to the implementation of the Refinancing as a whole.
Mandatory prepayment: the change of control call and put options requiring or permitting (as applicable) prepayment of the Convertible Bonds upon a change of control of the Issuer currently provided for in the Convertible Bond Trust Deed will be amended to be at 101 per cent. of the principal amount of the Convertible Bonds rather than par, as is currently provided for. This prepayment right is subject to the terms of the Intercreditor Agreement.
Restrictions on borrowings: Convertible Bondholders will benefit from a covenant given by the Issuer limiting the Group's indebtedness or commitments for indebtedness (other than intercompany debt, debt owed by certain Group companies principally involved with certain projects, the Convertible Bonds, receivables sold or discounted, certain deferred purchase agreements and certain other similar debt arrangements) to the higher of:
110 per cent. of the indebtedness (subject to the same exclusions described above) and commitments for indebtedness outstanding on the Refinancing Effective Date in USD (or, where such amounts are not denominated in USD, the USD equivalent of such amount calculated by reference to the GBP/USD exchange rate or the EUR/USD exchange rate prevailing on the Refinancing Effective Date) (including the Super Senior Secured Facilities and the Senior Secured Debt Facilities and amounts that may be capitalised or arise pursuant thereto including the Supplemental PIK Fee, Synthetic Warrants and the crystallised Make Whole Amount); and
an amount equal to five times the Group's earnings before interest, tax, depreciation and amortisation.

Such indebtedness may be refinanced (in whole or in part) within such limits (whether as to economics, tenor or otherwise).

PART F: IMPLEMENTATION OF THE REFINANCING

In order to implement the Refinancing, approvals from the Scheme Creditors, the Schuldschein Lenders, the Convertible Bondholders, Hedge Counterparties and Existing Bilateral LC Creditors, as well as the shareholders of the Issuer are required. Each of these approvals is summarised below.

The Schemes: if approved, the Schemes will provide for the amendment and restatement of all of the Existing Scheme Finance Documents in the form of the Amended Finance Documents as set out in the appendices to the Restructuring Implementation Deed and the entry into the New Finance Documents. The Schemes are summarised below at Part G (Summary of the Schemes).
The Schuldschein Loan Agreements: the implementation of the Refinancing as regards the Schuldschein Lenders will not be effected by way of the Schemes. This is because the Schuldschein Loan Agreements are governed by German law and are subject to the Frankfurt courts' jurisdiction, in contrast to the Existing Scheme Finance Documents, which are all governed by English law and subject to the jurisdiction of the English courts. Accordingly, it is not clear that the Court has jurisdiction in respect of the Schuldschein Loan Agreements and so they will not be amended as part of the Schemes. Instead, on the Refinancing Effective Date, the Schuldschein Lenders will convert their Schuldschein Loan Agreements into the form of a single English law syndicated term loan facility on the terms and in the Agreed Form appended to the Restructuring Implementation Deed.
The Convertible Bondholder Approvals: at or around the same time as the Schemes, Convertible Bondholders will be asked to vote on the Refinancing. Under the terms of the Convertible Bondholder Lock-up Agreement, the Convertible Bond Issuer may elect to propose either:
a written resolution under the terms of the Convertible Bond Trust Deed, which, in order to be passed, would require Convertible Bondholders holding 75 per cent. by value of the Convertible Bonds to vote in favour; and/or
an extraordinary resolution of Convertible Bondholders at a meeting of the Convertible Bondholders under the terms of the Convertible Bond Trust Deed, which, in order to be passed, would require 75 per cent. by value of Convertible Bondholders present and voting at the meeting to vote in favour of the resolutions (the "Convertible Bondholder Resolutions"). The quorum requirements applicable for the holding of a meeting of Convertible Bondholders in order to consider an Convertible Bondholder Resolution are as follows: (i) one or more persons together representing a two-thirds majority by value of the Convertible Bonds must be present (other than on an adjourned meeting, the

requirements of which are set out in (ii)); or (ii) if a first meeting is adjourned as a quorum was not present, at a second meeting, one or more persons together representing 25 per cent. by value of the Convertible Bonds.

If the Convertible Bond Restructuring cannot be implemented through a written resolution or the Convertible Bondholder Resolutions, as described above, a company voluntary arrangement of the Convertible Bond Issuer under Part I of the Insolvency Act 1986 (the "CVA"). In such a scenario, the Scheme Creditors and Schuldschein Lenders would vote on the CVA in respect of their guarantee claims against the Convertible Bond Issuer under the Existing Finance Documents.

On 25 April 2017, the Group announced that over 75 per cent. by value of Convertible Bondholders had entered into a lock-up agreement to support the Refinancing. This is a sufficient majority to pass an extraordinary resolution under the terms of the Convertible Bond Trust Deed to implement the amendments required to effect the Refinancing. Accordingly, the Group does not expect that a company voluntary arrangement in respect of the Convertible Bond Issuer will be required to implement the Refinancing.

The Schemes and the Convertible Bondholder Approvals are interconditional on one another, such that the Schemes will not become effective unless Convertible Bondholder Approvals have been passed.

Hedging Agreements: the implementation of the Refinancing as regards the Hedge Counterparties will not be effected by way of the Schemes. Instead, the Hedge Counterparties have undertaken to enter into the Restructuring Implementation Deed, which sets out the steps in relation to the Hedging Agreements in respect of the Refinancing. Please see Part D: Proposals concerning the Hedging Transactions above for further details.
Existing Wytch Farm Bilateral LC Facilities and the Existing Nelson Bilateral LC Facility Agreement: the implementation of the Refinancing as regards the Existing Bilateral LC Creditors will not be effected by way of the Schemes. Instead, the Existing Bilateral LC Creditors will be entering into separate amendment and restatement agreements and the Restructuring Implementation Deed, which sets out the steps in relation to the Existing Wytch Farm Bilateral LC Facilities and the Existing Nelson Bilateral LC Facility Agreement in respect of the Refinancing. Please see Part C: Proposals concerning the Existing Wytch Farm Bilateral LC Facilities and Nelson LC Facilities above for further details.
Issuer Shareholder Approvals: holders of Ordinary Shares will be asked to vote on the Shareholder Resolution at the General Meeting. The Shareholder Resolution will authorise:
the grant of rights to subscribe for and allotment by Premier of Ordinary Shares in connection with the issue of Equity Warrants to Scheme Creditors, Existing Bilateral LC Creditors and Schuldschein Lenders;
the grant of rights to subscribe for and allotment by Premier of Ordinary Shares in connection with the issue of Convertible Warrants to Convertible Bondholders;
the grant of rights to subscribe for and/or allotment by Premier of Ordinary Shares in connection with the amendment of the conversion price of the Convertible Bonds; and
the allotment by Premier of Ordinary Shares in connection with the payment of the coupon on the Convertible Bonds in Ordinary Shares.

The Refinancing is conditional upon the passing of the Shareholder Resolution, which is further described in section 4 of Part XI (Additional Information).

PART G: SUMMARY OF THE SCHEMES

In addition, each of the Schemes will, among other things:

provide for the allocation and issue of Equity Warrants and Synthetic Warrants amongst the Scheme Creditors;
provide for the allocation of participations in the unutilised Super Senior Secured RCF/LC Facilities as between the Scheme Creditors (based on their elections); and
create a moratorium against any Scheme Creditors taking any legal action or commencing any process against any Scheme Company.

The Restructuring Implementation Deed will, among other things:

confirm that all guarantees given by the Scheme Companies or the Existing Guarantors under the Existing Scheme Finance Documents remain in full force and effect notwithstanding the amendments and restatements;
waive all defaults, events of default or early termination events which have occurred or may have occurred prior to the time at which the Amended Finance Documents become effective; and
contain a consent from Scheme Creditors to proceed with any other action contemplated by the Restructuring Implementation Deed in order to effect the Refinancing.

As indicated above, the Schemes and the Convertible Bondholder Approvals are interconditional, such that the Schemes will not become effective unless Convertible Bondholder Approvals have been passed. Certain other conditions to the Schemes are summarised below.

Scheme Conditions

The Schemes will take effect at the Schemes Effective Time, at which time an attorney will be authorised, pursuant to the Schemes, to enter into the Restructuring Documents on behalf of the Scheme Creditors. However, the compromise or arrangement between the Scheme Creditors and the Scheme Companies in relation to the Scheme Claims of the Scheme Creditors as set out in the terms of the Restructuring Documents will not become fully effective until the Refinancing Effective Date.

The Schemes Effective Time will occur on the delivery of a certificated copy of the Schemes Sanction Orders to the Registrar of Companies, which may not occur until each of the following conditions have been satisfied:

the Convertible Bondholder Approvals have been obtained; and
the Shareholder Resolution being passed.

The Refinancing Effective Date will occur upon the following conditions (among others) being satisfied:

the satisfaction or waiver of all conditions precedent to the Restructuring Implementation Deed, the Amended and Finance Documents and the New Finance Documents (other than the occurrence of the Refinancing Effective Date); and
no Insolvency Event having occurred in relation to any Existing Obligor or New Obligor on or prior to the date on which the conditions set out in this paragraph have been satisfied (other than any CVA) contemplated by the Refinancing.

If the Schemes become effective, the Scheme Creditors of the Scheme Companies will be bound by the relevant Scheme's terms and by the terms of the Restructuring Documents, whether or not they voted in favour of the Schemes.

The Court Hearings to sanction the Schemes are expected to take place on 18 July 2017.

PART II—DESCRIPTION OF THE ISSUER AND THE GROUP

For technical terms used in this section- See “Glossary of Technical Terms”.

Overview

The Group has current interests in several countries around the world, with significant assets in the UK, Indonesia, Vietnam, Pakistan, the Falkland Islands and Latin America. The portfolio consists of oil and gas fields which are already producing, discovered fields not yet producing which are undergoing development planning or execution, and licences to explore for new oil and gas fields in prospective areas. Fields which are already producing or for which the decision to invest in the development has already been made or where the justification has been made for development but has not yet been approved are classified as ‘2P reserves’. Contingent resources, classified as ‘2C resources’, are less certain than reserves and are potentially recoverable but not yet considered mature enough for commercial development due to technological or business hurdles. As at 31 December 2016, the Group had 2P reserves of 353.3 MMBOE and 2C resources of 481.6 MMBOE, giving rise to a reserves and resource base of 834.9 MMBOE. Production for the year ended 31 December 2016 was 71.4 KBOEPD. Based on these rates of production and 2P reserves, the average remaining life span of the fields would be 13 years.

In the financial year ended 31 December 2016, the Group achieved revenues of US$983.4 million and a profit after tax of US$122.6 million (including a tax credit of US$522.0 million)

The Group’s reserves and production by country

Strategy

Premier’s strategy is to grow shareholder value by investing in high quality production and development opportunities while maintaining exposure to upside value from successful exploration within a strict capital discipline framework. Execution of the Group’s strategy comprises four pillars:

Operating in a safe and responsible manner. The Group has a proven track record of operating and delivering across the cycle from exploration through development to production with particular focus on offshore projects. Premier leverages its operating capabilities to maximise value from its assets and to position itself to take advantage of future opportunities. Premier aims to deliver operational excellence in all its activities in a safe and responsible manner.
Focused on high quality assets with commercially advantaged positions. The Group develops and operates high quality assets in parts of the world where the Group has a strategic or operational advantage.

In the UK North Sea, Premier has a strong business unit and considerable tax assets. The Group is also a key player in the South East Asia gas market and has a dominant position in the North Falklands Basin with access to a substantial undeveloped resource base.

Access to capital and financial liquidity. The Group aims to have a favourable debt structure with sufficient liquidity to underpin the Group's capital investment programme and ability to access new opportunities for future growth. The Group seeks to maintain a disciplined approach to spending each year and where necessary will seek farm-in partners for drilling programmes and development projects to maintain this discipline.
Attracting and retaining the right people. The Group employs highly capable in-house operating teams at an asset and country level supported by functional experts with a track record of project delivery. The Group's aim is to ensure that the organisation is appropriately sized with the right calibre of people to achieve the Issuer's strategic initiatives.

History and development of the Group

The Group was founded in 1934 in Scotland to pursue oil and gas exploration and production activities in Trinidad. In 1936, the Group's holding company was publicly listed in London as Premier (Trinidad) Oilfields Limited, and for the next two decades the Group focused on oil production in Trinidad.

The Group acquired its first interest in the North Sea in 1971. It expanded its presence on the UKCS when it merged with the Ball and Collins North Sea Consortium in 1977, gaining significant interests in the North Sea as well as properties in Sudan and West Africa.

In 1984, the Group purchased a 12.38 per cent. interest in the onshore oilfield at Wytch Farm in Dorset. This acquisition had a significant impact on the Group's reserve base and cash flow and continues today to make an important contribution to the Group's revenues. In December 2011, the Group acquired an additional 17.715 per cent. interest in the onshore oilfield at Wytch Farm taking the Group's total interest in Wytch Farm to 30.1 per cent.

In the late 1980s and early 1990s, the Group enjoyed a series of exploration successes, notably the discovery of the Qadirpur gas field in Pakistan in 1990, the Angus and Fife fields in the UKCS in 1983 and 1991 respectively and the Yetagun gas field in Myanmar in 1992.

In 1995, the Group acquired Pict Petroleum plc ("Pict"). Hess Corporation ("Hess"), which already had a substantial interest in Pict, became a 25 per cent. shareholder of the Group. As a result of the Pict acquisition, the Group participated in numerous further North Sea oil and gas fields, including the Fife, Fergus, Galahad and Scott fields. Supported by production revenue from the UKCS, the Group turned its attention to South East Asia with a view to developing energy resources to serve the region's rapidly expanding economies. In 1996, the Group acquired Sumatra Gulf Oil which gave it a majority interest in Natuna Sea Block A offshore Indonesia, comprising the Anoa oil field and substantial undeveloped gas fields, as well as exploration prospects. The Group also acquired Discovery Petroleum NL of Australia, thereby obtaining an interest in the Kakap licence, also in the Natuna Sea, which added oil and gas reserves and provided access to further prospective exploration acreage.

The Group was the original licensee of concessions Ml3 and Ml4 in Myanmar, when they were awarded in 1990. Shortly afterwards, the Group farmed out its interests to a subsidiary of Texaco, which became the operator, and a subsidiary of Nippon Oil Corporation, whilst retaining a 30 per cent. interest. The Yetagun field was discovered in 1992 and development began in 1996. In late 1997, Texaco sold its entire interest of 30 per cent. and transferred the role of operator to the Group. At the same time the Group sold a 30 per cent. interest to Petronas. Construction of the pipeline and facilities for this field took place during 1998 and 1999. The field started production in May 2000.

In 1998, the Group and Shell brought together their exploration and production interests in Pakistan to form a joint venture company, Premier & Shell Pakistan B.V. ("PSP"). In May 2001, the Group announced an asset swap with Shell which dismantled the partnership and, in September 2001, a new joint venture company was formed with Kufpec to hold the interests in Pakistan, Premier-Kufpec Pakistan B.V. ("PKP"). This joint venture was unwound in 2007 with each of the co-venturers now owning its share of the assets directly.

To consolidate its position as a leading independent production company in the South East Asian energy markets, the Group formed a strategic alliance with Petronas and Hess in 1999. As part of the strategic alliance, each of Petronas and Hess owned a 25 per cent. equity interest in the Group. In September 2002, the Group agreed to transfer its entire Myanmar business to Petronas and part of the Indonesian West Natuna asset to

subsidiaries of Petronas and Hess. In consideration for these transfers, Petronas and Hess cancelled their combined 50 per cent. shareholding in the Group and contributed US$376 million in cash and debt repayment. As part of the reorganisation, in 2003 the Issuer acquired Premier Oil Group Limited (“POGL”) and as a result became the holding company of the Group.

In 2005, the Group reorganised into four regional units: Asia, Middle East-Pakistan, North Sea and West Africa. This reorganisation took into account the successful entry into a number of new countries including Vietnam, Norway and Mauritania.

In 2006, Premier made two discoveries in Vietnam on Block 12W—Dua and Chim Sáo.

In 2007, the Group purchased an additional 20.05 per cent. interest in the Scott field for US$52.6 million, which increased its equity in the project to 21.83 per cent.

In 2009, the Group acquired Oilexco North Sea Limited (“Oilexco”) from administration for US$500.1 million, funded with a combination of new debt facilities and a rights issue to shareholders of £171 million. This added production, reserves and resources to the Group’s North Sea unit. The acquisition provided the Group with a greater presence in the North Sea and strengthened its existing operations in the area by adding a material package of assets comprising existing producing fields, development projects of existing discovered reserves and a portfolio of exploration prospects, together with UK operatorship capabilities. The Group also acquired Delek Energy (Vietnam) LLC which owned 25 per cent. equity in Block 12W in Vietnam, increasing the Group’s interest in the block to 53.125 per cent.

In 2010 and early 2011, the Group made a series of discoveries in the Catcher area of the UK North Sea. In May 2011, Premier acquired 60 per cent. of the Solan Field in the UK and in October 2011, the Group announced the acquisition of EnCore Oil plc, an AIM listed independent exploration and appraisal company. The latter transaction increased the Group’s interest in the UK Catcher area to 50 per cent., providing the Group with the operatorship of the Catcher development and added to the Group’s exploration position in the Central North Sea. It completed in January 2012.

In July 2012, the Group announced the acquisition of 60 per cent. of Rockhopper’s interests in certain offshore production licences in the Falkland Islands. This includes an interest in the Sea Lion development project which significantly enhanced the Group’s resource base and future growth potential. This acquisition completed on 19 October 2012.

In recent years, Premier has continued to focus the business on its core areas of Indonesia and Vietnam, the United Kingdom and the Falkland Islands, where it believes it has competitive advantage. Non-core assets were disposed of in Norway, the UK, Vietnam and Indonesia and through relinquishing exploration acreage in Kenya and Iraq. The remaining 40 per cent. of the Solan field was acquired in May 2015. In April 2017, Premier announced the signing of a share purchase agreement with a buyer for the sale of its Pakistan business unit. The transaction is subject to customary governmental and regulatory approvals and is expected to complete by year-end 2017. Premier has also entered Brazil and Mexico with awards of three exploration blocks in Brazil in 2013 and two exploration blocks in Mexico in 2015. Premier executed a successful drilling campaign in the Falkland Islands in 2015/2016, substantially increasing the discovered resource there. In early 2016 Premier acquired E.ON’s UK North Sea assets, which significantly enhanced Premier’s core UK business at a compelling valuation and added stable UK gas revenues to the portfolio. It also offered the potential to generate significant operating and cost synergies across the combined UK North Sea business. The Solan field started producing in April 2016.

Premier today is a growing independent exploration and production company. The Group has strong businesses in the UK, Indonesia, Vietnam and the Falkland Islands with good quality assets across the cycle. Premier aims to continue its growth through successful exploration, astute commercial deals and optimal asset management and believes that key to its success is maintaining focus on investing in and executing the development of high quality oil and gas projects.

As at 31 December 2016, the Group had cash including gross joint venture cash balances and undrawn facilities on hand of approximately US$645.9 million. Accounting net debt was US$2,765.2 million including cash and cash equivalents of US$255.9 million.

Key strengths

Long-life production profile supported by substantial reserves

The Group’s current producing portfolio generated an average production rate of 71,400 BOEPD in 2016 (full year 2015: 57,600 BOEPD) from a spread of high quality assets. The Group has a strong reserve base with

over 350 MMBOE of 2P reserves (as of the financial year ended 31 December 2016) which at current production rates implies a reserve life of around 13 years.

Good quality long-term gas contracts

A majority of the Group's gas production is sold under profitable long-term contracts to government-backed customers in Singapore and Pakistan. Revenues are denominated in US Dollars and funds are remitted directly to London bank accounts.

Large equity stakes and operatorships in high quality projects with optionality to deliver future value

The Group's current level of production is expected to increase in the medium term as a result of bringing on-stream new projects. The Group operates and holds high equity interests in several development and pre-development projects which are expected to deliver growth over the medium term—Catcher, currently under construction, and Tolmount and Sea Lion which are both pre-development projects. Operatorships allow the Group to exert significant influence over the planning and execution of these projects.

Experienced production and development operator of medium-sized oil projects

The Group has a good track record of operating high quality assets which can be traced back to 1998 when it operated the Yetagun gas project, offshore Myanmar. Subsequently, the Group has brought on-stream several other operated development projects, including Anoa Gas Export (Indonesia) in 2001, Anoa West Lobe (Indonesia) in 2006, Chim São (Vietnam) and Gajah Baru (Indonesia) in 2011, Dua (Vietnam) and Naga (Indonesia) in 2014, Pelikan (Indonesia) in 2015, and most recently Solan (UK) in 2016.

Liquidity

The Group had cash, including gross joint venture cash balances, and undrawn bank facilities of approximately US$645.9 million as at 31 December 2016. Combined with current cash flows, this effectively pre-finances the Group's committed investment programme. The Group seeks to maintain a disciplined spending target each year and where necessary will seek farm-in partners for drilling programmes and development projects to maintain this discipline.

Experienced management team with deep oil and gas industry and finance knowledge

The Group's senior management team has a wide range of experience throughout the industry and across the business. Tony Durrant, Chief Executive Officer, joined the Group as Finance Director in 2005 having been Head of the European Natural Resources Group of Lehman Brothers since 1997. He was promoted to Chief Executive Officer in June 2014. Richard Rose joined the Group as Finance Director in September 2014. Richard qualified as a chartered accountant with Ernst & Young and has spent over 20 years in the energy sector, including 13 years working with a range of international banks and brokers in equity capital markets and corporate finance. Richard joined Premier from Ophir Energy where his role encompassed strategy and head of corporate communications. Operationally, Robin Allan has significant experience having spent more than 20 years working within the industry (with the Group). Robin is currently chairman of The Association of British Independent Oil Exploration Companies (BRINDEX) and a member of the board of Oil and Gas UK.

Organisational structure

The Issuer has two principal wholly-owned subsidiaries—Premier Oil Group Limited ("POGL"), and Premier Oil Finance (Jersey) Limited ("POFJL"). POGL holds the majority of the Group's licence interests through its subsidiaries and is registered in Scotland. POGL itself has five principal wholly-owned subsidiaries: Premier Oil Holdings Limited ("POHL"), POUK, Premier Oil Overseas B.V. ("POOBV"), Premier Oil (Vietnam) Limited ("POVL") and Premier Oil E&P Holdings Limited ("POEPHL").

POHL, a company registered in England and Wales, is the immediate holding company of several specially formed entities which hold the Group's interests in exploration assets in Mexico and Brazil, along with the Group's wholly-owned subsidiary Premier Oil Exploration and Production Limited ("POEPL") which holds the Group's assets in the Falkland Islands. POHL is also the intermediate holding Company for two entities that hold the Group's interest in the Chinguetti field, offshore Mauritania.

Premier Oil UK Limited ("POUK"), a Scottish registered company, and POEPHL through its wholly owned subsidiaries Premier Oil E&P UK Limited ("EPUK") and Premier Oil E&P UK EU Limited ("EPUKEU"), all companies registered in England and Wales, between them hold the majority of the Group's UK assets.

POOBV, a Dutch registered company, holds the Group's wholly-owned subsidiaries, Premier Oil Kakap B.V. and Premier Oil Natuna Sea B.V., which hold, respectively, the Group's interests in Kakap and Natuna Sea Block A, both of which are in Indonesia.

POOBV also holds the Group's wholly owned subsidiary Premier Oil Pakistan Holdings B.V. which has three wholly-owned subsidiaries, Premier Oil Pakistan Exploration Limited, Premier Oil Pakistan Kadanwari Limited and Premier Oil Pakistan Kirthar B.V., which hold, respectively, the Group's interests in Qadirpur and Zamzama, Kadanwari, and Bhit fields, all of which are located in Pakistan. Furthermore, POOBV holds the Group's wholly owned subsidiary Premier Oil Vietnam Offshore B.V. ("POVO") which holds part of the Group's interests in Block 12W in Vietnam.

POVL, a company registered in the British Virgin Islands, holds the part of the Group's interest in Block 12W in Vietnam not held by POVO.

POFJL is a Jersey-registered company incorporated for the purpose of issuing convertible bonds and to be a party to various financial arrangements supporting the convertible bonds.

Description of Businesses and Operations

The Group's licence interests in the North Sea

United Kingdom Business Unit

Headquarters: Aberdeen.

The Group has a portfolio of licences in the UK which comprises a mixture of producing assets, development assets and pre-development assets (which are yet to begin producing) and exploration acreage.

Net to Premier, 2P reserves and 2C resources in the United Kingdom were estimated at 235.4 MMBOE as at 31 December 2016, representing 28 per cent. of the Group's global total reserves and resources.

UK production for the year ended 31 December 2016 averaged 33.0 KBOEPD and accounted for 46 per cent. of the Group's total production.

Huntington—producing asset, 100 per cent. operated interest

The Huntington oil field is in the Central North Sea, 230km north-east of Aberdeen. It was discovered by Oilexco in 2007. Premier acquired Oilexco and its 40 per cent. non-operated interest in the Huntington field in May 2009. A field development plan was sanctioned in November 2010, utilising the Sevan Marine-owned Voyageur FPSO.

In 2011, Teekay acquired the Voyageur FPSO from Sevan Marine, and financed the completion of the upgrade of the vessel. First oil from the Huntington field was achieved in April 2013.

In November 2015, Noreco defaulted on the joint operating agreement for the Huntington field, resulting in the company forfeiting its 20 per cent. interest in the field. In January 2016 Iona Energy entered insolvency procedures and its stake also passed to the other partners. Premier announced the acquisition of E.ON's UK North Sea assets in January 2016 and this completed in April 2016.

Net to Premier, 2P reserves and 2C resources for the Huntington field were estimated at 16.6 MMBOE as at 31 December 2016. Huntington production for the year ended 31 December 2016 averaged 10,800 BOEPD. During 2016, the Huntington field benefited from high uptime of over 90 per cent. and reservoir performance that exceeded expectations. Production is in decline and is forecast to continue until at least 2018.

Solan—producing asset, 100 per cent. operated interest

The Solan oil field, 150km west of the Shetland Islands, was discovered in 1991. The discovery was appraised by Chrysaor Limited (Chrysaor) with two wells drilled in 2008 and 2009. In May 2011, Premier signed a sale and purchase agreement (SPA) with Chrysaor to acquire a 60 per cent. equity interest in the Solan field. In

May 2015, Premier acquired Chrysaor’s remaining 40 per cent. interest in the field for nil upfront consideration. At the same time, Premier entered into an agreement with FlowStream whereby a US$100 million payment was received in return for the proceeds from 15 per cent. of future production from the field for a period of time.

Approval of the Solan Field Development Plan (“FDP”) was granted by DECC in April 2012. The FDP consisted of two producers and two injectors tied back to a platform with oil produced into a subsea storage tank and offloaded by shuttle tanker. The facilities were installed during 2014 with first oil achieved in April 2016 albeit later than planned and over budget. Average production for 2016 and to date in 2017 has been impacted by poorer than expected reservoir performance in the eastern part of the field which is limiting water injection and production rates from the second producing well.

Net to Premier, 2P reserves and 2C contingent resources for the Solan field were estimated at 31.5 MMBOE as at 31 December 2016. Solan production for the full year ended 31 December 2016 averaged 4,500 BOEPD but for the six months to December 2016 (once production was fully under way) it averaged 8,600 BOEPD. Production is forecast to continue until 2035.

Babbage—producing asset, 47 per cent. operated interest

The Babbage gas field was discovered in 1988 and is located in Block 48/2a in the UK Southern Gas Basin. Premier acquired its 47 per cent. operated interest in the Babbage gas field as a result of its acquisition of E.ON’s UK North Sea assets in 2016.

The Babbage gas field consists of a nine-slot minimum facilities platform with horizontal multi-fraced wells. Gas is exported to West Sole and on to Dimlington Gas Terminal. First gas was achieved in August 2010. The platform was initially manned to support well drilling and clean-up operations but was successfully moved to NPAI (Not Permanently Attended Installation) on 5 April 2017.

Block 48/2a also contains the Hawking and the Cobra gas discoveries as well as several exploration prospects.

Net to Premier, 2P reserves and 2C resources for the Babbage field were estimated at 6.9 MMBOE as at 31 December 2016. Production for the eight months from 28 April to 31 December 2016 averaged 3,100 BOEPD, net to Premier. Production is forecast to continue until 2029.

Partners in the Babbage gas field are Bayerngas (13 per cent.) and Dana Petroleum (40 per cent.).

Balmoral area fields—producing assets, various operated interests

The Balmoral, Glamis, Stirling, Brenda & Nicol fields are located in Blocks 16/21a, 16/21b and 16/21c in the UK Central North Sea. The Group acquired its interest in the Balmoral area fields through its acquisition of Oilexco in 2009. The Balmoral area fields produce via a floating production facility located on the Balmoral field. Oil is transported via the Brae-Forties link to Cruden Bay and overland to Hound Point. The Glamis field ceased production in 2008.

Net to Premier, 2P reserves and 2C resources in the Balmoral area fields were estimated at 6.5 MMBOE as at 31 December 2016. Production from the Balmoral Area for the year ended 31 December 2016 was 2,100 BOEPD, net to Premier. Production is in decline and is forecast to continue until at least 2018.

Elgin-Franklin area—producing asset, 5.2 per cent. non-operated interest

The Elgin-Franklin area (including the Elgin, Franklin and West Franklin gas condensate fields) is located in the Central North Sea. Premier acquired its 5.2 per cent. non-operated interest in the Elgin-Franklin area through its acquisition of E.ON’s UK North Sea assets in 2016.

The Elgin-Franklin area started production in 2001. The development utilises a TGP-500 jack-up design production, utilities and quarters (PUQ) platform located on Elgin. The PUQ is bridge-linked to a satellite wellhead platform (WHP). A normally unmanned WHP is located on Franklin, with production transported via subsea flow lines to the Elgin PUQ. The West Franklin field was developed via an extended reach well drilled from the Franklin wellhead platform, with first production in 2007. The West Franklin phase two development started production in January 2015. The development includes two WHPs—West Franklin A and Elgin B. Elgin B is bridge-linked to the Elgin A wellhead platform. Once processed on the Elgin PUQ, liquids are transported via a spur line to BP’s Marnock field and onwards via the Forties Pipeline System. Sales gas is exported via a dry gas pipeline to Bacton.

The Elgin-Franklin area, which is operated by Total, is a mid-life asset with low operating costs of less than $8/boe in 2016. The gas condensate fields are currently producing approximately 110 kboepd and are expected to maintain high production rates for the next three years as new wells are drilled on the fields.

Net to Premier, 2P reserves and 2C resources for the Elgin-Franklin area were estimated at 22.4 MMBOE as at 31 December 2016. Elgin-Franklin area production for the eight months from 28 April to 31 December 2016 averaged 5,500 BOEPD, net to Premier. Production is forecast to continue until 2034.

Partners in the Elgin Franklin area are Total (operator, 46.17 per cent.), Eni (21.87 per cent.), Shell (14.11 per cent.), ExxonMobil (4.38 per cent.), Chevron (3.90 per cent.), Dyas (2.19 per cent.) and Sumitomo Corporation (2.19 per cent.).

Glenelg—producing asset, 18.57 per cent. non-operated interest

The Glenelg gas condensate field is located in Block 29/4D and 29/5B in the Central North Sea, four kilometres to the west of the Elgin-Franklin area. The Glenelg field was discovered in 1999 and began producing in 2006. Premier acquired its 18.57 per cent. non-operated interest in the Glenelg field through its acquisition of E.ON's UK North Sea assets in 2016.

The Glenelg field has been developed as a satellite to the Elgin-Franklin area and is produced via a single well from the Elgin A WHP. Condensate from Glenelg is exported from Elgin via a spur line to the BP-operated Marnock field and onwards through the Forties Pipeline System. Following processing offshore on the Elgin and Franklin facilities, gas is exported via the Shearwater Elgin Area Line (SEAL) to the Shell-operated Bacton Terminal.

The Glenelg field was shut-in between 2011 and mid-2016 due to a downhole blockage and scaling on the single well. Well intervention operations at the 22/30c-G10Y well started in October 2015, and were completed in mid-2016. Production restarted at the Glenelg field in May 2016 but was shut in in late September as a result of a blocked scale inhibitor line. A remediation programme was implemented by the operator and production was reinstated in March 2017. Production is currently shut-in due to scaling issues but an intervention is being carried out and production is expected to restart soon.

Net to Premier, 2P reserves for the Glenelg field were estimated at 1.6 MMBOE as at 31 December 2016. Glenelg production for the eight months from 28 April to 31 December 2016 averaged 1,400 BOEPD, net to Premier. Production is forecast to continue until 2025.

Partners in the Glenelg field are Total (58.73 per cent.), Shell (14.70 per cent.) and Eni (8 per cent.).

Wytch Farm—producing asset, 30.1 per cent., non-operated interest

The Group acquired a 12.38 per cent. interest in Wytch Farm in 1984. The field is considered Europe's largest onshore oil field, although a significant part of it extends offshore. It has been developed with 11 well sites linked to a central gathering station. Production is then exported via pipeline to the Hamble terminal near Southampton for tanker loading. The field development has been in three main phases, commencing with first oil in 1979. In 1990 the second phase saw the development of the major Sherwood reservoir while the third phase extended the Sherwood development offshore.

In December 2011, the Group completed the acquisition of an additional 17.715 per cent. in the field for an initial cash consideration of US$96 million bringing the Group's total interest in Wytch Farm to 30.1 per cent.

Net to Premier, 2P reserves and 2C resources in the Wytch Farm area were estimated at 25.6 MMBOE as at 31 December 2016. Wytch Farm production for the year ended 31 December 2016 averaged 5,100 BOEPD, net to Premier. Production is in slow decline and is forecast to continue for at least another two decades.

Partners in Wytch Farm are Perenco UK Limited (operator, 50.1 per cent.), Maersk Oil (7.43 per cent.), Ithaca Energy (7.43 per cent.) and Repsol Sinopec Resources UK (4.95 per cent).

Kyle—producing field, 40 per cent. non-operated interest

In 1995, Premier acquired a 20 per cent. interest in the P748 licence, which contains the Kyle oil field, through its acquisition of Pict. Between 1997 and 2002, Premier acquired additional equity interests in the Kyle field taking its total interest to 40 per cent.

The Kyle field was developed via sub-sea wells connected to two manifolds (North and South) tied back 18 kilometres to the Maersk-operated Maersk Curlew FPSO. Oil and gas production via the Maersk Curlew FPSO began in 2001 before being diverted in 2005 to the Petrojarl Banff host processing facility. In

December 2011, a severe storm resulted in damage to the subsea infrastructure and the host Petrojarl Banff FPSO. The vessel was subsequently removed from the field and towed to Scapa Flow, in Orkney, to facilitate repairs. Production from Kyle resumed in mid-2014 following a two and a half year reinstatement project.

Net to Premier, 2P reserves and 2C resources were estimated at 4.8 MMBOE as at 31 December 2016. Kyle production for the year ended 31 December 2016 averaged 2,000 BOEPD, net to Premier. Production is in decline and is forecast to continue until 2018.

Partners in Kyle are CNR (operator, 45.71 per cent.) and Dana Petroleum (14.29 per cent.).

Ravenspurn North—producing asset, 28.75 per cent. non-operated interest

Ravenspurn North is a dry gas field discovered in 1984 within blocks 42/30a and 43/26a in the Southern North Sea. It came on-stream in 1990, had a peak rate of 450 mmscfd in 1997 and is currently producing 25 mmscfd (gross). Premier acquired its 28.75 per cent. interest in Ravenspurn North through its acquisition of E.ON's UK North Sea assets in 2016.

The Ravenspurn North field development consists of a gravity based concrete platform with accommodation, process facilities and compression linked to a steel wellhead platform. Two additional wellhead platforms were subsequently installed. Gas is exported to the Cleeton facilities then onward via the Cleeton/Ravenspurn South line to the Perenco operated terminal at Dimlington. 42 development wells have been drilled although three were not completed. Wells are largely deviated and hydraulically fractured.

Net to Premier, 2P reserves for the Ravenspurn North field were estimated at 2.0 MMBOE as at 31 December 2016. Ravenspurn North production for the eight months from 28 April to 31 December 2016 averaged 762 BOEPD, net to Premier. Production is forecast to continue until 2021.⁴

Premier's partner in Ravenspurn North is Perenco (operator, 71.25 per cent.).

Johnston—producing asset, 50.1 per cent operated interest

The Johnston field is a dry gas accumulation and was discovered in 1990. It is located within blocks 43/26a and 43/27a in the UK Southern North Sea. Premier acquired its 50.1 per cent. operated interest in Johnston through its acquisition of E.ON's UK North Sea assets in 2016.

Johnston was developed with two horizontal development wells drilled from a four slot subsea template, tied back to Ravenspurn North. Production commenced in 1994. An additional four wells have since been drilled, with two tied back to the template. After processing at Ravenspurn North gas is exported via the Perenco operated terminal at Dimlington line to the Perenco-operated terminal at Dimlington.

Net to Premier, 2P reserves and 2C resources for the Johnston field were estimated at 0.5 MMBOE as at 31 December 2016. Johnston production for the eight months from 28 April to 31 December 2016 averaged 600 BOEPD, net to Premier. Production is forecast to continue until 2020.⁴

Premier's partner in the Johnston field is Dana Petroleum (49.9 per cent.)

Scoter—producing asset, 12 per cent. non-operated interest

The Scoter field is located in blocks 23/26d and 22/30a in the Central North Sea. It lies 11 kilometres north of the Shell operated Shearwater field. Premier acquired its interests in the Scoter field through its acquisition of E.ON's UK North Sea assets in 2016.

The Scoter field was developed as a three well subsea tie-back to Shearwater. Gas sales from the field commenced in 2004. After processing, gas is exported from the Shearwater platform via SEAL to Bacton. Liquid production is exported to Cruden Bay via the Marnock Central Processing Facility, Forties Unity platform and Forties Pipeline System.

Net to Premier, 2P reserves for the Scoter field were estimated at 0.2 MMBOE as at 31 December 2016. Scoter production for the eight months from 28 April to 31 December 2016 averaged 449 BOEPD, net to Premier. Production is forecast to continue until 2019.

Partners in the Scoter field are ExxonMobil (44 per cent.) and Shell (44 per cent).

⁴ The Group has entered into an arrangement to share the abandonment cost exposure with E.ON SE on both the Ravenspurn North and Johnston fields, with E.ON SE paying up to £63 million of the cost depending on the final abandonment expenses incurred.

Merganser—producing asset, 7.9 per cent. non-operated interest

The Merganser gas and condensate field is located in blocks 22/30a and 22/25a in the Central North Sea, 12 kilometres to the north of the Shell-operated Shearwater field. Premier acquired its interest in the Merganser field through its acquisition of E.ON's UK North Sea assets in 2016.

The Merganser field was discovered in 1995 and began producing in 2006. The field produces from the Forties and Andrew reservoirs and consists of two subsea wells tied into the Scoter pipeline. The commingled production is transported to Shearwater for processing. Gas is exported from the Shearwater platform via SEAL to Bacton. Liquids production is exported to Cruden Bay via the Marnock Central Processing Facility, Forties Unity platform and Forties Pipeline System.

Net to Premier, 2P reserves for the Merganser field were estimated at 0.4 MMBOE as at 31 December 2016. Merganser production for the eight months from 28 April to 31 December 2016 averaged 380 BOEPD, net to Premier. Production is forecast to continue until 2019.

Partners in the Merganser field are ExxonMobil (44 per cent.), Shell (44 per cent) and JX Nippon E&P (UK) (4.08 per cent.).

Caister Murdoch System (CMS) area—various interests

The Caister Murdoch System (CMS) area centres on the Murdoch complex with tie-backs from Caister NUI and subsea wells in Hunter and Rita. Gas is aggregated at Murdoch and exported via the CMS export line to Theddlethorpe gas terminal. Premier has the following field interests in the CMS Area as a result of its acquisition of E.ON's UK North Sea assets in 2016.

Field	PMO interest	Development
Caister	40 per cent.	NUI tied back to Murdoch K Platform. Ceased production in 2015.
Hunter	79 per cent.	One subsea well tied back to Murdoch, stopped production in 2010 and restarted in 2015
Rita	74 per cent.	Dual lateral well tied back to Hunter. Well currently shut in.
Orca	23.5 per cent.	Three well platform development exporting to D/15-FA in Dutch sector.
Minke	42.7 per cent.	Single subsea well tied to D-15. Ceased production in 2011

Infrastructure

CMS Pipeline . . . 20 per cent.

Net to Premier, 2P reserves and 2C contingent resources for the Hunter, Rita and Orca fields were estimated at 0.01, 0.44 and 0.01 MMBOE as at 31 December 2016. Hunter and Orca field production for the eight months from 28 April to 31 December 2016 averaged 312 BOEPD and 106 BOEPD respectively, net to Premier. Production is forecast to continue until at least the end of 2017.

Nelson—producing asset, 1.66 per cent. non-operated interest

The Nelson oil and gas field, discovered in 1987, is located to the south east of the Forties field. Following an extensive appraisal drilling programme in the late 1980s, the field was subsequently developed using a conventional stand-alone fixed steel platform with one subsea template located six kilometres to the south. First oil was achieved in February 1994. Oil is exported via a spur line to the Forties Pipeline System and onwards to the BP-operated terminal facilities at Cruden Bay. Gas export is via the Fulmar pipeline to the Shell-operated terminal facilities at St Fergus. The Group acquired its 1.66 per cent. interest in the Nelson field when it acquired Oilexco in 2009.

Net to Premier, 2P reserves and 2C contingent resources were estimated at 0.5 MMBOE as at 31 December 2016. Nelson production for the year ended 31 December 2016 was 142 BOEPD, net to Premier. Production is forecast to continue until 2026.

Partners in Nelson are Shell (operator, 58.11 per cent.), Exxon Mobil (21.23 per cent.), Apache (11.52 per cent.), and Idemitsu Corporation (7.48 per cent.).

The Catcher Block—development project, 50 per cent. operated interest

The Catcher field was discovered by an exploration well drilled in May 2010 while the Catcher East side track also encountered excellent quality oil bearing sandstones and established a common pressure regime. Phase 2

of the Catcher area exploration campaign was completed in early 2011 with successful discoveries at Varadero and Burgman. In June 2012, the Carnaby discovery was made on the western part of the block. It is expected that the Carnaby discovery will contribute as a future tie back to the Catcher area development.

The development concept was formally agreed by partners in December 2013 and government approval was received in June 2014. The development now entails 20 subsea wells on the Catcher, Varadero and Burgman fields which will be tied back to a leased FPSO. The oil will be offloaded by tankers while the gas will be exported through the SEGAL facilities.

Development drilling activities started in July 2015 and all of the ten wells drilled thus far have met or exceeded pre-drill expectations in terms of reservoir quality and flow rates. The major elements of the subsea campaign were completed by year end 2016 with all of the subsea equipment installed. Short campaigns will be required in 2017 to tie-in wells as they become available from the drilling programme and to support commissioning operations once the FPSO has been installed. The construction work for the installation and integration of the FPSO topsides is now complete while the construction scope in the hull is nearing completion. Commissioning is underway and this will continue up until sailway which is expected late July. Premier continues to target production start-up in the fourth quarter of 2017.

The Catcher project is expected to produce 96 MMBOE with a peak production rate of at least 50 KBOEPD, declining thereafter until cessation in 2029. Forecast gross capex to first oil is now anticipated to be $1.3 billion, 19 per cent. lower than when sanctioned. Gross total project capex is forecast at $1.6 billion, a 29 per cent. reduction on the original sanctioned estimate. The Issuer anticipates that what remains of the capital expenditure already committed in order to attain first oil will be funded by a mixture of cash and debt drawn down.

The Group first acquired an interest in the Catcher area as part of its 2009 Oilexco acquisition. Premier increased its interest in the Catcher area by 15 per cent. to 50 per cent. in 2012 as a result of the Encore acquisition and acquired operatorship of the project.

Net to Premier, 2P reserves and 2C resources for the Catcher fields were estimated at 54.9 MMBOE as at 31 December 2016.

The partners in the Catcher area development are Premier (50 per cent., operator), Cairn (20 per cent.), MOL (20 per cent.) and Dyas (10 per cent.).

Tolmount gas field—development project, 50 per cent. operated interest

The Tolmount gas field is situated in Block 42/28d, in the UK Southern North Sea. It was discovered in 2011 with further appraisal drilling in 2013. It is one of the largest discoveries in the Southern Gas Basin in recent years. Premier acquired its 50 per cent. operated interest in the Tolmount gas field in 2016 as a result of its acquisition of E.ON's UK North Sea assets in 2016.

During 2016, Premier carried out conceptual studies and engineering work on a number of development options for the Tolmount main structure. In February 2017, a development concept comprising a standalone normally unmanned installation ("NUI") and a new gas export pipeline to the shore was selected. FEED will take place during 2017.

2C resources for the Tolmount field are estimated at 520 bcf (gross). Further upside at Tolmount includes Tolmount East and Tolmount Far East which are estimated to hold 250 bcf (gross) and 150 bcf (gross) of Prospective Resource. Once on-stream, production from the main Tolmount field is expected to continue for 19 years.

Premier's partner in the Tolmount gas field is Dana Petroleum (50 per cent.).

Additional resources in the UK

The Group has additional interests in the following in the UK North Sea: the Caledonia and Arran fields, the Cobra discovery, the Hawking discovery, the Austen discovery, the Artemis discovery and the Mongour discovery. Net to Premier, 2C contingent resources for the Caledonia and Arran fields were estimated at 6.4 MMBOE.

UK Exploration Assets

Premier actively manages its exploration portfolio. As part of this process, Premier sold its interest in the UK Bagpuss licence and continues to high grade the exploration portfolio acquired as part of its acquisition of E.ON's UK North Sea assets in 2016.

In the Southern North Sea, Premier has a 5 per cent. carried interest in the Ravenspurn Deep North well which spudded in December 2016. The well is testing the deep Carboniferous play underlying the Ravenspurn field and, if successful, will provide material follow-on opportunities for Premier within its Southern Gas Basin portfolio.

Summary of regulatory regime and licence terms in the UK

The Petroleum Act 1998 (the "Petroleum Act") governs oil and gas exploration and production activities in the UK. The Petroleum Act provides for a licensing regime, whereby exploration and production licences are granted to oil and gas companies. The Petroleum Act is supplemented by various environmental and health and safety laws and regulations.

The main type of licence which the Group holds is a Seaward Production Licence, which is granted in relation to offshore fields. Seaward Production Licences are valid for a sequence of terms. Each licence expires automatically at the end of each term, unless the licensee can demonstrate that sufficient progress has been made under the licence to warrant moving into the next term. The exploration period (the initial term) is usually set at four years. The licence expires at the end of the initial term unless the licensee has completed the work programme. At this stage, the licensee must also relinquish a fixed amount of acreage. The appraisal and development period is four years for Seaward Production Licences. The licence expires at the end of the second term unless the Secretary of State has approved a development plan. The production period is usually 18 years for Seaward Production Licences unless extended by the Secretary of State in exceptional circumstances (such as continuing production).

The terms and conditions of every licence are prescribed in a series of "Model Clauses", which are set out in statutory instruments deriving from the Petroleum Act (for Seaward Production Licences, the Petroleum Licensing (Production) (Seaward Areas) Regulations 2008). The Model Clauses applicable to a particular licence are those which are in force at the time it was granted. The Model Clauses govern the operation of the licence and deal with matters such as: the exploration, appraisal, development and production periods; extension of the licence by agreement; the licensee's obligations to carry out the work programme during the initial term, to obtain approval for a development and production programme and to obtain consent before drilling a well; an indemnity by licensees for the benefit of the Secretary of State for any third party claims; joint and several liability of licensees; restrictions on and consent for assignment; consent for change of control; and a power to revoke the licence in certain circumstances including insolvency of a licensee, a transfer of the licence or change of control without approval or breach of any of the licence terms.

The Secretary of State may serve a notice under the Petroleum Act to the operator of the field and each of the licensees (and potentially a holding or associated company) requiring them to prepare, submit and (once approved) carry out a decommissioning programme in relation to offshore oil and gas installations and pipelines (a "Decommissioning Notice"). Each licensee remains liable for decommissioning obligations until the Decommissioning Notice is withdrawn. When an interest in a licence changes hands, the Secretary of State typically releases a former licensee from its decommissioning obligations once the Secretary of State is satisfied that adequate arrangements are in place in relation to the decommissioning liabilities. These arrangements typically require the provision of financial security to ensure that existing and incoming licensees can discharge their decommissioning liabilities.

From 1 April 2016, the Oil and Gas Authority ("OGA") replaced the Department of Energy and Climate Change ("DECC") as the entity responsible for petroleum licensing and regulation of the upstream oil and gas sector in the UK. On 14 July 2016 the Department for Business, Energy and Industrial Strategy ("DBEIS") was created as the result of a merger between the DECC and the Department for Business, Innovation and Skills ("DBIS"). On 1 October 2016, the OGA was granted greater regulatory powers, including some powers which had previously belonged to the Secretary of State of Energy and Climate Change.

Summary of economic and fiscal regime in the UK

The primary amounts which the Group must pay to the UK government comprise taxation arising from the production of oil and gas. There are currently three main elements of taxation to which UK oil companies may be subject: petroleum revenue tax ("PRT"), ring fence corporation tax ("RFCT") and a supplementary charge

(the "Supplementary Charge"). There are currently no tax stabilisation measures in place. Royalties are no longer payable under licences. Licences carry a small annual rental charge which is calculated at an escalating rate on each square kilometre the licence covers at that date. There are no signature or production bonuses or other fiscal terms.

PRT is a field-based tax charged on the profits made by each participant from the production of oil under a licence. It only applies to fields which received development consent prior to 16 March 1993 (including three of the Group's fields). The previous PRT tax rate was 35 per cent. on profits after certain deductions and allowances, however in the March 2016 Budget, the Chancellor of the Exchequer announced that PRT will be reduced to 0 per cent. for chargeable periods ending after 31 December 2015.

RFCT applies to profits (after deduction of PRT) from oil and gas extraction activities and rights in the UK and UKCS instead of normal Corporation Tax. It applies regardless of when development consent was given and is intended to prevent profits from these activities being reduced for tax purposes by the setting off of losses from other trading activities. The current RFCT rate is 30 per cent. The profits from oil and gas extraction activities are "ring fenced" for RFCT purposes so that only losses derived from these activities can be set off against profits from these activities. However, it is possible to carry forward or back ring fence losses against other activities. RFCT is charged on taxable profits, which are profits after certain deductions for items such as capital expenditure, plant and machinery allowances, research and development, expenditure on mineral exploration and access and decommissioning. However, there are restrictions on the use of interest on borrowings to reduce ring fence profits.

The Supplementary Charge is also imposed on profits arising from any ring fenced activities (calculated in the same way as RFCT). The current rate is 10 per cent. In addition there is a basin-wide investment allowance applicable to investment expenditure incurred on or after 1 April 2015 in both new and existing fields and infrastructure within the ring fence tax regime. The new allowance exempts a proportion of a company's adjusted ring fence profits from the supplementary charge.

As part of the Oilexco acquisition in 2009, the Group acquired US$1.2 billion of allowable UK ring fence tax allowances. At 31 December 2016 the Group's ring fence tax losses and allowances had increased to an estimated US$4.0 billion due to investment in the UKCS and the availability of the ring fence expenditure supplement. These UK tax losses and allowances are available indefinitely for offset against future ring fence profits. The Group currently does not pay UK ring fence corporation tax or supplementary charge due to the ability to set these tax losses and allowances against future taxable profits. The Group will continue to benefit from the ring fence expenditure supplement, which, under current legislation, will uplift a proportion of the tax losses and allowances by 10 per cent. each year for the next three years.

The Group's licence interests in South-East Asia

Indonesia Business Unit

Headquarters: Jakarta

Net to Premier, 2P reserves and 2C resources in Indonesia were estimated at 148.3 MMBOE as at 31 December 2016, representing 18 per cent. of the Group's global total reserve and resource base. With 14,300 BOEPD produced in the region for the year ended 31 December 2016, Indonesia accounted for 20 per cent. of the Group's total production.

Natuna Sea Block A—producing asset, development projects & exploration, 28.67 per cent. operated interest

The Natuna Sea Block A lies near the maritime borders between Malaysia, Indonesia and Vietnam and is a major supplier of gas to Singapore. Premier acquired its 28.67 per cent. operated interest in Natuna Sea Block A through its acquisition of Sumatra Gulf Oil in 1996.

The Natuna Sea Block A development consists of four separate producing fields—the Anoa oil and gas field, the Gajah Baru gas field, the Pelikan gas field and the Naga gas field—which have been developed through a combination of platforms and subsea tie-backs.

Premier delivers gas from its Natuna Sea Block A fields to Singapore through the 650 kilometre WNTS pipeline under two gas sales agreements, GSA1 and GSA2. GSA1 was signed in 1999 with SembCorp, a government-controlled Singaporean utility, to deliver gas into Singapore from three PSCs—Natuna Sea Block A PSC, Kakap PSC and B Block PSC. Deliveries under GSA1 commenced in January 2001. The Anoa gas field, which came on-stream in January 2001, and the Pelikan gas field, which came on-stream in 2015, delivers gas under GSA1 from Natuna Sea Block A to Singapore.

In 2008, Premier signed a further fully termed Gas Sales Agreement (GSA2) with SembCorp for additional gas sales into the Singapore market. Gajah Baru, which was discovered by Premier in 2000 and brought on-stream in October 2011, and the Naga field, which came on-stream in November 2014, supply gas to Singapore from Natuna Sea Block A under GSA2.

Natuna Sea Block A contains several discovered gas fields not yet developed, including Bison, Iguana and Gajah Puteri (BIGP). The BIGP development, which will support Premier's existing long term gas contracts into Singapore and Indonesia, was sanctioned by the Issuer's board in March 2017 and long lead items for the project have been purchased. Delivery of first gas from the fields is targeted for 2019.

The pricing of Premier's gas delivered under GSA1 and GSA2 is directly related to HSFO pricing which moves broadly in line with international crude prices.

Net to Premier, 2P reserves and 2C contingent resources for Natuna Sea Block A were estimated at 53.5 MMBOE as at 31 December 2016. Natuna Sea Block A production for the year ended 31 December 2016 averaged 13,000 BOEPD, net to Premier. Production is forecast to continue until 2029—the gas sales contracts expire in 2028 and 2029.

Partners in Natuna Sea Block A are KUFPEC (33.33 per cent.), Pertamina & PTTEP (23 per cent.) and Petronas (15 per cent.).

Kakap field—producing asset, 18.75 per cent. non-operated interest

The Kakap field was discovered by a subsidiary of Marathon Oil in 1978, with well KG-IX, and production commenced in March 1986. Kakap consists of 10 separate fields, which have been developed with a combination of platforms and subsea tie-backs to the Kakap FPSO, where the oil is stabilised and exported via tankers.

The Group acquired its interest in the Kakap field in December 1996 through the acquisition of Discovery Petroleum NL. Gas production started in 2001 and is sold under GSA1 to Singapore as described above.

Net to Premier, 2P reserves and 2C contingent resources for the Kakap field were estimated at 3.8 MMBOE as at 31 December 2016. Kakap production for the year ended 31 December 2016 averaged 1,300 BOEPD, net to Premier. Production is forecast to continue until 2022.

Partners in the Kakap field are Star Energy (operator, 56.25 per cent.), PetroChina (15 per cent.), and Pertamina (10 per cent.).

Tuna Block—pre-development asset, 65 per cent. operated interest

In March 2007, Premier was awarded a 65 per cent. operated interest in the Tuna offshore block by the Indonesian Government. In April 2014, Premier drilled the Kuda Laut-1 well which discovered 183 feet of net oil-bearing reservoir and 327 feet of net gas-bearing reservoir. Oil and gas samples were also recovered to surface. The well was then side-tracked to drill the Singa Laut prospect in an adjacent fault block where 177 feet of net gas-bearing reservoir quality sands were penetrated.

Evaluation of potential development scenarios for the 2014 Kuda and Singa Laut discoveries on the Premier operated Tuna Block is ongoing including gas offtakes via the WNTS to Singapore and Indonesia or through existing infrastructure to Vietnam. In February 2017 Premier was granted a three-year extension to the exploration period of the licence. This will allow time for Premier to undertake further appraisal drilling and also to establish a commercial development concept for the field, ahead of submitting a Plan of Development.

Net to Premier, 2C resources for Tuna Block were estimated at 91.0 MMBOE as at 31 December 2016.

Partners in the Tuna Block are Mitsui Oil Exploration (20 per cent.) and GS Energy Corporation (15 per cent.).

Summary of regulatory regime and licence terms in Indonesia

Oil and gas exploration and production activities in Indonesia are mainly regulated by the Oil and Gas Law, Law No.22 of 2001, and its subordinate legislation and regulations. In addition, various environmental and health and safety laws and regulations apply. Furthermore, on 24 April 2014 a new negative investment list was issued through Presidential Decree No. 39/2014, which prohibits foreign investment companies from engaging in onshore drilling and limits the maximum foreign shareholding for offshore drilling to 75 per cent.

The Group's activities in Indonesia are governed by the production sharing contract regime. The Group is party to three production sharing contracts with differing terms. Under the PSCs, the maximum total term is 30 years

(subject to a possible extension approved by the Minister of Energy and Mineral Resources). The exploration period is six years (subject to possible extensions approved by the Special Task Force for Upstream Oil and Gas Business Activities Republic of Indonesia ("SKKMIGAS")). The development and production period begins after the declaration of commercial discovery with no specific duration stipulated for this period.

The PSCs deal with matters such as: the exploration, development and production periods; obligations to carry out the work programme during the initial term and to obtain approval for its development and production programme; the automatic transfer of assets acquired by the contractor in connection with the PSC to SKKMIGAS if charged as petroleum costs upon import into Indonesia; the requirement to offer a regionally-owned business a 10 per cent. participating interest in the PSC upon the declaration of commercial discovery; restrictions on, and government consent for, assignment of the PSC or change of control of a contractor; and the power of the contractor and SKKMIGAS to revoke the PSC where a party fails to remedy a major breach of the PSC.

The current regulatory and licence regime was expected to be updated by a New Oil & Gas Law during the course of 2016. This has yet to materialise. Draft versions of the new law which have been circulated indicate that SKKMIGAS will be replaced by a new state-owned enterprise BUMN-K with a similar mandate and under the control of the Indonesian Ministry of Energy and Mineral Resources. BUMN-K will enter into production-sharing contracts with licensees, although the Ministry of Energy and Mineral Resources will have a leading role in determining the terms and conditions of these contracts. Indonesia's national oil company Pertamina, will have a right of first refusal over any new oil and gas contracts. A note to the draft law suggests that Pertamina would be required to hold a 100 per cent. interest in the contract, and that farm-ins would be prohibited. If Pertamina does not exercise its right of first refusal, the BUMN-K will be entitled to auction the relevant oil and gas contract to private companies.

Minister of Energy Regulation 5/2015 deals with the expiry of current PSCs and contemplates three options for operation of a contract area following the expiry of the current PSC: management of operations to be carried out by Pertamina; extension of the PSC granted to one or more of the existing PSC contractors; or joint operations between Pertamina and one or more of the existing PSC contractors. If the Minister of Energy does not approve any of the options the relevant contract area will be put up for offer through a bid process. Applications for the future right to manage a contract area can be made by both Pertamina or the current PSC contractors at the earliest 10 years before the expiry of the PSC, and no later than two years before the expiry. The maximum term of any extension granted to the existing PSC Contractors is 20 years. Evaluation of the current management of PSCs will be undertaken by the Directorate General of Oil & Gas with final approval given by the Minister of Energy. Furthermore, the terms of the extension may include amendment to the previous PSC terms or the execution of a new PSC on new terms and conditions as determined by the Minister of Energy.

PSCs signed from 2008 onwards require an abandonment and site restoration programme, including a funding procedure, to be included within a plan of development. Contractors are required to establish a decommissioning fund and start contributing to such decommissioning fund from first production. Such financial funding shall be made annually in accordance with the annual work programme and budget, and such funding costs are recoverable. Furthermore, the Minister of Energy Regulation 5/2015 provides that any abandonment and site restoration obligations that have not been carried out prior to the expiry of a PSC shall be carried out by Pertamina and/or PSC contractors under the new or extended PSC, who may utilise abandonment and site restoration funds that were deposited by the previous PSC contractor under the expired PSC.

Summary of economic and fiscal regime in Indonesia

The contractual structure in Indonesia is one of production-sharing so each asset is the subject of an individual contract with a unique formula for calculating the production split between the Indonesian Government and the PSC contractor.

Some PSCs require first tranche petroleum, up to 20 per cent. of the production each year (before any deduction for cost recovery), to be allocated either to the Government of Indonesia, or between the Government and the contractor based on the profit allocation percentage split prescribed in the PSC. Under the PSCs, a share of net petroleum production in each quarter up to a maximum percentage of net production ("Cost Recovery Petroleum") is allocated to cover certain permitted petroleum costs incurred by the contractors. Petroleum costs which are not recovered from the allocation of Cost Recovery Petroleum in a quarter may be carried forward to the next succeeding quarters without interest until fully recovered. Only petroleum costs defined in the relevant PSC and Government Regulation 79/2010 are eligible for cost recovery. Profit

petroleum (being net production after the deduction of Cost Recovery Petroleum) is allocated between the Government of Indonesia and contractors after deductions for royalties and income tax in accordance with production on a sliding scale as prescribed in the PSC. A bonus or commission is paid as a lump-sum by the contractor on signing the PSC, and upon cumulative production reaching certain thresholds.

The income tax rate applicable to a PSC is the rate prevailing when the PSC was signed, and rates range from 25 per cent. to 45 per cent. The after tax profits of a PSC contractor are subject to a further tax of 20 per cent. on Branch Profits Remittances, which may be reduced by a tax treaty. The PSCs include tax stabilisation clauses.

A contractor is required to supply a specific portion of profit petroleum allocation to the domestic market at a defined percentage market price, with current ranges varying from contract to contract between 15-25 per cent. depending on the contract. Contractors are required to give preference to Indonesian goods and services in accordance with competitive standards. No specific percentage of local content is prescribed.

Vietnam Business Unit

Headquarters: Ho Chi Minh City

Block 12W is Premier's sole asset in Vietnam. Net to Premier, estimated 2P reserves and 2C resources for Block 12W were estimated at 41.2 MMBOE as at 31 December 2016, representing 5 per cent. of the Group's global total reserve and resource base. With 16,200 BOEPD produced in the region for the year ended 31 December 2016, Block 12W accounted for 23 per cent. of the Group's total production.

Block 12W—producing asset, 53.13 per cent. operated interest

The Group acquired a 75 per cent. interest in Block 12W located in the Nam Con Son Basin from Delek Energy Systems Limited in 2004, and subsequently farmed-out part of its interest to Santos Limited leaving the Group with a 37.5 per cent. operated interest. In 2009, the Group acquired Delek's remaining 25 per cent. interest in Block 12W and PetroVietnam subsequently exercised its back-in-right to acquire a 15 per cent. interest. As a result, the Group currently holds a 53.13 per cent. interest in Block 12W.

The area has similar geology to the West Natuna Sea area, approximately 300 kilometres to the south west. The Group announced two discoveries—Dua and Chim São—on the block in 2006. Chim São was successfully appraised in 2008. A field development plan for Chim São was submitted to the Vietnamese Government and approved in 2008 and the field was successfully brought on stream in October 2011.

The development of the Group-operated Dua oil field as a near field subsea tie-back to the Chim São facilities received approval from the Vietnamese Government in August 2012. First oil from the Dua field was achieved in July 2014.

A successful well intervention programme at Chim São, which included reservoir stimulation of three oil wells and a water injector, was carried out during 2016 and helped to offset natural decline from the existing wells in the field. Further intervention work and two infill wells are planned for 2017 to help maximise production levels.

Production is forecast to continue until 2028. Partners in Block 12W are Santos (31.88 per cent.) and PetroVietnam (15 per cent.).

Summary of regulatory regime and licence terms in Vietnam

Oil and gas exploration and production activities in Vietnam are mainly regulated by the Law on Petroleum No. 18-L/CTN dated 6 July 1993, as amended and supplemented in 2000 and 2008 and its subordinate legislation and regulations.

The Group is party to one production sharing contract in Vietnam. Under the PSC, the maximum total term is between 25 and 30 years. The exploration period is five to seven years. The development and production period begins after the declaration of commercial discovery with no specific time period stipulated for such period. The PSC includes provision for the PSC to be extended by agreement with the national oil company PetroVietnam.

The PSC deals with matters such as: the exploration, development and production periods; extension of the PSC by agreement with PetroVietnam; the contractor's obligations to carry out the work programme during the initial term, to obtain approval for its development and production programme and to obtain consent before drilling a well; the automatic transfer of assets acquired and/or provided by the contractor in connection with

the PSC to PetroVietnam if charged as petroleum costs upon full cost recovery or upon termination of the PSC; an option for PetroVietnam to hold a participating interest in a PSC upon the declaration of commercial discovery; joint and several liability of the contractors; an indemnity by the contractors for the benefit of PetroVietnam for any third party claims arising in relation to the PSC or anything done pursuant to it; restrictions on and government consent for assignment of the PSC or change of control of a contractor; and the power of the contractor and PetroVietnam to terminate the PSC where a party fails to remedy a material breach of the PSC.

Within 12 months from first oil production, contractors are required to prepare a decommissioning plan which also includes a decommissioning work programme and budget (“Decommissioning Plan”) for PetroVietnam’s endorsement and approval by the Ministry of Industry and Trade (“MOIT”). Contractors are required to establish a decommissioning fund and start contributing to it once the Decommissioning Plan is approved by the MOIT. Such financial funding is made annually in accordance with petroleum production and the funding costs are recoverable as petroleum costs. Contractors remain liable for decommissioning all facilities and assets used for petroleum operations under the PSC until decommissioning is completed to the MOIT’s satisfaction.

A new form of model PSC was issued by the Vietnamese Government which applies to all PSCs signed after 8 June 2013. Export tax and corporate income tax rates are now specified in the model, and contractors are subject to new compulsory payments which include a signing bonus and incremental production bonuses. The stabilisation clause has been narrowed and now only covers royalties, corporate income tax, and export tax. The new model PSC also sets out the procedures for PetroVietnam to exercise its pre-emption rights in the event that a contractor assigns all or part of its participating interest to a third party, or where a contractor experiences a change of control. Furthermore, PetroVietnam has been granted additional termination rights under the new model PSC. The new model PSC sets out more detailed abandonment requirements and procedures, including the requirement for the contractor to pay a security deposit into reserved funds for abandonment purposes. The new model PSC also increases the domestic supply obligations of a contractor and includes a requirement to prioritise the sale of all crude oil within the Vietnam market on prescribed terms at the Government’s request. Premier signed the PSC before 2013, but the new model form will apply to any further PSC or on renewal of the PSC.

Summary of economic and fiscal terms in Vietnam

The contractual regime in Vietnam is one of production-sharing so each asset is the subject of an individual contract with a unique formula for calculating the production split between the Vietnamese Government and the contractor based on subtracting a resource tax and Cost Recovery Petroleum from actual petroleum output.

Under the PSC, Cost Recovery Petroleum is allocated to cover certain permitted petroleum costs incurred by the contractors. Petroleum costs which are not recovered from the allocation of Cost Recovery Petroleum in a quarter may be carried forward to the next succeeding quarters without interest until fully recovered. Contractors are required to pay a resource tax to PetroVietnam progressively in accordance with production on a sliding scale, with concessional rates for encouraged projects. Contractors are charged income tax at a rate from 32 per cent. to 50 per cent. on their taxable income. The specific rate is determined by the Prime Minister and is subject to stabilisation clauses contained within the PSC. Profit petroleum (being net production after the deduction of Cost Recovery Petroleum) is allocated between PetroVietnam and contractors after deductions for resource tax and income tax in accordance with production on a sliding scale as prescribed in the PSC. Furthermore, a bonus or commission is paid as a lump-sum by the contractor on signing the PSC, on commercial discovery and upon first production and commercial production reaching certain targets.

Contractors must prioritise the sale of all petroleum within the Vietnam market on prescribed terms at the Government’s request. Contractors are required to give preference to Vietnamese goods and services in accordance with competitive standards. No specific percentage of local content is prescribed.

Pakistan and Mauritania Business Unit

Headquarters: Islamabad

The Group has six non-operated producing assets in Pakistan. Staff in this business unit also manage the Group’s non-operated interest in Mauritania.

Net to Premier, 2P reserves and 2C resources in Mauritania and Pakistan were estimated at 17.4 MMBOE as at 31 December 2016, which represents 2 per cent. of the Group's total reserve and resource base. With 7,900 BOEPD produced (net to Premier) for the year ended 31 December 2016, Mauritania and Pakistan accounted for 11 per cent. of the Group's total production.

Pakistan

The Group has been present in Pakistan since 1988, discovering the Qadirpur field in 1990. Since then, the Group has acquired interests in five other fields, all located in agricultural lowlands in the Indus basin. These fields have relatively low operating costs and production is sold at the wellhead to the government-owned gas utilities, SSGCL and SNGPL. Revenues are denominated in US Dollars and funds are remitted directly to London bank accounts.

Net to Premier, 2P reserves and 2C resources in Pakistan were estimated at 17.4 MMBOE as at 31 December 2016. Pakistan production for the year ended 31 December 2016 averaged 7,500 BOEPD, net to Premier. Pakistan production accounted for 11 per cent. of the Group's total production for that period.

On 5 April 2017 the Issuer announced that it has signed a share purchase agreement with Al-Haj Energy Limited for the sale of the Group's Pakistan business.

Qadirpur—producing asset, 4.75 per cent. non-operated interest

The Qadirpur gas field was discovered in 1990 and is the one of the largest gas fields in Pakistan. The field was declared commercial in 1992 and production commenced in October 1995. The field operator is the state-owned oil and gas company, Oil and Gas Development Company (“OGDCL”).

Phase I of the Qadirpur development was completed with gas supplies to SNGPL initially at the rate of 100 MMCFD from four wells. Shortly thereafter, gas sales were increased to 200 MMCFD and were maintained at that level until late 1999. In addition, in December 2000, raw gas supply started to the nearby Liberty power plant at 40 MMCFD.

A supply of 60 MMCFD permeate gas (a side stream of low heating value gas from process facilities) to local power plants commenced in February 2010.

Production was maintained against the field’s natural decline as a result of the successful installation of wellhead compressors and extended reach wells between 2011 and 2013. Since 2013 the field has been in natural decline. Production is forecast to continue until 2022.

Net to Premier, 2P reserves and 2C resources for the Qadirpur field were estimated at 11.6 MMBOE as at 31 December 2016. Qadirpur production for the year ended 31 December 2016 averaged 2,500 BOEPD, net to Premier.

Partners in the Qadirpur field are OGDCL (operator, 75 per cent.), Kufpec (13.25 per cent.) and Pakistan Petroleum (7 per cent.).

Bhit and Badhra—producing asset, 6.0 per cent. non-operated interest

The Bhit gas field was discovered in 1997. The partners signed a gas sales purchase agreement (“GSPA”) with SSGCL in November 2000 for 270 MMCFD and initial gas sales were achieved in late December 2002. A supplemental GSPA to increase the Bhit annual contract quantity from 270 MMCFD to 300 MMCFD was subsequently signed by the gas buyer SSGCL and joint venture partners. The nearby Badhra field was discovered in 1998 and appraised in 2003. It was approved for development by the Pakistan Government in January 2004 and first gas was achieved in January 2008.

Between 2012 and 2014, a programme of near field exploration wells and infill drilling at the Bhit and Badhra fields as well as a compressor reconfiguration project on Bhit helped to offset natural decline from existing wells. However, since 2013, production from the two fields has been in steady natural decline.

Net to Premier, 2P reserves and 2C resources for the Bhit and Badhra fields were estimated at 2.7 MMBOE as at 31 December 2016. Bhit and Badhra production for the year ended 31 December 2016 averaged 2,400 BOEPD, net to Premier. Production is forecast to continue until 2025.

Partners in the Bhit and Badhra fields are ENI (operator, 40 per cent.), OGDCL (20 per cent.) and Kufpec (34 per cent.).

Kadanwari—producing asset, 15.79 per cent. non-operated interest

The Kadanwari gas field was discovered in 1989 and brought on-stream in May 1995. The Group acquired its initial interest in the Kadanwari gas field in 1996. The gas is processed in a central processing facility. Production is now in steady natural decline as reflected by the over 50 per cent. fall year on year in production during 2016.

Net to Premier, 2P reserves and 2C resources for the Kadanwari field were estimated at 1.0 MMBOE as at 31 December 2016. Kadanwari production for the year ended 31 December 2016 averaged 953 BOEPD, net to Premier. Production is forecast to continue until 2020.

Partners in the Kadanwari field are ENI (operator, 18.42 per cent.), OGDCL (50 per cent.) and Kufpec (15.79 per cent.).

Zamzama—producing asset, 9.38 per cent. non-operated interest

The Zamzama gas field was discovered in May 1998 and five further appraisal and development wells were drilled in 2002 and 2003 which all proved successful with commercial gas flow at surface.

Gas contracts were signed in the fourth quarter of 2001 with SSGCL and SNGPL covering the supply of up to 320 MMCFD. Another gas supply contract was signed with SSGCL for an additional supply of 150 MMCFD

in 2005. While there has been a series of infill well drilling programmes and well intervention work since 2012 aimed at managing production from the field, Zamzama is now in steady natural decline.

Net to Premier, 2P reserves and 2C resources for the Zamzama field were estimated at 1.8 MMBOE as at 31 December 2016. Zamzama production for the year ended 31 December 2016 averaged 1,700 BOEPD, net to Premier. Production is forecast to continue until 2022.

Partners in the Zamzama field are OPPL (operator, 38.5 per cent.), GHPL (25 per cent.), ENI (17.75 per cent.) and Kufpec (9.38 per cent.).

Zarghun South—development asset, 3.75 per cent. non-operated interest

The Zarghun South field was discovered in 1998. An initial field development plan was approved by the Pakistan government and a development and production lease was issued in January 2004. A gas sales contract was negotiated with SSGCL. The field development planning commenced, but was delayed following higher than expected facilities bids in 2010. The joint venture then decided to wait for the passing of the 'Tight Gas Policy' in Pakistan, to take advantage of higher gas prices. A revised development plan was submitted in May 2012 and development work on the revised basis started early in 2013. First gas was achieved from the Zarghun gas field in August 2014. All of the Group's capital and operating costs pertaining to its 3.75 per cent. in the Zarghun gas field are carried by the operator.

Net to Premier, 2P reserves for the Zarghun South field were estimated at 0.4 MMBOE as at 31 December 2016. Zarghun South production for the year ended 31 December 2016 averaged 60 BOEPD, net to Premier. Production is forecast to continue until 2029.

Partners in the Zarghun South field are Mari Petroleum (operator, 35 per cent.), Jura Energy (40 per cent.), GHPL (17.50 per cent.) and Kufpec (3.75 per cent.).

Summary of regulatory regime and licence terms in Pakistan

Oil and gas exploration and production activities in Pakistan are regulated by various acts, ordinances, rules, regulations and policies enacted to amend and supplement the Regulation of Mines and Oilfields and Mineral Development (Government Control) Act 1948 (as amended by the Oilfields (Regulation and Development) Amendment Acts 1969, 1976 and 1984). In addition, various environmental and health and safety laws and regulations apply.

The Group's activities in Pakistan are governed by a concession contract regime. The Group is party to six development and production leases ("DPL") and related petroleum concession agreements ("PCA"). Under the PCAs, the exploration period is three to six years. The maximum total term of the DPL is between 20 and 25 years. The PCAs include provision for the PCA to be extended by agreement with the Government of Pakistan for another five years.

The PCA terms deal with matters such: the exploration, development and production periods; extension of the PCA by agreement with the Government of Pakistan; the working interest owner's ("WIO") obligations to carry out the work programme during the initial term, to obtain approval for its development and production programme and to obtain consent before drilling a well; the Government of Pakistan's right to take over assets acquired and/or provided by the WIO in connection with the PCA; a national oil company's (OGDC or Government Holdings (as applicable)) carry during the exploration period and its option to increase its participating interest upon a declaration of commercial discovery; joint and several liability of the WIOs; an indemnity by the WIO for the benefit of the Government of Pakistan for any third party claims arising in relation to the PCA or anything done pursuant to it; restrictions on and government consent for assignment of the PCA and change of control of the WIO; and the power of the Government of Pakistan to terminate the PCA if regular commercial production has not commenced within five years from the grant of a DPL or in the event of prolonged interruptions of commercial production which are not justified as force majeure, where a party fails to remedy a material breach of the PCA, misrepresentation by a WIO at the time of PCA grant, insolvency, failure to obtain Government consent on a change of control of the licensee and (to the extent specified in the relevant PCA/applicable laws) failure to make a payment under the applicable laws.

A licensee is required to submit to the Government of Pakistan a plan for the closing down of operations and for the removal of facilities or their transfer to the Government of Pakistan at least one year prior to termination of the PCA. The underlying principle is that the concession area must be reinstated to its original condition. Where this is not practicable, the WIO is required to pay compensation to the Government of Pakistan.

Summary of economic and fiscal regime in Pakistan

WIOs are required to pay royalties of 12.5 per cent. to the Government of Pakistan at a percentage of the wellhead value (as defined by applicable law). The rate of corporate income tax is 40-55 per cent. A bonus or commission is paid as a lump-sum by the WIO on commencement of commercial production and commercial production reaching certain targets. A windfall levy applies to crude oil and condensate. Depletion allowance is a special deduction which reduces taxable profits and is normally 15 per cent. of wellhead value.

The Government of Pakistan may require WIOs to sell oil on a pro-rata basis with other producers in Pakistan to the Government of Pakistan. WIOs are required to give preference to Pakistani goods and services in accordance with competitive standards. No specific percentage of local content is prescribed.

Mauritania

The Group acquired its interests in offshore Mauritania through acquisition in 2003.

Chinguetti—producing asset, 8.12 per cent. non-operated interest

Chinguetti was discovered in 2001. The Chinguetti oil field came on-stream in February 2006 and is in natural decline. Production from the Chinguetti field averaged 368 BOPD (2015: 415 BOPD) for the year ended 31 December 2016, net to Premier. In view of the low oil price and resulting marginal cash flows, the joint venture partners are targeting cessation of production from the field in 2017. To this end, the operator submitted an abandonment and decommissioning plan to the Government of Mauritania on 29 June 2016.

Net to Premier, 2P reserves and 2C resources for the Chinguetti field were estimated at 0.04 MMBOE as at 31 December 2016.

Partners in the Chinguetti field are Petronas (operator, 47.39 per cent.), Tullow Oil (22.26 per cent.), Societe Mauritanienne des Hydrocarbures (12 per cent.), Kufpec (10.23 per cent.).

Summary of regulatory regime and licence terms in Mauritania

The Group is a party to one PSC in Mauritania. Under the PSC, an exclusive exploration permit is granted to the contractor. This allows the contractor the exclusive right to explore for petroleum within the licensed area for a period of three to nine years. In the event of a commercial discovery, and provided all contractual obligations have been fulfilled, the Minister for Crude Hydrocarbons may (on application) grant an exclusive exploitation permit. The maximum duration of this permit is 25 years (with one possible extension of 10 years subject to government consent).

The PSC terms deal with matters such as: the exploration and exploitation periods; extension of the PSC; the contractor's obligations to carry out the work obligations during the exploration period and any extension period granted, to obtain approval for its annual work programmes and to notify the Directorate for the Exploration and Development of Crude Hydrocarbons prior to drilling a well; the acquisition by the Government (upon request by the Minister for Crude Hydrocarbons) of the assets acquired and/or provided by the contractor in connection with the PSC upon expiry, relinquishment or cancellation of the PSC (or, if specified in the PSC, renunciation of the exploitation authorisation) if charged as petroleum costs; an option for the Mauritanian Government to hold a participating interest in the PSC on the date of granting the first exclusive exploitation permit; joint and several liability of the contractors; an indemnity from the contractors for the benefit of any person (including the Government) for any loss or damage the contractor may cause to a person, caused by or resulting from petroleum operations; restrictions on and government consent for assignment of the PSC; obligations to notify the Minister of any change of control of the contractor; and rights of termination in the event of material breach or recurrent breach of the applicable legislation by the contractor, delay in making payments due to Government, suspension of a development, suspension of exploitation, failure to comply with an arbitral award and bankruptcy, composition with creditors or liquidation of assets by the contractor or its parent company.

The operator is required to provide an abandonment and decommissioning plan to the Minister for approval at times specified in the relevant PSC. At a point in time specified in the relevant PSC, the parties to the PSC are required to deposit an amount calculated by reference to the contractor's estimate of the abandonment and decommissioning costs into an escrow account (or, if relevant, a different amount negotiated with the Minister for Crude Hydrocarbons). If the balance in the escrow account is insufficient to cover all decommissioning costs, the contractors are required to fund the shortfall.

Summary of economic and fiscal terms in Mauritania

The contractual regime in Mauritania is one of production-sharing so each asset is the subject of an individual contract with a unique formula for calculating the production split between the Mauritanian Government and contractors.

Under the PSCs, Cost Recovery Petroleum is allocated to cover certain permitted costs incurred by the contractors. Petroleum costs which are not recovered from the allocation of Cost Recovery Petroleum in a calendar year may be carried forward to the next succeeding calendar year until fully recovered. Profit petroleum (being net production after the deduction of Cost Recovery Petroleum) is allocated between the Mauritanian Government and contractors in accordance with production on a sliding scale. The contractor must pay an annual surface fee, which is a fee per square kilometre. A bonus or commission is paid as a lump-sum by the contractor on signing the PSC and on commercial production reaching certain targets. A contractor's net profits from all petroleum operations are subject to income tax. In calculating net profit, a number of deductions may be made including any losses or charges directly related to the petroleum operations. The rate of tax levied and available deductions are specified in each PSC. Based on future production profile and the availability of historical tax losses, the Chinguetti field is not expected to ever pay taxes. The PSC includes a comprehensive stabilisation clause.

The Government of Mauritania may require contractors to sell oil to the Government of Mauritania in order to meet the needs of domestic consumption in the country. A contractor is required to give preference to Mauritanian goods and services in accordance with competitive standards.

Falkland Islands Business Unit

The Falkland Islands is a British Overseas Territory with formal British diplomatic representation provided by the Governor of the Falklands. The Legislative Assembly enjoys a substantial measure of responsibility for the conduct of affairs concerning the Falkland Islands, although the Governor retains responsibility for foreign affairs and defence.

In July 2012, Premier farmed in for 60 per cent. of Rockhopper's exploration licence interests in the North Falklands Basin, including the Sea Lion discovery. The transaction was completed in October 2012 and Premier assumed operatorship of the Sea Lion area development in November 2012.

In January 2016, Premier and Rockhopper executed an amendment to the 2012 SPA. As a result, the development carry of US$674 million will be split equally between Phase 1 and the next development phase. Rockhopper will pay a Guarantee Fee to Premier of US$15.9 million per quarter for five years from first oil. Instead of the financing arrangements in the original SPA, Premier will provide Rockhopper with a Standby Loan Facility of up to US$750 million (at a 15 per cent. rate), although it is anticipated that Rockhopper will continue to review alternative financing sources.

The overall strategy to develop the discovered reserves and resources in the North Falklands Basin remains a phased development solution. Sea Lion Phase 1 will develop 220 mmbbls (gross) from the north-east and north-west sections of the reservoir in PL032. A subsequent Phase 2 will develop a further 300 mmbbls (gross) of contingent resource in PL032 and the satellite accumulations in the north of the adjacent PL004. There is a further 250 mmbbls of low risk near field exploration potential which could be included in either the Phase 1 or Phase 2 developments. Phase 3 will entail the development of the Isobel/Elaine fan complex in the south of PL004, subject to further appraisal drilling.

Net to Premier, 2P reserves and 2C resources for the region were estimated at 392.5 MMBOE as at 31 December 2016, which represents 47 per cent. of the Group's total reserve and resource base.

Sea Lion Phase 1—development asset, 60 per cent. operated asset

The Sea Lion field is located on the Falklands Plateau, 220 kilometres north of the Falkland Islands, and lies in 450 metres of water. The geological setting is a north-south Atlantic failed rift with primarily early Cretaceous to Tertiary fill in a typical half graben structure with a large bounding fault in the east. The Sea Lion accumulation is close to the eastern margin and is fully appraised.

Sea Lion Phase 1, in which Premier has a 60 per cent. operated interest, will recover 220 mmbbls (gross) of reserves in the north-east and north-west of PL032 over 20 years. The development concept is a leased FPSO with subsea wells. In January 2016, Premier commenced FEED on its operated Sea Lion Phase 1 project with FEED contracts awarded to SBM Offshore for the FPSO, Subsea 7 for the subsea installation, NOV for the flexible flowlines and One Subsea for the subsea production system. FEED for the Sea Lion Phase 1 project

progressed well during 2016 and the breakeven cost of the project reduced significantly over the course of the year from US$55/bbl to US$45/bbl while the capex to first oil was reduced from US$1.8 billion to US$1.5 billion.

In August 2016, Premier secured approval from the Secretary of State for an extension to the Sea Lion Discovery Area licence to April 2020. The focus is now on securing an appropriate funding solution for Phase 1 of the project, which may include an equity partner, with the aim of reducing the Issuer's capital commitments to the development.

The Group's partner in Sea Lion Phase 1 is Rockhopper (40 per cent.). Production from Phase 1, once on-stream, is forecast to continue for 20 years.

Falkland Island Exploration Assets

Commencing March 2015, Premier carried out a Falkland Islands exploration campaign, which targeted multiple stacked fans in PL004 and PL032. The Zebedee well in PL004 was declared a discovery having penetrated multiple targets in the Cretaceous F2 and 3 formations with a total hydrocarbon net pay of 136 feet, adding around 60 mmbbls of resource to a potential Phase 2 development.

The Isobel Deep well, which was the first test of the Isobel/Elaine fan complex, encountered oil-bearing sandstones at the prognosed depth and opened up a new play in the previously unexplored southern part of PL004. Following operational difficulties the Isobel Deep well was suspended and the Eirik Raude rig transferred to another operator. The rig returned to the North Falklands Basin in the fourth quarter of 2015 to re-drill the Isobel prospect. The well confirmed the results of the original Isobel Deep exploration well and, in addition, discovered hydrocarbons in shallower sandstone horizons.

Summary of regulatory regime and licence terms in the Falkland Islands

The Offshore Mineral Ordinance 1994, as amended, (the "Mineral Ordinance") governs oil and gas exploration and production activities in the Falkland Islands. The Mineral Ordinance provides for a licensing regime, whereby exploration and production licences are granted to private oil and gas companies. The Mineral Ordinance is supplemented by various environmental and health and safety laws and regulations.

Licences are valid for a sequence of terms. Each licence expires automatically at the end of each term, unless the licensee can demonstrate that sufficient progress has been made under the licence to warrant moving into the next term. The first phase of the exploration period is set between three to eight years. Licensees may enter additional phases, but the licence expires at the end of the first phase if the work programme is not completed. The appraisal period is five years, and the licence expires at the end of the appraisal period unless the Governor has approved a development plan. The production period is 35 years, or longer if needed to complete production.

The terms and conditions of every licence are prescribed in a series of "Model Clauses", which are set out in statutory instruments deriving from the Mineral Ordinance. The Model Clauses applicable to a particular licence are those which are in force at the time it was granted. For the purposes of the following summary, the Model Clauses applicable to the Group's licences are materially the same. The Model Clauses govern the operation of the licence and deal with matters such as: the exploration, appraisal and production periods; extension of the licence by agreement; the licensee's obligations to carry out the work programme during the initial term, to obtain approval for a development and production programme and to obtain consent before drilling a well; an indemnity by licensees for the benefit of the Governor for any third party claims; joint and several liability of licensees; restrictions on and consent for assignment; consent for change of control; and a power to revoke the licence in certain circumstances including insolvency of a licensee, a transfer of the licence without approval, change of control, or breach of any of the licence terms. Licensees are responsible for preparing, submitting and (once approved) carrying out a decommissioning programme in relation to offshore oil and gas installations and pipelines in the licence area.

Summary of economic and fiscal regime in the Falkland Islands

A 9 per cent. royalty is payable under the licences. Each licence also carries an annual rental charge which is calculated at an escalating rate on each square kilometre the licence covers at that date.

Corporation tax is currently 26 per cent. on all profits from exploration and extraction activities. A lower rate of 21 per cent. may be available, for other activities, on the first £1,000,000 of profits. 100 per cent. Tax Depreciation Allowance will be available in the amount of US$231 million relating to consideration paid by the

Group when farming-in to Rockhopper's licence interests. A 100 per cent. depreciation allowance is available on intangible expenditures. There are no tax stabilisation measures in place.

The fiscal regime in the Falkland Islands is expected to undergo reform as the government is believed to have commissioned an external consultation on certain aspects of the regime.

New Country Entry/Exploration Unit

Premier's exploration portfolio has seen significant change over the last few years, moving away from its traditional but now mature areas. The forward focus is on under-explored but proven hydrocarbon basins that have the potential to develop into new business units in 2018 and beyond. In these new countries Premier has a disciplined approach to investment ensuring that cost exposure in the exploration phase is minimised and only the best opportunities are matured to drill-ready status.

Brazil

In May 2013, Premier was awarded three blocks in Brazil's 11th Bidding Round. The blocks are located in deep water basins offshore North East Brazil in largely under-explored areas. The Group was awarded a 50 per cent. operated equity stake in CE-M-665 and CE-M-717 in the Ceara basin, a Cretaceous rift basin with a proven oil source rock. The Group was also awarded a 35 per cent. non-operated equity stake in FZA-M-90 in the Foz do Amazonas basin.

In April 2015, Premier farmed into CE-M-661 in the Ceara Basin, for a 30 per cent. non-operated interest at zero upfront cost, further building on its position in the Ceara Basin. In August 2016, Premier obtained licence extensions from the Brazilian government (ANP) to July 2019 on its operated licences CE-M-665 and CE-M-717. The extensions will enable Premier to realise cost synergies with other operators in the Equatorial Margin with potential drilling operations planned for the first half of 2019.

Premier's partner in CE-M-717 and CE-M-665 is CEPSA (50 per cent.). Premier's partners in CE-M-661 are Total (Operator, 45 per cent.) and Quieroz Galvão E&P (25 per cent.).

In the Foz do Amazonas basin, Premier completed its evaluation of the new 3D seismic data across block FZA-M-90 and decided to exit. Premier's 35 per cent. interest in the block was transferred to operating partner Quieroz Galvão E&P. The Farm-out agreement for this block was signed in December 2016 and completed in early 2017.

Summary of regulatory regime and licence terms in Brazil

Oil and gas exploration and production activities in Brazil are regulated by the Brazilian Federal Constitution, Federal Laws Nos. 9,478/1997 (the "Petroleum Law"), 11,909/2009 (the "Gas Law") and 12,351/2010 (the "Pre-Salt Law"). (In addition, various environmental and health and safety laws and regulations apply. In October, Brazil's Congress voted to remove the national oil company, Petrobras', obligation to own a minimum 30 per cent. stake in and be the sole operator for Brazil's pre-salt offshore fields.

The Group's concession contracts are in the form of the model contract prescribed by the National Agency of Petroleum, Natural Gas and Biofuels ("ANP") for the 11th Bid Round and are regulated by the wider concession contract regime under the Petroleum Law. Under the concession contracts, the exploration period is set at five years. In general terms, the concession expires at the end of the initial term unless the concessionaire has completed the work programme and there has been a discovery. The production period begins on the date of the declaration of commerciality by the concessionaire and may last up to 27 years from the declaration of commerciality. The concession contracts include provision for the concession to be extended by agreement between the concessionaire and the ANP.

The concession contracts deal with matters such as: the exploration, development and production periods; extension of the concession by agreement with the ANP; the concessionaire's obligations to carry out the work programme during the initial term, to obtain approval for its development and production programme and to obtain consent before drilling a well; a requirement for the appointment of the operator to be approved by the ANP; local content requirements; joint and several liability of concessionaires; an indemnity by concessionaires for the benefit of the Brazilian federal government for any third party claims arising in relation to the concession or anything done pursuant to it; restrictions on and government consent for assignment of a concession or change of control of a concessionaire; and a power of revocation of the concession in circumstances including insolvency of the concessionaire or failure to remedy a breach of any of the concession terms within a period of no less than ninety days following notice from the ANP.

Concessionaires are required to submit a decommissioning plan and decommissioning work programme and budget to the ANP together with the development plan for a field. Upon request by the ANP, the concessionaire must present security for decommissioning costs which can take the form of insurance, letter of credit, contingency fund or other security acceptable to the ANP. The amount of the security is based on the field's development plan.

Summary of economic and fiscal regime in Brazil

Under the Group's concession contracts, the concessionaire is required to pay royalties to the ANP monthly in an amount equal to 10 per cent. of sales revenue calculated on the basis of the ANP price reference. Extraordinary financial compensation may be payable by concessionaires in the event that high volumes of oil or natural gas are produced or a certain field is highly profitable in other ways. This compensation is known as the 'special participation percentage' and varies from 10 per cent. to 40 per cent. It is applied on sales revenue calculated on the basis of the ANP reference price and adjusted by deductions allowed by the law. In addition, concessionaires must pay an annual fee for the occupation or retention of the concession area throughout the exploration, development and production periods. Additionally, concessionaires must pay to the owners of the land of participation a fee of 1 per cent. applied on sales revenue calculated on the basis of the ANP reference price. The current combined corporate income tax rate is approximately 34 per cent. Brazil does not apply ring-fencing in the determination of the corporate income tax liability. There are no tax stabilisation measures in place.

In the event of an emergency, the ANP may require concessionaires to restrict exports and supply oil to the Brazilian market or a national strategic inventory on a pro-rata basis with other producers in Brazil in order to meet the needs of domestic consumption in the country. Under Brazilian national content rules, a certain percentage of goods, equipment and services must be purchased from Brazilian suppliers. The minimum national content for the Group's blocks is 37 per cent. for the exploration period and between 55 per cent. and 65 per cent. for the production period.

Mexico

In July 2015, Premier entered Mexico with the award of a non-operated 10 per cent. interest in Blocks 2 and 7 in Mexico's Round 1. The blocks are located in the shallow water Sureste Basin in the Gulf of Mexico, one of the world's most prolific hydrocarbon provinces. Large parts of the basin remain under-explored, particularly in comparison to the US Gulf of Mexico. One such area is the Salinas sub-basin where Blocks 2 and 7 are located and where light oil will be targeted in Tertiary clastic reservoirs.

In 2016, the Mexico joint venture partners completed the technical evaluation of Block 7 acreage including the amplitude supported Zama prospect which has a well-defined flat spot, an indicator of potential hydrocarbons. In December 2016 Premier exercised its option to increase its equity interest in the licence to 25 per cent. In May 2017, the Zama-1 exploration well in Block 7 was spudded. This is the first exploration well to be drilled on acreage awarded in Mexico's first international licencing round in 2015.

Premier's partners in Block 7 are Talos Energy (35 per cent. operated interest) and Sierra Oil and Gas (40 per cent. interest).

Summary of regulatory regime and licence terms in Mexico

The Mexican oil and gas industry only opened to private investors in 2013. Exploration and extraction contracts are tendered and entered into with contractors by the National Hydrocarbons Commission ("CNH"). The Mexican Ministry of Energy determines the type of contract offered in each bid round, with contractual forms including profit-sharing contracts, licenses and, production-sharing contracts. The Group is party to two PSCs.

Under each PSC a percentage of production is allocated to a contractor who assumes all costs and risks related to the activities. The initial term of a PSC is twenty-five years from the effective date which is extendable, at the request of Contractor, for two additional five-year periods, subject to the approval of the CNH. The exploration period is three years with the possibility of two one-year extensions. The development and production period begins after the declaration of commercial discovery with no specified time period stipulated for such period.

The PSCs deal with matters such as: the exploration, development and production periods; extension of the PSC; the contractor's obligation to carry out the work programme during the initial term; the procedure to obtain approval for its production programme; the submission of annual work programs to the CNH; the submission of budgets to the CNH and the eligibility of costs for costs recovery; the automatic transfer to the

State of materials provided or acquired by the contractor in connection with the operations upon termination of the PSC; payment and production split procedures; the liability of contractors; and termination provisions.

Contractors are obliged to carry out all operations related to abandonment of the contact area. The development plan and each work program submitted to the CNH must provide for provisions related to abandonment. Upon making a commercial discovery, contractors are obliged to set up an investment trust as an abandonment fund under joint control of the contractor and the CNH.

Summary of economic and fiscal terms in Mexico

The fiscal regime in Mexico is set out in the Hydrocarbons Revenue Law. The PSCs use a unique formula for calculating the production split between the Mexican Government and the contractor based on subtracting royalties and cost recovery oil from the actual crude oil output.

Under the PSCs, a share of net oil production in each quarter up to a maximum percentage of net production (“Cost Recovery Oil”) is allocated to cover certain permitted petroleum costs incurred by the contractors. Petroleum costs which are not recovered from the allocation of Cost Recovery Oil in a quarter may be carried forward to succeeding quarters without interest until fully recovered. Contractors are required to pay royalties to the Mexican government based on the gross income derived from production, calculated by applying a formula to the contractual spot price of hydrocarbons starting at a fixed rate of 7.5 per cent. if the price is under $44.78 per barrel, with the rate increasing if the price rises above this level. Profit petroleum (being net production after the deduction of Cost Recovery Oil) is allocated between the Mexican government and contractors after deductions for royalties, whilst the profit petroleum owed to the Mexican government is subject to an adjustment mechanism contained within the PSCs based on the monthly internal rate of return of contractors, which is designed to capture additional profits for the government. Additionally, contractors are required to pay a fee for the exploration phase at a rate charged per square kilometre assigned to the contractor and a further monthly tax on exploration and extraction of hydrocarbon activities at rates charged per square kilometre assigned to the contractor. The corporate income tax rate is 30 per cent. Employers in Mexico must pay profit sharing to employees each year equal to 10 per cent. of the taxable income of the business.

There is a requirement that exploration and production of hydrocarbons activities in Mexico should reach at least 25 per cent. local content for 2015 and should be increased progressively up to 35 per cent. in 2025. (Local content refers to the amount of locally produced materials, personnel, financing, goods and services rendered to the oil industry).

Iraq

In November 2012, the Group was awarded a 30 per cent. non-operated interest in Block 12, an 8,000 square kilometre block in the under-explored Salman Zone in southern Iraq, in the foreland of the Zagros fold belt updip from producing fields.

On 14 December 2015 Premier signed a share purchase agreement with Bashneft International B.V. (“BNI”), the current operator, to assign its participating 30 per cent. interest share in Block 12 back to BNI. The Group is in the process of obtaining the necessary governmental consents for its withdrawal from Iraq. The Group anticipates that it will receive these consents and that it will complete the withdrawal during 2017. The Group has ceased all exploratory work in Iraq and it is not responsible for any exploration well costs, or any related liabilities, obligations and losses relating to activities under the exploration, development and production contract for Block 12. As such, the Group has effectively transferred the economic ownership of its operations in Iraq to BNI.

Summary of regulatory and licence regime in Iraq

In Iraq, the Group is party to an exploration, development and production service contract with the South Oil Company of the Iraqi Ministry of Oil (“SOC”). Under the service contract, the exploration period is five years with provision for a two-year extension and a further two-year appraisal period. The development period is twenty years from development approval with the possibility of a five-year extension. The service contract has a maximum term of thirty years.

The service contract deals with matters such as: the exploration, appraisal and development periods; extension of the service contract by agreement with the SOC; the contractor’s obligations to carry out the work programme during the initial term, to obtain approval for its development and production programme and to obtain consent before drilling a well; a requirement for the appointment of the operator to be approved by the SOC; assets acquired and/or provided by the contractor in connection with the service contract becoming the

property of the SOC; joint and several liability of the contractors; an indemnity by the contractors for the benefit of the SOC for any third party claims arising in relation to the service contract or anything done pursuant to it; restrictions on and government consent for assignment of the service contract or change of control of a contractor; a power of revocation of the service contract upon not less than three months' notice by the SOC in certain circumstances including insolvency of the contractor, failure to remedy a breach of any of the service contract terms or applicable law, failure to execute in any material respect the minimum work programme, approved exploration, appraisal plans, development plans or related work programs and budgets or the assignment of any interest, right or obligation under the service contract in contravention of the terms of the service contract. Contractors are required to prepare a decommissioning plan midway through the development period.

Summary of economic and fiscal terms in Iraq

The fiscal regime in Iraq is a service contract-based one, where the oil companies fund all activity in return for a recovery of their costs plus a fixed fee per barrel of production as remuneration. The remuneration is a fee per barrel which is set following competitive bidding between companies. The remuneration level for Block 12 is US$5/bbl of oil equivalent under the service contract subject to adjustments depending on the level of production. In addition, the SOC reimburses the costs and expenditures incurred by the contractors (known as petroleum cost) either in export oil or cash. The corporate income tax liability does not exceed 35 per cent. of remuneration. The service contract includes a wide stabilisation clause.

Summary of the Group's reserves and resources as at 31 December 2016

	UK	Falkland Islands	Indonesia	Pakistan & Mauritania	Vietnam	Total
2P Reserves
On production	71.3	—	29.3	11.7	25.4	137.7
Approved for development	56.0	—	11.8	—	—	67.9
Justified for development	1.4	134.4	6.2	—	5.7	147.7
Total 2P Reserves	128.7	134.4	47.3	11.7	31.1	353.3
% of total	36%	38%	13%	3%	9%	100%
2C Contingent Resources
Development pending	50.6	—	—	—	—	50.6
Development un-clarified/on hold	24.0	148.6	99.2	5.7	8.2	285.7
Development not currently viable	32.1	109.5	1.8	—	1.9	145.2
Total 2C Contingent Resources	106.7	258.1	101.0	5.7	10.1	481.6
Total 2P Reserves & 2C Contingent Resources	235.4	392.5	148.3	17.4	41.2	834.9
% of total	28%	47%	18%	2%	5%	100%

The Group's licence interests

The table below shows the Group's licences interests as at the date of this Prospectus.

Licence	Blocks	Operator	Premier Equity%	Associated Fields/Discoveries
Brazil
CE-M-661	CE-M-661	Total	30.00
CE-M-665_R11	CE-M-665	Premier	50.00
CE-M-717_R11	CE-M-717	Premier	50.00	Pecem
Falkland Islands
PL003a	14/14 (part) & 14/19 (part)	Rockhopper	4.50
PL003b	14/14 (part) & 14/19 (part)	Rockhopper	4.50
PL004a	14/15 (part), 14/20, 15/11 (part) & 15/16 (part)	Premier	36.00	Isobel Deep

Licence	Blocks	Operator	Premier Equity%	Associated Fields/Discoveries
PL004b	14/15 (part)	Premier	36.00	Beverley; Casper South; Zebedee
PL004c	14/15 (part)	Premier	36.00
PL032	14/5, 14/10	Premier	60.00	Casper North; Sea Lion
PL033	15/1 (part) & 15/6 (part)	Premier	60.00
Indonesia
Kakap Block	Kakap Block	Star Energy	18.75	Kakap
Natuna Sea Block A	Natuna Sea Block A	Premier	28.67	Anoa; Gajah Baru; Naga; Pelikan
Tuna Block	Tuna Block	Premier	65.00	Kuda Laut; Singa Laut
Mauritania
PSC B	Chinguetti EEA	Petronas	8.12	Chinguetti
Mexico
Mexico Block 2	2	Talos	10.00
Mexico Block 7	7	Talos	25.00
Pakistan
D&PL No.140/PAK/2000	Kirthar	ENI	6.00	Bhit
D&PL No.150/PAK/2002	2667-1 (Dadu)	Orient	9.38	Zamzama
D&PL No.160/PAK/2003	Kirthar	ENI	6.00	Badhra
D&PL No.161/PAK/2003	Bolan	Mari	3.75	Zarghun South
D&PL No.84/PAK/92	Tajjal	ENI	15.79	Kadanwari
D&PL No.85/PAK/93	Qadirpur	OGDCL	4.75	Qadirpur
United Kingdom
PL089	SY88b, SY98a, SZ8a	Perenco	30.39	Wytch Farm (Onshore)
P077	22/12a	Shell	50.00	Nelson
P087	22/7a	Premier	46.50	Nelson
P110	22/14a (Rest of Block Shallow)	Premier	25.04	Huntington
P110	22/14a (Rest of Block Deep)	BG International (CNS)	27.24	Huntington
P111	22/25a Merganser down to 300 metres (MERG))	Premier	65.99	Merganser
P114	22/27a (Deep Banff Area being the strata under the top Jurassic (A))	CNR	20.00
P119	15/29a (area P)	Premier	100.00	Ptarmigan
P164	205/26a	Premier	100.00	Solan
P185	15/22 (rest of block, non-Palaeocene formation)	Nexen	50.00	Blackhorse
P188	22/30b	Total	5.20	Elgin
P201	16/21a, 16/21d	Premier	85.00	Balmoral; Glamis; Stirling
P201	16/21a (Brenda field area)	Premier	100.00	Brenda
P213	16/26a (area P)	Premier	100.00	Caledonia
P224	29/2a (Deep Banff Area being the strata under the top Jurassic (A))	CNR	20.00
P233	15/25a	Premier	70.00	Nicol
P264	23/26d A	Premier	100.00	Scoter
P344	16/21b & 16/21c (Balmoral Field Area	Premier	44.20	Balmoral; Stirling

Licence	Blocks	Operator	Premier Equity%	Associated Fields/Discoveries
	(BALM)) and 16/21c (Stirling Field (STIR))
P354	22/2a (non-Chestnut field area)	Premier	30.00
P362	29/5b	Total	5.20	Franklin
P380	43/26a (Rave (RAVE A)) and (Rave (Rave B))	Perenco	35.94	Ravenspurn North
P380	43/26a (Ravenspurn North Field Carboniferous Area (RAVE (CA))	BP	5.00
P380	43/26a (Residual Area excluding Ravenspurn North (RESID)	Premier	72.22
P452	44/23a (Caister Field (AREA AA)	ConocoPhillips	40.00	Caister
P452	44/23e D	Premier	79.00	Hunter
P454	44/29b B	Engie	42.67	Orca
P456	48/2a	Premier	47.00	Babbage
P534	98/6a & 98/7a	Perenco	30.39	Beacon
P611	44/24a, 44/30a	Engie	42.67	Minke; Orca
P666	22/30c, 29/5c	Total	5.20	West Franklin
P686	43/27a	Premier	42.22	Johnston
P748	29/2c	CNR	40.00	Kyle
P752	29/4d	Total	18.57	Glenelg
P766	44/21b	Premier	68.31	Rita
P771	44/22c	Premier	76.00	Rita
P1042	15/25b	Premier	100.00	Brenda
P1114	22/14b	Premier	65.00	Huntington
P1330	42/28d	Premier	50.00	Tolmount
P1430	28/9a	Premier	50.00	Burgman; Carnaby; Catcher; Varadero
P1720	23/16c	Dana	30.00	Arran
P1823	30/13b	Engie	25.00	Austen
P2068	22/29b	Total	5.20
P2070	28/4a	Premier	54.00	Laverda
P2077	28/8	Premier	54.00
P2105	42/28e, 42/29d	Premier	50.00	Greater Tolmount
P2136	47/3k	Premier	100.00	Greater Tolmount
P2178	21/17d, 21/18b	Premier	40.00
P2184	22/18c, 22/19d	Premier	40.00
P2212	48/1b, 48/2b	Premier	50.00	Greater Babbage
P2290	48/3	Premier	50.00	Greater Babbage
P2301	48/1c	Premier	50.00	Greater Babbage
P2305	42/28c	Premier	50.00	Greater Tolmount
P2229	13/23c	Encounter	40.10
Vietnam
Block 12W	12W	Premier	53.13	Chim Sáo; Dua

Recent Trends

Production

The Group delivered record production of 71.4 kboepd in 2016, in line with previously upgraded full year guidance of 68 – 73 kboepd and up 24 per cent. on the prior year (2015: 57.6 kboepd). Production for the four months to 30 April 2017 averaged 82.6 kboepd.

In the UK, production averaged 33.0 kboepd during 2016, double that of 2015, and over 40 kboepd in Q4 2016. The step change in production was primarily due to the new contributions from the ex-E.ON portfolio and the Solan field. There was also high uptime and strong reservoir performance from a number of fields,

most notably Huntington, Babbage and Wytch Farm, whilst Elgin-Franklin benefitted from an ongoing infill drilling programme. Higher than expected production from these assets was slightly offset by lower than anticipated production from Solan resulting from a late start-up and poorer than expected reservoir performance.

Premier’s operated South East Asia assets outperformed during 2016. High uptime of over 90 per cent., better than expected reservoir performance and a successful well intervention programme helped to mitigate natural decline from the Chim São field in Vietnam. Across the border in Indonesia, Premier’s operated Natuna Sea Block A secured an increased market share within its principal gas contract GSA1 of 44 per cent. (2015: 43 per cent.) against a contractual share of 41 per cent. and delivered record production under GSA2 of 94 BBtud during 2016. Natuna Sea Block A’s contractual share of GSA1 has increased to 47 per cent. for 2017.

Production from Pakistan and Mauritania averaged 7.9 kboepd for the year, 6 per cent. over budget. The decrease compared to the prior year reflects natural decline in all of the fields.

Industry Trends

2016 saw another significant decline in global capital expenditure as low commodity prices persisted and uncertainty over the duration of the downturn remained. Capital continued to be prioritised towards sanctioned expenditure and the preservation of balance sheets while the industry’s appetite to invest in new developments and exploration remained depressed. Reduced activity and on-going scrutiny of costs by the upstream sector continues to impact the oil service sector. Some smaller service companies have already gone out of business reducing optionality in certain supply chains but in particular the offshore subsea sector, where backlog is rolling off and activity is dominated by several large players.

Selected Financial Information

Consolidated Income Statement

	Year to 31 December
	2014	2015	2016
	US$m
Sales revenues	1,629.4	1,067.2	983.4
Other operating income/(costs)	—	31.9	(6.1)
Cost of sales	(986.2)	(661.0)	(767.1)
Impairment charge on oil and gas properties	(784.4)	(1,023.7)	(556.2)
Reduction in decommissioning estimates	—	—	75.7
Exploration expense	(51.2)	(95.4)	(48.0)
Pre-licence exploration costs	(20.3)	(13.6)	(10.4)
Excess of fair value over costs of acquisition	—	—	228.5
Costs related to the acquisition of subsidiaries	—	—	(21.6)
Profit on disposal of non-current assets	12.4	1.2	—
General and administration costs	(25.4)	(14.4)	(24.1)
Operating loss	(225.7)	(707.8)	(145.9)
Share of profit/(loss) in associate	1.9	(1.9)	1.8
Interest revenue, finance and other gains	57.1	40.7	13.2
Finance costs, other finance expenses and losses	(195.8)	(160.6)	(259.7)
Loss before tax	(362.5)	(829.6)	(390.6)
Tax	136.5	(241.1)	522.0
Profit/(loss) for the year from continuing operations	(226.0)	(1,070.7)	131.4
Discontinued operations
(Loss)/gain for the year from discontinued operations	15.7	(33.1)	(8.8)
Profit/(loss) after tax	(210.3)	(1,103.8)	122.6
Profit/(loss) per share (cents)
From continuing operations
Basic	(43.3)	(209.6)	25.7
Diluted	(43.3)	(209.6)	25.4
From continuing and discontinued operations
Basic	(40.3)	(216.1)	24.0
Diluted	(40.3)	(216.1)	23.7

Consolidated Statement of Comprehensive Income

	Year to 31 December
	2014	2015	2016
	US$m
Profit/(loss) for the year	(210.3)	(1,103.8)	122.6
Cash flow hedges on commodity swaps
Gains/(losses) arising during the year	296.1	164.4	(38.3)
Less: reclassification adjustments for gains in the year	(46.0)	(278.9)	(92.4)
	250.1	(114.5)	(130.7)
Tax relating to components of other comprehensive income	(139.0)	76.0	56.1
Cash flow hedges on interest rate and foreign exchange swaps	15.5	19.8	3.3
Exchange differences on translation of foreign operations	(48.3)	(37.0)	3.0
Losses on long-term employee benefit plans	(0.2)	(0.1)	0.2
Other comprehensive (expense)/income	78.1	(55.8)	(68.1)
Total comprehensive (expense)/income for the year	(132.2)	(1,159.6)	54.5

Consolidated Balance Sheet

	Year to 31 December
	2014	2015	2016
	US$m
Non-current assets:
Intangible exploration and evaluation assets	825.7	749.7	1,011.4
Property, plant and equipment	2,430.0	2,611.7	2,726.2
Goodwill	240.8	240.8	240.8
Investment in associate	7.6	5.3	6.2
Long-term employee benefit plan surplus	0.8	0.5	—
Long-term receivables	494.1	11.5	143.4
Deferred tax assets	971.7	871.6	1,304.0
	4,970.7	4,491.1	5,432.0
Current assets
Inventories	26.1	20.8	22.3
Trade and other receivables	468.9	274.4	315.1
Derivative financial instruments	273.4	118.3	34.9
Cash and cash equivalents	291.8	401.3	255.9
Asset held for sale	56.7	—	—
	1,116.9	814.8	628.2
Total assets	6,087.6	5,305.9	6,060.2
Current liabilities
Trade and other payables	(628.7)	(472.0)	(412.6)
Short-term provisions	(14.1)	(24.8)	(56.1)
Derivative financial instruments	(48.1)	(2.2)	(57.2)
Short-term debt	(300.0)	—	(273.0)
Deferred income	—	(20.9)	(27.3)
Liabilities directly associated with asset held for sale	(1.8)	—	—
	(992.7)	(519.9)	(826.2)
Net current assets/(liabilities)	124.2	294.9	(198.0)
Non-current liabilities
Long-term debt	(2,086.2)	(2,615.1)	(2,730.5)
Deferred tax liabilities	(254.2)	(193.3)	(192.6)
Deferred income	—	(87.6)	(88.1)
Derivative financial instruments	—	(74.3)	(101.6)
Long-term provisions	(882.3)	(1,080.9)	(1,312.1)
	(3,222.7)	(4,051.2)	(4,424.9)
Total liabilities	(4,215.4)	(4,571.1)	(5,251.1)
Net assets	1,872.2	734.8	809.1
Equity and reserves:
Share capital	106.7	106.7	106.7
Share premium account	275.4	275.4	275.4
Merger reserve	374.3	374.3	374.3
Retained earnings	1,142.3	46.3	122.3
Other reserves	(26.5)	(67.9)	(69.6)
	1,872.2	734.8	809.1

Condensed Consolidated Cash Flow Statement

	Year to 31 December
	2014	2015	2016
	US$m
Net cash from operating activities	924.3	809.5	431.4
Net cash used in investing activities	(1,383.2)	(850.5)	(859.3)
Net cash from financing activities	291.5	163.5	282.6
Currency translation differences relating to cash and cash equivalents	10.3	(13.0)	(0.1)
Net (decrease)/increase in cash and cash equivalents	(157.1)	109.5	(145.4)
Cash and cash equivalents at the beginning of the year	448.9	291.8	401.3
Cash and cash equivalents at the end of the year	291.8	401.3	255.9

Capital Resources

Liquidity

Premier seeks to have sufficient liquidity to underpin the Group’s capital investment programme and to access new opportunities for future growth. The Group seeks to maintain a disciplined approach to spending each year and where necessary will seek farm-in partners for drilling programmes and development projects to maintain this discipline.

The Group monitors its funding position and its liquidity risk throughout the year to ensure it has access to sufficient funds to meet forecast cash requirements. Cash forecasts are regularly produced based on, inter alia, the Group’s latest life of field production and expenditure forecasts, management’s best estimate of future commodity prices (based on recent forward curves, adjusted for the Group’s hedging programme) and the Group’s borrowing facilities. Sensitivities are run to reflect different scenarios including, but not limited to, changes in oil and gas production rates, possible reductions in commodity prices and delays or cost overruns on major development projects. This is done to identify risks to liquidity and covenant compliance and enable management to formulate appropriate and timely mitigation strategies.

Although the Group continued to have significant headroom on its borrowing facilities in the financial year ended 31 December 2016, the Group’s projections indicate that, under the existing facilities, a breach of one or more of the Group’s financial covenants will occur on 31 July 2017 if the Refinancing has not completed by that time or if the deferrals in the Senior Lock-up Agreement are not extended. However, if the Refinancing is approved, forecasts and projections indicate that the Group, at currently forecast oil prices and production levels, has sufficient working capital for its present requirements (see the working capital statement in section 16 of Part XI (Additional Information)). For a description of the Group’s financial requirements beyond the 12 month period covered by the working capital statement, see section 16 of Part XI.

Cash flow

Premier aims to maximise cash flow from operations in order to maintain financial strength, so as to meet its debt obligations, invest in the future of the business and deliver long-term returns to shareholders. Premier’s cash flows are protected by a rolling forward hedging programme.

The following table sets forth the consolidated cash flow statements of the Group for the financial years ended 31 December 2014, 2015 and 2016.

	2014	2015	2016
	US$m	US$m	US$m
Net cash from operating activities	924.3	809.5	431.4
Investing activities:
Capital expenditure	(1,195.5)	(992.2)	(678.1)
Acquisition of subsidiaries	—	—	(135.0)
Cash balance acquired in the period	—	—	24.9
Decommissioning funding	—	—	(62.3)
Disposal of oil and gas properties	130.7	219.6	(8.8)
Loan to joint venture partner	(318.4)	(77.9)	—
Net cash used in investing activities	(1,383.2)	(850.5)	(859.3)
Financing activities:
Proceeds from issuance of Ordinary Shares	0.1	—	—
Purchase and cancellation of own shares	(93.0)	—	—
Purchase of ESOP Trust shares	(6.4)	(0.9)	0.2
Proceeds from drawdown of long-term bank loans	655.0	775.0	435.0
Debt arrangement fees	(22.1)	(9.6)	(26.3)
Repayment of long-term bank loans	(100.0)	(300.0)	—
Repayment of senior loan notes	—	(209.4)	—
Dividends paid	(44.0)	—	—
Interest paid	(98.1)	(91.6)	(126.3)
Net cash from financing activities	291.5	163.5	282.6
Currency translation differences relating to cash and cash equivalents	10.3	(13.0)	(0.1)
Net (decrease)/increase in cash and cash equivalents	(157.1)	109.5	(145.4)
Cash and cash equivalents at the beginning of the year	448.9	291.8	401.3
Cash and cash equivalents at the end of the year	291.8	401.3	255.9

Net cash from operating activities

The fall in the Group's operating cash flow over the financial years ended 31 December 2014 to 2016 is mainly due to lower realised oil prices, including a reduction in the value of our oil hedges settled in the year, partially offset by an increase in volumes lifted following the acquisition of the E.ON assets and first oil from Solan.

Net cash generated from operating activities was US$431.4 million generated for the financial year ended 31 December 2016 (2015: US$809.5 million). This was impacted significantly by the external macro environment which saw the oil price average US$47.3/bbl (2015: US$52.4/bbl). Consequently, Premier realised an average price for the year post hedge of US$52.2/bbl. This was only partially mitigated by a strong production performance, tight cost control and a hedging programme.

Despite the difficult macro environment and a low oil price throughout 2015, net cash generated from operating activities was US$809.5 million generated for the financial year ended 31 December 2015 (2014: US$924.3 million). This was achieved by strong production performance, extensive cost savings and the benefit of the hedging programme. Premier's portfolio of crudes was sold at an average of US$52.6/bbl (2014: US$98.2/bbl) (pre-hedge) and US$70.0/bbl (2014: US$101.0/bbl) (post hedge) compared with an average Brent crude price of US$52.4/bbl.

Net cash generated from operating activities was US$924.3 million generated for the financial year ended 31 December 2014. Premier's portfolio of crudes was sold at an average of US$98.2/bbl in this year. Realised average gas prices, a significant portion of which tracks oil price movement, achieved US$8.4 per thousand standard cubic feet (mscf) in 2014. Operating costs per barrel of oil equivalent (boe) reduced to US$18.8 in 2014 compared to 2013. This reflected higher operating efficiency as well as one-off credits in Vietnam and Indonesia totalling US$20 million. Premier's cash flows were protected by a rolling forward hedging programme which, together with the refinancing of the company's principal credit facility in 2014, ensured that the group had significant liquidity to fund its capital investment programme in 2015.

Net cash used in investing activities

Net cash used in investment activities was US$859.3 million for the financial year ended 31 December 2016, compared to US$850.5 million for the financial year ended 31 December 2015 and US$1,382.2 million for the financial year ended 31 December 2014.

The net cash used in investing activities for the financial year ended 31 December 2016 totalled U.S.$859.3 million and primarily related to the following:

Capital expenditure of US$678.1 million, which included US$548.5 million of development capex and US$126.6 million of exploration and evaluation expenditure. The principal development projects were Solan and Catcher fields in the UK while exploration expenditure mainly related to Premier's exploration campaign in the Falklands Islands, which concluded in the first quarter of 2016, and Brazil.
Payments related to decommissioning in the period of US$62.3 million, which included a one-off US$53 million catch up payment into escrow for future decommissioning of Chim São.
The acquisition of the E.ON assets for a cash consideration of US$135.0 million, including working capital adjustments.

The net cash used in investing activities for the financial year ended 31 December 2015 totalled US$850.5 million and primarily related to the following:

Capital expenditure of US$1070.1 million, which included US$769.5 million of development capex, US$216.8 million of exploration and evaluation expenditure and US$77.9 million which was advanced to Chrysaor prior to the acquisition of their 40 per cent. share in Solan. The principal development projects were the Solan and Catcher fields in the UK. Exploration expenditure mainly related to Premier's exploration campaign in the Falkland Islands.
Disposal proceeds of US$219.6 million relating to the disposals of Block A Aceh onshore Indonesia, the Scott area assets in the UK and the sale of the Norway business unit.

The net cash used in investing activities for the financial year ended 31 December 2014 totalled US$1,383.2 million and primarily related to the following:

Capital expenditure of US$1,513.9 million, which included US$887.5 million of development capex, US$294.1 million of exploration and evaluation expenditure and US$318.4 million of funding support which was provided to Chrysaor in the Solan project. The principal development projects were the Solan and Catcher fields in the UK, and the Dua field in Vietnam. Exploration and evaluation spend included costs principally related to exploration drilling and pre-development activities in Norway, Indonesia, the Falkland Islands and Kenya.
Disposal proceeds of US$130.7 million in relation to the sale of the Scott area assets in the UK and the Luno II discovery in Norway.

Net cash from financing activities

Net cash from financing activities amounted to US$282.6 million, US$163.5 million and US$291.5 million in the financial years ended 31 December 2016, 2015 and 2014 respectively.

The net cash from financing activities for the 12 months ended 31 December 2016 totalled US$282.6 million, and primarily related to:

US$435.0 million of proceeds from drawdown of long-term bank loans.
US$26.3 million of debt arrangement fees.
US$126.3 million of interest paid.

The net cash from financing activities for the 12 months ended 31 December 2015 totalled US$163.5 million, and primarily related to:

US$775.0 million of proceeds from the drawdown of long-term bank loans.
US$9.6 million of debt arrangement fees.
US$300.0 million of repayment of long-term bank loans.
US$209.4 million of repayment of senior loan notes.
US$91.6 million of interest paid.

The net cash from financing activities for the 12 months ended 31 December 2014 totalled U.S.$291.5 million, and primarily related to:

US$93.0 million buyback programme and US$44.0 million of dividends paid.

US$655.0 million of proceeds from drawdown of long-term bank loans.
US$22.1 million of debt arrangement fees.
US$100.0 million of repayment of long-term bank loans.
US$98.1 million of interest paid.

Funding structure

Equity financing

As at the Latest Practicable Date Premier has issued 510,824,261 Ordinary Shares (all of which are fully paid). The Ordinary Shares have a nominal value of 12.5 pence each.

Debt financing

The Group's borrowings as at 31 December 2016, less unamortised issue costs and debt arrangement fees, amounted to US$3,003.5 million (31 December 2015: US$2,615.1 million). The Group's net accounting debt position as at 31 December 2016 was US$2,765.2 million (31 December 2015: US$2,242.2 million) including cash resources of US$255.9 million (31 December 2015: US$401.3 million) as summarised below.

	2014	2015	2016
	US$m	US$m	US$m
Cash and cash equivalents	291.8	401.3	255.9
Convertible bonds	(228.5)	(232.9)	(237.5)
Other long-term debt	(2,185.5)	(2,410.6)	(2,783.6)
Net debt	(2,122.2)	(2,242.2)	(2,765.2)

Further details of the Group's borrowings are set out in section 1 (The Group's existing indebtedness under the Existing Finance Documents, Hedging Agreements, Bilateral LC Facilities and Convertible Bonds) of Part I (Information on the Refinancing).

Funding and Treasury Policies

Commodity price hedging

The Group's commodity hedging policy is to cover up to 50 per cent. of forecast entitlement production on a rolling 12 to 18 month basis taking the benefit of short term strengths in the commodity markets. In order to implement this policy the Group can either sell forward, purchase floors for cash or via collars, funded by selling caps at a ceiling price. For 2016 and 2017 the Group have used forward sales to hedge production. The Group also purchased floors for cash for 2017 in order to protect against downside oil price risk.

The Group has agreed to carry out its commodity hedging in respect of its producing assets in accordance with a hedging strategy agreed with creditors in respect of the Existing Term Loan, the Existing RCF, the USPP Notes, the Schuldschein Loans, the Bilateral LC Facilities and the Hedging Transactions. The hedging strategy operates as a framework such that the Group is permitted to hedge its production up to the levels set out in the strategy but it is not obliged to do so. These hedging levels include a maximum of 70% of forecast entitlement oil production for 12 months, up to 50% of UK gas production for 18 months and up to 25% of HSFO (linked to Indonesian gas production) for 18 months. In addition, the Group has agreed to use reasonable endeavours to hedge a minimum of 20 per cent. of oil volumes (excluding production from Solan and Catcher) at US$50/bbl or above on a 12 month rolling basis so long as Premier (acting reasonably) considers that the terms available for such hedging are commercially acceptable. Should oil prices remain consistently below US$50/bbl, there is a risk that such hedging will be unavailable to the Group or that it may be available only at a commercially unacceptable cost.

The Group has currently hedged 43 per cent. of its budgeted 2017 oil entitlement production through a mixture of swaps, options and fixed price term sales at an average price of US$51/bbl as at 30 April 2017 and approximately 42 per cent. of its budgeted 2017 UK gas entitlement production through fixed price term sales at an average price of 49.6 pence/therm.

Foreign exchange hedging

The Group's functional and reporting currency is US dollars. However, the Group's primary foreign exchange exposure is to GBP due to its large UK asset base and particularly at the moment due to the ongoing capital expenditure on the Catcher development project located in the UK North Sea. The Group policy is to sell US

dollars and purchase GBP forward up to six months based on forecast expenditure. The Group currently has relatively small exposures to Euros; these are covered by selling US dollars on a spot basis.

At the year end, the Group recorded a mark-to-market loss of US$57.4 million on its outstanding foreign exchange contracts (2015: loss of US$19.1 million). The Group currently has £150.0 million retail bonds, €60.0 million long-term senior loan notes and a £100.0 million term loan in issuance which have been hedged under cross currency swaps in US dollars at average fixed rates of US$1.64:£ and US$1.37:€.

Applicable Interest rates

As at 31 December 2016, 52 per cent. of the Group's total borrowings is fixed or has been fixed using the interest rate swap markets. On average, the cost of drawn funds for the year was 4.6 per cent. Mark-to-market credits on interest rate swaps amounted to US$1.0 million (2015: credit of US$7.7 million), which are recorded as movements in other comprehensive income.

Further details of the Group's interest rates and the revised interest rates that will be payable following completion of the Refinancing are set out in section 2 (Overview of the Refinancing) of Part I (Information on the Refinancing).

Restrictions on use of capital resources

If the Refinancing is completed, the Group will be subject to restrictive covenants, restricting the ability of the Group, without the consent of its creditors, to, amongst other things: incur additional debt; make certain payments, including dividends and other distributions, with respect to outstanding share capital; repay or redeem subordinated debt or share capital; create or incur certain liens; make certain acquisitions and investments or loans; sell, lease or transfer certain assets, including shares of any of the Issuer's restricted subsidiaries; incur expenditure on exploration and appraisal activities in excess of approved levels; guarantee certain types of the Group's other indebtedness; expand into unrelated businesses; merge or consolidate with other entities; or enter into certain transactions with affiliates.

Principal Investments

The Group's capital investment from 1 January 2014 to 31 December 2016 principally related to the development of the Solan and Catcher fields. Further details of these projects can be found on pages 66 - 67 and 70 - 71 of this Prospectus.

To the extent that Premier sanctions significant new development projects, it is expected that funding would come from one or more of the following sources: existing facilities; new equity raised; partner funding (i.e., a farm down in exchange for a carry) or third party funding arrangements.

Employees

As at 31 December 2014, 2015 and 2016, the Issuer had 927, 829 and 799 employees, respectively. As at the Latest Practicable Date, the number of employees of the Group was 795.

The following table sets forth the Group's employees as at 31 December 2014, 2015 and 2016 by geographic location.

	As at 31 December
	2014	2015	2016
Falkland Islands	56	44	31
Indonesia	474	451	439
Norway	32	25	—
Pakistan	14	13	13
Singapore	15	0	—
United Kingdom	249	209	233
Vietnam	81	81	78
Brazil	6	6	5
Mexico	—	—	—
Total	927	829	799

The following table shows the average number of employees by main category of activity during the year to December 2014, 2015 and 2016.

Average to 31 December
2014	2015	2016
Technical and operations	657	608
Management and administration	283	263

Share incentive plans

The Group currently operates four share incentive plans: (1) the Premier Value Share Plan ("PVSP") for all employees (excluding senior managers and Executive Directors); (2) a Long Term Incentive Plan ("LTIP") for senior managers and Executive Directors; (3) a Share Incentive Plan ("SIP") for UK-based and expatriate employees only; and (4) a Save As You Earn ("SAYE") Share Option Scheme for UK-based and expatriate employees only. Details about these plans have been provided on pages 118 - 121 of Premier's 2016 Annual Report and Financial Statements.

For the year ended 31 December 2016, the total cost recognised by the Issuer for equity-settled share-based payment transactions is US$19.7 million (2015: US$23.0 million). A credit of US$19.7 million has been recorded in retained earnings (2015: US$23.0 million) for all equity-settled payments of the Group.

In 2015, the Board approved the introduction of the PVSP for the broader employee population. This moved away from the 'one size fits all' reward philosophy of the 2009 LTIP which was broadly operated in the same way for executives, senior management and the wider employee population. The PVSP is a much simpler long-term incentive scheme and continues to incorporate performance measures based on both relative and absolute total shareholder return to help ensure continued alignment with our shareholders. Proposals for a new plan, intended to replace the 2009 LTIP, were approved by Shareholders at the Issuer's 2017 AGM. Full details regarding the new remuneration policy and plan are included on pages 99 to 100 of Premier's 2016 Annual Report and Financial Statements. Awards under the LTIP comprise three elements: Equity Pool Awards and Performance Share Awards that vest after the expiry of a three-year performance period, and a potential Matching Award that vests at the expiry of a further three-year performance period, commencing at the end of the three-year performance period for Equity Pool and Performance Share Awards. The 2016 LTIP awards, which were scaled back significantly, will not be eligible for a Matching Award.

Under the SIP, employees are invited to make contributions to buy partnership shares. If an employee agrees to buy partnership shares the Issuer currently matches the number of partnership shares bought with an award of shares (matching shares), on a one-for-one basis.

Eligible employees with six months or more continuous service can join the SAYE Share Option Scheme. Employees can save up to a maximum of £500 per month through payroll deductions for a period of three or five years, after which time they can acquire shares at up to a 20 per cent. discount on the original grant share price. The options outstanding at 31 December 2016 had a weighted average exercise price of £0.45 (2015: £1.31) and a weighted average remaining contractual life of 2.9 years (2015: 3.63 years). The fair value of the options granted during the year was determined using the Black-Scholes valuation model and is not material.

PART III—OPERATING AND FINANCIAL REVIEW OF THE ISSUER

Incorporation by reference

The operating and financial review of the Issuer as set out in the Issuer’s Annual Reports and Accounts for 2014, 2015 and 2016, which are available on the Issuer’s website at www.premier-oil.com, are hereby incorporated by reference into this document.

Cross reference list

The following list is intended to enable investors to identify easily specific items of financial information which have been incorporated by reference into this document. The sections of the documents listed below which are not incorporated by reference are either not relevant to investors or are superseded by information elsewhere in this document.

Operating and financial review for the Issuer for the year ended 31 December 2016

The page numbers below refer to the relevant pages of the Issuer’s audited Annual Report and Financial Statements for the year ended 30 December 2016:

Chief Executive Officer’s Review pages 18 – 21.
Financial Review pages 48 – 53.

Operating and financial review for the Issuer for the year ended 31 December 2015

The page numbers below refer to the relevant pages of the Issuer’s audited Annual Report and Financial Statements for the year ended 31 December 2015:

Chief Executive Officer’s Review pages 22 – 25.
Financial Review pages 50 – 55.

Operating and financial review for the Issuer for the six months ended 31 December 2014

The page numbers below refer to the relevant pages of the Issuer’s audited Annual Report and Financial Statements for the year ended 31 December 2014:

Chief Executive’s Review pages 8 – 11.
Financial Review pages 48 – 52.

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PART IV—HISTORICAL FINANCIAL INFORMATION

Basis of Financial Information

The financial statements of Premier included in the consolidated audited Annual Reports and Accounts of Premier for the financial years ended 31 December 2014, 31 December 2015 and 31 December 2016 together with the audit reports of Deloitte LLP thereon are incorporated by reference into this document. All of these financial statements have been prepared in accordance with the requirements of the PD Regulation and the Listing Rules and in accordance with IFRS as adopted by the EU.

There are no qualifications in the auditor’s reports on the historical financial information. The audit opinions received for each of the financial years ended 31 December 2015 and 2016 included an emphasis of matter to highlight the following:

In respect of the 2015 audit report, the auditors emphasised that there was a risk of a covenant breach in respect of the testing period ending 30 June 2016. Whilst the auditors concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements was appropriate, there was a material uncertainty which may have given rise to significant doubt over the Issuer’s and the Group’s ability to continue as a going concern; and
In respect of the 2016 audit report, the auditors emphasised that there was a risk of a covenant breach on the Group’s debt facilities in respect of the next testing period which, as part of the lender discussions outlined below, which had been deferred on a rolling one month basis and was due to be tested for the 12 month period ending 31 March 2017. Whilst the auditors concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements was appropriate, the risk that the Refinancing will not be approved by the Group’s lenders and shareholders or that the covenant test will not continue to be deferred until approval is received constitutes a material uncertainty that may cast significant doubt over the Issuer’s and the Group’s ability to continue as a going concern.

Cross-Reference List

The following list is intended to enable investors to identify easily specific items of information which have been incorporated by reference into this document. The sections of the documents listed below which are not incorporated by reference are either not relevant to investors or are superseded by information elsewhere in this document.

2016 Annual Report and Financial Statements

Independent auditors’ report (pages 126 – 132).
Consolidated Income Statement (page 141).
Consolidated Balance Sheet (page 143).
Consolidated Statement of Changes in Equity (page 144).
Consolidated Cash Flow Statement (page 145).
Notes to the Consolidated Financial Statements (pages 146 – 172).

2015 Annual Report and Financial Statements

Independent auditors’ report pages (119 – 123).
Consolidated Income Statement (page 132).
Consolidated Balance Sheet (page 134).
Consolidated Statement of Changes in Equity (page 135).
Consolidated Cash Flow Statement (page 136).
Notes to the Consolidated Financial Statements (pages 137 – 164).

2014 Annual Report and Financial Statements

Independent auditors’ report (pages 132 – 137).
Consolidated Income Statement (page 138).

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Consolidated Balance Sheet (page 140).
Consolidated Statement of Changes in Equity (page 141).
Consolidated Cash Flow Statement (page 142).
Notes to the Consolidated Financial Statements (pages 143 – 168).

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PART V—CAPITALISATION AND INDEBTEDNESS

The following tables show the Group’s capitalisation, indebtedness and net indebtedness. They do not reflect the impact of the Refinancing on the consolidated net assets of the Group.

Capitalisation and indebtedness

The following table sets out the Group’s audited capitalisation and indebtedness as at 31 December 2016, extracted without material adjustment from the Group’s financial statements for the year ended 31 December 2016.

| | As at
31 December 2016
US$ million |
| --- | --- |
| Current debt | |
| Guaranteed^{5} | 273.0 |
| Secured | — |
| Unguaranteed/ Unsecured | — |
| Total current debt | 273.0 |
| Non-current debt | |
| Guaranteed^{6} | 2,747.9 |
| Secured | — |
| Unguaranteed/ Unsecured | — |
| Total non-current debt | 2,747.9 |
| Shareholders’ equity | |
| Share capital | 106.7 |
| Share premium account | 275.4 |
| Merger reserve | 374.3 |
| Other reserves | 52.7 |
| Total shareholders’ equity | 809.1 |
| Total capitalisation | 3,830.0 |

There has been no material change to the Group’s total capitalisation or total indebtedness since 31 December 2016.

5 This comprises obligations under the Existing Term Loan Facility Agreement.
6 This comprises obligations under the RCF Facility Agreement, USPP Note Agreements, Schuldschein Loan Agreements, Convertible Bonds, and Retail Bonds.

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2. Net indebtedness

The following table sets out the Group's unaudited net financial indebtedness as at 31 March 2017, extracted without material adjustment from the Group's unaudited underlying accounting records at 31 March 2017.

| | As at
31 March 2017 |
| --- | --- |
| | US$ million |
| Cash | 274.4 |
| Cash equivalents | 0.3 |
| Trading securities | — |
| Liquidity | 274.7 |
| Current financial receivable | — |
| Current bank debt | (273.0) |
| Current portion of non-current debt | — |
| Other current financial debt | — |
| Current financial debt | (273.0) |
| Net current financial indebtedness | 1.7 |
| Non-current bank loans | (2,327.2) |
| Bonds issued | (423.0) |
| Other non-current debt^{7} | (370.0) |
| Non-current financial indebtedness | (3,120.2) |
| Net financial indebtedness | (3,118.5) |

The Group had no indirect or contingent indebtedness at 31 March 2017.

7 This comprises letter of credit facilities in respect of future decommissioning obligations.

PART VI—INFORMATION ABOUT THE OFFER

The Offer

The Issuer is proposing, subject to certain conditions, to issue in aggregate up to 93,443,462 Equity Warrants and/or Synthetic Warrants through the Offer, with the exact proportions of each to be determined by the elections of the Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors to receive Equity Warrants or Synthetic Warrants. The Equity Warrants and Synthetic Warrants form an integral part of the Refinancing.

The Equity Warrants will entitle the Equity Warrant Holders to subscribe for Warrant Shares at the Exercise Price at any time during the Exercise Period as set out in Part VII (Terms and Conditions of the Equity Warrants). The Exercise Period will commence on the Refinancing Effective Date and will end on 31 May 2022. The Equity Warrants will be issued subject to the terms and conditions summarised in that Part.

The Synthetic Warrants will entitle the Synthetic Warrant Holders to receive a pro rata share of a fee calculated by reference to the change in value of the Issuer's market capitalisation as set out in Part VIII (Terms and Conditions of the Synthetic Warrants). The Synthetic Warrants will be issued subject to the terms and conditions summarised in that Part.

Scheme Creditors will be invited to elect to receive Equity Warrants, Synthetic Warrants or a mix of both by completing an Election Form. The Schuldschein Lenders and Existing Bilateral LC Creditors will be invited to make the same election in separate Schuldschein/Bilateral LC Investor Letters.

If a Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor makes partial elections to receive a combination of Equity Warrants and Synthetic Warrants, appropriate adjustments will be made on the Refinancing Effective Date so that it receives the correct pro rata allocation of Equity Warrants and Synthetic Warrants.

Each Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor may nominate an affiliate, related fund or third party to receive the Equity Warrants or Synthetic Warrants it is entitled to elect to receive.

Scheme Creditors must submit an Election Form by the Forms Submission Deadline. After submitting an Election Form, Scheme Creditors will have until the Election Adjustment Deadline to change their election in respect of the Equity Warrants and the Synthetic Warrants using a form substantially the same as the Election Form. Schuldschein Lenders and Existing Bilateral LC Creditors must return Schuldschein/Bilateral LC Investor Letters by the Election Adjustment Deadline Date.

A Scheme Creditor will be an "Unadmitted Scheme Creditor" if it does not submit an Election Form before the Forms Submission Deadline. Unadmitted Scheme Creditors will have up to 12 months from the Refinancing Effective Date to provide an Election Form to elect to receive Synthetic Warrants. Unadmitted Scheme Creditors are not eligible to receive Equity Warrants. Unadmitted Scheme Creditors will not receive any Synthetic Warrants unless they provide such evidence as the Information Agent, the Holding Period Trustee and the Issuer may reasonably require proving that they were a Scheme Creditor at the Record Time. Unadmitted Scheme Creditors that do not provide an Election Form within this 12 month period will not be entitled to receive any Synthetic Warrants. The Issuer will issue Synthetic Warrants once a month after the Refinancing Effective Date, on a date to be determined by the Issuer, to Unadmitted Scheme Creditors that have come forward in the previous monthly period.

Conditions

The Offer is conditional on completion of the Refinancing, including the conditions set out on pages 16 - 17 of this Prospectus.

If these conditions are not met, the Offer will not proceed and any applications made by the Scheme Creditors, Schuldschein Lenders or Existing Bilateral LC Creditors will be rejected unless the Issuer, in its discretion,

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waives one or more of the conditions. The Issuer will use all reasonable endeavours to procure the necessary Shareholder Resolution is passed and remains in full force for the issuance of the Equity Warrants.

3. Use of proceeds of the Offer

The Offer is being made to Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors in consideration of the terms of the Refinancing. No proceeds will be raised from the issue of the Equity Warrants and Synthetic Warrants but the Issuer may receive proceeds from the exercise of the Equity Warrants if the Equity Warrant Holder elects, at its discretion, to pay the Exercise Price to the Issuer in cash rather than by way of an adjustment to the Equity Warrant Holder's entitlement to Warrant Shares.

Return on investment in the Equity Warrants and Synthetic Warrants

A return on investment in the Equity Warrants may be realised by either: (i) transferring the Equity Warrants in exchange for valuable consideration (subject to applicable restrictions on transfer); or (ii) exercising the Equity Warrants and receiving any distributions paid on, or the proceeds from selling, the Warrant Shares. As the Equity Warrants are convertible into Ordinary Shares, the return on the Equity Warrants will depend on the performance of the Ordinary Shares. Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors should be aware that there is a risk that the market price of the Ordinary Shares could fall beneath the Exercise Price of the Equity Warrants, which may make exercising the Equity Warrants unattractive.

A return on investment in the Synthetic Warrants may be realised by either: (i) transferring the Synthetic Warrants in exchange for valuable consideration (subject to applicable restrictions on transfer); or (ii) on receipt of the Synthetic Equity Growth Fee as described in Part VIII (Terms and Conditions of the Synthetic Warrants). The return on the Synthetic Warrants will directly depend on the performance of the Ordinary Shares.

4. Overseas investors

The attention of persons resident outside of the UK is drawn to the notices to investors on the front pages of this Prospectus. These notices contain restrictions on participation in the Offer by such persons.

Equity Warrants will be available only to investors who either: (i) are not located in the United States (within the meaning of Regulation S); or (ii) are located in the United States and are either QIBs or IAIs.

5. CREST

CREST is a paperless settlement procedure enabling securities to be transferred from one person's CREST account to another without the need to use share certificates or by written instruments of transfer. On admission of the Warrant Shares to trading, the Articles permit the holding of the Warrant Shares under the CREST system and the Issuer will apply for the Warrant Shares to be admitted to CREST with effect from their admission to trading. Accordingly, settlement of transactions in the Warrant Shares following their admission to trading may take place within the CREST system if any Shareholder so wishes (provided that the Warrant Shares are not in certificated form).

CREST is a voluntary system and, upon the specific request of a Shareholder, the Warrant Shares of that Shareholder which are being held under the CREST system may be exchanged, in whole or in part, for share certificates.

6. Investor terms and conditions

(a) Introduction

These terms and conditions apply to Scheme Creditors, Schuldschein Lenders or Existing Bilateral LC Creditors agreeing to subscribe for Equity Warrants or Synthetic Warrants under the Offer, including, for the avoidance of doubt, a Scheme Creditor, Schuldschein Lender or Existing Bilateral LC Creditor which nominates an affiliate, related fund or third party to receive the Equity Warrants or Synthetic Warrants it is entitled to elect to receive.

Each person to whom these terms and conditions apply, as described above (an "Investor") agrees with the Issuer to be bound by these terms and conditions. An Investor will, without limitation, so agree and become so

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bound upon returning to the Issuer a completed Election Form or Schuldschein/Bilateral LC Investor Letter (as appropriate) to apply for Equity Warrants or Synthetic Warrants.

(b) Agreement to subscribe for Equity Warrants or Synthetic Warrants

The Investor agrees to subscribe for Equity Warrants or Synthetic Warrants as specified in its completed Election Form or Schuldschein/Bilateral LC Investor Letter. To the fullest extent permissible by law, the Investor agrees that it will not be entitled to any remedy of rescission at any time before or after the Equity Warrants or Synthetic Warrants, as applicable, are issued to it. This does not affect any other rights such Investor may have.

(c) Withdrawal

Persons wishing to exercise statutory withdrawal rights to withdraw from the Offer after the publication by the Issuer of a document supplementing this Prospectus must do so by sending a written notice of withdrawal (which must include the account number and the full name and address of the person wishing to exercise such right of withdrawal) in writing to the Information Agent, no later than two Business Days after the date on which the supplementary prospectus is published. Calls to the Information Agent are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and randomly monitored for security and training purposes.

Notice of withdrawal given by any other means or which is deposited with or received by the Information Agent after the expiry of this period will not constitute a valid withdrawal. Provisional allotments of entitlements to Equity Warrants or Synthetic Warrants which are the subject of a valid withdrawal notice will be deemed to be declined. Such entitlements will be treated as if the entitlement had not been validly taken up.

(d) Warranties

Each Investor and any person confirming an agreement to subscribe for Equity Warrants or Synthetic Warrants on behalf of an Investor, warrants to the Issuer that:

i. in agreeing to subscribe for Equity Warrants or Synthetic Warrants under the Offer, the Investor is relying only on the Prospectus, including the information incorporated into it by reference as set out in Appendix III (Information Incorporated by Reference) and not on any other information or representation concerning the Issuer or the Offer. Such Investor agrees that neither the Issuer nor any of its officers or Directors will have any liability for any such other information or representation;

ii. if the laws of any place outside the UK are applicable to the Investor's agreement to subscribe for Equity Warrants or Synthetic Warrants, such Investor has complied with all such laws and will not infringe any laws outside the UK as a result of agreeing to subscribe or any actions arising from such Investor's rights and obligations under these terms and conditions; and

iii. if an entity other than a natural person completes an Election Form or Schuldschein/Bilateral LC Investor Letter on behalf of an Investor, it has authority to do so on behalf of the Investor.

(e) Money laundering legislation

To ensure compliance with the Money Laundering Legislation, the Issuer or the Information Agent may require, at its absolute discretion, verification of the identity of the person by whom or on whose behalf an Election Form or Schuldschein/Bilateral LC Investor Letter is lodged. If the Election Form or Schuldschein/Bilateral LC Investor Letter is submitted by a UK regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Legislation, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Issuer or the Information Agent. In such a case, the lodging agent's stamp should be inserted on the Election Form or Schuldschein/Bilateral LC Investor Letter.

The Issuer and the Information Agent reserve the right to request such information as is necessary to verify the identity of an Investor and (if any) the underlying beneficial owner of an Investor. The person lodging the Election Form or Schuldschein/Bilateral LC Investor Letter, including any person who appears to the Information Agent to be acting on behalf of some other person, accepts the Offer and shall thereby be deemed to agree to promptly provide the Information Agent with such information and other evidence as the Information Agent may require to satisfy the verification of identity requirements and to do all other acts and things as may reasonably be required as to comply with the Money Laundering Legislation.

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If the Information Agent determines that the verification of identity requirements apply to any Investor or application, the relevant Equity Warrants or Synthetic Warrants (notwithstanding any other term of the Offer) will not be issued to the relevant Investor unless and until the verification of identity requirements have been satisfied in respect of that acceptor or application. The Information Agent is entitled, in its absolute discretion, to determine whether the verification of identity requirements apply to any Investor or application and whether such requirements have been satisfied, and neither the Information Agent nor the Issuer will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays in issuing the Equity Warrants or Synthetic Warrants. If, within a reasonable time following a request for identity verification, the Information Agent has not received evidence satisfactory to it as aforesaid, the Issuer or the Information Agent may, in its absolute discretion, treat the relevant application as invalid.

Submission of a Form of Proxy or an Election Form or Schuldschein/Bilateral LC Investor Letter will constitute a warranty to each of the Issuer and the Information Agent from the Investor that the Money Laundering Legislation will not be breached by application of such remittance and an undertaking by the Investor to promptly provide to the Information Agent such information as may be specified by the Information Agent as being required for the purpose of the Money Laundering Legislation.

(f) Governing Law and Jurisdiction

The contract to subscribe for the Equity Warrants and/or Synthetic Warrants and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Issuer and the Information Agent each Investor irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent any action being taken against an Investor by the Issuer or Information Agent in any other jurisdiction.

(g) Miscellaneous

The rights and remedies of the Issuer under the terms and conditions set out in this paragraph 7 are in addition to any rights and remedies which would otherwise be available to it, and the exercise or partial exercise of one will not prevent the exercise of any other.

On submitting an Election Form or a Schuldschein/Bilateral LC Investor Letter, each Investor must disclose to the Information Agent:

i. if he is a natural person, his nationality; or
ii. if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents posted in connection with the Offer will be sent at the Investor's risk. They may be sent by post to such Investor at an address notified to the Information Agent.

Each Investor in Equity Warrants agrees to be bound by the Articles once Warrant Shares have been issued to such Investor.

In the case of a joint agreement to subscribe for Equity Warrants or Synthetic Warrants, references to "an Investor" in these terms and conditions are to each of such Investors and such Investors' liability is joint and several.

In these terms and conditions, reference to a "Part" is to a Part of this Prospectus. Words and terms defined elsewhere in this Prospectus have the same meaning in these terms and conditions. RBC is not acting for any Investor, nor will it treat any Investor as its client by virtue of submitting an Election Form or Schuldschein/Bilateral LC Investor Letter or by virtue of any offer to subscribe being accepted, nor will it be responsible to any Investor for providing the protections afforded to its clients or for not providing any Investor with such advice in relation to the Offer. In particular, it will not owe to any Investor any duties or responsibilities concerning the price of the Equity Warrants or Synthetic Warrants or concerning the suitability of investments in such to any Investor.

The Issuer reserves the right to modify the Offer at any time before the Election Adjustment Date and to terminate the Offer at any time before the Refinancing Effective Date.

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Announcement of the results of the Offer

By no later than 10.00 a.m. GMT time on the next Business Day following the Refinancing Effective Date, the Issuer will announce the final results of the Offer, including whether all of the conditions have been satisfied or waived.

The announcement will be made by way of a press release.

The Issuer will not provide post issuance information.

Expenses

No commissions, fees or expenses will be charged to Investors by the Issuer under the Offer.

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PART VII—TERMS AND CONDITIONS OF THE EQUITY WARRANTS

Introduction

The Equity Warrants will be constituted by the Equity Warrant Deed Poll and will be issued subject to, and with the benefit of, the terms and conditions which are summarised below. The Equity Warrants will be issued pursuant to the Companies Act 2006. The ISIN of the Restricted Equity Warrants will be GB00BYWTVX25 and the ISIN of the Regulation S Equity Warrants will be GB00BYWTVY32.

The Issuer will issue Equity Warrants equivalent to up to 15 per cent. of the issued share capital of the Issuer on a Fully Diluted Basis.⁸

The Equity Warrants will be afforded full anti-dilution protection in respect of their value as described at section 4 below.

Exercise and subscription

(a) Subscription rights

Each Equity Warrant Holder will have the right to subscribe at any time during the Exercise Period for Warrant Shares at the Exercise Price on the basis of one Warrant Share for every Equity Warrant held. The Exercise Price will, at the Equity Warrant Holder’s discretion, be satisfied either by way of an adjusted entitlement to the Warrant Shares or in payment in full in cash on subscription. The Exercise Price and/or the number of warrants to be subscribed for will be subject to adjustment in accordance with the terms of the Share Warrant Deed Poll and summarised in section 4 below.

(b) Exercise Price

Subject to the occurrence of any Equity Adjustment Event, the Equity Warrants will have an exercise price equal to the base value of the Ordinary Shares (the “Exercise Price”). For this purpose the “base value” of an Ordinary Share means the closing price on the Reference Date of an Ordinary Share (being 42.75 pence per share).

The Exercise Price is denominated in pounds sterling.

(d) Fractions of shares

No fraction of a Warrant Share will be issued on the exercise of an Equity Warrant and any fractional entitlement will accordingly be rounded down to the nearest whole Warrant Share, but if more than one Equity Warrant is exercised at the same time by the same Equity Warrant Holder, then, for the purposes of determining the number of Warrant Shares to be issued and whether any (and, if so, what) fraction a of Warrant Share would arise, the number of Warrant Shares arising on the exercise of each Equity Warrant (including, for this purpose, fractions) will first be aggregated.

(e) Exercise procedure

i. Equity Warrants represented by Global Warrant Certificates may only be exercised by the delivery, or the sending by authenticated SWIFT message (or such other method acceptable to CREST) (confirmed in writing), of both a duly completed Exercise Notice and a duly completed Investor Letter (copies of which may be obtained from CREST and the Warrant Agent during normal business hours) to CREST, with a copy to the Warrant Agent and the Issuer immediately after such Exercise Notice and Investor Letter have been delivered or sent to CREST.

ii. To exercise one or more Equity Warrants represented by Individual Warrant Certificates, the Equity Warrant Holder must: (a) execute and deposit, at such Equity Warrant Holder’s own expense, both a duly completed Exercise Notice and a duly completed Investor Letter at the specified office of the Warrant

⁸ This figure is based on the issued share capital of the Issuer as at the Latest Practicable Date and is subject to change if the Issuer were to issue more Ordinary Shares prior to the Entitlement Calculation Date. Any other figures referred to throughout this Prospectus which are derived from this figure or are otherwise based on the issued share capital of the Issuer as at the Latest Practicable Date, will also be subject to change if the Issuer were to issue more Ordinary Shares prior to the Entitlement Calculation Date. The Issuer anticipates that no more than 100,000 Ordinary Shares could potentially be issued prior to the Entitlement Calculation Date. For illustrative purposes only, the issue of an additional 100,000 Ordinary Shares prior to the Entitlement Calculation Date would require the issue of an additional 21,951 Equity Warrants and/or Synthetic Warrants.

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Agent during normal business hours on any Business Day during the Exercise Period, with a copy to the Issuer immediately after such Exercise Notice and Investor Letter have been so deposited; (b) at the same time as it delivers an Exercise Notice and an Investor Letter in accordance with (a) above, deposit the relevant Individual Warrant Certificates at the specified office of the Warrant Agent; and (c) pay to the Warrant Agent the aggregate amount of the Exercise Price due in respect of the Equity Warrants specified in the Exercise Notice.

iii. The Issuer shall pay any and all stamp, issue, documentary, transfer and registration taxes and duties or other taxes and duties equivalent thereto (including any interest and penalties thereon), payable in the UK, Luxembourg or Belgium in respect of the execution of the Equity Warrant Instrument, the execution and authentication of the Global Warrant Certificates or the Individual Warrant Certificates, the deposit of the Global Warrant Certificates and their registration in the name of a common depositary on behalf of CREST, and the issue of the Warrants and shall indemnify each Warrant Holder therefor, save that the Issuer shall only be liable to pay, or indemnify a Warrant Holder for, UK stamp taxes payable in respect of an Individual Warrant Certificate that has been presented by a Warrant Holder to HMRC for stamping where (a) the relevant Warrant Holder wishes to rely on the Individual Warrant Certificate in evidence for the purposes of civil proceedings before a UK court or tribunal to which that Warrant Holder is a party in circumstances where it could not reasonably (and without material cost to the Warrant Holder) have avoided the need to produce a stamped Individual Warrant Certificate in those proceedings; or (b) in the event of any change in the law after the date of the Equity Warrant Instrument relating to UK stamp duty as it applies to the Individual Warrant Certificate, the Warrant Holder (acting reasonably) certifies to the Issuer that, having taken reasonable steps (not involving material cost to the Warrant Holder) to avoid the need to present the Individual Warrant certificate for stamping, it considered that it was in its commercial interests to do so.

(f) Allotment and partial exercise:

Warrant Shares will be issued in uncertificated form through CREST, unless the relevant Warrant Holder elects to receive the Warrant Shares in certificated form or, at the time of issue, the Warrant Shares are not a participating security in CREST.

Where Warrant Shares are to be issued through CREST, they will be delivered to the account specified by the relevant Equity Warrant Holder in the relevant Exercise Notice within two Business Days following the relevant exercise date of the Equity Warrants (or as soon as practicable thereafter but not later than seven Business Days from the relevant exercise date of the Equity Warrants). Where Warrant Shares are to be issued in certificated form, a certificate in respect thereof will be dispatched by mail free of charge (but uninsured and at the risk of the person entitled thereto) to the relevant Equity Warrant Holder, or as it may direct in the relevant Exercise Notice, within 21 days following the relevant exercise date of the Equity Warrants. If an Equity Warrant Holder exercises only some of the Equity Warrants represented by his Individual Warrant Certificate, the Issuer will procure that a new Individual Warrant Certificate is issued to him for the balance.

(g) Dividends

Warrant Shares will not rank for any dividends or other distributions for which the record date is a date before their allotment but, subject thereto, will rank in full for all dividends and other distributions declared, made or paid on or after their allotment and pari passu in all other respects with the Ordinary Shares in issue at that date.

(h) Applicable laws and regulation

Exercise of the Equity Warrants will be subject to all applicable laws and regulations, including U.S. federal, state and local securities laws, and (to the extent relevant) policies and practices of CREST, in force on the relevant date of exercise. Without prejudice to the Issuer's warranties and undertakings under the Equity Warrant Deed Poll or any obligation to issue and deliver Individual Warrant Certificates, neither the Issuer nor the Warrant Agent will incur any liability whatsoever if it is unable to effect the transactions contemplated as a result of any such laws, regulations or policies or practices.

Equity Warrants may only be exercised by holders who either: (i) are not located in the United States (within the meaning of Regulation S); or (ii) are located in the United States and are either QIBs or IAIs.

Ranking

The Equity Warrants will not be secured and will not have any priority ranking as debt.

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4. Equity Adjustment Events

Definition

"Equity Adjustment Event" means any one of:

(a) any allotment or issue of Shares (or instruments or rights convertible or exchangeable into Shares), including any issue out of profits or share premium account or other reserves, where the consideration for such allotment or issue is at a price per Share which is less than the Market Price per Ordinary Share but excluding any allotment or issue of (i) Warrant Shares, (ii) Ordinary Shares on exercise of a Convertible Warrant; or (iii) Ordinary Shares on conversion of Convertible Bonds; or (iv) Ordinary Shares as a result of amendments to the terms of the Convertible Bonds to the extent such allotment or issue results from conversion at a conversion price equal to or greater than the current conversion price, and to the extent the conversion price is less than the current conversion price only the shortfall below such price will be taken into account;

(b) any re-designation or amendment of the terms of any security or instrument such that it becomes convertible or exchangeable into a share where the aggregate of:

i. the consideration received by the Issuer in respect of the original allotment or issue of such instrument or security;

ii. the consideration (if any) received by the Issuer in respect of such re-designation or amendment; and

iii. the consideration (if any) received or to be received by the Issuer in connection with any conversion or exchange,

is less than the Market Price per Ordinary Share, provided that: (i) if an adjustment is made pursuant to this section 4(b) there will be no subsequent adjustment pursuant to section 4(a) above if and when the security or instrument is subsequently converted or exchanged, but (ii) if no adjustment is made pursuant to this section 4(b) a subsequent adjustment may be made under section 4(a) above if and when the security or instrument is subsequently converted or exchanged;

(c) any re-designation or amendment of the terms of any security or instrument such that it is converted or exchanged into or becomes a share (but excluding the Convertible Bonds, provided that they will only be excluded to the extent that the terms of the Convertible Bonds as amended and restated on the Refinancing Effective Date have not been amended or modified) where the aggregate of:

i. the consideration received by the Issuer in respect of the original allotment or issue of such instrument or security;

ii. the consideration (if any) received by the Issuer in respect of such re-designation or amendment; and

iii. the consideration (if any) received by the Issuer in connection with any conversion or exchange,

is less than the Market Price per Ordinary Share, provided that if an adjustment occurs under this section 4(c) there will be no subsequent adjustment pursuant to section 4(a) above;

(d) any sub-division or consolidation or reclassification of Shares;

(e) any cancellation or reduction of the Issuer's share capital, share premium account or capital redemption reserve or any purchase or redemption of Shares or instruments or rights convertible into Shares;

(f) any increase in the nominal value of Shares by way of capitalisation of reserves;

(g) a modification or alteration of any rights of conversion or exchange attaching to any security or instrument (i) excluding the Equity Warrants and (ii) including the Convertible Warrants save to the extent that there is any modification, alteration or adjustment to the exercise price of such Convertible Warrants in accordance with the terms of the Convertible Warrant Instrument (including terms relating to adjustments) as in force at the Refinancing Effective Date) which is convertible or exchangeable into or may be re-designated as Ordinary Shares (but, in the case of the Convertible Bonds, only a modification or alteration to the conversion rights attaching to the Convertible Bonds as amended and restated at the Refinancing Effective Date, so that, following such modification or alteration, the amount per Share actually paid or

deemed paid on exercise of the rights of conversion or exchange is less than the Market Price per Ordinary Share, provided that:

i. if an adjustment is made pursuant to this section 4(g) there will be no subsequent adjustment pursuant to section 4(a) above if and when the Convertible Bonds are subsequently converted or exchanged; but
ii. if no adjustment is made pursuant to this section 4(g) a subsequent adjustment may be made under section 4(a) above if and when the Convertible Bonds are subsequently converted or exchanged; or

(i) any distribution of income, capital, profits or reserves in cash, assets or other property, and whether paid or made and however described (and for these purposes a distribution of assets includes an issue of shares or other securities credited as fully or partly paid up).

Procedure

If there is an Equity Adjustment Event whilst any Equity Warrants are outstanding, the auditors (or if the auditors are unable or unwilling to act in such capacity, an independent expert) will be instructed by the Issuer to determine in writing the adjustment (if any) to the Exercise Price in relation to those outstanding Equity Warrants and/or the Specified Number of Warrant Shares to be issued on any subsequent exercise of each outstanding Warrant which, in the auditors' (or the independent expert's) expert opinion (acting as experts and not as arbitrators), is fair and reasonable having regard to the nature of the Equity Adjustment Event to compensate an Equity Warrant Holder for the economic effect on the Equity Warrant(s) of the Equity Adjustment Event at the time the Equity Adjustment Event occurs.

The Issuer will give written notice (an "Adjustment Notice") to the Equity Warrant Holders of any adjustment to the Exercise Price of each outstanding Equity Warrant or the Specified Number of Warrant Shares to be issued on any subsequent exercise of each outstanding Equity Warrant as soon as reasonably practicable, and in any event within 10 Business Days, after the date of the auditors' (or independent expert's) determination.

The Adjustment Notice will state: (i) the Equity Adjustment Event giving rise to the adjustment; (ii) the Exercise Price in relation to each outstanding Warrant both before and after the adjustment (if applicable); (iii) the Specified Number of Warrant Shares to be issued on exercise of a Warrant both before and after the adjustment (if applicable); and (iv) the effective date of the adjustment. The Adjustment Notice will be accompanied by the written determination of the auditors (or the independent expert) above signed on behalf of the auditors (or independent expert) (acting as experts and not as arbitrators), certifying that in their opinion the adjustment set out in the Adjustment Notice complies with the provisions of the Equity Warrant Instrument and, in the absence of manifest error, their judgment will be conclusive and binding on all concerned.

Upon receipt of an Adjustment Notice any Equity Warrant Holder (that holds its Equity Warrants in certificated form by way of an Individual Warrant Certificate) may surrender its Individual Warrant Certificate (if it has elected to receive its Equity Warrants in certificated form pursuant to the terms of the relevant Global Warrant Certificate) for the Equity Warrants at the registered office of the Issuer, together with such evidence as the Issuer may reasonably require to prove title to the relevant Equity Warrants of the Equity Warrant Holder and, upon such surrender, the Issuer will deliver to such Equity Warrant Holder a new Individual Warrant Certificate endorsed with the adjusted Exercise Price and/or Specified Number of Warrant Shares (if applicable) in relation to each outstanding Equity Warrant. For the avoidance of doubt, the failure of an Equity Warrant Holder to deliver the applicable Individual Warrant Certificate (if it has elected to receive its Equity Warrants in certificated form pursuant to the terms of the relevant Global Warrant Certificate) for its Equity Warrants to the Issuer for replacement will not prejudice the rights of such Equity Warrant Holder to receive the benefit of such adjustment on the exercise of the relevant Warrants.

Notwithstanding the foregoing if, while any Equity Warrants are outstanding, the Issuer acquires non-cash assets by issuing Shares (or securities convertible into Shares) to a person or persons in circumstances where the market value of those assets (the "Asset Market Value") is less than the Market Price of the Shares (or securities convertible into Shares) which are issued as consideration, the auditors (or the independent expert if the auditors are unwilling or unable to act in such a capacity) will apply and recommend an adjustment to the Equity Warrants in accordance with the provisions of this section 4 only to the extent that it is necessary to compensate the Equity Warrant Holders for the extent to which the Asset Market Value is less than the Market Price.

Adjustments will so far as is possible be made by adjusting the Exercise Price rather than the Specified Number of Warrant Shares, provided that no adjustment will be made to the extent that it would result in the Exercise Price, as adjusted, being less than the nominal value of an Ordinary Share. If a further adjustment is

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required, the number of Warrant Shares issuable upon exercise of each outstanding Equity Warrant will be increased as is necessary for that adjustment.

Where the auditors or the independent expert (as the case may be) are in the process of determining whether events or circumstances constituting an Equity Adjustment Event require an adjustment to the Exercise Price or Specified Number of Warrant Shares (if applicable) then such modification will be made to the operation of the adjustment provisions as may be advised by the auditors or independent expert (as the case may be) to be in its opinion appropriate to compensate an Equity Warrant Holder for the economic effect of all such events and circumstances without compensating that Equity Warrant Holder more than once for the same economic effect(s).

If more than one event or circumstance constituting an Equity Adjustment Event occurs or may occur within a short period of time, then the Issuer will request that the auditors or independent expert (as the case may be) determines what (if any) modifications are required to the operation of the adjustment provisions to compensate an Equity Warrant Holder for the economic effect on its Equity Warrant of all such events and circumstances without compensating that Equity Warrant Holder more than once for the same economic effect.

For the avoidance of doubt: (i) the issue of Warrant Shares pursuant to the exercise of the Equity Warrants will not result in an adjustment to the Exercise Price or Specified Number of Warrant Shares; and (ii) if and to the extent that following the Refinancing Effective Date and in accordance with the conversion rights attaching to the Convertible Bonds (including terms relating to adjustments) in force as at the Refinancing Effective Date (but excluding any amendments to the terms of the Convertible Bonds after the Refinancing Effective Date), the conversion price or the consideration per Ordinary Share received on conversion of the Convertible Bonds is less than the Market Price per Ordinary Share, there will be no adjustment to the Exercise Price or the Specified Number of Warrant Shares provided that this will not apply to the extent that such conversion price or consideration received is less than the Market Price as a result of re-designation or amendment to the terms of the Convertible Bonds that takes place after the Refinancing Effective Date and is not in accordance with the terms of the Convertible Bonds in force as at the Refinancing Effective Date.

5. Information and other rights of Equity Warrant Holders

The Issuer will make available to each Equity Warrant Holder through its website (and will, upon the written request by any Equity Warrant Holder, send or procure that there is sent to such Equity Warrant Holder):

(a) a copy of the Issuer’s audited financial statements and interim accounts, in each case, no later than the time they are issued to holders of Ordinary Shares or announced via a regulatory news service; and
(b) a copy of every notice, circular or other document issued to the holders of Ordinary Shares concurrently with the issue of the same items to those holders.

Upon the written request of any Equity Warrant Holder, the Issuer will promptly inform such Equity Warrant Holder of the Exercise Price and the Specified Number of Ordinary Shares which would fall to be issued at that time in respect of one Equity Warrant.

6. Restrictions on transfer

The Equity Warrants will be freely transferable except that:

(a) Transfer of Equity Warrants may not be affected after the due exercise of such Equity Warrants;
(b) For so long as any Equity Warrants are represented by either of the Global Warrant Certificates, such Equity Warrants will be transferable through an account at CREST, subject to and in accordance with the rules and procedures of CREST. Title will pass upon registration of the transfer in the records of CREST;
(c) If and for so long as any Equity Warrants are represented by Individual Warrant Certificates, an Equity Warrant may be transferred upon surrender of the related Individual Warrant Certificate (or, if no Individual Warrant Certificate is surrendered, upon evidence reasonably satisfactory to the Warrant Agent and the Issuer of a person’s interest in the Equity Warrant), with a duly completed and endorsed form of transfer in specified form at the specified office of the Warrant Agent, together with such other evidence as the Warrant Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer. In the case of a transfer where not all of the Equity Warrants evidenced by the surrendered Individual Warrant Certificate are the subject of the transfer, a new Individual Warrant Certificate in respect of the balance not transferred will be issued to the transferor. No transfer of any Equity Warrant which is represented by an Individual Warrant Certificate will be valid unless and until entered on the warrant register. Within five Business Days of the surrender of an

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Individual Warrant Certificate, the Warrant Agent will register the transfer in question and deliver a new Individual Warrant Certificate to the Equity Warrant Holder or (at the request and risk of any such relevant Equity Warrant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such Equity Warrant Holder;

(d) The transfer of any Equity Warrant which is represented by an Individual Warrant Certificate will be effected without charge by or on behalf of the Issuer or the Warrant Agent. Neither the Issuer nor the Warrant Agent will be responsible for the payment of tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer;

(e) Transfers of Equity Warrants will be subject to all applicable laws and regulations, including US federal, state and local securities laws. Any purported transfer in violation of those laws or regulations will be void and ineffective, and will not operate to transfer any interest in the applicable Equity Warrants to the purported transferee. The Equity Warrants may only be transferred either (i) outside the United States in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S or (ii) to persons in the United States whom the transferor reasonably believes are either QIBs or IAIs in transactions exempt from or otherwise not subject to the registration requirements of the US Securities Act; and

(f) All transfers of Equity Warrants and entries on the warrant register will be subject to the detailed regulations concerning the transfer of Equity Warrants set out in the warrant agency agreement.

7. Form and title

(a) General provisions

The Equity Warrants will be issued in registered form. The Warrant Agent will maintain the warrant register at the specified office of the Warrant Agent, on which will be entered the names and addresses of the Equity Warrant Holders and the particulars of the Equity Warrants held by them and of any transfer, exercise, purchase and/or cancellation of those Equity Warrants.

(b) Global Warrant Certificates

The Equity Warrants will, subject to (c) below, be represented by the Global Warrant Certificates. The Global Warrant Certificates will be executed manually by or on behalf of the Issuer and authenticated manually by or on behalf of the Warrant Agent. The Global Warrant Certificates will be deposited with, and registered in the name of, a common depositary on behalf of CREST. The Equity Warrants represented by the Global Warrant Certificates will be issued by crediting the relevant person's respective securities accounts within CREST.

(c) Individual Warrant Certificates

Individual Warrant Certificates will be issued at the election of one or more Equity Warrant Holders either (i) upon initial issuance of the Equity Warrants; or (ii) in accordance with the terms of the Global Warrant Certificates. The Warrant Agent will authenticate and deliver an Individual Warrant Certificate: (i) to each Warrant Holder who elects to receive an Individual Warrant Certificate upon initial issuance of the Warrants; and (ii) if either of the Global Warrant Certificates becomes exchangeable (in whole or in part) for Individual Warrant Certificates in accordance with its terms, to each relevant person designated by CREST in accordance with the terms of the Share Warrant Instrument and the relevant Global Warrant Certificate.

8. Issuer undertakings

The Issuer will undertake that whilst any Equity Warrant remains to be exercised:

(a) It will not take any action or omit to take any action which would result in it not having authority to issue Warrant Shares free from pre-emption rights on allotment to enable the Issuer to satisfy in full all outstanding Warrants;

(b) It will not modify the rights attached to the Ordinary Shares or alter the Articles or the Equity Warrant Deed Poll in any way which could have an adverse effect on the rights of the Equity Warrant Holders unless such modification treats the holders of Ordinary Shares equally (as if the Equity Warrants had been exercised);

(c) It will not undertake any action or omit to take any action to the extent that it would constitute an Equity Adjustment Event which would, or would be reasonably likely to, result in an Equity Warrant Holder being unable to be fully compensated for the economic effect of the Equity Adjustment Event on its

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Equity Warrant(s) at the time the Equity Adjustment Event occurs pursuant to the adjustments to the Exercise Price and the Specified Number of Warrant Shares;

(d) Except as set out in the Equity Warrant Deed Poll it will not do anything which would, or could reasonably be expected to, result in the Exercise Price being lower than the nominal value of the Warrant Shares to be issued to Equity Warrant Holders;

(e) It will not make an offer to purchase any Equity Warrants from any Equity Warrant Holder unless an offer to purchase is made pro rata to all Equity Warrant Holders;

(f) It will use its reasonable endeavours to maintain a listing of the Ordinary Shares on the premium segment of the Official List and maintain their admission to trading on the main market of the London Stock Exchange;

(g) In the event of a scheme of arrangement or analogous proceeding which effects the interposition of a limited liability company between the holders of Ordinary Shares and the Issuer, it will take (or will procure that there is taken) all necessary action to ensure that immediately after completion of the proceeding: (i) such amendments are made to the Equity Warrant Deed Poll as are necessary to ensure that the Equity Warrants may be converted into or exchanged for ordinary shares in the limited liability company mutatis mutandis in accordance with and subject to the Equity Warrant Deed Poll and (ii) the ordinary shares of the limited liability company are:

i. admitted to the premium segment of the Official List and admitted to trading on the main market of the London Stock Exchange; or
ii. admitted to listing on the New York Stock Exchange; and

(h) In the event that an offer is made for the Ordinary Shares (whether effected by means of a contractual offer or a scheme of arrangement, within the meanings given in the City Code on Takeovers and Mergers), it will use reasonable endeavours to procure that an appropriate offer (as such term is interpreted pursuant to Rule 15 of the City Code on Takeovers and Mergers) is made by the offeror to the Equity Warrant Holders.

Each of these warranties will be separate and will not be limited or qualified by the terms of any of the other warranties under the Equity Warrant Deed Poll.

9. Authority

In order to issue the Equity Warrants, which will be convertible into Warrant Shares, to Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors, the Issuer will need to grant the Directors authority to grant rights to subscribe for and to allot 93,443,462 Ordinary Shares at the General Meeting. Section 4 of Part XI (Additional Information) describes in further detail the Shareholder Resolution to be proposed at the General Meeting.

10. Admission to trading

The Equity Warrants will not be admitted to trading on any market or exchange.

11. Expiry

The Equity Warrants will expire and be of no further force and effect at 9.00 a.m. on 31 May 2022.

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PART VIII—TERMS AND CONDITIONS OF THE SYNTHETIC WARRANTS

Introduction

The Synthetic Warrants will be constituted by the Synthetic Warrant Deed Polls and will be issued subject to, and with the benefit of, the terms and conditions which are summarised below. The Synthetic Warrants will be issued immediately following the Refinancing Effective Date. The ISIN of the Super Senior Synthetic Warrants will be GB00BYWTW392 and the ISIN of the Senior Synthetic Warrants will be GB00BYWTW400.

The Synthetic Warrants will be afforded full anti-dilution protection in respect of their value as described at section 5 below.

Synthetic Equity Growth Fee

The Synthetic Warrants will confer on each Synthetic Warrant Holder the right to receive a payment in cash from or on behalf of the Issuer of a Proportionate Share of a fee which in aggregate is equal to the Synthetic Warrant Percentage of:

(a) the Market Capitalisation, on the earliest of:

i. the calendar quarter-end date on which the Gross Leverage Ratio of the Group falls below 3:1;
ii. the calendar quarter-end date on which the New Net Leverage Ratio of the Group falls below 2.5:1;
iii. the maturity date of the Senior Secured Debt Facilities; and
iv. the date on which the Senior Secured Debt Facilities are repaid or prepaid and cancelled in full,

(the "Calculation Date")

(b) minus the Total Base Value,

(such aggregate amount being the "Synthetic Equity Growth Fee").

Basis of calculation

(a) Market Capitalisation

"Market Capitalisation" used for the purposes of calculating the Synthetic Equity Growth Fee, will at the sole discretion of the Issuer in the case of a Calculation Date that arises under section 2(a)(i) or 2(a)(ii) above, be calculated based on, either:

i. the Net of Equity Raise Proceeds Market Capitalisation; or
ii. the Gross of Equity Raise Proceeds Market Capitalisation,

and the Market Capitalisation figure used for the purposes of calculating the Synthetic Equity Growth Fee in the case of a Calculation Date that arises under section 2(a)(i) or, unless the calculation date arises as a result of a change of control, section 2(a)(iv) will be the Gross of Equity Proceeds Market Capitalisation.

For these purposes:

i. "Net of Equity Raise Proceeds Market Capitalisation" means the market capitalisation of the Issuer calculated by reference to the average closing price for an Ordinary Share, as derived from the Official List, over a period of three consecutive trading days immediately prior to the Calculation Date, excluding any Equity Raise Proceeds and the Excluded Calculation Items;
ii. "Gross of Equity Raise Proceeds Market Capitalisation" means the market capitalisation of the Issuer calculated by reference to the average closing price for an Ordinary Share, as derived from the Official List, over a period of three consecutive trading days immediately prior to the Calculation Date, including any Equity Raise Proceeds, but excluding the Excluded Calculation Items;
iii. "Equity Raise Proceeds" means the proceeds of any equity raising (net of any costs, fees and expenses incurred in such equity raising) carried out by the Issuer after the Refinancing Effective Date and prior to the Calculation Date, including without limitation, any issue of Ordinary Shares, any placement, rights issue or other similar arrangement which has the effect of increasing the capital invested in the Issuer; and
iv. "Excluded Calculation Items" means:

(a) the value as at the Calculation Date of shares issued for any non-cash consideration (but excluding for this purpose any shares issued via a so-called cash box placing);

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(b) the value as at the Calculation Date of shares issued pursuant to the terms of the Convertible Bonds;
(c) the value as at the Calculation Date of shares issued on exercise of any Convertible Warrants pursuant to the terms of the Convertible Warrant Instrument;
(d) the value as at the Calculation Date of shares issued on exercise of any Equity Warrants pursuant to the terms of the Equity Warrant Instrument; and
(e) the value as at the Calculation Date of shares in the Issuer issued pursuant to a share scheme.

(b) Total Base Value

"Total Base Value" for the purposes of calculating the Synthetic Equity Growth Fee means £218,371,728.58.

"Proportionate Share" for the purposes of calculating the Synthetic Equity Growth Fee means in respect of each Synthetic Warrant Holder, a share of the Synthetic Equity Growth Fee, expressed as a percentage, equal to the number of Synthetic Warrants held by that Synthetic Warrant Holder, divided by the total number of Synthetic Warrants issued under the Synthetic Warrant Instruments, multiplied by 100.

(d) Synthetic Warrant Percentage

"Synthetic Warrant Percentage" for the purposes of calculating the Synthetic Equity Growth Fee means an amount, expressed as a percentage, equal to:

(N / Aggregate Units) x (0.15/0.82) x 100

where:

N = the total number of Synthetic Warrants issued pursuant to the Senior Synthetic Warrant Instrument or Super Senior Synthetic Warrant Instrument (as applicable);

Aggregate Units = approximately 93,443,462 (being the aggregate of the total number of Synthetic Warrants issued pursuant to the Synthetic Warrant Instruments and the total number of Equity Warrants issued pursuant to the Equity Warrant Instrument).

(e) Currency

The Synthetic Equity Growth Fee will be denominated in pounds sterling.

Ranking

The Synthetic Equity Growth Fee (and any applicable interest thereon) payable to Super Senior Creditors and Senior Creditors will rank pari passu with the Group's Super Senior Secured Facilities and Senior Secured Debt Facilities respectively.

Synthetic Adjustment Events

Definition

"Synthetic Adjustment Event" means the events listed below (to the extent they are not an Excluded Calculation Item), following the occurrence of which, the calculation of the Market Capitalisation, will:

(a) be reduced by the value of any consideration received for any allotment or issue of Shares (or instruments or rights convertible or exchangeable into shares), including any issue out of profits or share premium account or other reserves;
(b) be adjusted to take account of any re-designation or amendment of the terms of any security or instrument (which has an immediate dilutive effect) such that it becomes convertible or exchangeable into a Share where the aggregate of:

i. the consideration received by the Issuer in respect of the original allotment or issue of such instrument or security;
ii. the consideration (if any) received by the Issuer in respect of such re-designation or amendment; and
iii. the consideration (if any) received or to be received by the Issuer in connection with any conversion or exchange,

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is less than the Market Price per Ordinary Share, provided that: (a) if an adjustment is made pursuant to this section 5(b) there will be no subsequent adjustment pursuant to section 5(a) above if and when the security or instrument is subsequently converted or exchanged, but (b) if no adjustment is made pursuant to this section 5(b) a subsequent adjustment may be made under section 5(a) above if and when the security or instrument is subsequently converted or exchanged;

(c) be adjusted to take account of any re-designation or amendment of the terms of any security or instrument (which has an immediate dilutive effect) such that it is converted or exchanged into or becomes a Share (but excluding the Convertible Bonds, provided that they will only be excluded to the extent that the terms of the Convertible Bonds as amended and restated on the Refinancing Effective Date have not been amended or modified) where the aggregate of:

i. the consideration received by the Issuer in respect of the original allotment or issue of such instrument or security;

ii. the consideration (if any) received by the Issuer in respect of such re-designation or amendment; and

iii. the consideration (if any) received by the Issuer in connection with any conversion or exchange,

is less than the Market Price per Ordinary Share, provided that if an adjustment occurs pursuant to this section 5(c) there will be no subsequent adjustment pursuant to section 5(a) above;

(d) be adjusted to take account of any reclassification of shares which otherwise affects the market capitalisation of the Issuer, other than a sub-division or consolidation of Shares;

(e) be adjusted to take account of any cancellation or reduction of the Issuer's share capital, share premium account or capital redemption reserve or any purchase or redemption of Shares, where there is a distribution or return of value to shareholders in the Issuer;

(f) be adjusted to take account of a modification or alteration of any rights of conversion or exchange (which has an immediate dilutive effect) attaching to any security or instrument (i) excluding the Equity Warrants and (ii) including the Convertible Warrants save to the extent that there is any modification, alteration or adjustment to the exercise price of such Convertible Warrants in accordance with the terms of the Convertible Warrant Instrument (including terms relating to adjustments) as in force at the Refinancing Effective Date) which are convertible or exchangeable into or may be re-designated as Ordinary Shares (but, in the case of the Convertible Bonds, only a modification or alteration to the conversion rights attaching to the Convertible Bonds following the Refinancing Effective Date), so that, following such modification or alteration, the amount per Share actually paid or deemed paid on exercise of the rights of conversion or exchange is less than the Market Price per Ordinary Share, provided that:

i. if an adjustment is made pursuant to this section 5(f) there will be no subsequent adjustment pursuant to section 5(a) above if and when the Convertible Bonds are subsequently converted or exchanged; but

ii. if no adjustment is made pursuant to this section 5(f) a subsequent adjustment may be made under section 5(a) above if and when the Convertible Bonds are subsequently converted or exchanged; or

(g) be adjusted to take account of any distribution of income, capital, profits or reserves in cash, assets or other property, and whether paid or made and however described (and for these purposes a distribution of assets includes an issue of shares or other securities credited as fully or partly paid up, except in the case of a bonus, scrip or equivalent issue which does not reduce the Issuer's assets).

Procedure

If there is a Synthetic Adjustment Event prior to the Calculation Date, the auditors (or if the auditors are unable or unwilling to act in such capacity, an independent expert) will be instructed by the Issuer to determine in writing the reduction and/or adjustment (if any) to the calculation of the Market Capitalisation which, in the auditors' (or the independent expert's) expert opinion (acting as experts and not as arbitrators), is fair and reasonable having regard to the nature of the Synthetic Adjustment Event to compensate a Synthetic Warrant Holder for the economic effect on the Synthetic Warrant(s) of the Synthetic Adjustment Event at the time the Synthetic Adjustment Event occurs.

The Issuer will give written notice (a "Synthetic Adjustment Notice") to the Synthetic Warrant Holders of any reduction or adjustment to the calculation of the Market Capitalisation as soon as reasonably practicable, and in any event within 10 Business Days, after the date of the auditors' (or independent expert's) determination.

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The Adjustment Notice will state: (i) the Synthetic Adjustment Event giving rise to the reduction and/or adjustment; (ii) the reduction or adjustment which will need to be made to the calculation of the Market Capitalisation on the Calculation Date to reflect the nature of the Synthetic Adjustment Event; and (iii) the effective date of the reduction and/or adjustment. The Adjustment Notice will be accompanied by the written determination of the auditors (or the independent expert) above signed on behalf of the auditors (or independent expert) (acting as experts and not as arbitrators), certifying that in their opinion the adjustment set out in the Synthetic Adjustment Notice complies with the provisions of the applicable Synthetic Warrant Deed Poll and, in the absence of manifest error, their judgment will be conclusive and binding on all concerned.

Notwithstanding the foregoing if, prior to the Calculation Date, the Issuer acquires non-cash assets by issuing Shares (or securities convertible into Shares) to a person or persons in circumstances where the market value of those assets (the "Asset Market Value") is less than the Market Price of the Shares (or securities convertible into Shares) which are issued as consideration then, notwithstanding that any such non-cash consideration constitutes an Excluded Calculation Item, the auditors (or the independent expert if the auditors are unwilling or unable to act in such a capacity) will apply and recommend an adjustment which will need to be made to the calculation of the Market Capitalisation on the Calculation Date in accordance with the provisions of this section 5 only to the extent that it is necessary to compensate the Synthetic Warrant Holders for the extent to which the Asset Market Value is less than the Market Price.

Where the auditors or the independent expert (as the case may be) are in the process of determining whether events or circumstances constituting a Synthetic Adjustment Event require a reduction or adjustment to the calculation of the Market Capitalisation on the Calculation Date then such modification will be made to the operation of the adjustment provisions as may be advised by the auditors or independent expert (as the case may be) to be in its opinion appropriate to compensate a Synthetic Warrant Holder for the economic effect of all such events and circumstances without compensating that Synthetic Warrant Holder more than once for the same economic effect(s).

If more than one event or circumstance constituting a Synthetic Adjustment Event occurs prior to the Calculation Date, then the Issuer will request that the auditors or independent expert (as the case may be) determines what (if any) modifications are required to the operation of the adjustment provisions in this section 5 to compensate a Synthetic Warrant Holder for the economic effect on its Synthetic Warrant of all such events and circumstances without compensating that Synthetic Warrant Holder more than once for the same economic effect.

For the avoidance of doubt: (i) the issue of Warrant Shares pursuant to the exercise of the Equity Warrants will not result in an reduction or adjustment to the calculation of the Market Capitalisation on the Calculation Date; and (ii) shares issued to the holders of Convertible Bonds pursuant to Condition 7 of Schedule 1 (Form of Original Definitive Registered Bond) to the Convertible Bond Trust Deed will be deemed to be an issue of Ordinary Shares at the Market Price and will not constitute a Synthetic Adjustment Event.

6. Information rights of Synthetic Warrant Holders

The Issuer will make available to each Synthetic Warrant Holder through its website (and will, upon the written request by any Synthetic Warrant Holder, send or procure that there is sent to such Synthetic Warrant Holder):

(a) a copy of the Issuer's audited financial statements and interim accounts, in each case, no later than the time they are issued to holders of Ordinary Shares or announced via a regulatory news service; and
(b) a copy of every notice, circular or other document issued to the holders of Ordinary Shares concurrently with the issue of the same items to those holders.

7. Restrictions on transfer

The Synthetic Warrants will be freely transferable except that:

(a) Transfers of Synthetic Warrants will be subject to all applicable laws and regulations, including U.S. federal, state and local securities laws. Any purported transfer in violation of those laws or regulations will be void and ineffective, and will not operate to transfer any interest in the applicable Synthetic Warrants to the purported transferee;
(b) For so long as any Synthetic Warrants are represented by the Global Synthetic Warrant Certificate, such Synthetic Warrants will be transferable through an account at CREST, subject to and in accordance with the rules and procedures of CREST. Title will pass upon registration of the transfer in the records of CREST;

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(c) If and for so long as any Synthetic Warrants are represented by Individual Synthetic Warrant Certificates, such Synthetic Warrants may be transferred upon surrender of the related Individual Synthetic Warrant Certificate (or, if no Individual Synthetic Warrant Certificate is surrendered, upon evidence reasonably satisfactory to the Warrant Agent and the Issuer of a person's interest in the Synthetic Warrant), with a duly completed and endorsed form of transfer in specified form at the specified office of the Warrant Agent, together with such other evidence as the Warrant Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer. In the case of a transfer where not all of the Synthetic Warrants evidenced by the surrendered Individual Synthetic Warrant Certificate are the subject of the transfer, a new Individual Synthetic Warrant Certificate in respect of the balance not transferred will be issued to the transferor. No transfer of any Synthetic Warrant which is represented by an Individual Synthetic Warrant Certificate will be valid unless and until entered on the warrant register. Within five Business Days of the surrender of an Individual Synthetic Warrant Certificate, the Warrant Agent will register the transfer in question and deliver a new Individual Synthetic Warrant Certificate to the Synthetic Warrant Holder or (at the request and risk of any such relevant Synthetic Warrant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such Synthetic Warrant Holder;

(d) The transfer of any Synthetic Warrant which is represented by an Individual Synthetic Warrant Certificate will be effected without charge by or on behalf of the Issuer or the Warrant Agent. Neither the Issuer nor the Warrant Agent will be responsible for the payment of tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer; and

(e) All transfers of Synthetic Warrants and entries on the synthetic warrant register are subject to the detailed regulations concerning the transfer of Synthetic Warrants set out in the warrant agency agreement.

8. Form and title

(a) General provisions

The Synthetic Warrants will be issued in registered form. The Warrant Agent will maintain the synthetic warrant register at the specified office of the Warrant Agent, on which will be entered the names and addresses of the Synthetic Warrant Holders and the particulars of the Synthetic Warrants held by them and of any transfer or purchase of those Synthetic Warrants.

(b) Global Synthetic Warrant Certificate

The Synthetic Warrants will, subject to (c) below, be represented by the Global Synthetic Warrant Certificate. The Global Synthetic Warrant Certificate will be executed manually by or on behalf of the Issuer and authenticated manually by or on behalf of the Warrant Agent. The Global Synthetic Warrant Certificate will be deposited with, and registered in the name of a common depositary on behalf of CREST. The Synthetic Warrants represented by the Global Synthetic Warrant Certificate will be issued by crediting the relevant persons' respective securities accounts within CREST.

(c) Individual Synthetic Warrant Certificates

Individual Synthetic Warrant Certificates will be issued at the election of one or more Synthetic Warrant Holders either (i) upon initial issuance of the Synthetic Warrants; or (ii) in accordance with the terms of the Global Synthetic Warrant Certificate. The Warrant Agent will authenticate and deliver an Individual Synthetic Warrant Certificate: (i) to each Synthetic Warrant Holder who elects to receive an Individual Synthetic Warrant Certificate upon initial issuance of the Warrants; and (ii) if either of the Global Warrant Certificates becomes exchangeable (in whole or in part) for Individual Synthetic Warrant Certificates in accordance with its terms, to each relevant person designated by CREST an Individual Synthetic Warrant Certificate in accordance with the terms of the Synthetic Warrant Instruments and the relevant Global Warrant Certificate.

9. Issuer undertakings

The Issuer will undertake that prior to the Calculation Date:

(a) It will not undertake any action or omit to take any action to the extent that it would constitute a Synthetic Adjustment Event which would, or would be reasonably likely to, result in a Synthetic Warrant Holder being unable to be fully compensated for the economic effect of the Synthetic Adjustment Event on its Synthetic Warrant(s) at the time the Synthetic Adjustment Event occurs pursuant to the adjustments to the calculation of the Market Capitalisation;

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(b) It will not make an offer to purchase any Super Senior Synthetic Warrants from any Super Senior Synthetic Warrant Holder unless an offer to purchase is made pro rata in respect of all Super Senior Synthetic Warrants to all Super Senior Synthetic Warrant Holders;

(c) It will not make an offer to purchase any Senior Synthetic Warrants from any Senior Synthetic Warrant Holder unless an offer to purchase is made pro rata in respect of all Senior Synthetic Warrants to all Senior Synthetic Warrant Holders;

(d) It will use its reasonable endeavours to maintain a listing of the Ordinary Shares on the premium segment of the Official List and maintain their admission to trading on the main market of the London Stock Exchange;

(e) In the event of a scheme of arrangement or analogous proceeding which effects the interposition of a limited liability company between the holders of Ordinary Shares and the Issuer, it will take (or will procure that there is taken) all necessary action to ensure that immediately after completion of the proceeding:

i. such amendments are made to the Synthetic Warrant Deed Polls as are necessary to ensure that the Synthetic Warrants continue to entitle the Synthetic Warrant Holders to receive payment from the Issuer;

ii. the limited liability company: (a) provides a guarantee to the Synthetic Warrant Holders in respect of the Issuer's obligation to pay the Synthetic Equity Growth Fee and any interest payable thereon when due under the Synthetic Warrant Deed Polls; (b) undertakes to procure that the Issuer performs when due all of its obligations under or pursuant to the Synthetic Warrant Deed Poll; and (c) undertakes to pay on demand any amount of the Synthetic Equity Growth Fee and any interest payable thereon if the Issuer fails to make any payment of the same when it is due under the Synthetic Warrant Deed Polls;

iii. the ordinary shares of the limited liability company are: (a) admitted to the premium segment of the Official List and admitted to trading on the main market of the London Stock Exchange; or (b) admitted to listing on the New York Stock Exchange;

iv. the ordinary shares of the limited liability company are deemed to be 'Ordinary Shares' for the purposes of the Synthetic Warrant Deed Polls; and

v. the obligations of the Issuer and the limited liability company under the Synthetic Warrant Deed Polls are validly secured and the Issuer will obtain a legal opinion in writing which can be relied on by the Synthetic Warrant Holders confirming the same; and

(f) Each of these warranties will be separate and will not be limited or qualified by the terms of any of the other warranties under the Super Senior Synthetic Warrant Deed Poll or the Senior Synthetic Warrant Deed Poll (as appropriate).

Authority

The Board does not require shareholder approval to issue the Synthetic Warrants and may issue them using the general powers of the Board provided for in the Articles.

Admission to trading

The Synthetic Warrants will not be admitted to trading on any market or exchange.

Expiry

The Synthetic Warrants will not expire until the Synthetic Equity Growth Fee is paid on the terms of the Synthetic Warrant Deed Polls following the Calculation Date.

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PART IX—INFORMATION ABOUT THE WARRANT SHARES

Information about the Warrant Shares

The Warrant Shares will be Ordinary Shares with a par value of 12.5 pence each in the capital of the Issuer. The ISIN of the Ordinary Shares is GB00B43G0577. The Warrant Shares will be issued pursuant to the applicable provisions of the Companies Act 2006. The Warrant Shares will be denominated in pounds sterling.

Warrant Shares to be issued on exercise of an Equity Warrant will be issued in uncertificated form through CREST, unless the relevant Warrant Equity Holder elects to receive the Warrant Shares in certificated form or, at the time of issue, the Warrant Shares are not a participating security in CREST. Where Warrant Shares are to be issued through CREST, they will be delivered to the account specified by the relevant Equity Warrant Holder in the relevant Exercise Notice within two Business Days following the relevant exercise date of the Warrants (or as soon as practicable thereafter but not later than seven Business Days from the relevant exercise date of the Warrants). Where Warrant Shares are to be issued in certificated form, a certificate in respect thereof will be dispatched by mail free of charge (but uninsured and at the risk of the person entitled thereto) to the relevant Equity Warrant Holder, or as it may direct in the relevant Exercise Notice, within 21 days following the relevant exercise date of the Equity Warrants.

Authority to allot the Warrant Shares

In order to issue the Equity Warrants, which shall be convertible into Warrant Shares, the Board will need to be granted authority to allot and to grant rights to subscribe for 93,443,462 Ordinary Shares at the General Meeting. Section 3 of Part XI (Additional Information) describes in further detail the Shareholder Resolution to be proposed at the General Meeting.

The issue of Warrant Shares will dilute the holdings of Existing Ordinary Shares. If all Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors elect to receive Equity Warrants and to pay the Exercise Price in cash, the Warrant Shares issued upon exercise will represent 15 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis. This would reduce to approximately 6 per cent. if all Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors elect to receive Equity Warrants and to exercise them cashlessly, that is, by a reduction in the number of Warrant Shares issuable on exercise.

Rights attaching to the Warrant Shares

(a) Dividends and other distributions

The Warrant Shares will be fully paid and will rank pari passu with the fully paid Ordinary Shares in issue on the relevant exercise date in all material respects, except that the Warrant Shares will not rank for any rights, distributions or payments on the record date (or other due date for the establishment of entitlement) for which falls prior to the relevant exercise date. With respect to dividends, this means:

Subject to the Companies Act 2006, the Shareholders can declare dividends by passing an ordinary resolution. No such dividend can exceed the amount recommended by the Board. Subject to the Companies Act 2006, the Directors may pay interim dividends, and also any fixed rate dividend, if they consider that the financial position of the Issuer justifies such payments. If the Board acts in good faith, it is not liable for any loss that Shareholders may suffer because a lawful dividend has been paid on other shares which rank equally with or behind their shares.
All dividends will be declared and paid in proportions based on the amounts paid up on the Warrant Shares during any period for which the dividend is paid. Sums which have been paid up in advance of calls will not count as paid up for this purpose. If the terms of any Warrant Share say that it will be entitled to a dividend as if it were a fully paid up, or partly paid up, share from a particular date (in the past or future), it will be entitled to a dividend on this basis.
The Board may withhold payment of all or any part of any dividends (including scrip dividends) or other money which would otherwise be payable in respect of the Warrant Shares from a person with a 0.25 per cent. interest (as described in the Articles) if such a person has been served with a restriction notice or after failure to provide the Issuer with information concerning interests in those shares required to be provided under the Companies Act 2006.

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The Board may, if authorised by an ordinary resolution of the Issuer, offer Shareholders the right to choose to receive extra Warrant Shares which are credited as fully paid up, instead of some or all of their cash dividend.
If a dividend has not been claimed for 12 years after being declared or becoming due for payment, it will be forfeited and go back to the Issuer.
The Issuer may stop sending dividend payments through the post, or cease using any other method of payment (including payment through CREST if either (i) at least two consecutive payments have remained uncashed or are returned undelivered or that means of payment has failed or (ii) one payment remains uncashed or is returned undelivered or that means of payment has failed and reasonable enquiries have failed to establish any new address or account of the registered holder. The Issuer will resume sending dividend payments if requested in writing by the Shareholder.
There are no restrictions in the Articles on the rights of non-UK shareholders to hold, receive dividends from or vote the Ordinary Shares.

(b) Voting rights

Subject to any rights or restrictions attaching to any class of shares, every Shareholder present in person at a general meeting has, upon a show of hands, one vote, and every Shareholder present in person or by proxy has, upon a poll, one vote for every share held by him. Resolutions put to the meeting will generally be decided on a show of hands. No Shareholder shall be entitled to vote at any general meeting in respect of any share held by him if he has not paid any amount relating to that share which is due at the time of the meeting or if a Shareholder has been served with a restriction notice (as defined in the Articles) after failure to provide the Issuer with information concerning interests in those shares required to be provided under the Companies Act 2006.

(c) Variation of rights

Subject to the Companies Act 2006, rights attached to any class of shares may be varied with the written consent of the holders of not less than three-quarters in nominal value of the issued shares of that class, or by an extraordinary resolution passed at a separate general meeting of the holders of those shares. At every such separate general meeting (except an adjourned meeting) the quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of the class.

(d) Restrictions on transfer

The Warrant Shares will be subject to the same restrictions on transfer as other Ordinary Shares:

Any Shareholder may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Board may approve. The instrument of transfer must be executed by or on behalf of the transferor and (in the case of a partly-paid share) the transferee and the transferor will continue to be treated as the holder until the transferee’s name is entered in the register;
The Board may, without giving any reason, refuse to register the transfer of any shares which are not fully paid. The Board may also decline to register a transfer of certificated shares if the instrument of transfer:

(a) is not properly stamped to show the payment of any applicable stamp duty and accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may reasonably require;
(b) is in respect of more than one class of share; and
(c) is to joint transferees and is in favour of more than four such transferees;

Furthermore, where a Shareholder holds over 0.25 per cent. of the existing shares in a particular class and has been served with a restriction notice the Board can refuse to register a transfer of any shares which are certificated shares unless they are satisfied that they have been transferred to an independent third party;
Any shares in the Issuer may be held in uncertificated form and these shares must be transferred through CREST. (Provisions of the Articles do not apply to any uncertificated shares to the extent that such provisions are inconsistent with the holding of shares in uncertificated form with the transfer of shares through CREST or with any provision of the Uncertificated Securities Regulations 2001.) If according to the Articles or any relevant legislation the Issuer has the right to sell, transfer or otherwise deal with the

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CREST shares the Directors may require the holder of that share to change the CREST share to a certificated share; and

The Board may decline to register a transfer of CREST shares in the circumstances set out in the “uncertificated securities rules” (as defined in the Articles) and where, in the case of a transfer to joint holders, the number of joint holders to whom the uncertificated share is to be transferred exceeds four.

(e) Alteration of share capital:

The shares of the Issuer can be sub-divided pursuant to an ordinary resolution of the Shareholders. Any resolution authorising the Issuer to sub divide any of its shares can provide that, as between the holders of the divided shares, different rights and restrictions of a kind which the Issuer can apply to new shares can apply to different divided shares.

(f) Redemption

The Warrant Shares are neither redeemable nor convertible into other securities.

(g) Winding-up

The Warrant Shares shall participate parri passu with the other Ordinary Shares in the distribution of the Issuer’s assets to Shareholders on the liquidation or winding-up of the Issuer. All holders of Ordinary Shares rank beneath the Issuer’s creditors.

Mandatory bids, squeeze-out and sell-out rules

(a) Mandatory Bids

The City Code on Takeovers and Mergers (the “Takeover Code”) applies to the Issuer. Rule 9 of the Takeover Code provides that if an acquisition of interests in shares were to increase the aggregate holding of the acquirer and its concert parties to interests in shares carrying 30 per cent. or more of the voting rights in the Issuer, the acquirer and, depending on circumstances, its concert parties would be required (except with the consent of the Takeover Panel) to make a cash offer for the outstanding shares in the Issuer at a price not less than the highest price paid for interests in shares by the acquirer or its concert parties during the previous 12 months. This requirement would also be triggered by any acquisition of interests in shares by a person holding (together with its concert parties) shares carrying between 30 per cent. and 50 per cent. of the voting rights in the Issuer if the effect of such acquisition were to increase that person’s percentage of the total voting rights in the Issuer.

(b) Squeeze-Out

Under the Companies Act 2006, if a “takeover offer” (as defined in section 974 of the Companies Act) is made for the shares and the offeror were to acquire, or unconditionally contract to acquire, not less than 90 per cent. in value of the shares to which the offer relates and not less than 90 per cent. of the voting rights carried by the shares to which the offer relates, it could, within three months of the last day on which its takeover offer can be accepted, compulsorily acquire the remaining 10 per cent. The offeror would do so by sending a notice to outstanding shareholders telling them that it will compulsorily acquire their shares and then, six weeks later, it would execute a transfer of the outstanding shares in its favour and pay the consideration for the outstanding shares to the Issuer, which would hold the consideration on trust for outstanding shareholders. The consideration offered to the shareholders whose shares are compulsorily acquired under this procedure must, in general, be the same as the consideration that was available under the takeover offer.

The Companies Act 2006 also gives minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer relates to all the shares and, at any time before the end of the period within which the offer can be accepted, the offeror holds or has agreed to acquire not less than 90 per cent. in value of the shares and not less than 90 per cent. of the voting rights carried by the shares, any holder of shares to which the offer relates who has not accepted the offer could, by a written communication to the offeror, require it to acquire those shares. The offeror is required to give any shareholder notice of his/her right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period or, if later, three months from the date on which notice is served on

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shareholders notifying them of their sell-out rights. If a shareholder exercises his/her sell-out rights, the offeror is entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

Admission to trading

The Issuer does not anticipate publishing a prospectus to admit the Warrant Shares to trading once issued under any requirement of either the current Prospectus Rules or future rules to be made pursuant to the 'new Prospectus Regulation', the most recent draft of which as at the date of this document was dated 26 April 2017.

Taxation considerations

The potential tax implications of subscribing for and holding the Warrant Shares are set out in Part X (Taxation).

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PART X—TAXATION

General

The following statements are intended only as a general guide to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of acquiring, holding or disposing of Warrants or Warrant Shares. They are based on current UK tax law as applied in England and Wales and what is understood to be the current practice of HMRC as at the date of this Prospectus, both of which may change, possibly with retrospective effect. These statements relate only to certain limited aspects of the UK tax treatment of persons who are resident and, in the case of individuals domiciled, for tax purposes in (and only in) the UK and to whom “split year” treatment does not apply. The following statements assume that the Warrant Holder or Warrant Share Holder is to be the absolute beneficial owner of their Warrants and their Warrant Shares (any dividends paid on them). Unless expressly stated otherwise, these statements apply only where the Warrant Holder or Warrant Share Holder holds their Warrants and (as applicable) their Warrant Shares for the purposes of a trade. The following statements assume that any individual Warrant Holders or Warrant Share Holders are not the officers or employees of the Issuer or of any related company and have not (and are not deemed to have) acquired the Warrants or Warrant Shares by virtue of an office or employment.

Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors must consult their own independent professional advisers if they are in any doubt as to the potential tax consequences applicable to them in respect of the acquisition, subscription, exercise, purchase, holding or sale of Warrants or Warrant Shares, or if they are not solely UK tax resident.

The comments set out below do not include a consideration of the potential UK inheritance tax consequences of holding Warrants or Warrant Shares. Holders or prospective holders of Warrants or Warrant Shares should consult their own professional advisers in relation to the potential UK inheritance tax consequences of holding them.

Taxation of the Synthetic Warrants

Issue of the Synthetic Warrants and payment of the Synthetic Equity Growth Fee

The Issuer will not be required to withhold at source on account of UK tax when issuing the Synthetic Warrants or on paying the Synthetic Equity Growth Fee.

The tax treatment of Synthetic Warrants and the payment of the Synthetic Equity Growth Fee will depend on the circumstances of the Synthetic Warrant Holder, and Synthetic Warrant Holders should consult their own advisers to determine whether, and on what basis, they are subject to UK corporation tax, income tax or capital gains tax in respect of either the receipt of Synthetic Warrants or the payment of the Synthetic Equity Growth Fee.

Transfer of the Synthetic Warrants

A disposal by a Synthetic Warrant Holder of their right to receive the Synthetic Equity Growth Fee may, depending on their circumstances and subject to any available exemption or relief, be subject to UK corporation tax on income or UK income tax (as applicable). Where a Synthetic Warrant Holder who is an individual holds their Synthetic Warrants for the purposes of investment and not for the purposes of a trade, the disposal of their right to receive the Synthetic Equity Growth Fee may instead, and depending on their circumstances and subject to any available exemption or relief, potentially be subject to capital gains tax.

Stamp duty and SDRT

No stamp duty or SDRT should arise on the issue or transfer of the Synthetic Warrants, or on the payment of the Synthetic Equity Growth Fee.

Taxation of the Equity Warrants

Issue of the Equity Warrants

The Issuer will not be required to withhold at source on account of UK tax when issuing the Equity Warrants.

The tax implications of the receipt of Equity Warrants will depend on the circumstances of the Equity Warrant Holder, and Equity Warrant Holders therefore should consult their own advisers to determine whether, and on what basis, they may be subject to UK corporation tax, income tax or capital gains tax in respect of the receipt of Equity Warrants.

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Transfer of the Equity Warrants

A disposal of Equity Warrants may, depending on the Warrant Holder's circumstances and subject to any available exemption or relief, may be subject to UK corporation tax on income or UK income tax (as applicable). Where an Equity Warrant Holder who is an individual holds their Equity Warrants for the purposes of investment and not for the purposes of a trade, the disposal of their Equity Warrants may instead, and depending on their circumstances and subject to any available exemption or relief, potentially be subject to capital gains tax.

Exercise of the Equity Warrants

An Equity Warrant Holder who exercises the subscription rights conferred by their Equity Warrants will not thereby be treated as disposing of the Equity Warrants. The amount that such Warrant Holder paid to acquire the Equity Warrant that they exercise, together with the amount they pay for the Warrant Shares acquired pursuant to such exercise, shall constitute that person's acquisition cost in the Warrant Shares thus acquired.

Lapse of the Equity Warrants prior to exercise

If a Warrant lapses, the Warrant Holder should not be treated as having made a disposal for chargeable gains purposes.

Stamp duty and SDRT

The statements below apply to any holders of Equity Warrants irrespective of their residence and are intended as a general guide to the current position. They may not apply to certain categories of person such as intermediaries or other persons (such as charities) who are not liable to stamp duty or SDRT, or to certain categories of person who may, although not primarily liable for the tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986, as amended. The statements below do not apply to similar duties or taxes which are imposed in or by other jurisdictions.

(a) Issue of Equity Warrants

No stamp duty should be payable on the issue of Equity Warrants, and nor should SDRT be chargeable on the issue of Equity Warrants subject to the comments on the issue of Equity Warrants to a clearance service or a depository receipt system below.

Special rules will apply where the Equity Warrants are issued to, or to a nominee or agent for, either a person whose business is or includes issuing depository receipts within section 67 or section 93 of the Finance Act 1986 or a person providing a clearance service within section 70 or section 96 of the Finance Act 1986, under which SDRT or stamp duty may be charged at $1.5\%$ of the amount or value of the consideration payable or, in certain cases, on the value of the Equity Warrants. The value of the Equity Warrants for these purposes would be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.

(b) Transfer of Equity Warrants

The transfer on sale of Equity Warrants held in certificated form will generally give rise to a liability, usually met by the purchaser, to stamp duty at the rate of $0.5\%$ (rounded up to the nearest multiple of £5) of the amount or value of consideration paid. An exemption from stamp duty will be available on an instrument transferring Equity Warrants where the amount or value of the consideration for the sale is £1,000 or less and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000.

An agreement to transfer Equity Warrants which is or becomes unconditional will generally give rise to SDRT at the rate of $0.5\%$ of the amount or value of the consideration paid, such SDRT generally being payable by the transferee or purchaser. The liability to SDRT will generally be cancelled or any SDRT paid refunded if the agreement is completed by a duly stamped transfer, or a transfer which is not chargeable with any stamp duty or otherwise required to be stamped, within six years of either the date of the agreement or, if the agreement was conditional, the date when the agreement became unconditional.

No stamp duty or SDRT will arise on a transfer of Equity Warrants into CREST provided that, in the case of SDRT, the transfer is not for money or money's worth.

A transfer of Equity Warrants effected on a paperless basis through CREST will generally be subject to SDRT at the rate of 0.5% of the amount or value of the consideration payable, which will be collected and accounted for to HMRC by the operator of CREST (such SDRT generally being payable by the transferee or purchaser).

Special rules will apply where the Equity Warrants are transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depository receipts within section 67 or section 93 of the Finance Act 1986 or a person providing a clearance service within section 70 or section 96 of the Finance Act 1986, under which SDRT or stamp duty may be charged at 1.5% of the amount or value of the consideration payable or, in certain cases, on the value of the Equity Warrants. The value of the Equity Warrants for these purposes would be the price they might reasonably be expected to fetch on a sale in the open market at the time they are transferred.

If the Equity Warrants have been issued or transferred to a clearance service and the 1.5% charge applied to that issue or transfer (or if it would have applied but for the charge being contrary to EU law) then subsequent transfers of the Equity Warrants within the clearance service generally should not be subject to SDRT.

The issue of Warrant Shares on the exercise of Equity Warrants will not be chargeable to stamp duty or SDRT subject to the statements regarding the issue of chargeable securities to a clearance service set out below.

Special rules apply where shares are issued or transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depository receipts within section 67 or section 93 of the Finance Act 1986 or a person providing a clearance service within section 70 or section 96 of the Finance Act 1986, under which SDRT or stamp duty may be charged at 1.5% of the amount or value of the consideration payable or, in certain limited cases, on the value of the shares. Following litigation, HMRC have confirmed that they will no longer seek to apply the 1.5% charge on the issue of shares into a clearance service or depository receipt arrangement on the basis that the charge is not compatible with EU law.

Taxation of the Warrant Shares

Dividends—withholding tax

The Issuer will not be required to withhold at source on account of UK tax when paying dividends. Liability to tax on dividends will depend upon the individual circumstances of each Warrant Share Holder.

Dividends—Individuals

The general tax treatment of dividends paid by the Issuer to Warrant Share Holders who are individuals is as follows:

All dividends received by an individual shareholder from the Issuer (or from other sources) will, except to the extent that they are earned through an ISA, self-invested pension plan or other regime which exempts the dividends from tax, form part of the shareholder's total income for income tax purposes and will represent the highest part of that income.
A nil rate of income tax applies to the first £5,000 of taxable dividend income received by an individual shareholder in a tax year (the "Nil Rate Amount"), regardless of what tax rate would otherwise apply to that dividend income.
Any taxable dividend income actually received by an individual shareholder in a tax year in excess of the Nil Rate Amount is taxed at a special rate, as set out below.

Where a Warrant Share Holder's taxable dividend income for a tax year exceeds the Nil Rate Amount, the excess amount (the "Relevant Dividend Income") will be subject to income tax:

at the rate of 7.5%, to the extent that the Relevant Dividend Income falls below the threshold for the higher rate of income tax;
at the rate of 32.5%, to the extent that the Relevant Dividend Income falls above the threshold for the higher rate of income tax but below the threshold for the additional rate of income tax; and
at the rate of 38.1%, to the extent that the Relevant Dividend Income falls above the threshold for the additional rate of income tax.

In determining whether and, if so, to what extent the Relevant Dividend Income falls above or below the threshold for the higher rate of income tax or, as the case may be, the additional rate of income tax, the

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shareholder's total taxable dividend income for the tax year in question (including the part within the Nil Rate Amount) will, as noted above, be treated as the highest part of the Warrant Share Holder's total income for income tax purposes.

Dividends—Companies and other Warrant Share Holders

Warrant Share Holders within the charge to UK corporation tax which are "small companies" (for the purposes of UK taxation of dividends) will not generally be subject to tax on dividends from the Issuer.

Other Warrant Share Holders within the charge to corporation tax will not be subject to tax on dividends from the Issuer so long as the dividends fall within an exempt class and certain conditions are met. In general, dividends paid on non-redeemable shares that do not carry any present or future preferential rights to dividends or to the company's assets on its winding up, and dividends paid to a person holding less than 10% of the issued share capital of the payer (or any class of that share capital), are examples of dividends that fall within an exempt class.

Transfer of Warrant Shares

A disposal of Warrant Shares may, depending on the Warrant Share Holder's circumstances and subject to any available exemption or relief, be subject to UK corporation tax on income or UK income tax (as applicable).

If, however, the Warrant Share Holder holds their Warrant Shares as an investment not for the purpose of a trade, the transfer of their Warrant Shares may instead, depending on their circumstances and subject to any available exemption or relief, give rise to a chargeable gain or an allowable loss for the purposes of capital gains tax or, as the case may be, corporation tax on chargeable gains.

Stamp duty and SDRT

The statements below apply to any purchasers of Warrant Shares irrespective of their residence and are intended as a general guide to the current position. They may not apply to certain categories of person such as intermediaries or other persons (such as charities) who are not liable to stamp duty or SDRT, or to certain categories of person who may, although not primarily liable for the tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986, as amended. The statements below do not apply to similar duties or taxes which are imposed in or by other jurisdictions.

(a) Issue of Warrant Shares

See part (c) of "Stamp duty and SDRT" within the section titled "Taxation of the Equity Warrants" above.

(b) Transfer of Warrant Shares

The transfer on sale of Warrant Shares held in certificated form will generally give rise to a liability, usually met by the purchaser, to ad valorem stamp duty at the rate of 0.5% (rounded up to the nearest multiple of £5) of the amount or value of consideration paid. An exemption from stamp duty will be available on an instrument transferring Warrant Shares where the amount or value of the consideration for the sale is £1,000 or less and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000.

An agreement to transfer Warrant Shares which is or becomes unconditional will generally give rise to SDRT at the rate of 0.5% of the amount or value of the consideration paid, such SDRT generally being payable by the transferee or purchaser. The liability to SDRT will generally be cancelled or any SDRT paid refunded if the agreement is completed by a duly stamped transfer, or a transfer which is not chargeable with any stamp duty or otherwise required to be stamped, within six years of either the date of the agreement or, if the agreement was conditional, the date when the agreement became unconditional.

No stamp duty or SDRT will arise on a transfer of Warrant Shares into CREST provided that no instrument of transfer is executed and, in the case of SDRT, the transfer is not for money or money's worth. A transfer of Warrant Shares effected on a paperless basis through CREST will generally be subject to SDRT at the rate of 0.5% of the amount or value of the consideration payable, which will be collected and accounted for to HMRC by the operator of CREST (such SDRT generally being payable by the transferee or purchaser).

As noted above, special rules apply where shares are issued or transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depository receipts within section 67 or section 93 of the Finance Act 1986 or a person providing a clearance service within section 70 or section 96 of the Finance Act

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1986, under which SDRT or stamp duty may be charged at 1.5% of the amount or value of the consideration payable or, in certain limited cases, on the value of the shares. If the Warrant Shares have been issued or transferred to a clearance service and the 1.5% charge applied to that issue or transfer (or would have applied but for the charge being contrary to EU law) then subsequent transfers of the Warrant Shares within the clearance service generally should not be subject to SDRT.

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PART XI—ADDITIONAL INFORMATION

Responsibility

Premier and the Directors, whose names appear in section 6 of this Part XI (Additional Information) accept responsibility for the information contained in this document. To the best of the knowledge and belief of Premier and the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Incorporation and Registered Office

Premier was incorporated and registered with the name of Dalglen (No. 836) Limited in Scotland on 31 July 2002 with registration number SC234781. The company name was changed from Dalglen (No. 836) Limited to Premier Oil Group Limited pursuant to a written resolution passed on 13 September 2002. Premier was re-registered as a public limited company on 10 March 2003, and its name was changed from Premier Oil Group Limited to Premier Oil plc pursuant to a special resolution passed on 3 March 2003 and which became effective on 15 July 2003.

The principal legislation under which Premier operates is the Companies Act 2006 and regulations made thereunder.

Premier is domiciled in the United Kingdom and its registered office is 4th Floor, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EN. Premier's head office is 23 Lower Belgrave Street, London SW1W 0NR. The telephone number of its head office is +44 (0)20 7730 1111.

Share Capital

As at the Latest Practicable Date, the issued share capital of Premier was £63,853,032.60 divided into 510,824,261 fully paid Ordinary Shares of 12.5 pence each. As at the Latest Practicable Date, Premier does not hold any treasury shares.

The Convertible Bonds were issued on 1 November 2012, with a par value of US$245.3 million, exchange price of £4.34 (US$7.00 at fixed exchange rate) per share and a coupon of 2.5 per cent. The holders of Convertible Bonds may convert the Convertible Bonds into Ordinary Shares of the Issuer at any time from 11 August 2016 until six days before their maturity date of 27 July 2018. Under the terms, the exchange price is to be adjusted on the occurrence of certain events, including any payment of dividends by the Issuer. The current exchange price is £4.21 (US$6.79) per share. The total number of Ordinary Shares to be issued, if all bonds are converted at this adjusted exchange price, is 36,117,350. If the bonds have not been previously purchased and cancelled, redeemed or converted, they will be redeemed at par value on 27 July 2018. Interest of 2.50 per cent per annum will be paid semi-annually in arrears up to that date. Pursuant to the Refinancing and subject to the passing of the Shareholder Resolution, the exchange price is to be amended to 74.71 pence (US$0.9174 at the new fixed exchange rate) per Ordinary Share. The total number of Ordinary Shares to be issued, if all bonds are converted at this adjusted conversion price, is 267,400,942.

For the year ended 31 December 2013, the Issuer's called-up, issued and fully-paid share capital was £66,152,621 and there were 529,220,964 Ordinary Shares in issue. During 2014, 18,455,248 Ordinary Shares were repurchased and cancelled, representing 3.61 per cent. of the Issuer's issued share capital as at 31 December 2014. The nominal value of the shares purchased and cancelled during the year was £2.3 million (US$3.8 million) and the aggregate amount of consideration paid by the Issuer for those shares was £55.7 million (US$93.0 million). For the year ended 31 December 2014, the Issuer's called-up, issued and fully-paid share capital was £63,851,383 and there were 510,811,061 Ordinary Shares in issue. During 2015, none of the Issuer's Ordinary Shares were re-purchased or cancelled therefore the share capital of the Issuer remained at £63,851,383 with 510,811,061 Ordinary Shares in issue. During 2016, 12,605 Ordinary Shares were issued pursuant to the Issuer's 2009 Saving Related Share Option Scheme and therefore the issued share capital as at 31 December 2016 was £63,852,333 with 510,823,666 Ordinary Shares in issue.

Existing Shareholder authorities

By an ordinary resolution at the Issuer's annual general meeting held on 17 May 2017, the Directors were generally and unconditionally authorised to exercise all the powers of the Company pursuant to, and in

accordance with, Section 551 of the Act, to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company:

a. up to a nominal amount of £21,284,319 (such amount to be reduced by the nominal amount allotted or granted under part b) below in excess of such sum); and

b. comprising equity securities (as defined in Section 560(1) of the Act) up to a nominal amount of £42,568,638 (such amount to be reduced by any allotments or grants made under part (A) above) in connection with an offer by way of a rights issue:

i. to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their existing holdings; and

ii. to holders of other equity securities as required by the rights of those securities or, if the Directors otherwise consider it necessary, as permitted by the rights of those securities,

and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, provided that these authorities shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2018 or at the close of business on 16 August 2018, whichever is the sooner, save that the Company may before such expiry make offers and enter into agreements which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after such expiry and the Directors may allot shares or grant rights to subscribe for or convert securities into shares in pursuance of such an offer or agreement as if the authorities conferred hereby had not expired.

By a special resolution at the Issuer's annual general meeting held on 17 May 2017, the Directors were given powers pursuant to Section 571 of the Act, to allot equity securities (within the meaning of Section 560(1) of the Act) for cash under the authority conferred by Resolution 1 above and/or sell Ordinary Shares held by the Company as treasury shares for cash as if Section 561 of the Act did not apply to any such allotment or sale provided that this power shall be limited:

a. to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity securities (but in the case of an authority granted under part (b) of Resolution 1 above, by way of a rights issue only):

i. to Ordinary shareholders (excluding any shareholder holding shares as treasury shares) in proportion (as nearly as may be practicable) to their existing holdings of Ordinary Shares; and

ii. to holders of other equity securities, as required by the rights of those securities, or as the Directors otherwise consider necessary,

and so that the Directors may impose any limits or restrictions and make any such arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and

b. in the case of the authority granted under part (a) of Resolution 1 above and/or in the case of any sale of treasury shares for cash, to the allotment (otherwise than pursuant to sub-paragraph a. above) of equity securities or sale of treasury shares up to a nominal amount of £3,192,647

such power shall apply until the conclusion of the Annual General Meeting of the Company to be held in 2018 or at the close of business on 16 August 2018, whichever is the sooner, save that, in each case, the Company may during this period make offers and enter into agreements which would, or might, require equity securities to be allotted (and/or treasury shares to be sold) after the power ends and the Directors may allot equity securities (and/or sell treasury shares) in pursuance of such an offer or agreement as if the power conferred hereby had not expired.

By a special resolution at the Issuer's annual general meeting held on 17 May 2017 the Directors were given the power, in addition to the authority described in Resolution 2 above, to allot equity securities (within the meaning of Section 560(1) of the Act) for cash under the authority conferred by Resolution 1 above and/or sell Ordinary Shares held by the Company as treasury shares for cash as if Section 561 of the Act did not apply to any such allotment or sale, such power to be:

a. limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £3,192,647; and

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b. used only for the purposes of financing (or refinancing, if the power is to be used within six months after the original transaction) a transaction which the Directors determine to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this notice,

such power shall apply until the conclusion of the Annual General Meeting of the Company to be held in 2018 or at the close of business on 16 August 2018, whichever is the sooner, save that, in each case, the Company may during this period make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and/or treasury shares to be sold) after the power ends and the Directors may allot equity securities (and/or sell treasury shares) in pursuance of such an offer or agreement as if the power conferred hereby had not expired.

4. Shareholder Resolution to be proposed at the General Meeting

For the purpose of implementing the Refinancing and the Offer, a resolution in substantially the following form will be proposed at the General Meeting (the "Shareholder Resolution"):

THAT, in addition and without prejudice to any existing authorities conferred on the Board, the Board be generally and unconditionally authorised to exercise all the powers of the Company pursuant to, and in accordance, with Section 551 of the Companies Act 2006, to allot Ordinary Shares in the Company and to grant rights to subscribe for, or to convert any security into, Ordinary Shares in the Company up to a nominal amount of £59,039,247.10 in connection with:

(A) the issue of the Equity Warrants to Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors who elect to receive such Equity Warrants pursuant to the Equity Warrant Instrument;

(B) the issue of the Convertible Warrants to Convertible Bondholders pursuant to the Convertible Warrant Instrument;

(C) an amendment of the terms of the Convertible Bonds pursuant to which the conversion price will be lowered such that the Convertible Bonds will become convertible into a greater number of Ordinary Shares in the Company; and

(D) the issue of Ordinary Shares to Convertible Bondholders, or to other persons provided that the proceeds are used to make payments to Convertible Bondholders in satisfaction of the obligation to either issue Ordinary Shares or pay cash interest in respect of the Convertible Bonds pursuant to the Convertible Bond Trust Deed (as amended),

and so that the above authorisation shall permit additional Equity Warrants, Convertible Warrants and Ordinary Shares to be allotted and issued in order to give effect to the Customary Anti-Dilution Protections, and so that the directors of the Company may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, provided that these authorities shall expire on 15 June 2022, save that the Company may before such expiry make offers and enter into agreements (including the Equity Warrant Instrument and the Convertible Warrant Instrument) which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after such expiry and the directors may allot shares or grant rights to subscribe for or convert securities into shares in pursuance of such an offer or agreement as if the authorities conferred hereby had not expired.

The Shareholder Resolution seeks authority for the Board, in addition to any existing authority, to allot, or grant rights to subscribe for or convert securities into, a limited number of shares in the Issuer. Section 551 of the Companies Act 2006 requires such authority to be granted by the Issuer in a general meeting so that any allotment of shares or grant of rights to subscribe for or convert securities into shares is not exercised at the sole discretion of the Directors.

The Shareholder Resolution therefore authorises the Directors to allot Ordinary Shares or grant rights to subscribe for or convert securities into shares up to an aggregate nominal amount of £59,039,247.10 (representing 472,313,977 Ordinary Shares of 12.5 pence each). This amount represents approximately 92 per cent. of the issued Ordinary Share capital (excluding treasury shares) of the Issuer.

The figure used for the nominal amount of the issued share capital of the Issuer is based on the Ordinary Shares in issue as the Latest Practicable Date. As at the Latest Practicable Date, no Ordinary Shares are held by the Issuer in treasury.

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The Directors intend to use the authorities sought under the Shareholder Resolution in connection with:

(A) the issue of the Equity Warrants, which will grant Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors the right to elect to receive a pro rata share of up to approximately 93,443,462 Equity Warrants, representing 15 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis. The proportion of share capital that the Equity Warrants will cover will not be known until Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors have elected to receive Equity Warrants, Synthetic Warrants or a combination of both. For the purposes of the Shareholder Resolution, it has been assumed that all elections will be to receive Equity Warrants, but the proportion of the Issuer’s issued share capital that is the subject of the Equity Warrants will be reduced below 15 per cent. to the extent that elections for Synthetic Warrants are made;

(B) the issue of the Convertible Warrants which will grant some or all Convertible Bondholders the right to elect to receive a pro rata share of up to approximately 18,688,692 Convertible Warrants, representing 3 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis;

(C) an amendment of the terms of the Convertible Bonds pursuant to which the conversion price will be lowered from £4.21 to 74.71 pence such that the Convertible Bonds will become convertible into up to 267,400,942 Ordinary Shares, representing approximately 30 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis and also accounting for Ordinary Shares issued on conversion. 231,283,592 more Ordinary Shares would be issued on conversion than is currently the case, representing approximately 26 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis; and

(D) the issue of Ordinary Shares to Convertible Bondholders, or to persons other than Convertible Bondholders where the proceeds are paid to Convertible Bondholders, as alternatives to paying cash interest on the Convertible Bonds. The market value of Ordinary Shares to be issued in this way would be up to approximately US$6,133,100 per annum based on the amount of interest that is currently expected to be payable on the Convertible Bonds. Based on the closing share price of 62.25 pence per Ordinary Share on the Latest Practicable Date, this would entail the issue of approximately 7,578,744 Ordinary Shares per annum (representing approximately 1 per cent. of the issued Ordinary Share capital of the Issuer on a Fully Diluted Basis and also accounting for Ordinary Shares issued to satisfy or fund the coupon). The actual number of Ordinary Shares to be issued will depend on the market value of the Ordinary Shares at the time of issue and exchange rates.

If the maximum number of Equity Warrants and Convertible Warrants were issued and exercised, approximately 112,132,154 additional Ordinary Shares will be required to be issued, representing 18 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis. Holders of Equity Warrants or Convertible Warrants may elect at their sole discretion: (i) to pay a cash price on exercise; or (ii) opt for cashless exercise whereby the number of shares they receive on exercise will be reduced accordingly. Given the strike price of the warrants of 42.75 pence, in the event that the maximum number of Equity Warrants and Convertible Warrants are issued and exercised for a cash price, the Issuer would receive approximately £47.9 million in cash proceeds. Alternatively, and at the closing price on the Latest Practicable Date, if holders of the Equity Warrants and Convertible Warrants elected for cashless exercise approximately 35,125,734 additional Ordinary Shares will be required to be issued, representing approximately 6 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis.

Changes are also being made to the terms of the Group’s Convertible Bonds which could result in additional Ordinary Shares being issued in the future. As a result of the reduction of the Convertible Bonds’ conversion price, there will be an additional 231,283,592 Ordinary Shares underlying the Convertible Bonds, representing 26 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis and also accounting for Ordinary Shares issued on conversion. In the event that conversion takes place, all Shareholders would benefit from a reduction of total debt of US$245,324,000. Assuming that the coupon on the convertible bonds is fully satisfied or funded by the issue of new shares, approximately 7,578,744 additional Ordinary Shares will be issued per annum and approximately 36,714,804 over the life of the Convertible Bonds based on the closing share price on the Latest Practicable Date, representing 1 per cent. and 6 per cent. of the Issuer’s issued share capital on a Fully Diluted Basis. The actual number of additional Ordinary Shares issued will depend on the prevailing share price at the time of issue of the relevant additional Ordinary Shares. If the coupon is fully satisfied or funded by the issue of new shares there would be a saving in cash interest costs for the Group of US$6.1 million per annum and US$29.7 million over the life of the Convertible Bonds.

If the maximum number of Equity Warrants and Convertible Warrants were issued and exercised for cash, all Convertible Bonds are converted into Ordinary Shares at the reduced conversion price and the entire coupon on the Convertible Bonds is satisfied by the issue of new Ordinary Shares (based on the closing share price and

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applicable fx rates on the Latest Practicable Date), the total number of Ordinary Shares issued pursuant to the Refinancing would be approximately 416,247,900 or approximately 45 per cent. of the Issuer's issued share capital on a Fully Diluted Basis and also accounting for Ordinary Shares issued on conversion and to satisfy or fund the coupon. Were these shares to be issued, the Group would benefit from the proceeds raised from the exercise of the Equity Warrants, the Convertible Warrants, the reduction in total debt arising from the conversion of the Convertible Bonds and the savings in cash interest costs on the convertible bonds, amounting to approximately US$337.4 million in aggregate.

The authorities that are being sought also provide for additional headroom to grant rights to subscribe for or issue up to 56,066,077 Ordinary Shares if adjustments are made to the number of Ordinary Shares to be issued upon exercise of the Equity Warrants or the Convertible Warrants as a result of the Customary Anti-Dilution Protections, or if the number of Ordinary Shares in issue changes before the Entitlement Calculation Date.

These authorities shall last until 15 June 2022 save that the Issuer may before such expiry make offers and enter into agreements (including in respect of the issue of Equity Warrants or Convertible Warrants) which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after such expiry and the directors may allot shares or grant rights to subscribe for or convert securities into shares in pursuance of such an offer or agreement as if the authorities conferred hereby had not expired.

5. Articles of Association

The following is a summary of the Issuer's Articles of Association, which are available on the Issuer's website and at the Issuer's registered office. The Articles of Association, which were adopted in May 2010, contain provisions (among others) to the following effect:

(A) Objects

The Issuer's objects are unrestricted.

(B) Share rights

Subject to the Companies Act and other shareholders' rights, shares may be issued with such rights and restrictions as the Issuer may by ordinary resolution decide, or (if there is no such resolution or so far as it does not make specific provision) as the Board may decide. Redeemable shares may be issued. Subject to the Articles, the Companies Act and other shareholders' rights, unissued shares are at the disposal of the Board.

(C) Voting rights

Subject to any rights or restrictions attaching to any class of shares, every member present in person at a general meeting has, upon a show of hands, one vote, and every member present in person or by proxy has, upon a poll, one vote for every share held by him. Resolutions put to the meeting will generally be decided on a poll. No member shall be entitled to vote at any general meeting in respect of any share held by him if he has not paid any amount relating to that share which is due at the time of the meeting or if a member has been served with a restriction notice (as defined in the Articles) after failure to provide the Issuer with information concerning interests in those shares required to be provided under the Companies Act.

(D) Dividends and other distributions

Subject to the Companies Act, the Issuer's shareholders can declare dividends by passing an ordinary resolution. No such dividend can exceed the amount recommended by the Board. Subject to the Companies Act, the Directors may pay interim dividends, and also any fixed rate dividend, if they consider that the financial position of the Issuer justifies such payments. If the Board acts in good faith, it is not liable for any loss that shareholders may suffer because a lawful dividend has been paid on other shares which rank equally with or behind their shares.

The Board may withhold payment of all or any part of any dividends (including scrip dividends) or other money which would otherwise be payable in respect of the Issuer's shares from a person with a 0.25 per cent. interest (as described in the Articles) if such a person has been served with a restriction notice after failure to provide the Issuer with information concerning interests in those shares required to be provided under the Companies Act.

Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide, all dividends will be divided and paid in proportions based on the amounts which have been paid up on the shares during any period for which the dividend is paid. Dividends may be declared or paid in any currency.

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The Board may, if authorised by an ordinary resolution of the Issuer, offer Shareholders the right to choose to receive extra Ordinary Shares which are credited as fully paid up, instead of some or all of their cash dividend.

If a dividend has not been claimed for 12 years after being declared or becoming due for payment, it will be forfeited and go back to the Issuer.

The Issuer may stop sending dividend payments through the post, or cease using any other method of payment (including payment through CREST), for any dividend if, either (i) at least two consecutive payments have remained uncashed or are returned undelivered or that means of payment has failed or (ii) one payment remains uncashed or is returned undelivered or that means of payment has failed and reasonable enquiries have failed to establish any new address or account of the registered holder. The Issuer will resume sending dividend payments if requested in writing by the shareholder.

Each Ordinary Share entitles the holder to an equal share of any surplus assets of the Issuer after creditors have been paid in the event of a winding-up of the Issuer.

(E) Variation of Rights

Subject to the Companies Act, rights attached to any class of shares may be varied with the written consent of the holders of not less than three-quarters in nominal value of the issued shares of that class, or by an extraordinary resolution passed at a separate general meeting of the holders of those shares. At every such separate general meeting (except an adjourned meeting) the quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of the class.

(F) Lien, Forfeiture and Untraced Shareholders

The Issuer has a lien (enforceable by sale) on all partly-paid shares for any money owed to the Issuer for the shares. The Directors are entitled to exercise their right of sale where the money owed by the shareholder is payable immediately, the Directors have given notice to the shareholder of the amount owed (stating the amount due, demanding payment and setting out the Directors' right to enforce the lien through sale), the notice has been served on the shareholder and the Directors have waited 14 days for the shareholder to pay the sum due.

The Board can also call on shareholders to pay any money which has not yet been paid to the Issuer for their shares as well as any interest which may accrue from the date of the call until the date it is satisfied and any expenses incurred as a result of the non-payment of the call. The Directors can send the shareholder a notice requiring payment of the unpaid amount; the notice must demand payment of the sum due plus interest and expenses, give the date by which the total is due (which must be at least 14 days after the date of the notice), specify where payment is to be made and state the Issuer's right of forfeiture in respect of outstanding calls. Where this call remains unsatisfied the shares can be forfeited; the shares become the property of the Issuer and the Directors can dispose of them in any way they decide.

As regards certificated shares, if during a 12 year period at least 3 cash dividends have gone unclaimed and at least 3 letters from the Issuer have not been responded to the Issuer may publish a notice in a national and local newspaper stating its intention to sell the shares. If, during the 3 months following the notice, the shareholder still fails to respond, the Issuer may sell the shares. If the untraced shareholder does not claim the proceeds of the sale of his/her shares within six years of such sale (i.e. it has been at least 18 years since the shareholder last claimed a dividend or communicated with the Issuer) then the proceeds of the sale are forfeited and belong to the Issuer absolutely.

(G) Transfer of shares

Any member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Board may approve. The instrument of transfer must be executed by or on behalf of the transferor and (in the case of a partly-paid share) the transferee and the transferor will continue to be treated as the holder until the transferee's name is entered in the register.

The Board may, without giving any reason, refuse to register the transfer of any shares which are not fully paid. The Board may also decline to register a transfer of certificated shares if the instrument of transfer:

is not properly stamped to show the payment of any applicable stamp duty and accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may reasonably require;
is in respect of more than one class of share; and

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is to joint transferees and is in favour of more than four such transferees.

Furthermore, where a shareholder holds over 0.25 per cent. of the existing shares in a particular class and has been served with a restriction notice the Board can refuse to register a transfer of any shares which are certificated shares unless they are satisfied that they have been transferred to an independent Third Party.

Any shares in the Issuer may be held in uncertificated form and these shares must be transferred through CREST. (Provisions of the Articles do not apply to any uncertificated shares to the extent that such provisions are inconsistent with the holding of shares in uncertificated form with the transfer of shares through CREST or with any provision of the Uncertificated Securities Regulations 2001.) If according to the Articles or any relevant legislation the Issuer has the right to sell, transfer or otherwise deal with the CREST shares the Directors may require the holder of that share to change the CREST share to a certificated share.

The Board may decline to register a transfer of CREST shares in the circumstances set out in the Uncertificated Securities Regulations (as defined in the Articles) and where, in the case of a transfer to joint holders, the number of joint holders to whom the uncertificated share is to be transferred exceeds four.

(H) Meetings

The Articles are silent on the notice period required to call annual general meetings and extraordinary general meetings. The Companies Act provides that the board of directors has the power to call general meetings, as do shareholders representing at least 5 per cent. of the Issuer's paid-up voting share capital. By law the Issuer may call annual general meetings on 21 clear days' notice, but it must call them on 20 working days if it is to comply with the Corporate Governance Code. By law the Issuer may call general meetings other than annual general meetings on 14 clear days' notice, but must call them on 14 working days if it is to comply with the Corporate Governance Code.

Before a general meeting can start there must be at least two people present who are entitled to vote (shareholders or proxies or both). Every Director is entitled to speak at the general meeting. The Chairman is entitled to adjourn a meeting, whether quorate or not, for any reason so that the business of the meeting can be carried out properly and can also adjourn a quorate meeting with the agreement of the meeting. Meetings can be adjourned indefinitely and more than once. A general meeting adjourned for lack of quorum must be held at least 10 clear days after the original meeting.

(I) Change of name

The Directors may change the name of the Issuer by passing a board resolution.

(J) Directors

(i) Appointment of Directors

The Issuer must have a minimum of two Directors and a maximum of 20 and the Directors are not required to hold shares in the Issuer. Directors may be appointed by the Issuer by ordinary resolution or by the Board. The only people who can be appointed as Directors at a general meeting are those Directors retiring during the meeting, persons recommended by the Directors or persons recommended by the shareholders where the shareholder is entitled to vote and delivers to the Issuer notice of his intention to recommend the relevant individual along with the individual's consent.

(ii) Removal of Directors

In addition to any power to remove Directors conferred by legislation, the Issuer can remove a Director before the end of his term in office by passing a special resolution.

(iii) Retirement of Directors

At every annual general meeting the following must retire from office; any Director who has been appointed by the Board since the last annual general meeting, any Director who held office at the time of the preceding two annual general meetings and who did not retire then and any Director who has been in office as a non-executive Director for more than 9 years at the date of the meeting. Any retiring Director may offer himself up for reappointment and can be reappointed by an ordinary resolution of the shareholders.

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(iv) Vacation of Office by Directors

In addition to the legislative provisions on vacation of a Directors' office, any Director automatically vacates his office as Director if; he gives the Issuer written notice of his resignation; he offers to resign and this offer is accepted; all of the other Directors (where there are at least three) pass a resolution requiring him to vacate; he is suffering from a physical or mental health illness and the Directors pass a resolution removing him from office; he has missed Directors' meetings for a continuous 6 month period without permission and the Directors pass a resolution removing him; or a bankruptcy order is made against him.

(v) Alternate Directors

Any Director can appoint another person to act as a Director in his place. Where this person is not already a Director their appointment requires the approval of the Directors.

(vi) Remuneration of Directors

The total fees paid to all of the Directors (excluding any payments made to executive Directors or under any other provision of the Articles) must not exceed £600,000 a year or such higher sum decided on by ordinary resolution of the Issuer. Any Director who is appointed to any executive office will be entitled to receive such remuneration (whether as salary, commission, profit share or any other form of remuneration) as the Board or any committee authorised by the Board may decide, either in addition to or in place of his fees as a Director. In addition, any Director who, in the opinion of the Board or any committee authorised by the Board, performs any special or extra services for the Issuer, may be paid such extra remuneration as the Board or any committee authorised by the Board may determine. Each Director may be paid his reasonable travelling, hotel and incidental expenses of attending and returning from meetings of the Board, or committees of the Board or of the Issuer or any other meeting which as a Director he is entitled to attend, and will be paid all expenses properly and reasonably incurred by him in connection with the Issuer's business or in the performance of his duties as a Director. The Issuer can also fund a Director or a Director of its holding Company for any purpose permitted by the Companies Act and, as far as permitted by the legislation, can indemnify any Director against any liability.

(vii) Pensions and Gratuities for Directors

The Board or any committee authorised by the Board may exercise the powers of the Issuer to provide benefits either by the payment of gratuities or pensions or by insurance or in any other manner for any Director or former Director or his relations or dependents. However, no benefits (except those provided for by the Articles) may be granted to a Director or former Director who has not been employed by or held an executive office or place of profit under the Issuer or any of its subsidiary undertakings or their respective predecessors in business without the approval of an ordinary resolution of the Issuer.

(viii) Permitted Interests of Directors

The Directors may authorise any matter which would otherwise involve a Director breaching his duty under the Companies Act to avoid conflicts of interest. In order to obtain authorisation the Director must tell the nature and extent of his interest to the Board as soon as possible and in sufficient detail. Any Director (including the conflicted Director) may propose this authorisation. In considering this proposal the conflicted Director will not be entitled to vote and will not count in the quorum and may be excluded from the meeting whilst the decision is taken.

Where authority is given the Board may specify such terms to be imposed on the Director as the Board thinks fit e.g. the conflicted Director may be excluded from the receipt of certain information. The Board may also provide that the Director is not bound to disclose to the Issuer any information which he comes into possession of otherwise than in his role as a Director where disclosure would entail a breach of confidence. The Board may provide that the terms of the authorisation be recorded in writing and any authority given may be varied or revoked at any time.

Where a Director is indirectly or directly interested in a contract with the Issuer this must be disclosed in accordance with the Companies Act. Where this is the case the Director may do the following:

have any kind of interest in a contract with or involving the Issuer;
hold any office (except that of auditor) with the Issuer;
do paid professional work for the Issuer;

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become a director of any holding company or subsidiary of the Issuer; and/or
be a director of any other company so long as the appointment cannot reasonably be regarded as giving rise to a conflict of interest.

(ix) Restrictions on voting

A Director cannot vote or be counted in the quorum when the Board is considering his appointment to a position within the Issuer or a company in which the Issuer has an interest. Furthermore, except as mentioned below, no Director may vote on, or be counted in a quorum in relation to, any resolution of the Board in respect of any contract in which he has an interest. A Director can only vote where his interest cannot reasonably be regarded as material or where the only material interest he has in it is included in the following list:

a resolution about giving him any security or any indemnity for any money which he, or any other person, has lent at the request, or for the benefit, of the Issuer or any of its subsidiary undertakings;
a resolution about giving any security or any indemnity to any other person for a debt or obligation which is owed by the Issuer or any of its subsidiary undertakings, to that other person, if the director has taken responsibility for some or all of that debt or obligation. The Director can take this responsibility by giving a guarantee, indemnity or security;
a resolution giving him any other indemnity where all Directors are also being offered indemnities on substantially similar terms;
a resolution about the Issuer funding any expenditure incurred defending proceedings where all Directors are also being offered indemnities on substantially similar terms;
a resolution about any proposal relating to an offer of any shares or debentures or other securities for subscription or purchase by the Issuer or any of its subsidiary undertakings, if the Director takes part because he is a holder of shares, debentures or other securities, or if he takes part in the underwriting or sub-underwriting of the offer;
a resolution about a contract in which he has an interest because of his interest in securities of the Issuer;
a resolution regarding a contract with a company in which the Director has an interest (including where the Director is a director or shareholder of that other company) as long as he does not hold an interest in shares representing one percent or more of any class of equity share capital of that company or of the voting rights in that company;
a resolution relating to a pension fund, superannuation scheme, retirement, death or disability fund where these benefits are provided to employees generally;
any arrangement for the benefit of employees of the Issuer or any of its subsidiary undertakings which gives him benefits which are also generally given to the employees to whom the arrangement relates; or
a resolution about any proposal relating to any insurance which the Issuer can buy and renew for the benefit of the Directors or of a group of people which includes the Directors.

Subject to the provisions of the Companies Act, the Issuer may by ordinary resolution suspend or relax the above provisions to any extent or ratify any contract which has not been properly authorised in accordance with the above provisions.

(x) Borrowing powers

Subject to the Issuer's Articles of Association, the Companies Act and any directions given by the Issuer by special resolution, the business of the Issuer will be managed by the Board who may use all the Issuer's powers. In particular, the Board may exercise all the Issuer's powers to borrow money and to mortgage or charge any of its undertaking, property, assets and uncalled capital, to issue debentures and other securities and to give security for any debt, liability or obligation of the Issuer or any Third Party.

The Articles of Association provide for a borrowing restriction which limits the borrowings of the Issuer and obliges the Issuer to exercise all voting and other rights or powers of control exercisable by the Issuer in relation to the Group so as to ensure that no money is borrowed if the total amount of the borrowings of the Group then exceeds, or would as a result of such borrowing exceed, a multiple of four times the Group's adjusted capital and reserves (as defined in the Articles). This borrowing limit can be exceeded if the shareholders provide consent in advance by passing an ordinary resolution.

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At the Issuer's 2016 annual general meeting, its shareholders passed an ordinary resolution to increase the borrowing limit such that the total amount of the Group's borrowings may not exceed an amount equal to the greater of: (i) US$4 billion; or (ii) five times the Issuer's adjusted capital and reserves.

(K) Changes in capital

If recommended by the Board, the Issuer's shareholders can pass an ordinary resolution to capitalise any sum which is part of the Issuer's reserves or which the Issuer is holding as net profits. Unless the ordinary resolution states otherwise, the directors may use this sum to either: (i) pay up some or all of any issued shares which have not already been called or paid in advance; or (ii) to pay up in full unissued shares, debentures or other securities of the Issuer which would then be allotted or distributed, credited as fully paid, to shareholders.

6. Directors

The current Directors of the Issuer and their functions are as follows:

Executive Directors

Tony Durrant Chief Executive Officer
Robin Allan Director, North Sea and Exploration
Richard Rose Finance Director

Non-Executive Directors

Mike Welton Chairman
Anne Marie Cannon Non-Executive Director
Jane Hinkley Senior Independent Non-Executive Director
Iain Macdonald Non-Executive Director

The business address of each of the Directors is 23 Lower Belgrave Street, London SW1W 0NR.

Directors' Profiles

The business experience and principal business activities outside of the Issuer of each of the Directors are as follows:

(a) Tony Durrant (Chief Executive Officer)

Tony Durrant joined Premier in June 2005, becoming Finance Director in July 2005 and Chief Executive Officer in June 2014. He qualified as a chartered accountant with Arthur Andersen before joining the investment banking division of Lehman Brothers in 1987, going on to become a managing director and Head of the European Natural Resources Group. He is a non-executive director and chairman of the audit & risk and remuneration committees of Greenergy Fuels Holdings Ltd. He is a member of the advisory committee of FlowStream Commodities.

Tony is a member of the Nomination Committee.

(b) Robin Allan (Director, North Sea and Exploration)

Robin Allan joined Premier in July 1986. He joined the Board in 2003 as Director of Business Development before being appointed Director for the Asia region in 2009. He returned to London in 2012 to take up a role as Director, Business Units and, in 2015, was appointed Director, North Sea and Exploration. He currently chairs The Association of British Independent Oil Exploration Companies (BRINDEX) and is a board member of Oil & Gas UK.

(c) Richard Rose (Finance Director)

Richard Rose joined Premier in September 2014 as Finance Director. He qualified as a chartered accountant with Ernst & Young LLP and has spent over 20 years in the energy sector, including 13 years working with a range of international banks and brokers in equity capital markets and corporate finance. He joined Premier from Ophir Energy where he was Strategy and Head of Corporate Communications

(d) Mike Welton (Chairman)

Mike Welton joined Premier's Board in June 2009 as a Non-Executive Director and became Chairman in October 2009. He currently sits on the advisory board of Montrose Associates. Mike was previously chief

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executive of Balfour Beatty plc, chairman of Southern Water Services Limited, Hanson plc and the UK Government's Railway Sector Advisory Group and a director of Morrison Utility Services. He is an advisor to Montrose Associates.

Mike chairs the Nomination Committee. Mike has indicated to the Board that he will step down as Chairman on completion of the Refinancing and identification of a suitable replacement.

(e) Anne Marie Cannon (Non-Executive Director)

Anne Marie Cannon joined Premier's board as a Non-Executive Director in February 2014. She has over 30 years' experience in the energy and banking sectors, including roles at Thomson North Sea, Shell Exploration and Production and J Henry Schroder Wagg. She was previously a senior advisor to the natural resources group at Morgan Stanley, focussing on upstream mergers and acquisitions. She is currently the deputy chair of the board of Aker BP ASA, a non-executive director of Aker ASA and STV Group plc and chairs the remuneration committee of STV Group plc. She has previously held executive director roles on the boards of Hardy Oil and Gas and British Borneo.

Anne Marie is also a member of the Audit and Risk Committee, Nomination Committee and the Remuneration Committee.

(f) Jane Hinkley (Senior Independent Non-Executive Director)

Jane Hinkley joined Premier's Board in September 2010 as a Non-Executive Director. Jane is a qualified chartered accountant with executive experience, primarily in international shipping. She was CFO and subsequently Managing Director of Gotaas-Larsen Shipping Corporation, Managing Director of Navion Shipping AS and a non-executive director of Revus Energy ASA. She is currently a non-executive director of Vesuvius plc, and is the chairman of Teekay GP LLC.

Jane chairs the Remuneration Committee and is a member of the Audit and Risk Committee and the Nomination Committee.

(g) Iain Macdonald (Non-Executive Director)

Iain Macdonald joined Premier's Board in May 2016 as a Non-Executive Director. Before joining Premier he spent 30 years at BP in a variety of engineering, licensing, business management and finance roles culminating in three years as Deputy Group CFO for BP plc. He also served as a non-executive director of TNK-BP Ltd from 2009 to 2011. He is currently a non-executive director of Skills for Health Ltd and is also a non-executive director of and chairs the audit committee of SUEK JSC.

Iain chairs the Audit and Risk Committee and is a member of the Nomination Committee and the Remuneration Committee.

Directors' Confirmations

As at the date of this document, none of the Directors have during the five years prior to the date of this document:

been convicted in relation to a fraudulent offence:
been associated with any bankruptcies, receiverships or liquidations while acting in the capacity of a member of the administrative, management or supervisory bodies or as a partner, founder or senior manager of any partnership or company;
been subject to any official public incrimination and/or sanctions by any statutory or regulatory authorities (including any designated professional bodies); or
been disqualified by a court from acting as a director of a company or from acting as a member of the administrative, management or supervisory bodies of any company or from acting in the management or conduct of the affairs of any company.

None of the Directors were selected to act in such capacity pursuant to any arrangement or understanding with any major shareholder, customer, supplier or other person having a business connection with the Group.

As at the date of this document, no restrictions have been agreed by any Director on the disposal within a certain time period of their holdings of their Ordinary Shares.

There are no family relationships between any of the Directors.

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Potential conflicts

There are the following potential conflicts of interests between the Directors' duties to the Issuer and their private interests and/or other duties. Each conflict has been authorised by the Board.

Director	Potential conflict
Tony Durrant	• Advisory member of FlowStream Commodities.
Mike Welton	• Mr Welton’s son is a research director of an energy consulting group.
Robin Allan	• Chairman of The Association of British Independent Oil Exploration Companies (BRINDEX).
• Board member of Oil & Gas UK.
Anne Marie Cannon	• Deputy Chair of Aker BP ASA.
• Non-executive director of Aker ASA.
Jane Hinkley	• Director and Chairman of Teekay Group LLC.
• Non-executive director of Vesuvius plc.
Iain Macdonald	• Non-executive director of SUEK JSC, a global coal producer.
Richard Rose	• Director of Premier Pension Plan Trustee Limited, the Trustee Company for the Premier Oil plc Retirement and Death Benefits Plan.

7. Remuneration and benefits

The table below reports total remuneration for the year ended 31 December 2016 for each Executive Director.

| | Salary^{9}
£'000s | Taxable benefits^{10}
£'000s | Annual bonus^{11}
£'000s | Long-term incentives^{12}
£'000s | Pension benefits^{13}
£'000s | Other payments^{14}
£'000s | Total
£'000s |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Executive Directors | | | | | | | |
| Robin Allan | 353.8 | 22.7 | 227.8 | 0 | 128.1 | 1.5 | 733.9 |
| Tony Durrant | 569.0 | 26.2 | 378.4 | 0 | 429.2 | 1.5 | 1,404.3 |
| Richard Rose | 300.0 | 22.1 | 197.7 | 0 | 55.8 | 1.8 | 557.4 |
| Former Executive Director | | | | | | | |
| Neil Hawkings^{15} | 183.7 | 11.8 | 89.3 | 0 | 47.4 | 1.1 | 333.3 |

9 Salary is shown on a gross basis.

10 Taxable benefits include medical and dental insurance, car allowance, life assurance and critical illness cover, health insurance and a subsidised gym membership. In particular, in 2016, Robin Allan, Tony Durrant and Richard Rose received a car allowance of £15,000 and Neil Hawkings received a car allowance of £7,788 (£15,000 per annum pro-rated for his period of service).

11 Robin Allan, Tony Durrant and Richard Rose received total annual bonus awards for the year ended 31 December 2016 of 64.4 per cent of salary, 66.5 per cent of salary and 65.9 per cent of salary respectively. Bonus amounts above 50 per cent of salary are awarded in the form of deferred shares ('Deferred Bonus Awards'). Neil Hawkings received a total bonus award of 50.5 per cent of salary pro-rated to reflect his period of service during the year.

12 Long-term incentives include awards granted under Premier’s 2009 Long Term Incentive Plan ('LTIP') subject to a performance period ending in the relevant financial year. In 2015 and 2016 the relevant performance targets for such awards were not achieved and the awards lapsed.

13 Richard Rose’s pension figure includes a combination of pension contributions to the defined contribution scheme and a salary supplement. For other Executive Directors, pension figures comprise accrued pension entitlements under the Issuer’s final salary scheme including salary supplements and target funding payments and excluding Director contributions.

14 Other payments include SIP awards and SAYE options. Robin Allan, Tony Durant and Richard Rose were granted undiscounted SAYE options during the year; as no discount was applied, the embedded value of these options is nil. Each Executive Director was awarded SIP Matching Awards during the year; SIP awards are valued as the number of Matching Awards granted multiplied by the share price at date of award.

15 Neil Hawkings stepped down as a Director of Premier on 30 June 2016. Details shown above are for the period 1 January to 30 June 2016. His salary includes an accrued holiday payment of £6,802.88. For the purpose of comparability with other Directors, the £47,400 pension figure for Neil Hawkings was recalculated at 31 December 2016 using a statutory factor of 20. The amount he received as at his date of leaving was £392,600.

The table below reports total remuneration for the year ended 31 December 2016 for each Non-Executive Director.

| | Base fee
£'000s | Additional fees^{16}
£'000s | Expenses^{17}
£'000s | Total
£'000s |
| --- | --- | --- | --- | --- |
| Non-Executive Directors^{18} | | | | |
| Mike Welton (Chairman) | 169.6 | — | — | 169.6 |
| Anne Marie Cannon | 53.0 | — | — | 53.0 |
| Jane Hinkley | 53.0 | 10.6 | 0.1 | 63.7 |
| Iain Macdonald | 35.3 | — | — | 35.3 |
| Former Non-Executive Directors | | | | |
| David Bamford^{19} | 19.3 | — | 0.2 | 19.5 |
| Joe Darby^{20} | 53.0 | 10.6 | 1.2 | 64.8 |
| David Lindsell^{21} | 53.0 | 10.6 | — | 63.6 |
| Michel Romieu^{22} | 19.3 | — | 0.6 | 19.9 |

The total amount set aside or accrued by the Group for the year ended 31 December 2016 to provide pension, retirement or similar benefits to the current Directors was £1.3 million (which includes the pension numbers in the table above and target funding payments, as described on page 112 of the Issuer's 2016 Annual Report).

8. Directors' service contracts and letters of appointment

Details of Executive Directors' service contracts and Non-Executive Directors' letters of appointment providing for benefits upon termination of employment are set out at pages 103 to 105 of Premier's 2016 Annual Report and Financial Statements. Iain Macdonald's appointment letter (effective 1 May 2016) and Jane Hinkley's appointment letter (effective 31 August 2016) provide for the same benefits upon termination as the appointment letters of the other Non-Executive Directors.

9. Directors' Interests

Share capital

The following table sets out the interest in the share capital of the Issuer of the Directors (including beneficial interests or interests of any person connected with a Director) as at the Latest Practicable Date:

Director	Number of Ordinary Shares	Percentage of share capital
Tony Durrant	1,234,736	0.2417%
Mike Welton	22,531	0.0044%
Robin Allan	521,689	0.1021%
Anne Marie Cannon	10,000	0.0020%
Jane Hinkley	13,234	0.0026%
Iain Macdonald	23,076	0.0045%
Richard Rose	56,873	0.0111%

16 During the year, Joe Darby acted as Senior Independent Director, David Lindsell was Chairman of the Audit and Risk Committee, Jane Hinkley was Chairman of the Remuneration Committee and Mike Welton was the Chairman of Premier and was also Chairman of the Nomination Committee.

17 Amounts disclosed relate to travel and accommodation expenses paid to Non-Executive Directors in respect of qualifying services during the year.

18 Iain Macdonald was appointed as a Director on 1 May 2016. His annual fee for 2016 was £53,000 per annum in line with the other Non-Executive Directors. The total figure shown for 2016 reflects the fee paid to him for service from 1 May 2016 to 31 December 2016.

19 David Bamford resigned as a Director on 11 May 2016. His annual fee for 2016 was £53,000 per annum in line with the other Non-Executive Directors. The total figure shown for 2016 reflects the fee paid to him for service from 1 January to 11 May 2016.

20 Joe Derby resigned from the board on 17 May 2017, and so received his annual fee of £53,000 per annum for the year ended 31 December 2016.

21 David Lindsell resigned from the board on 17 May 2017, and so received his annual fee of £53,000 per annum for the year ended 31 December 2016.

22 Michel Romieu resigned as a Director on 11 May 2016. His annual fee for 2016 was £53,000 per annum in line with the other Non-Executive Directors. The total figure shown for 2016 reflects the fee paid to him for service from 1 January to 11 May 2016.

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Share awards

As at the Latest Practicable Date, the Executive Directors have been granted the following Performance Share Awards under the Issuer’s 2009 Long Term Incentive Plan, which remain outstanding:

Director	Date of grant	Awards held at the Latest Practicable Date	Performance period	Earliest vesting date
Tony Durrant	27.02.15	510,161	01.01.15 – 31.12.17	01.01.18
	12.04.17	567,864	01.01.16 – 31.12.18	01.01.19
Robin Allan	27.02.15	264,308	01.01.15 – 31.12.17	01.01.18
	12.04.17	294,203	01.01.16 – 31.12.18	01.01.19
Richard Rose	27.02.15	224,148	01.01.15 – 31.12.17	01.01.18
	12.04.17	249,500	01.01.16 – 31.12.18	01.01.19

As at the Latest Practicable Date, the Executive Directors have been granted the following Equity Pool Awards under the Issuer’s 2009 Long Term Incentive Plan which, remain outstanding:

Cycle	Performance period	Starting market capitalisation	Outstanding Equity Pool allocation (% of Pool)
			Tony Durrant	Robin Allan	Richard Rose
2015	01.01.15 – 31.12.17	£1,178 million	6.00%	4.25%	4.25%
2016	01.01.16 – 31.12.18	£350 million	6.00%	4.25%	4.25%

As at the Latest Practicable Date, the following Executive Directors have been granted the following Deferred Bonus Awards under the 2017 Long Term Incentive Plan, which remain outstanding:

Director	Date of grant	Awards held at the Latest Practicable Date	Earliest vesting date
Tony Durrant	12.04.2017	142,574	12.04.2020
Robin Allan	12.04.2017	77,357	12.04.2020
Richard Rose	12.04.2017	72,437	12.04.2020

Share options

As at the Latest Practicable Date, the following Executive Directors have been granted the following options to subscribe for Ordinary Shares under the Company’s 2009 Savings Related Share Option Scheme, which remain outstanding:

Director	Date of grant	Exercisable dates	Acquisition price per share (£)	Options held at the Latest Practicable Date
Tony Durrant	04.05.16	01.06.19 – 30.11.19	0.4200	42,857
Robin Allan	04.05.16	01.06.19 – 30.11.19	0.4200	42,857
Richard Rose	04.05.16	01.06.19 – 30.11.19	0.4200	42,857

Corporate Governance

Board of Directors

The Board is collectively responsible for the governance of the Issuer on behalf of Premier’s shareholders and is accountable to Premier’s shareholders for the long-term success of the Group.

The Board governs the Group in accordance with authority set out in the Articles of Association and in compliance with the UK Corporate Governance Code. The Board is responsible for maintaining sound risk management and internal control systems. In meeting this responsibility, the Board monitors the Issuer’s risk management and internal control systems throughout the year and, on an annual basis, carries out a review of their effectiveness. The Board meets at least six times each year and, in addition, an update conference call takes place in the months when no formal meeting is scheduled.

The Board has established Audit and Risk, Remuneration and Nomination Committees. Each Committee has formal terms of reference approved by the Board which can also be found on the Issuer’s website. The Company Secretary provides advice and support to the Board and all Board Committees. Board Committees are authorised to engage the services of external advisers as they deem necessary.

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Audit and Risk Committee

The Committee is comprised solely of Non-Executive Directors. At the conclusion of the financial year ended 31 December 2016 its members were David Lindsell (Chair), Anne Marie Cannon, Joe Darby and Iain Macdonald. David Lindsell retired from the Committee on stepping down from the Board on 17 May 2017 and Iain Macdonald was appointed as chairman of the Committee. Jane Hinkley was appointed as a member of the Committee on 11 April 2017. All members of the Committee are deemed to be independent. The Board is satisfied that the membership of the Committee meets the requirements for recent and relevant financial experience.

The meetings of the Committee are normally attended by the Finance Director, the Group Financial Controller, the Group Audit and Risk Manager and representatives of the auditors. Other Executive Directors or senior managers are required to attend when significant risk management or control issues relating to their area of responsibility are considered by the Committee. During the year, the Committee meets privately with the Group Audit and Risk Manager, and with the Issuer's auditors. Whilst Rachel Rickard, the Company Secretary, is on maternity leave, Andy Gibb, the Interim Company Secretary, acts as secretary to the Committee.

The Committee's main responsibilities are:

monitoring and reviewing the effectiveness of the Issuer's risk management and internal control systems, including in particular the identification of emerging risks and the effectiveness of actions taken to mitigate them, together with the results of the programme of reviews of these systems and management's response to the review findings;
monitoring and reviewing the effectiveness and objectivity of the Issuer's Group Audit and Risk function, the appropriateness of its work plan, the results of reviews undertaken, and the adequacy of management's response to matters raised;
monitoring the integrity of the Company's financial statements and any formal announcements relating to the Company's financial performance and the significant financial reporting judgements they contain;
reviewing the external auditor's independence and objectivity and the effectiveness of the audit process;
developing and implementing policy on the engagement of the external auditor to supply non-audit services; and
monitoring the enforcement of the Company's Code of Conduct and the adequacy and security of its whistleblowing procedure.

The Committee is required to report its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken.

The Committee may engage the services of external advisers as it deems necessary in the furtherance of its duties, at the Issuer's expense. No external advisers materially assisted the Committee during the year. The Committee's terms of reference include all matters indicated by the Disclosure and Transparency Rule 7.1 and the Code.

The Committee is required to meet at least three times per year and has an agenda linked to events in the Issuer's financial calendar. The Committee met four times in 2016.

Remuneration Committee

The Committee is comprised solely of Non-Executive directors. At the conclusion of the financial year ended 31 December 2016, its members were Jane Hinkley (Chair), Joe Darby and David Lindsell. Joe Darby and David Lindsell retired from the Committee on stepping down from the Board on 17 May 2017 and Anne Marie Cannon and Iain Macdonald were appointed as members of the Committee. All members of the Committee are deemed to be independent.

Members of the Committee meet without any executives present for part of each meeting. The Chief Executive Officer attended meetings of the Committee by invitation but absented himself when the Committee discussed matters relating to his own remuneration. Tony Durrant, Chief Executive Officer, and Mike Fleming, Group HR Director, attend meetings as appropriate. Whilst Rachel Rickard is on leave, Andy Gibb acts as secretary to the Committee. Members of the Board and any other employees attending Committee meetings leave the meeting where their own remuneration is being discussed.

The Committee’s main responsibilities are:

determining the Remuneration Policy for Executive Directors and senior management;
determining the individual remuneration packages for each Executive Director and any changes thereto;
considering the design of, and determining targets for, the annual bonus plan;
reviewing and recommending to the Board the establishment of any new employee share plans and any material amendments;
to the Issuer’s existing share plans;
determining the quantum and performance conditions for long-term incentive awards;
reviewing pension arrangements, service agreements and termination payments for Executive Directors;
approving the Directors’ Remuneration Report, ensuring compliance with related governance provisions and legislation;
reviewing bonus outcomes for the Group, including Executive Directors; and
considering the remuneration policies and practices across the Group.

The Committee is required to meet at least three times per year and may arrange additional ad hoc meetings. The Committee met five times in 2016.

Kepler Associates, a brand of Mercer Limited which is part of the MMC group of companies (“Kepler”), is the independent adviser to the Committee. Kepler was appointed by the Committee in 2011 through a competitive tender process and was retained during the year. The Committee is of the view that Kepler provides independent remuneration advice to the Committee and does not have any connections with the Issuer that may impair its independence. Kepler is a founding member and signatory to the UK Remuneration Consultants’ Code of Conduct which governs standards in the areas of transparency, integrity, objectivity, confidentiality, competence and due care, details of which can be found at www.remunerationconsultantsgroup.com. In 2016 Kepler provided advice on remuneration for executives and, in particular, on the Issuer’s long-term incentive arrangements. They also reviewed the Directors’ Remuneration Report, provided advice on market and best practice guidance, and attended Committee meetings. Kepler reports directly to the Committee and provides no other services to the Issuer. Its total fee for the provision of remuneration services in 2016 was £58,625 on the basis of time and materials.

During the year the Committee also took advice from PwC to provide performance updates on outstanding LTIP awards, including the vesting of the 2014 Equity Pool, Performance Share Awards and Matching Share Awards. Total fees for PwC for the provision of remuneration services in 2016 were £30,500 on a fixed fee basis. The Committee also sought advice from Berwin, Leighton & Paisner LLP in relation to a review of Executive Director pension arrangements and settlement arrangements for Neil Hawkings. Total fees for 2016 for Berwin, Leighton & Paisner LLP were £12,692 on the basis of time and materials. The Committee evaluates the support provided by its advisers annually and is satisfied that the advice it received in 2016 was objective and independent.

Nomination Committee

The Committee is comprised of all Non-Executive Directors and the Chief Executive Officer. At the conclusion of the financial year ended 31 December 2016, its members were Mike Welton (Chair), Anne Marie Cannon, Joe Darby, Jane Hinkley, David Lindsell, Iain Macdonald and Tony Durrant. Joe Darby and David Lindsell stepped down from the Committee when they retired from the Board on 17 May 2017. Mike Fleming, Group HR Director, attends meetings as appropriate. Whilst Rachel Rickard is on leave, Andy Gibb acts as secretary to the Committee.

The Committee’s main responsibilities are:

to plan Board member succession and oversee plans for senior management succession, taking into account the strategy of the Issuer, skills, knowledge, diversity and experience required to deliver the strategy;
to regularly review the structure, size and composition of the Board and Committees; and
to lead the process for Board appointments, identifying and nominating for the approval of the Board, candidates to fill Board vacancies.

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The Committee is required to meet at least two times a year and may arrange additional ad hoc meetings. The Committee met three times in 2016.

Corporate Governance Code

The Issuer complied with the Code throughout 2016 with the exception of Code Provision E.2.4 (Notice period for General Meetings). The General Meeting held on 25 April 2016 to approve the acquisition of E.ON UK E&P was held on less than 14 working days' notice in order to avoid financial penalties under the sale and purchase agreement in view of the pre-agreed completion deadline.

11. Major Shareholders

As at the Latest Practicable Date, the Issuer had received notification from the following institutions, in accordance with Chapter 5 of the Disclosure and Transparency Rules, of their significant holdings of voting rights (3 per cent. or more) of the Issuer's issued Ordinary Shares:

Shareholder	Date of notification to the stock exchange	Notified number of voting rights	Notified % of voting rights	Nature of holding
Bank of America Corporation	22/05/2017	38,663,916	7.569%	Indirect
Deutsche Bank AG	09/05/2017	36,031,284	7.05%	Direct & Indirect
Dimensional Fund Advisors LP	18/05/2017	25,626,026	5.017%	Indirect
Artemis Investment Management LLP	13/05/2015	25,451,951	4.98%	Direct & Indirect
Aviva plc & subsidiaries^{23}	27/04/2009	3,933,529	4.95%	Direct & Indirect
Schroders plc	12/01/2017	24,688,996	4.83%	Indirect
AXA Investment Managers	03/03/2017	23,907,981	4.68%	Indirect
Ameriprise Financial, Inc	20/01/2012	24,666,346	4.66%	Direct & Indirect

None of the Issuer's major shareholders set out above has different voting rights from any other holder of Ordinary Shares.

The Issuer is not aware of any person who, directly or indirectly, owns or controls the Issuer. The Issuer is not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Issuer.

12. Listing and admission to trading of the Equity Warrants, Synthetic Warrants and Warrant Shares

The Equity Warrants and Synthetic Warrants will not be admitted to trading on any market or exchange. The Issuer will use all reasonable endeavours to procure that the Warrant Shares will be admitted to trading on the premium segment of the main market of the London Stock Exchange as soon as practicable (and in any event not later than seven Business Days) after the relevant exercise date of the Equity Warrants.

13. Litigation

Other than as set out below, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) during the 12 months preceding the date of this document which may have, or have had in the recent past, significant effects on the financial position or profitability of the Group.

Indonesian branch profits tax repayment claim

From 2011 the Indonesian Tax Authority has imposed a 20 per cent. branch profit tax rate to the Group's operations in Indonesia. The Group is contesting this imposition on the grounds that, under the Netherlands—Indonesia Tax Treaty, the Group is entitled to a 10 per cent. branch profit tax rate. In accordance with due process in Indonesia, Premier has paid the additional tax of US$132 million and is processing a claim for repayment using Indonesian tax dispute resolution and international tax treaty dispute procedures.

14. Auditors and auditors' confirmation

The consolidated financial statements of the Issuer for the financial years ended 31 December 2014, 2015 and 2016 have been audited without qualification by Deloitte LLP, a member firm of the Institute of Chartered

23 Interests shown for Aviva plc and its subsidiaries pre-date the share split in 2011.

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Accountants of England & Wales. For emphasis of matters contained in the 2015 and 2016 financial statements see Part IV (Historical Financial Information) of this Prospectus.

On 17 May 2017 Shareholders appointed Ernst & Young LLP as the Issuer’s new auditor until the conclusion of its 2018 annual general meeting.

15. Material contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been or will be entered into by members of the Group for the purpose of the Refinancing.

Senior Lock-Up Agreement

The Scheme Companies, along with each other Participating Company, have entered into the Senior Lock-up Agreement with Scheme Creditors representing approximately 95.2 per cent. by value of the Scheme Creditors (excluding the Retail Bondholders) and 100 per cent. of the Schuldschein Lenders (referred to as the “Participating Senior Creditors”).

Under the terms of the Senior Lock-up Agreement, Participating Senior Creditors have given several customary undertakings, including:

to support the Refinancing and to vote in favour of the Schemes (except in the case of the Schuldschein Lenders, who have undertaken separately to enter into contractual documents implementing the Refinancing) and, if applicable, a CVA;
not to take, encourage, assist or support any action which might impede, frustrate, delay or prevent the implementation of the Refinancing;
to instruct their legal advisers to negotiate the Restructuring Documents on the terms of the agreed term sheets in good faith; and
not to transfer their rights under the Existing Scheme Finance Documents or the Schuldschein Loan Agreements (as applicable), unless the proposed transferee of such rights accedes to the Senior Lock-up Agreement (subject to limited carve outs).

In addition to the undertakings described above, the Participating Senior Creditors waive any event of default arising as a result of a default under the Existing Scheme Finance Documents or the Schuldschein Loan Agreements (as applicable) caused by the implementation of the Senior Lock-up Agreement. In addition, the Participating Senior Creditors waive any event of default arising as a result of any breach of the Existing Leverage Ratio and Existing Interest Cover Ratio until termination of the Senior Lock-up Agreement or the Refinancing Effective Date (whichever is earlier).

The other provisions of the Senior Lock-up Agreement are customary. The lock-up provisions bind the parties to the Senior Lock-up Agreement for the duration of the Senior Lock-up Agreement’s effectiveness, subject to certain limited termination rights.

The Senior Lock-up Agreement also allows additional Scheme Creditors to become party to the Senior Lock-up Agreement by delivering an accession deed.

The Senior Lock-up Agreement is only fully effective from the date on which the Participating Senior Creditors representing 75 per cent. by value of the outstanding debt under each of the Existing Scheme Finance Documents (other than the Retail Bondholders) and all of the Schuldschein Lenders enter into the Agreement, both the Hedging Lock-up Agreement and the Existing Bilateral LC Lock-up Agreement have become fully effective, and either the Convertible Bondholder Lock-up Agreement has become fully effective or creditors with sufficient value of claims have signed the Senior Lock-up Agreement, the Hedging Lock-up Agreement or the Existing Bilateral LC Lock-up Agreement to vote in favour of a CVA. The Senior Lock-up Agreement became effective on 14 March 2017 and its terms will apply until the earlier of (i) the date on which it is terminated (as to which, see below), (ii) 31 July 2017 or any later date agreed between POUK and the Majority Participating Senior Creditors and (iii) the Refinancing Effective Date.

An individual Participating Senior Creditor can terminate the Senior Lock-up Agreement if, amongst other things:

the Majority Participating Senior Creditors determine that there has been a material adverse effect. In this context, “material adverse effect” is defined as a material adverse effect upon the ability of any company within the Group to implement, or perform its obligations under, the Refinancing or a material adverse

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effect on the consolidated financial position of the Group taken as a whole (with certain limited exceptions relating to accounting impairments);

a court or governmental body order has been made, preventing the implementation of the Refinancing and it has not been revoked or dismissed within 60 days of it being made; or
a Participating Company does not pay a Participating Senior Creditor on the due date any amount payable under an Existing Finance Document and the Participating Senior Creditor has given written notice of such failure to the Participating Company, unless the failure to pay is caused by an administrative or technical error or a material disruption to the payment systems required to make such a payment and payment is made within five Business Days of the Participating Senior Creditor’s written notice to the Participating Company.

The Senior Lock-up Agreement also provides for termination in certain circumstances, including:

an insolvency event having occurred in respect of any Participating Company, at the election of a specified majority of a Participating Senior Creditor Group in respect of that Participating Senior Creditor Group’s rights and obligations only;
if creditors vote down, or the Court refuses to sanction, the Schemes, at the election of a specified majority of a Participating Senior Creditor Group in respect of that Participating Senior Creditor Group’s rights and obligations only;
if a sufficient threshold of Convertible Bondholders have voted against a CVA such that the CVA cannot be approved for the purposes of the Insolvency Rules 1986, at the election of a specified majority of a Participating Senior Creditor Group in respect of that Participating Senior Creditor Group’s rights and obligations only;
at the election of a specified majority of a Participating Senior Creditor Group in respect of that Participating Senior Creditor Group’s rights and obligations only on and from the point at which the English High Court makes any determination to exercise any powers under section 6(4)(a) of the Insolvency Act 1986 in relation to a CVA which either (i) is not appealed by the Convertible Bond Issuer or the Issuer, or (ii) is appealed but such appeal is rejected by the English High Court;
at the election of a specified majority of a Participating Senior Creditor Group in respect of that Participating Senior Creditor Group’s rights and obligations only, if any of the Participating Companies has materially breached the Senior Lock-up Agreement; or
if, as a result of individual Participating Senior Creditors or Participating Senior Creditor Groups terminating the agreement, the remaining Participating Senior Creditors represent less than the thresholds required for effectiveness under the Senior Lock-up Agreement or if any Hedge Counterparty or Existing Bilateral LC Creditor terminates the Hedging Lock-up Agreement or the Existing Bilateral LC Lock-up Agreement (as applicable).

In addition to the Participating Senior Creditors’ power to terminate the Senior Lock-up Agreement, the Senior Lock-up Agreement will automatically terminate upon the occurrence of certain dates or events, including:

the Long-Stop Date; and
upon the execution by the Majority Participating Senior Creditors and the Participating Companies of an agreement purporting to replace the Senior Lock-up Agreement.

The Senior Lock-up Agreement can also be terminated in respect of the rights and obligations of a Participating Senior Creditor Group, with the mutual written consent of the specified majority of that Participating Senior Creditor Group, the Majority Participating Senior Creditors and POUK.

The Senior Lock-up Agreement became fully effective on 14 March 2017.

Convertible Bondholder Lock-up Agreement

The Scheme Companies, the Convertible Bond Issuer and certain Participating Convertible Bondholders representing 81.9 per cent. by value of the Convertible Bonds have entered into the Convertible Bondholder Lock-up Agreement, pursuant to which they undertake to support the Refinancing and the Convertible Bondholder Approvals.

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The Participating Convertible Bondholders who are parties to the Convertible Bondholder Lock-up Agreement have made undertakings under the Convertible Bondholder Lock-up Agreement on very similar terms to those under the Senior Lock-up Agreement.

The Convertible Bondholder Lock-up Agreement is effective upon Convertible Bondholders representing 50 per cent. by value of the Convertible Bonds entering into the Convertible Bondholder Lock-up Agreement and upon the Senior Lock-up Agreement becoming fully effective.

The Convertible Bondholder Lock-up Agreement contains termination rights which are similar to those set out in the Senior Lock-up Agreement. In addition, there is also a termination event if the Senior Lock-up Agreement has been terminated with respect to all persons which are party to the Senior Lock-up Agreement in accordance with its terms.

The Convertible Bondholder Lock-up Agreement became fully effective on 14 March 2017.

Hedging Lock-Up Agreement

The Scheme Companies, the Participating Companies and certain Hedge Counterparties whose consent is required in order to implement the Refinancing have entered into the Hedging Lock-up Agreement, pursuant to which they undertake to support the Refinancing.

The Participating Hedge Counterparties who are party to the Hedging Lock-up Agreement have made undertakings under the Hedging Lock-up Agreement on very similar terms to those under the Senior Lock-up Agreement.

The Hedging Lock-up Agreement is effective upon all of the Participating Hedge Counterparties signing the Hedging Lock-up Agreement and the Senior Lock-up Agreement and the Existing Bilateral LC Lock-up Agreement becoming fully effective.

The Hedging Lock-up Agreement contains termination rights which are similar to those set out in the Senior Lock-up Agreement. There is also a termination right if a Participating Hedge Counterparty terminates the Senior Lock-up Agreement in its capacity as a party to the Senior Lock-up Agreement. Furthermore, there is also a termination event if the Senior Lock-up Agreement has been terminated with respect to all persons which are party to the Senior Lock-up Agreement in accordance with its terms.

The Hedging Lock-up Agreement became fully effective on 14 March 2017.

Existing Bilateral LC Lock-Up Agreement

The Scheme Companies, the Participating Companies and the Existing Bilateral LC Creditors have entered into the Existing Bilateral LC Lock-up Agreement, pursuant to which they undertake to support the Refinancing.

The Participating Existing Bilateral LC Creditors have made undertakings under the Existing Bilateral LC Lock-up Agreement on very similar terms to those under the Senior Lock-up Agreement.

The Existing Bilateral LC Lock-up Agreement is effective upon all of the Existing Bilateral LC Creditors signing the Existing Bilateral LC Lock-up Agreement and the Senior Lock-up Agreement becoming fully effective.

The Existing Bilateral LC Lock-up Agreement contains termination rights which are similar to those set out in the Senior Lock-up Agreement. There is also a termination right if a Existing Bilateral LC Creditor terminates the Senior Lock-up Agreement in its capacity as a party to the Senior Lock-up Agreement. Furthermore, there is also a termination event if the Senior Lock-up Agreement has been terminated with respect to all persons which are party to the Senior Lock-up Agreement in accordance with its terms.

The Existing Bilateral LC Lock-up Agreement became fully effective on 14 March 2017.

Restructuring Implementation Deed

On or before the Refinancing Effective Date, the Schuldschein Lenders, the Hedge Counterparties, the Existing Bilateral LC Creditors, an attorney (on behalf of the Scheme Creditors) and certain Group companies will enter into the Restructuring Implementation Deed. The Restructuring Implementation Deed describes the necessary steps to be taken for the Refinancing to occur including the steps pursuant to which the Existing Finance Documents will be amended and restated in the form set out in the appendices to the Restructuring Implementation Deed and as summarised in Part I (Information on the Refinancing) of this Prospectus.

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Warrant Instruments

On the Refinancing Effective Date the Issuer will execute by way of deed poll the Equity Warrant Instrument, the Synthetic Warrant Instruments and the Convertible Warrant Instrument, which will create the Equity Warrants, the Synthetic Warrants and the Convertible Warrants respectively. The terms of the Equity Warrant Instrument are summarised in Part VII (Terms and Conditions of the Equity Warrants). The terms and conditions of the Synthetic Warrant Instruments are summarised in Part VIII (Terms and Conditions of the Synthetic Warrants). The terms of the Convertible Warrant Instrument are substantially the same as the terms of the Equity Warrant Instrument.

Acquisition of 60 per cent. of the petroleum interests in the Falkland Islands of Rockhopper Exploration plc ("Rockhopper")

Pursuant to a sale and purchase agreement dated 12 July 2012 between Rockhopper, Premier Oil Iraq (Exploration & Production) Limited (subsequently renamed as Premier Oil Exploration and Production Limited) and the Issuer, the Issuer acquired certain petroleum licence interests in the Falkland Islands of Rockhopper, including a 60 per cent. participating interest in the Sea Lion discovery situated in Falkland Islands Petroleum Licence PL032. In consideration for the acquisition of the licence interests, the Issuer agreed to pay Rockhopper $231 million in cash on completion of the transfer and certain contributions to Rockhopper's future expenditure. The acquisition completed on 18 October 2012 and by an amendment and restatement of the sale and purchase agreement dated 12 January 2016 it was agreed to amend the Issuer's contributions to Rockhopper's future expenditure as follows:

The Issuer to pay US$48 million of exploration costs incurred by Rockhopper in the Falkland Islands; this has now been fully paid;
The Issuer to pay US$48 million of Sea Lion pre-development costs incurred by Rockhopper in the Falkland Islands; this has now been fully paid;
The Issuer to pay Rockhopper US$337 million of Sea Lion Phase 1 development costs incurred by Rockhopper after Sea Lion Phase 1 project sanction;
The Issuer to pay Rockhopper US$337 million of Sea Lion Phase 2 development costs incurred by Rockhopper after Sea Lion Phase 2 project sanction;
Rockhopper to pay the Issuer US$15.9 million per calendar quarter (subject to review prior to Phase 1 project sanction) from the date of first oil production from Sea Lion Phase 1 for 20 calendar quarters; and
The Issuer to lend Rockhopper up to US$750 million at a rate of 15 per cent. for Rockhopper's share of Sea Lion Phase 1 development costs following Sea Lion Phase 1 project sanction.

Acquisition of 40 per cent. interest in the Solan field from Chrysaor Limited ("Chrysaor")

On 29 May 2015, POUK entered into a sale and purchase agreement with Chrysaor under the terms of which POUK acquired Chrysaor's entire 40 per cent. interest in the Solan field (the "Solan Interest"). The consideration for this transaction was the settlement of an existing loan of $572,347,700 plus accrued interest on such sum (and future interest on such sum at a rate of 10 per cent. per annum) between the Issuer and Chrysaor (the "Outstanding Loan"), and the creation of a new 'royalty' revenue stream to be paid to Chrysaor under the terms of a Royalty and Net Production Interest Deed entered into between POUK and Chrysaor on 29 May 2015.

The royalties will be paid from a notional 40 per cent. interest in the field's net operating cash flow under three royalty streams as follows:

Royalty Stream 1—an initial monthly payment based on the net production revenues from the Solan Interest each month, capped at $3 million per year from POUK to Chrysaor which will be offset against any subsequent royalty payments and net production interest;
Royalty Stream 2—further monthly payments, up to $100 million in aggregate, based on the net production revenues from the Solan Interest each month, provided that such further payments will only be made (i) following repayment by Chrysaor to POUK of the Outstanding Loan, and (ii) once the cap in relation to Royalty Stream 1 has been reached in a given year; and
Royalty Stream 3—calculated and operates as per Royalty Stream 1 with additional reductions for certain development capital costs, provided that payments under Royalty Stream 3 will only commence once the

aggregate amount which would otherwise have been payable under Royalty Stream 3 exceeds the estimated Solan decommissioning costs.

Agreement with FlowStream Magni Ltd. ("FlowStream") in relation to the transfer of a 15 per cent. production interest in the Solan field's production

On 29 May 2015, POUK entered into an agreement with FlowStream whereby FlowStream agreed to make a payment of $100 million to the Issuer in consideration for the transfer of 15 per cent. of Solan field production to FlowStream (the "Streaming Deed") and the marketing of that share on FlowStream's behalf. The Issuer guarantees the obligations of POUK under the Streaming Deed.

The key terms of the Streaming Deed provide as follows:

following each lifting of Solan hydrocarbons, POUK shall deliver the relevant share (15 per cent.) to FlowStream;
FlowStream shall pay transportation costs and marketing fees to be deducted for each delivery; and
the Streaming Deed shall terminate on the earlier of:
the date on which the agreed return is achieved; or
the date the Solan Licence expires (currently 15 March 2018, subject to further extensions),

the result of which being that the length of the term of the Streaming Deed is dependent on the Solan field's production levels and the future oil price.

Acquisition by PEPUK of interests in the Huntington field from Noreco Oil (UK) Limited ("Noreco") and Iona UK Huntington Limited ("Iona") under the Huntington Joint Operating Agreement

On 8 January 2016 and 29 January 2016 PEPUK and POUK elected to acquire from Noreco and Iona respectively their entire equity interests in the Huntington field for no consideration pursuant to the default and forfeiture provisions within a joint operating agreement in relation to the Huntington field. PEPUK and POUK already held, respectively, a 25 per cent. and a 40 per cent. equity interest in the Huntington field. The Issuer anticipates that the transfer of the interests will occur in two stages, with PEPUK first acquiring POUK's interest in the Huntington field before proceeding to acquire Noreco and Iona's interests in the Huntington field.

Acquisition by POGL of E.ON E&P UK Limited from E.ON BETEILIGUNGEN GMBH ("E.ON")

On 29 January 2016 POGL entered into an agreement with E.ON whereby POGL acquired the entire issued share capital of E.ON E&P UK Limited for a base purchase price of $120 million, plus a completion adjustment of $15 million, giving a total consideration of $135 million. The Issuer completed the transaction on 29 April 2016.

The assets of E.ON E&P UK Limited's group included legal and beneficial interests in certain petroleum exploration and/or production licences, participating interests in the joint operating agreements and/or unitisation and unit operating agreements relating to such licences, and legal and beneficial interests in certain property and data relating to such licences, together with all rights, liabilities and obligations associated with such interests. At the time of the acquisition the assets were valued at approximately $1.6/boe based on 2P reserves.

The production assets comprised:

a 5.2 per cent. interest in the unitised Elgin-Franklin area (including the Elgin, Franklin and West Franklin gas condensate fields), along with an 18.57 per cent. interest in the Glenelg gas condensate field;
a 25 per cent. operated interest in the Huntington oil field, which rises to 38.5 per cent. post the default of Noreco Oil (UK) Limited and Iona Energy Inc. in respect of their equity in the field;
a 47 per cent. operated interest in the Babbage gas field;
operated interests in the Johnston (50.1 per cent.), Rita (74 per cent.) and Hunter (79 per cent.) gas fields;
interests in the Scoter (12 per cent.) and Merganser (7.9 per cent.) gas condensate fields; and
interests in the Orca (23.4685 per cent.), Caister (40 per cent.) and Ravenspurn North (28.745 per cent.) gas fields,

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together with associated property interests including pipelines, processing, and storage and office facilities.

The pre-development assets comprised:

a 50 per cent. operated interest in the Tolmount gas discovery; and
interests in the Arran (5.12 per cent.) and Austen (25 per cent.) discoveries.

Other assets comprised:

interests in a further 16 exploration licences in the UK (3 West of Shetland, 7 Central North Sea, 6 Southern North Sea), 13 of which are operated; plus a further licence in the process of being awarded;
a 20 per cent. interest in the CMS infrastructure;
a 30 per cent. interest in the ETS pipeline; and
a 42.7 per cent. interest in the Minke field, which ceased production in 2011.

16. Working capital

The Issuer is of the opinion that the working capital available to the Group is not sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus.

The above statement is made on the basis that the Refinancing is subject to a number of conditions including: (i) Shareholders approving the Shareholder Resolution; (ii) the Scheme Creditors approving the Schemes and such schemes being subsequently sanctioned by the Court; (iii) all other necessary parties (including the Schuldschein Lenders, Hedge Counterparties and Existing Bilateral LC Creditors) approving the Refinancing; (iv) the Group obtaining the Convertible Bondholder Approvals; and (v) the delivery of conditions precedent that are customary for a secured financing transaction and/or within the control of the Group.

Each of the Schuldschein Lenders, Hedge Counterparties and Existing Bilateral LC Creditors and a sufficient majority of Convertible Bondholders to pass the Convertible Bondholder Approvals have entered into lock-up agreements (the terms of which are described in section 15 of Part XI (Additional Information) whereby they have undertaken to support the Refinancing. The Schemes requires approval from 75% by value and a majority in number of Scheme Creditors who vote. More than 75% of Scheme Creditors by value have entered into a lock-up agreement whereby they have undertaken to vote in favour of the Schemes. As the Retail Bondholders have not entered into a lock-up agreement and the Retail Bonds continue to trade, the Issuer cannot be assured that a majority of Scheme Creditors in number will vote in favour of the Schemes. The lock-up agreements are subject to customary termination rights, including on the occurrence of a material adverse change, failure by Group companies to repay their debts as they fall due or on insolvency.

The Issuer believes, based on the level of support the Refinancing has received to date, that the risk of the conditions described in (ii), (iii), (iv) and (v) above not being satisfied is remote. However if any of the conditions described in (i) to (v) above were not satisfied, the Refinancing would not complete, and there would therefore be a significant risk of the Group entering into insolvency proceedings as set out above.

Timing

Since 14 March 2017 the Group's financial covenants have been deferred under the terms of the Senior Lock-up Agreement. If the Refinancing does not complete before 31 July 2017, the parties to the Senior Lock-up Agreement would be entitled to terminate the agreement, which would cause the deferrals to cease to be effective.

Without the deferrals contained in the Monthly Deferrals and the Senior Lock-up Agreement, the Issuer would have breached the financial covenants contained in the USPP Notes, the Schuldschein Loan Agreement, the RCF Facility Agreement and the Existing Term Loan Facility Agreement in respect of the testing periods ending on 30 June 2016 and 31 December 2016. As a result, if the financial covenant deferrals were to lapse and the Issuer was unable to secure further deferrals of a similar nature, there would be an event of default under each of those facilities, which could in turn trigger cross-defaults into the other financing arrangements of the Group. In such circumstances, there is a risk that all of the Group's outstanding debt under the Group's financing arrangements would be accelerated.

Even if the Issuer is able to secure future financial covenant deferrals, there is a risk that the Issuer will not be able to repay its US$150,000,000 and £100,000,000 term loan facility under the Existing Term Loan Facility Agreement when it matures on 29 November 2017, in which case the events of default, acceleration, cross-default and insolvency described above could occur. If the Issuer does not secure future financial

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covenant deferrals, there is a risk that this term loan facility will become payable before 29 November 2017 as a consequence of the events of default and acceleration of the Group's debts described above.

Covenant shortfall

As described above, in the event of a covenant shortfall, there is a risk that all of the Group's outstanding debt under the Group's financing arrangements would be accelerated such that the entirety of the Group's debt would immediately fall due. As at 30 April 2017 the amount outstanding under the Group's financing arrangements which could be required to be repaid following a breach of its financial covenants was US$3.43 billion.

If this were to occur, it is likely that the Group would have to enter into insolvency proceedings and counterparties to material contracts would seek to exercise termination rights under those contracts. In such circumstances, the ability of the Group to continue trading will depend upon the Group being able to negotiate an alternative refinancing proposal with its creditors and, if necessary, that proposal being approved by Shareholders. Whilst the Board would seek to negotiate such an alternative refinancing proposal with its creditors, there is no certainty that the creditors would engage with the Board in those circumstances. There would therefore be a significant risk of the Group entering into insolvency proceedings, which the Directors consider would likely result in no value being returned to Shareholders.

Action plan

In order to address this issue, the Issuer has agreed the deferrals contained in the Senior Lock-up Agreement and has negotiated the terms of the Refinancing with its creditors. On successful completion of the Refinancing, the Group's financial covenants would be revised. As a result, the Issuer is of the opinion that, were the Refinancing to complete, the working capital available to the Group would be sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus.

Implications

If the Refinancing completes, the Group's financial covenants will be revised. From 31 March 2018 onwards the Group's New Net Leverage Ratio covenant will be reduced quarterly and the New Interest Cover Ratio will be increased quarterly, and each will be reset to 3:1 from 31 March 2019 onwards. In addition, the Group will be required to reduce Covenanted Net Debt to US$2.95 billion or less by 31 December 2018. As at 30 April 2017, the Group's unaudited Covenanted Net Debt was approximately US$3.23 billion. Under the reasonable worst case scenario in the Group's working capital projections, the Group is forecast to breach both the New Net Leverage Ratio when it falls to 7:1 and the New Interest Cover Ratio when it increases to 1.9:1, when the Group's results to 30 June 2018 are delivered, which is expected to be in the latter half of the third quarter of 2018, after the end of the 12 month period covered by the working capital statement. In addition, under the reasonable worst case scenario the Group will breach its requirement to reduce Covenanted Net Debt to US$2.95 billion or less by 31 December 2018. This is not forecast to arise within the 12 month period covered by the working capital statement. The reasonable worst case scenario assumes that the Group is not able to execute its business plan and contemplates a combination of downside sensitivities including an oil price environment with prices materially below current forecasts, production delivery below current forecasts and a three month delay to the timing of first oil from the Catcher development beyond that currently expected.

The breaches of the New Net Leverage Ratio and New Interest Cover Ratio anticipated at 30 June 2018 in the reasonable worst case scenario may be remedied by one or more of the following:

Catcher achieving first oil in late 2017 in line with the Group's guidance;
the Group achieving average production of 75k boepd for 2017, in line with the Group's guidance;
the oil price remaining at or above current levels; or
the Group executing its business plan (including farm-outs and disposals of assets).

The occurrence of one or more of the above could generate additional EBITDA and cash flow which would increase the likelihood of the Group being able to meet its financial covenants when they are measured at 30 June 2018.

If the Group is able to execute its business plan (including farm-outs and disposals of assets) and oil prices remain at or above current levels, the Group is also expected to reduce its Covenanted Net Debt to less than US$2.95 billion by 31 December 2018. However, if either the Group is not able to deliver its business plan in full or if a low oil price environment persists, the Group may not be able to meet this covenant.

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If the Refinancing does not complete, the financial covenants deferrals contained in the Senior Lock-up Agreement would lapse. If the Issuer was unable to secure further deferrals of a similar nature, there would be an event of default under each of the USPP Notes, the Schuldschein Loan Agreement, the RCF Facility Agreement and the Existing Term Loan Facility Agreement, which could in turn trigger cross-defaults into the other financing arrangements of the Group. There would therefore be a risk that all of the Group's outstanding debt would be accelerated such that the entirety of the Group's debt would immediately fall due. In such circumstances, the ability of the Group to continue trading would depend upon the Group being able to negotiate an alternative refinancing proposal with its creditors. As there is no certainty that creditors would engage with the Board in these circumstances, there would therefore be a significant risk of the Group entering into insolvency proceedings.

17. Significant change

On 5 April 2017 the Group signed a share purchase agreement with Al-Haj Energy Limited for the sale of its Pakistan Business Unit for a cash consideration of US$65.6 million. A deposit was paid to the Group of US$15 million with a further interim deposit of US$10 million due within 60 days. The transaction is subject to receipt of customary government and regulatory approvals and is expected to complete by year-end 2017. Save as described in this section 17 of Part XI (Additional Information), there has been no significant change in the financial or trading position of the Group since 31 December 2016, the date to which the Issuer's last audited financial statements incorporated into this document by reference are prepared.

18. Dividend policy

The Issuer did not pay a dividend for the financial years ended 31 December 2014, 2015 and 2016.

The Issuer's policy is to reward Shareholders principally through share price growth and to utilise cash flow within the business.

In August 2015, the Issuer agreed with its lending group to modify its financial covenants until mid-2017. Under this agreement the financial covenants have been modified as follows:

Existing Leverage Ratio increased to 4.75:1 until the period ending 31 December 2016 and to 4.5:1 for the period ending 30 June 2017, before returning to its pre-modified level of 3:1 for the period ending 31 December 2017.
Existing Interest Cover Ratio reduced to 3:1 until the period ending 30 June 2017, before returning to its pre-modified level of 4:1 for the period ending 31 December 2017.

Under the terms of the agreement with its lending group, the Issuer is restricted from proposing a dividend to the extent that its projections indicate that its financial covenants will be above their pre-modified levels.

Pursuant to the Refinancing, the Issuer will covenant that it shall not declare, make or pay any dividend or other distribution or redeem or repay any of its share capital (other than pursuant to the terms of the Group's employee benefit trust and other employee incentivisation schemes).

19. Related party transactions

Save as disclosed in note 25 to the 2016 Annual Report and Financial Statements, note 25 to the 2015 Annual Report and Financial Statements and note 24 to the 2014 Annual Report and Financial Statements, there are no related party transactions between the Group and its related parties that were entered into during the financial years covered by the historical financial information and up to and including the date of this Prospectus.

20. Documents available for inspection

From the date of this Prospectus to the Refinancing Effective Date copies of the following documents will be available for inspection on the Issuer's website at www.premier-oil.com and, during normal business hours on any Business Day, at the offices of Slaughter and May, One Bunhill Row, London, EC1Y 8YY:

the Articles;
Premier's 2016 Annual Report and Financial Statements;
Premier's 2015 Annual Report and Financial Statements;
Premier's 2014 Annual Report and Financial Statements; and
this Prospectus.

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APPENDIX I—DEFINITIONS

All references in this Base Prospectus to “sterling” and “£” refer to pounds sterling. In addition, all references to “US dollars” and “US$” refer to United States dollars and all references to “Euro” and “€” are to the currency introduced at the start of the European economic and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended.

References to the singular in this document shall include the plural and vice versa, where the context so requires. The terms “subsidiary” and “subsidiary undertaking” have the meanings given to them under section 1159 of the Companies Act 2006.

“1992 ISDA Master Agreement” . . . means the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as published by the International Swaps and Derivatives Association Inc.

“2002 ISDA Master Agreement” . . . means the 2002 ISDA Master Agreement as published by the International Swaps and Derivatives Association, Inc.

“2011 Holder” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means any “holder” of the 2011 Notes as that term is used in the 2011 Note Agreement.

“2011 Make-Whole Notes” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the following three tranches of notes to be issued by POUK on the Refinancing Effective Date, each issue to be in a principal amount to be determined as at the Refinancing Effective Date, under the Amended and Restated 2011 USPP Agreement:

(a) the € 9.17% series A make-whole notes due 31 May 2021;

(b) the US$ 8.96% series B make-whole notes due 31 May 2021; and

“2011 Notes” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the following three tranches of notes issued by POUK under the 2011 USPP Note Agreement:

(a) the €75 million 5.32% series A senior notes due 9 June 2018 (of which €35,000,000 in principal amount is outstanding);

(b) the US$70 million 5.11% series B senior notes due 9 June 2018 (of which US$13,000,000 in principal amount is outstanding); and

(c) the US$174 million 5.78% series C senior notes due 9 June 2021 (of which US$128,000,000 in principal amount is outstanding).

“2011 USPP Amendment Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Agreement for the Amended and Restated Agreement to be entered into between (amongst others) POUK, the Issuer and each 2011 Holder amending and restating the 2011 USPP Note Agreement and the 2011 Notes in the form scheduled to the Restructuring Implementation Deed.

“2011 USPP Note Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the note purchase and guaranty agreement dated 9 June 2011 in respect of the 2011 Notes.

“2012 Holders” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means any “holder” of the 2012 Notes as that term is used in the 2012 Note Agreement.

“2012 Make-Whole Notes” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the following four tranches of notes to be issued by POUK on the Refinancing Effective Date, each issue to be in a principal amount to be determined as at the Refinancing Effective Date, under the Amended and Restated 2012 USPP Agreement:

(a) the € 8.43% series A make-whole notes due 31 May 2021;

(b) the US$ 8.52% series B make-whole notes due 31 May 2021;

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(c) the US$ 9.14% series C make-whole notes due 31 May 2021; and
(d) the US$ 9.29% series D make-whole notes due 31 May 2021.

“2012 Notes” means the following four tranches of notes issued by POUK under the 2012 USPP Note Agreement:

(a) the €25,000,000 4.58% series A senior notes due 15 March 2019 (of which €25,000,000 in principal amount is outstanding);
(b) the US$70,000,000 4.67% series B senior notes due 15 March 2019 (of which US$35,000,000 in principal amount is outstanding);
(c) the US$94,000,000 5.29% series C senior notes due 15 March 2022 (of which US$84,000,000 in principal amount is outstanding); and
(d) the US$38,000,000 5.44% series D senior notes due 15 March 2024 (of which US$38,000,000 in principal amount is outstanding).

“2012 USPP Amendment Agreement” means the Agreed Form amendment and restatement agreement to be entered into between (amongst others) POUK, the Issuer and each 2012 Holder amending and restating the 2012 USPP Note Agreement and the 2012 USPP Notes in the form scheduled to the Restructuring Implementation Deed.

“2012 USPP Note Agreement” means the note purchase and guaranty agreement dated 15 March 2012 entered into between POUK, the Issuer and the note purchasers listed therein.

“Account Holder Letter” means a Retail Bond Account Holder Letter or a CREST Account Holder Letter.

“Account Holder” means a Retail Bond Account Holder or a CREST Account Holder.

“Accounting Net Debt” means the net debt of the Group as calculated in accordance with the accounting policies and procedures used for the preparation of its annual accounts and financial statements.

“Adjustment Notice” has the meaning given to it in section 4 of Part VII (Terms and Conditions of the Equity Warrants).

“Agreed Form” means in respect of any document:

(a) prior to the date of the Restructuring Implementation Deed, means that document being in form and substance satisfactory to each Private Creditor Adviser and made available to the Scheme Creditors, and to the extent it is a party to any such document, any other party, via the Schemes Website, provided that no Private Creditor Adviser has received any objection from any Private Creditor relating to that Private Creditor Adviser or such other party (if applicable), acting reasonably and taking into account the terms of any Lock-up Agreement to which such Private Creditor is a party; and
(b) from the date of the Restructuring Implementation Deed, shall have the meaning given to that term in the Restructuring Implementation Deed.

“Agreed Investment Case” has the meaning given to it in section 1 of Part I (Information on the Refinancing) of this Prospectus.

“Amended and Restated 2011 USPP Agreement” means the 2011 USPP Note Agreement as amended and restated as

a consequence of the Schemes and pursuant to the 2011 USPP Amendment Agreement in accordance with the Restructuring Implementation Deed.

“Amended and Restated 2012 USPP Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the 2011 USPP Note Agreement as amended and restated as a consequence of the Schemes and pursuant to the 2011 USPP Amendment Agreement, in accordance with the Restructuring Implementation Deed.

“Amended and Restated Nelson Bilateral LC Facility Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Existing Nelson Bilateral LC Facility Agreement as amended and restated and converted into a committed LC facility as a consequence of the Refinancing and pursuant to the Existing Bilateral LC Facilities Amendment Agreement, in accordance with the Restructuring Implementation Deed.

“Amended and Restated Retail Bond Agency Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Existing Retail Bond Agency Agreement as amended and restated as a consequence of the Schemes and pursuant to the Retail Bond Amendment Agreement, in accordance with the Restructuring Implementation Deed.

“Amended and Restated Retail Bond Trust Deed” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Existing Retail Bond Trust Deed as amended and restated as a consequence of the Schemes and pursuant to the Retail Bond Amendment Agreement in accordance with the Restructuring Implementation Deed.

“Amended and Restated Term Loan Facility Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Existing Term Loan Facility Agreement as amended and restated in Agreed Form as a consequence of the Schemes and pursuant to the Existing Term Loan Amendment Agreement, in accordance with the Restructuring Implementation Deed.

“Amended and Restated Term Loan Facility” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . has the meaning given to the term “facility” in the Amended and Restated Term Loan Facility Agreement.

“Amended and Restated USPP Note Agreements” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Amended and Restated 2011 USPP Agreement and the Amended and Restated 2012 USPP Agreement.

“Amended Finance Documents” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the finance documents amended and restated pursuant to the Schemes and/or the Refinancing and in each case the relevant Amendment Agreement in accordance with the Restructuring Implementation Deed, being:

(a) the Amended and Restated Nelson Bilateral LC Facility Agreement;

(b) the Amended and Restated Retail Bond Agency Agreement;

(d) the Amended and Restated Term Loan Facility Agreement;

(e) the Amended and Restated USPP Note Agreements;

(f) the Amended Hedging Agreements;

(g) the Amended Retail Bond Final Terms;

(h) the Amended USPP Notes;

(i) the Converted Facility Agreement;

(j) the New Wytch Farm LC Facility Agreement;

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(k) the Senior RCF Facility Agreement; and
(l) the Super Senior Secured RCF/LC Facility Agreement.

“Amended Hedging Agreements” . . . means the Hedging Agreements as amended by the Hedging Common Terms Agreement.

“Amended Retail Bond Final Terms” means the Existing Retail Bond Final Terms as amended as a consequence of the Schemes and pursuant to the Retail Bond Amendment Agreement in accordance with the Restructuring Implementation Deed.

“Amended Retail Bonds” . . . . . . . means the Retail Bonds as amended pursuant to the Amended and Restated Retail Bond Trust Deed, the Amended and Restated Retail Bond Agency Agreement and the Amended Retail Bond Final Terms.

“Amended USPP Notes” . . . . . . . means:
(a) the 2011 Notes as amended as a consequence of the Schemes and pursuant to the 2011 USPP Amendment Agreement, in accordance with the Restructuring Implementation Deed; and
(b) the 2012 Notes as amended as a consequence of the Schemes and pursuant to the 2012 USPP Amendment Agreement, in accordance with the Restructuring Implementation Deed.

“Amendment Agreement” . . . . . . . means each of:
(a) the 2011 USPP Amendment Agreement
(b) the 2012 USPP Amendment Agreement;
(c) the Converted Amendment Agreement;
(d) the Existing Bilateral LC Facilities Amendment Agreement;
(e) the Existing Term Loan Amendment Agreement;
(f) the Hedging Common Terms Agreement;
(g) the RCF Amendment Agreement; and
(h) the Retail Bond Amendment Agreement.

“Arm’s Length Terms” . . . . . . . means, in respect of the sale of Trust Securities, the sale of those Trust Securities to a third party on arm’s length terms.

“Articles of Association” or “Articles” means the articles of association of the Issuer as adopted from time to time.

“Asset Market Value” . . . . . . . has the meaning given to it in section 4 of Part VII (Terms and Conditions of the Equity Warrants).

“Board” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the board of directors of the Issuer.

“Borrower” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) the Issuer, where applicable, as issuer of the Retail Bonds and borrower under the Wytch Farm LC Facility with HSBC plc;
(b) POUK, where applicable, as a borrower under the RCF Facility Agreement, a borrower under the Existing Term Loan Facility Agreement, the borrower under each Schuldschein Loan Agreement, the issuer of the 2011 Notes, the issuer of the 2012 Notes, the borrower the Wytch Farm LC Facility with Royal Bank of Canada, the borrower under the Wytch Farm LC Facility with United Overseas Bank Limited;
(c) Premier Oil Group Limited, where applicable, as the borrower under the Wytch Farm LC Facility with DBS Bank Ltd and as

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the borrower under the Existing Nelson Bilateral LC Facility Agreement;

(d) Premier Oil Exploration and Production Limited as a borrower under the RCF Facility Agreement; and
(e) Premier Oil Holdings Limited as a borrower under the RCF Facility Agreement.

"Brazilian Guarantee" means the deed of guarantee and indemnity in respect of the guarantee and indemnity to be granted by the Brazilian Guarantor in favour of the Global Agent.

"Brazilian Guarantor" means Premier Oil do Brasil Petroleo e Gas Ltda.

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Edinburgh and New York, and, in relation to any date for payment or purchase of a currency other than euro, the principal financial centre of the country of that currency, or, in relation to any date for payment or purchase of euro, any TARGET Day.

"Catcher" means any working or participating interest of any member of the Group in the hydrocarbon accumulation commonly known as Catcher field which underlies Block 28/9a of the UK Continental Shelf pursuant to licence D1430, the Burgman Field and the Varadero Field.

"CDI Holder" means each beneficial owner of CDIs representing Retail Bonds, holding those CDIs directly or indirectly in account(s) in the name of any CREST Account Holder acting on the beneficial owner's behalf at the Record Time, including any beneficial owner of CDIs which is a CREST Account Holder.

"CDIs" means CREST Depository Instruments, which are indirect, dematerialised, depository interests in the Retail Bonds issued, held, settled and transferred through CREST.

"CIN" means CIN (Belgium) Limited, a subsidiary of EUI.

"Clearing System" means Euroclear, Clearstream, or any other clearing system and, in each case, each of their respective nominees and successors, acting through itself or a depository and any other system designed for similar or analogous proceedings.

"Clearstream" means Clearstream Banking, société anonyme.

"CoCom" means the coordinating committee of certain creditors of the Group comprising Barclays Bank PLC, BNP Paribas, Commonwealth Bank of Australia, DNB (UK) Limited, Lloyds Bank plc, Mizuho Bank, Ltd. and The Royal Bank of Scotland plc appointed pursuant to the CoCom appointment letter dated 21 April 2016 between (amongst others) the Issuer and Barclays Bank plc.

"Common Depository" means Deutsche Bank AG, London Branch in its capacity as common depository in respect of the Retail Bonds cleared through Euroclear and Clearstream.

"Companies Act" means the Companies Act 2006.

"Converted Amendment Agreement" means the Agreed Form amendment and restatement agreement in respect of the Schuldschein Loan Agreements, in accordance with and in the form scheduled to the Restructuring Implementation Deed.

"Converted Facility" means the facility under the Converted Facility Agreement.

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“Converted Facility Agreement”	means the English law governed term loan facility in respect of the Schuldschein Loan Agreements as amended and restated in accordance with theRestructuring Implementation Deed.
“Convertible Bond Amendment and Restatement Agreement”	means the Agreed Form supplemental trust deed, which is available on the Schemes Website, pursuant to which, on theRefinancing Effective Date, (i) the deed poll in respect of the Convertible Bonds is to be amended and restated, (ii) the Convertible Bond Trust Deed is to be amended and restated, and (iii) the paying, transfer and exchange agency agreement in respect of the Convertible Bonds is to be amended and restated.
“Convertible Bond Issuer”	means Premier Oil Finance (Jersey) Limited, a company registered in Jersey with registered number 97486 and with its registered office at 3 Castle Street, St. Helier,Jersey, JE4 5UT.
“Convertible Bond Restructuring”	means the restructuring of the Convertible Bonds on the terms set out in the Convertible Bond Amendment and Restatement Agreement.
“Convertible Bond Trust Deed”	means the trust deed dated 1 November 2012 and entered into between the Convertible Bond Issuer, the Issuer and the Convertible Bond Trustee.
“Convertible Bond Trustee”	means Deutsche Trustee Company Limited (acting in its capacity as trustee under the Convertible Bond Trust Deed).
“Convertible Bondholder Approvals”	means the approval of the Convertible Bond Restructuring either by way of:(a) approval of the Convertible Bondholder Resolutions by the requisite threshold of the holders of the Convertible Bonds under theConvertible Bond Trust Deed; or(b) approval of a CVA by a sufficient threshold of creditors of the Convertible Bond Issuer entitled to vote on a CVA such that a CVA is approved for the purposes of Rule 15.34 of the Insolvency Rules (England and Wales) 2016 and either:(i) the 28 day period in which an application may be brought to challenge a CVA pursuant to section 6(3)(a) of the Insolvency Act 1986 has expired without any application being made; or(ii) any application brought to challenge a CVA pursuant to section 6 of the Insolvency Act 1986 within the initial 28 day period (as described in section 6(3)(a) of the Insolvency Act 1986) has been rejected by the High Court of England and Wales and either (a) no appeal of the decision is made within 21 days (or such longer period as the High Court in England and Wales may permit prior to the end of such 21 day period) or (b) an application to appeal is rejected by the High Court or (if applicable) the Court of Appeal in England and Wales.
“Convertible Bondholder Lock-up Agreement”	means the lock up agreement dated 28 February 2017 and fully effective from 14 March 2017, between the Convertible Bond Issuer, the Issuer, POUK and certainParticipating Convertible Bondholders.
“Convertible Bondholder Meeting”	means a meeting of the Convertible Bondholders convened in accordance with the Convertible Bond Trust Deed in connection with theRefinancing (including any adjournment of such meeting).

“Convertible Bondholder Resolutions”	means the “Extraordinary Resolutions” (as defined in the Convertible Bond Trust Deed) proposed by the Convertible Bond Issuer (either at each Convertible Bondholder Meeting or through a written resolution procedure under the Convertible Bond Trust Deed), as may be necessary or desirable to approve and implement the Refinancing in respect of the Convertible Bonds.
“Convertible Bondholders”	means the persons who hold the ultimate beneficial interests in the Convertible Bonds and whose interests in the Convertible Bonds are held through records maintained in book entry form by a Clearing System.
“Convertible Bonds”	means the US$245,324,000 2.5 per cent. convertible bonds due 2018 issued by the Convertible Bond Issuer, guaranteed by the Issuer and constituted by the Convertible Bond Trust Deed.
“Convertible Warrants”	means the warrants, representing 3 per cent. of the Issuer’s nominal share capital on a Fully Diluted Basis, with similar terms to the Equity Warrants, to be issued to Convertible Bondholders pursuant to the Convertible Bond Restructuring.
“Court Hearing”	means the hearing or hearings by the Court of the application to sanction each of the Schemes and to make the Schemes Sanction Orders.
“Court”	means the Court of Session in Scotland.
“Covenanted Net Debt”	means Accounting Net Debt as adjusted for certain items, of which the most significant are issued LCs, partners’ shares of gross joint venture cash balances and cash which is otherwise included on the Group’s balance sheet but is not held for the Group’s beneficial interest.
“CREST Account Holder Letter”	means the account holder letter for use by CREST Account Holders in relation to voting at the Scheme Meetings in respect of Retail Bonds represented by CDIs.
“CREST Account Holder”	means any CREST participant recorded directly in the records of CREST as a holder of CDIs, either for its own account or on behalf of its client, for whom CIN is their account holder with Euroclear in respect of the Retail Bonds.
“CREST Regulations”	means the Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.I. No 68/1996) and the Uncertificated Securities Regulations 2001 (SI No. 2001/3755), including any modifications thereof or any regulations in substitution therefor and for the time being in force.
“CREST”	means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the CREST Regulations).
“Customary Anti-Dilution Protections”	has the meaning given to it in section 2 of Part I( Information on the Refinancing ).
“CVA”	means a company voluntary arrangement under Part I of the Insolvency Act 1986 of the Convertible Bond Issuer to effect the transactions contemplated by the Refinancing in respect of the Convertible Bonds.
“Directors”	means the directors whose names appear on 142 of this Prospectus.
“Disqualified Person”	means a person who is a citizen of, or domiciled or resident in, or subject to the laws of, any jurisdiction where the offer to issue to, subscription, exercise or other form of acceptance by, such person

of any Equity Warrants is prohibited by law or would, or would be likely to, result in POUK, the Issuer or any of its subsidiaries being required to comply with any filing, registration, disclosure or onerous requirement in such jurisdiction (as may be determined by the Directors in their sole discretion), which shall include without limitation, any person electing to receive Equity Warrants who has not made the US Certifications.

“EBITDA” means the measure of the Group’s earnings used in the New Financial Covenants and the Gross Leverage Ratio under the Synthetic Warrants, being, in summary, earnings before interest, tax, depreciation and amortisation.

“EBITDAX” means the measure of the Group’s earnings used in the Existing Financial Covenants, being, in summary, earnings before interest, taxes, depreciation, amortisation, impairment, exploration spend and reduction in decommissioning estimates.

“Election Adjustment Deadline” means 9.30 am on the day that is two Business Days after the date on which the Schemes Effective Time occurs.

“Election Form” means the form for use in relation to making elections in respect of the Equity Warrants and the Synthetic Warrants and for participation in the Super Senior Secured RCF/LC Facilities.

“Eligible Person” means any person other than a Disqualified Person.

“English Court” means the High Court of Justice in England and Wales (or, in relation to an appeal from the High Court of Justice in England and Wales, the Court of Appeal in England and Wales and, if applicable, the Supreme Court of England and Wales).

“Entitlement Calculation Date” means:

(a) the date which is three Business Days after the Schemes Effective Time; or
(b) such later date as may be notified from time to time by Premier to the Scheme Creditors in accordance with Clause 11.6 and the Restructuring Implementation Deed,

provided always that such date shall be no fewer than two Business Days and no more than five Business Days prior to the Refinancing Effective Date.

“EPUK” means Premier Oil E&P UK Limited.

“EPUKEU” means Premier Oil E&P UK EU Limited.

“Equity Adjustment Event” has the meaning given to it Part VII (Terms and conditions of the Equity Warrants).

“Equity Warrant Document” means:

(a) an Equity Warrant Instrument;
(b) the global warrant certificate(s) to be issued in respect of the warrants constituted by an Equity Warrant Instrument; and
(c) individual warrant certificates (if any) issued in respect of the Equity Warrants.

“Equity Warrant Instrument” means the Agreed Form share warrant instrument constituting the Equity Warrants scheduled to the Restructuring Implementation Deed.

“Equity Warrant Holder” means any holder of an Equity Warrant.

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"Equity Warrants" means warrants equivalent to up to 15 per cent. of the nominal share capital of the Issuer on a Fully Diluted Basis, issued pursuant to the Equity Warrant Instrument.

"EUI" means Euroclear UK & Ireland Limited.

"EURIBOR" means the Euro Interbank Offered Rate.

"Euroclear" means Euroclear Bank S.A./N.V..

"Executive Directors" means the individuals listed as executive directors in the table on page 142 of this Prospectus.

"Exercise Notice" means an Exercise Notice in the appropriate form appended to the Equity Warrant Instrument.

"Exercise Period" the period from the Refinancing Effective Date until 9.00 a.m. 31 May 2022.

"Exercise Price" has the meaning given to it in section 2(b) of Part VII (Terms and conditions of the Equity Warrants).

"Existing Bilateral LC Creditors" means (a) DBS Bank Ltd in its capacity as 'Bank' under the Existing Nelson Bilateral LC Facility Agreement; and (b) DBS Bank Ltd, HSBC Bank plc, Royal Bank of Canada and United Overseas Bank Limited, London Branch, in each case in its capacity as a creditor under the Existing Wytch Farm Bilateral LC Facility Agreement to which it is a party.

"Existing Bilateral LC Facilities Amendment Agreement" means the Agreed Form amendment and restatement agreement to be entered into between (amongst others) the Existing Bilateral LC Creditors, the Issuer, Premier Oil Group Limited, Premier Oil Holdings Limited and POUK amending and restating the Existing Nelson Bilateral LC Facility Agreement and the Existing Wytch Farm Bilateral LC Facilities scheduled to the Restructuring Implementation Deed.

"Existing Bilateral LC Lock-up Agreement" means the lock-up agreement dated 8 March 2017 and fully effective from 14 March 2017 between the Issuer, POUK, certain other companies within the Group and the Participating Existing Bilateral LC Creditors.

"Existing Borrower" means, where appropriate, a borrower under the Existing Debt Documents, being each of:

(a) the Issuer, where applicable, as issuer under the Existing Retail Bond Finance Documents, or as a borrower under the Existing Wytch Farm Bilateral LC Facility with HSBC plc;

(b) POUK, where applicable, as a borrower under the RCF Facility Agreement, a borrower under the Existing Term Loan Facility Agreement, the borrower under each Schuldschein Loan Agreement, the issuer of the 2011 Notes, the issuer of the 2012 Notes, the borrower under the Existing Wytch Farm Bilateral LC Facility with Royal Bank of Canada, and the borrower under the Existing Wytch Farm Bilateral LC Facility with United Overseas Bank Limited;

(c) Premier Oil Group Limited, where applicable, as a borrower under the Existing Wytch Farm Bilateral LC Facility Agreement with DBS Bank Ltd and as the borrower under the Existing Nelson Bilateral LC Facility Agreement;

(d) Premier Oil Exploration and Production Limited, where applicable, as a borrower under the RCF Facility Agreement; and
(e) Premier Oil Holdings Limited, where applicable, as a borrower under the RCF Facility Agreement.

“Existing DBS Bilateral LC Facility Agreement” means the uncommitted revolving bond, guarantee and standby letter of credit facility under the uncommitted revolving bond facility letter dated 28 July 2011 from DBS Bank Ltd to, and countersigned on 1 August 2011 by, Premier Oil Group Limited.

“Existing Debt Document” means:

(a) the Existing Finance Documents;
(b) the Existing Wytch Farm Bilateral LC Facility Agreement;
(c) the Existing Nelson Bilateral LC Facility Agreement; and
(d) the Hedging Agreements.

“Existing Finance Documents” means, together, the Existing Scheme Finance Documents and the Schuldschein Finance Documents.

“Existing Financial Covenants” means the Existing Leverage Ratio and the Existing Interest Cover Ratio.

“Existing Guarantors” means the Issuer, POUK, the Convertible Bond Issuer, Premier Oil Group Limited, Premier Oil Overseas B.V., Premier Oil Vietnam Offshore B.V., Premier Oil Kakap B.V., Premier Oil Natuna Sea B.V., Premier Oil (Vietnam) Limited, Premier Oil Holdings Limited, Premier Oil Exploration and Production Limited and Premier Oil E&P UK Limited.

“Existing Interest Cover Ratio” means the Group’s EBITDAX to net interest cover ratio being the interest cover ratio contained in the Existing Finance Documents (other than the Existing Retail Bond Finance Documents).

“Existing Leverage Ratio” means the Group’s net debt to EBITDAX cover ratio being the leverage ratio contained in the Existing Finance Documents (other than the Existing Retail Bond Finance Documents).

“Existing Nelson Bilateral LC Facility Agreement” means the Existing DBS Bilateral LC Facility Agreement but only to the extent that the commitments thereunder are utilised to issue any letter of credit in respect of the decommissioning liabilities of the Nelson Field.

“Existing Obligor” means, as applicable, in respect of the Existing Debt Documents, the Existing Borrowers and the Existing Guarantors.

“Existing Ordinary Shares” means Ordinary Shares in issue at the date of this Prospectus.

“Existing Retail Bond Agency Agreement” means the agency agreement relating to the Retail Bond entered into by, amongst others, the Issuer, the Retail Bond Trustee and Deutsche Bank AG, London in its capacities as issuing and paying agent, paying agent, transfer agent and calculation agent and dated 18 November 2013.

“Existing Retail Bond Final Terms” means the final terms appended to the Retail Bond Global Certificate issued on the date of issue of the Retail Bonds.

“Existing Retail Bond Finance Documents” means the Existing Retail Bond Trust Deed, the Existing Retail

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	Bond Agency Agreement, the Existing Retail Bond Final Terms and the Retail Bonds.
“Existing Retail Bond Trust Deed”	means the trust deed constituting the Retail Bonds entered into between, among others, the Issuer and the Retail Bond Trustee, dated 18 November 2013.
“Existing Scheme Finance Documents”	means, together, the RCF Finance Documents, the USPP Finance Documents, the Existing Term Loan Finance Documents and the Existing Retail Bond Finance Documents.
“Existing Senior Finance Documents”	means the Issuer and POUK (in their capacity as borrowers or issuers under the Existing Scheme Finance Documents and the Schuldschein Loan Agreements) and the Existing Guarantors in their capacity as guarantors under the Existing Finance Documents.
“Existing Term Loan Amendment Agreement”	means the Agreed Form amendment and restatement agreement to be entered into between (amongst others) the Existing Term Loan Creditors, Premier Oil and POUK amending and restating the terms of the Existing Term Loan Facility Agreement in the form scheduled to the Restructuring Implementation Deed.
“Existing Term Loan Creditor”	means a “Lender” under and as that term is defined in the Existing Term Loan Facility Agreement.
“Existing Term Loan Facility Agreement”	means the term loan facility agreement dated 29 November 2013, entered into between, among others, Lloyds Bank plc as facility agent and the Issuer as parent company.
“Existing Term Loan Finance Document”	means a “Finance Document” as defined in the Existing Term Loan Facility Agreement.
“Existing Term Loan Supplemental Agreements”	means the supplemental agreements dated 2 June 2016, 3 October 2016 and 28 December 2016 relating to the Existing Term Loan Facility Agreement, in each case entered into between, among others, the Issuer, POUK and Lloyds Bank plc as facility agent under the Existing Term Loan Facility Agreement.
“Existing Wytch Farm Bilateral LC Facilities”	means the letter of credit facilities under the Existing Wytch Farm Bilateral LC Facility Agreements.
“Existing Wytch Farm Bilateral LC Facility Agreement”	means:(a) the Existing DBS Bilateral LC Facility Agreement (but only to the extent that the commitments thereunder are utilised to issue any letter of credit in respect of the decommissioning liabilities of Wytch Farm);(b) the facility letter dated 19 March 2014 from HSBC Bank plc to, and countersigned on 7 April 2014 by, the Issuer;(c) the uncommitted standby credit facility letter dated 8 December 2011 from Royal Bank of Canada to, and countersigned on 8 December 2011 by, Premier Oil Holdings Limited and POUK; and(d) the uncommitted revolving bond facility letter dated 27 February 2013 from (and signed on 11 March 2013 by)

United Overseas Bank Limited to, and countersigned on 2 May 2013 by, Premier Oil UK Limited.

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"Expenditure Budget" means the long form documentation containing a mechanism for the approval by the Private Creditors of the Group's annual capital expenditure and exploration budget which must detail, among other things, committed and uncommitted capital expenditure and exploration expenditure broken down into certain categories.

"FCA" means the Financial Conduct Authority.

"Flowstream" means Flowstream Magni Ltd.

"Form of Proxy" means the form of proxy for use by RCF Creditors, Existing Term Loan Creditors and USPP Holders in relation to voting at the Scheme Meetings.

"Forms Submission Deadline" means 5 pm on 22 June 2017.

"FSMA" means the Financial Services and Markets Act 2000.

"Fully Diluted Basis" means, in respect of the Issuer's issued share capital, the Issuer's issued share capital on the Entitlement Calculation Date after it has been grossed up to account for the maximum number of Ordinary Shares capable of being issued on the exercise of the Equity Warrants or Convertible Warrants.

"General Meeting" a general meeting of the Issuer to be held pursuant to which holders of Ordinary Shares will vote on whether to approve the Shareholder Resolution.

"GLAS" means Global Loan Agency Services Limited.

"Global Agent" means GLAS in its capacity as global agent under the Amended Finance Documents and the New Finance Documents.

"Global Warrant Certificates" means the Regulation S Global Warrant Certificate and/or the Restricted Securities Global Warrant Certificate (as the context requires).

"Gross Leverage Ratio" means the Group's ratio of gross debt to EBITDA being the gross leverage ratio used in certain benchmarks under the Synthetic Warrants.

"Group" means the Issuer and its subsidiaries from time to time (including, as the context requires, from the date of its incorporation, Newco).

"Guarantors" means the Existing Guarantors and any New Guarantors that are not already Existing Guarantors.

"Hedge Counterparty" means BNP Paribas, The Bank of Nova Scotia, DNB Bank ASA, Lloyds Bank plc, ING Bank N.V., Wells Fargo Securities International Limited, Citigroup Global Markets Limited, Commonwealth Bank of Australia, ABN AMRO Bank N.V., Canadian Imperial Bank of Commerce, DBS Bank Ltd, Bank of Montreal, DnB Bank ASA London Branch, HSBC Bank plc, Barclays Bank PLC, MUFG Securities EMEA plc, Deutsche Bank AG, London Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd, or any party to which an interest in a Hedging Agreement is transferred, in accordance with the transfer provisions set out in the Intercreditor Agreement.

"Hedging Agreement" any ISDA Master Agreement or other framework agreement similar in effect to an ISDA Master Agreement (including the schedule to that ISDA Master Agreement and any confirmations entered into under it) or other agreement between a Hedge Counterparty and an Existing Obligor and/or New Obligor which

governs one or more Hedging Transactions entered into between such Hedge Counterparty and Existing Obligor and/or New Obligor.

“Hedging Common Terms Agreement” means the Agreed Form hedging common terms agreement amending certain terms of the Hedging Agreements in the form scheduled to the Restructuring Implementation Deed.

“Hedging Lock-up Agreement” means the lock up agreement dated 9 March 2017 and fully effective from 14 March 2017, between the Issuer, POUK, Premier Oil Holdings Limited, certain other Existing Obligors and New Obligors within the Group and the Participating Hedge Counterparties.

“Hedging Transactions” means the Group’s hedging arrangements with the Hedge Counterparties including commodity swaps and options, interest rate swaps, cross currency swaps and foreign exchange forwards.

“Holding Period Expiry Date” means the last date falling at the end of the Holding Period.

“Holding Period Trust Deed” means the Agreed Form trust deed to be entered into on or prior to the Refinancing Effective Date between, among others, POUK, the Issuer and the Holding Period Trustee.

“Holding Period Trust” means the bare trust in respect of Scheme Creditors’, Schuldschein Lenders’ and Existing Bilateral LC Creditors’ Warrants, an Existing Bilateral LC Creditor’s Warrants and a Schuldschein Lender’s Warrants administered by the Holding Period Trustee.

“Holding Period Trustee” means Lucid Issuer Services Limited in its capacity as trustee under the Holding Period Trust Deed.

“Holding Period” means the period of 12 months commencing on the Refinancing Effective Date.

“IAI” means an institutional “accredited investor” within the meaning of clauses (1), (2), (3) or (7) of paragraph (a) of Rule 501 of Regulation D under the US Securities Act or an entity wholly owned by any person that is an “accredited investor” within the meaning of clauses (1), (2), (3) or (7) of paragraph (a) of Rule 501 of Regulation D under the US Securities Act.

“IFRS” means International Financial Reporting Standards.

“Individual Warrant Certificates” means Regulation S Individual Warrant Certificates and/or Restricted Securities Individual Warrant Certificates (as the context requires).

“Information Agent” means Lucid Issuer Services Limited.

“Insolvency Event” means any corporate action, legal proceedings or other formal procedure or step that is taken in relation to:

(a) (i) the suspension of payments, a moratorium of any indebtedness, the winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement, voluntary or involuntary bankruptcy or otherwise), of any Existing Obligor or New Obligor;

(ii) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, trustee, custodian or other similar officer in respect of any Existing Obligor or New Obligor; or

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(iii) any creditor or creditors taking possession of all or substantially all of the assets of any Existing Obligor or New Obligor or a distress, execution, attachment, sequestration or other legal process being levied, enforced or sued on or against all or substantially all the assets of any Existing Obligor or New Obligor and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter,

or any analogous procedure or step that is taken in any jurisdiction, but excluding anything set out in paragraph (b) below.

(b) Paragraph (a) does not include any action, proceeding, procedure or other step:

(i) which has received approval from the Majority Participating Senior Creditors as being necessary or desirable (A) to implement or consummate the Refinancing or (B) to otherwise protect the interests of the Participating Senior Creditors;

(ii) which is contemplated as part of the Refinancing (including the Schemes, any CVA and any filing or petition made in any other jurisdiction by or on behalf of any Existing Obligor or New Obligor and relating to any Scheme and/or CVA for the purposes of the Refinancing); or

(iii) taken in relation to any winding-up petition or other similar action described within (a) above and taken by a creditor which is discharged, stayed or dismissed within 30 days of commencement.

“Intercreditor Agreement” means the Agreed Form intercreditor agreement to be entered into between, amongst others, the Super Senior Creditors named as original parties therein, the Senior Creditors named as original parties therein, the Retail Bond Trustee, the Convertible Bond Trustee and the Global Agent that will regulate the relationships between the various creditor groups after the Refinancing Effective Date.

“Investor Letter” means an Investor Letter in the appropriate form appended to the Equity Warrant Instrument.

“ISDA Master Agreement” means the 1992 ISDA Master Agreement or the 2002 ISDA Master Agreement.

“Issuer” or “Premier” means Premier Oil plc, a company incorporated in Scotland with registered number SC234781 and with its registered office at 4th floor, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN.

“Issuer Scheme” means the proposed scheme of arrangement pursuant to Part 26 of the Companies Act between the Issuer and its Scheme Creditors in the form set out herein with, or subject to, any modification, addition or condition which the Court may think fit to approve or impose, as appropriate in accordance with the terms of the Scheme.

“Issuer Scheme Claim” means any claim in respect of any Liability of the Issuer to any of the Issuer Scheme Creditors arising out of the Existing Scheme Finance Documents, arising on or before the Record Time or which may arise after the Record Time as a result of an obligation or Liability of the Issuer incurred or as a result of an event occurring or an act done on or before the Record Time (including, for the

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avoidance of doubt, any interest accruing on, or accretions arising in respect of, such claims before or after the Record Time).

“Issuer Scheme Creditors” . . . . . . means the RCF Creditors, the Existing Term Loan Creditors, the USPP Holders, the Retail Bondholders, the Retail Bond Trustee and the Common Depository each in their capacity as a creditor of the Parent Company as at the Record Time, including each of their transferees, assignees and successors after the Record Time.

“Issuer Scheme Senior Meeting” . . . means the meeting of the Issuer Senior Scheme Creditors in respect of the Issuer Senior Scheme Claims to consider the Issuer Scheme to be held at the time and date set out in the Expected Timetable of Principal Events set out in this Prospectus.

“Issuer Scheme Super Senior Meeting” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the meeting of the Issuer Super Senior Scheme Creditors in respect of the Issuer Super Senior Scheme Claims to consider the Issuer Scheme to be held at the time and date set out in the Expected Timetable of Principal Events set out in this Prospectus.

“Issuer Senior Scheme Claims” . . . . means the Issuer Scheme Claims excluding any claim in respect of any Liability of the Issuer to the RCF Creditors arising out of the RCF Facility Agreement in connection with any utilisations of the RCF Facilities (other than utilisations (i) of any rollover loans to refinance loans outstanding before the Reference Date or (ii) by way of replacement, extension and/or re-utilisation of commitments made available by cancellation and/or expiry of any LC issued prior to, and remaining outstanding at, opening of business on the Reference Date) on or after the Reference Date.

“Issuer Senior Scheme Creditors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Issuer Scheme Creditors with Issuer Senior Scheme Claims.

“Issuer Shareholder Approvals” . . . . means the approval of the Shareholder Resolution at the General Meeting.

“Issuer Super Senior Scheme Claims” means Issuer Scheme Claims comprising any claim in respect of any Liability of Premier to the RCF Creditors arising out of the RCF Facility Agreement in connection with any utilisations of the RCF Facilities (other than utilisations (i) of any rollover loans to refinance loans outstanding before the Reference Date or (ii) by way of replacement, extension and/or re-utilisation of commitments made available by cancellation and/or expiry of any LC issued prior to, and remaining outstanding at, opening of business on the Reference Date) or commitments to advance loans or issue LCs on or after the Reference Date.

“Issuer Super Senior Scheme Creditors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means Issuer Scheme Creditors with Issuer Super Senior Scheme Claims.

“Latest Practicable Date” . . . . . . . means 22 May 2017.

“LCs” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means letters of credit.

“Liability” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means any debt, liability or obligation of a person whether it is present, future, prospective or contingent, whether or not it is fixed or undetermined, whether or not it involves the payment of money or performance of an act or obligation and whether it arises at common law, in equity or by statute, under the laws of Scotland, England and Wales or any other jurisdiction, or in any manner whatsoever.

“LIBOR” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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“Lock-up Agreements” . . . . . . . . means the Senior Lock-up Agreement, the Hedging Lock-up Agreement, the Existing Bilateral LC Lock-up Agreement and the Convertible Bondholder Lock-up Agreement.

“Long-Stop Date” . . . . . . . . . . . means:

(a) in respect of the Senior Lock-up Agreement, the Existing Bilateral LC Lock-up Agreement and the Hedging Lock-up Agreement, 31 July 2017 or such later date as the relevant members of the Group and the relevant majority of participating senior creditors agree (subject in the case of the Existing Bilateral LC Lock-up Agreement and the Hedging Lock-up Agreement to a backstop date of 29 September 2017 unless consented to by the Existing Bilateral LC Creditors and the Hedge Counterparties (acting reasonably); and

(b) in the case of the Convertible Bondholder Lock-up Agreement, five Business Days following the expiry of the 28 day challenge period in respect of any CVA under section 6(3)(a) of the Insolvency Act 1986, unless, before the expiry of that challenge period, an application is brought to challenge the CVA pursuant to section 6 of the Insolvency Act 1986, in which case the “Long-Stop Date” will be the date that is three Business Days after the earlier of (i) the date on which such challenge is withdrawn or (ii) the date on which such challenge is rejected by an English Court with no prospect of appeal).

“Majority Participating Senior Creditors” . . . . . . . . . . . is a term used in the operative provisions of the Senior Lock-up Agreement and means:

(a) the RCF Creditors who have entered into the Senior Lock-up Agreement and who hold more than 66²/₃ per cent. by value of the aggregate commitments of the RCF Creditors participating in the Senior Lock-up Agreement;

(b) the Existing Term Loan Creditors who have entered into the Senior Lock-up Agreement and who hold more than 66²/₃ per cent. by value of the aggregate commitments of the Existing Term Loan Creditors participating in the Senior Lock-up Agreement;

(c) the USPP Holders who have entered into the Senior Lock-up Agreement and who hold more than 50 per cent. by value of the aggregate principal amount outstanding of the USPP Notes held by the USPP Holders participating in the Senior Lock-up Agreement; and

(d) the Schuldschein Lenders who have entered into the Senior Lock-up Agreement and who hold more than 75 per cent. by value of the aggregate commitments of the Schuldschein Lenders participating in the Senior Lock-up Agreement.

“Make-Whole Amount” . . . . . . . . means the contractual rights of the USPP Holders under the USPP Finance Documents to receive ‘make-whole’ amounts, which require the making of a payment derived from a formula based on the net present value of future coupon payments in order to compensate the holders of those notes for the early repayment of the USPP Notes and consequent loss of the fixed rate interest they would have otherwise received.

"Market Price" means the average of the closing middle market quotations for an Ordinary Share, as derived from the Official List, for the three trading days immediately prior to the announcement of the relevant allotment or issue of Shares (or, if not announced in advance, the three trading days prior to the relevant allotment or issue).

"Money Laundering Legislation" means the Proceeds of Crime Act 2002, the Money Laundering Regulations 2007 and the Terrorism Act 2000 each as may be amended from time to time and supporting secondary legislation.

"Monthly Deferrals" means the monthly deferrals of the covenants in relation to the Group's Existing Leverage Ratio and Existing Interest Cover Ratio.

"Nelson Field" means any working or participating interest of any member of the Group in the area known as the Nelson Field, including its interest in offshore licences P077 and P087 and any interest of any member of the Group in any cashflow or hydrocarbons arising in respect of that area or any assets required for the exploitation of that area.

"New Borrower" means a borrower under the Amended Finance Documents and New Finance Documents, being each of:

(a) the Issuer, where applicable, as issuer of the Amended Retail Bonds; and
(b) POUK, where applicable, as the borrower under the Senior RCF Facility Agreement, the borrower under the Super Senior Secured RCF/LC Facility Agreement, as borrower under the Amended and Restated Term Loan Facility Agreement, as the issuer of the Amended USPP Notes, as the borrower under the Converted Facility Agreement and as the borrower under the New Wytch Farm LC Facility Agreement.

"Newco" means an English company, to be incorporated, which will hold all of the share capital in Premier Oil Group Limited and be a wholly owned subsidiary of the Issuer.

"New Finance Documents" means the Agreed Form new finance documents, set out in the Schedules to the Restructuring Implementation Deed and entered into pursuant to the Restructuring Implementation Deed, being:

(a) the Brazilian Guarantee;
(b) the Intercreditor Agreement;
(c) the New Security Documents;
(d) the Override Agreement;
(e) the Synthetic Warrant Documents; and
(f) the USPP Make-Whole Notes.

"New Financial Covenants" means the New Interest Cover Ratio, and the New Net Leverage Ratio and a minimum liquidity requirement.

"New Guarantors" means, with effect from the Refinancing Effective Date, NewCo, the Issuer, POUK, the Convertible Bond Issuer, Premier Oil Group Limited, Premier Oil Overseas B.V., Premier Oil Vietnam Offshore B.V., Premier Oil Kakap B.V., Premier Oil Natuna Sea B.V., Premier Oil (Vietnam) Limited, Premier Oil Holdings Limited, Premier Oil Exploration and Production Limited, Premier Oil E&P UK Limited, Premier Oil E&P UK EU Limited, Premier Oil E&P UK Energy Trading Limited, Premier Oil E&P Holdings Limited, EnCore Oil Limited, Premier Oil (EnCore Petroleum) Limited, EnCore (NNS) Limited, Premier Oil ONS Limited, Premier Oil Mauritania B Limited, Premier Oil Mexico Holdings Limited, Premier Oil do Brasil Petróleo e Gás Ltda, Premier Oil Exploration

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and Production Mexico S.A. de C.V., Premier Oil Tuna B.V, Premier Oil Exploration Limited, Premier Oil Exploration ONS Limited, Premier Oil Far East Limited, Premier Oil and Gas Services Limited, Premier Oil Vietnam 121 Limited, EnCore Gas Storage Limited, Premier Oil Aberdeen Services Limited, FP Mauritania A B.V., FP Mauritania B B.V., Premier Oil Buton B.V., Premier Oil Congo (Marine IX) Limited, Premier Oil Exploration (Mauritania) Limited, Premier Oil Investments Limited, Premier Oil Pakistan Offshore B.V., Premier Oil Philippines B.V., Premier Oil Red Sea Limited, Premier Oil Ventures Limited, Premier Oil Vietnam North B.V., and Premier Oil West Tuna Limited.

“New Interest Cover Ratio” means the ratio of EBITDA to interest, being, in summary, the interest cover ratio which the Group will be subject to pursuant to the Override Agreement.

“New Net Leverage Ratio” means the ratio of the Group’s net debt to EBITDA being, in summary, the leverage ratio which the Group will be subject to pursuant to the Override Agreement, as further described in (as further described in Part A (Proposals Concerning the Scheme Creditors) of Part 1 of this Prospectus).

“New Obligors” means the New Borrowers and the New Guarantors.

“New Security Documents” means the Agreed Form new security documents entered into or to be entered into by any member of the Group creating or expressed to create any security over all or any part of its assets in respect of the obligations of any of the New Obligors under any of the Amended Finance Documents and the New Finance Documents (which shall, in respect of any Existing Guarantor which is also a New Guarantor, include any obligations in respect of any guarantee given by such Existing Guarantor in respect of the Existing Finance Documents that continues in accordance with the terms of the Schemes, the Restructuring Implementation Deed, the Amended Finance Documents and the New Finance Documents) in favour of the Security Agent.

“New Security” means the security package to be given to Scheme Creditors, Schuldschein Lenders and certain Existing Bilateral LC Creditors and Hedge Counterparties pursuant to the terms of the New Security Documents.

“New Wytch Farm LC Facilities” means the new syndicated committed facilities made available by the Existing Bilateral LC Creditors under the New Wytch Farm LC Facility Agreement.

“New Wytch Farm LC Facility Agreement” means the Existing Wytch Farm Bilateral LC Facilities as amended and restated and converted into a committed LC facility as a consequence of the Refinancing and pursuant to the Existing Bilateral LC Facilities Amendment Agreement in accordance with the Restructuring Implementation Deed.

“NewCo” means an English company to be incorporated which will hold all of the share capital in Premier Oil Group Limited and be a wholly owned Subsidiary of the Issuer.

“Nil Rate Amount” has the meaning given to it in Part X (Taxation).

“Nominated Recipient” means a person nominated by a Scheme Creditor, a Schuldschein Lender or an Existing Bilateral LC Creditor to receive any portion of its Equity Warrants and Synthetic Warrants.

“Non-Executive Directors” means the individuals listed as non-executive directors in the table on page 142 of this Prospectus.

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"Non-US Status"	means, in relation to a person, that such person is not located in the United States and will receive the Equity Warrants and/or Synthetic Warrants in an offshore transaction within the meaning of Regulation S.
"Offer"	the offer to the Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Facilities constituting an invitation to apply for the Equity Warrants or the Synthetic Warrants on the terms and subject to the conditions set out in this Prospectus.
"OPEC"	means the Organization of the Petroleum Exporting Countries, an intergovernmental organisation that coordinates and unifies the petroleum policies of its member countries, which include the Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Gabon and Angola.
"Ordinary Shares"	means the ordinary shares of the Issuer.
"Outstanding Loan"	has the meaning given to it in section 15 of Part XI ( Additional Information ).
"Override Agreement"	means the Agreed Form English law override agreement to be entered into between, amongst others, the Issuer, the Private Creditors, the Global Agent and the Security Agent, setting out common provisions applicable to the New Finance Documents and certain of the Amended Finance Documents and scheduled to the Restructuring Implementation Deed.
"Participating Company"	means each member of the Group which entered into the Lock-up Agreements being each Existing Obligor and each new Obligor other than Premier Oil Aberdeen Services Limited.
"Participating Convertible Bondholders"	means each original participating Convertible Bondholder who has signed or acceded to the Convertible Bondholder Lock-up Agreement, in each case, which has not ceased to be a Participating Convertible Bondholder in accordance with the terms of the Convertible Bondholder Lock-up Agreement.
"Participating Existing Bilateral LC Creditors"	means each Existing Bilateral LC Creditor who has signed or acceded to the Existing Bilateral LC Lock-up Agreement, in each case, which has not ceased to be a Participating Existing Bilateral LC Creditor in accordance with the terms of the Existing Bilateral LC Lock-up Agreement.
"Participating Hedge Counterparties"	means each Hedge Counterparty who has signed or acceded to the Hedging Lock-up Agreement, in each case, which has not ceased to be a Hedge Counterparty in accordance with the terms of the Hedging Lock-up Agreement.
"Participating Senior Creditor Group"	means:
	(a) the RCF Creditors;
	(b) the Existing Term Loan Creditors;
	(c) the USPP Holders; and
	(d) the Schuldschein Lenders,
	in each case who have signed or acceded to the Senior Lock-up Agreement.

"Participating Senior Creditor"	means each RCF Creditor, Existing Term Loan Creditor, USPP Holder and Schuldschein Lender who has signed or acceded to the Senior Lock-up Agreement, in each case, which has not ceased to be a Participating Senior Creditor in accordance with the terms of the Senior Lock-up Agreement.
"PKP"	means Premier-Kufpec Pakistan B.V.
"POEPHL"	means Premier Oil E&P Holdings Limited.
"POEPL"	means Premier Oil Exploration and Production Limited.
"POFJL"	means Premier Oil Finance (Jersey) Limited.
"POGL"	means Premier Oil Group Limited.
"POHL"	means Premier Oil Holdings Limited.
"POOBV"	means Premier Oil Overseas B.V.
"POUK"	means Premier Oil UK Limited, a company registered in Scotland with registered number SC048705 and with its registered office at 4th floor, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN.
"POUK Scheme"	means the scheme of arrangement proposed pursuant to Part 26 of the Companies Act between POUK and its Scheme Creditors in the form set out herein with, or subject to, any modification, addition or condition which the Court may think fit to approve or impose, as appropriate in accordance with the terms of the Scheme.
"POUK Scheme Claims"	means any claim in respect of any Liability of POUK to any of its Scheme Creditors arising out of the Existing Scheme Finance Documents, arising on or before the Record Time or which may arise after the Record Time as a result of an obligation or Liability of POUK incurred or as a result of an event occurring or an act done on or before the Record Time (including, for the avoidance of doubt, any interest accruing on, or accretions arising in respect of, such claims before or after the Record Time).
"POUK Scheme Creditors"	means the RCF Creditors, the Existing Term Loan Creditors, the USPP Holders, the Retail Bondholders, the Retail Bond Trustee and the Common Depository each in their capacity as a creditor of POUK as at the Record Time, including each of their transferees, assignees and successors after the Record Time.
"POUK Scheme Senior Meeting"	means the meeting of the POUK Senior Scheme Creditors in respect of the POUK Senior Scheme Claims to consider the POUK Scheme.
"POUK Scheme Super Senior Meeting"	means the meeting of the POUK Super Senior Scheme Creditors in respect of the POUK Super Senior Scheme.
"POUK Senior Scheme Claims"	means the POUK Scheme Claims excluding any claim in respect of any Liability of POUK to the RCF Creditors arising out of the RCF Facility Agreement in connection with any utilisations of the RCF (other than utilisations (i) of any rollover loans to refinance loans outstanding before the Reference Date or (ii) by way of replacement, extension and/or re-utilisation of commitments made available by cancellation and/or expiry of any LC issued prior to, and remaining outstanding at, opening of business on the Reference Date) on or after the Reference Date.
"POUK Senior Scheme Creditors"	means the POUK Scheme Creditors with POUK Senior Scheme Claims.

“POUK Super Senior Scheme Claims”	means the POUK Scheme Claims comprising any claim in respect of any Liability of POUK to the RCF Creditors arising out of the RCF Facility Agreement in connection with any utilisations of the RCF Facilities (other than utilisations of any rollover loans to refinance loans outstanding before the Reference Date or by way of replacement, extension and/or re-utilisation of commitments made available by cancellation and/or expiry of any LC issued prior to, and remaining outstanding at, opening of business on the Reference Date) or commitments to advance loans or issue LCs on or after the Reference Date.
“POUK Super Senior Scheme Creditors”	means the POUK Scheme Creditors with POUK Super Senior Scheme Claims.
“POVL”	means Premier Oil (Vietnam) Limited.
“POVO”	means Premier Oil Vietnam Offshore B.V.
“Pre-Schemes Letter”	means the letter from the Scheme Companies to the Scheme Creditors regarding the objectives of the Schemes and the composition of the Scheme Meetings, dated 15 May 2017.
“Private Creditor Adviser”	means legal advisors to the Participating Senior Creditors.
“Private Creditors”	means the RCF Creditors, Existing Term Loan Creditors, USPP Holders, Schuldschein Lenders and creditors under the Amended and Restated Nelson Bilateral LC Facility and New Wytch Farm LC Facilities.
“Prospectus”	means this prospectus.
“PSP”	means Premier & Shell Pakistan B.V.
“QIB”	means a “qualified institutional buyer” as defined in Rule 144A under the US Securities Act.
“RCF Amendment Agreement”	means the Agreed Form amendment and restatement agreement to be entered into between (amongst others) the Issuer, Premier Oil Holdings Limited, POUK, Premier Oil Exploration and Production Limited and Barclays Bank PLC (as Facility Agent) in respect of the RCF Facility Agreement amending and restating the terms of the RCF Facility Agreement into the Super Senior Secured RCF/ LC Facility Agreement and the Senior RCF Facility Agreement in the form scheduled to the Restructuring Implementation Deed.
“RCF Creditor”	means a lender under the RCF Facility Agreement.
“RCF Facility Agreement”	means the credit facility agreement dated 7 July 2014 and entered into between, among others, the Issuer, POUK, Premier Oil Holdings Limited, Premier Oil Exploration and Production Limited and Barclays Bank PLC (as facility agent).
“RCF Facility”	means a facility made available under the RCF Facility Agreement.
“RCF Finance Document”	means a “Finance Document” as defined in the RCF Facility Agreement.
“RCF Supplemental Agreements”	means the supplemental agreements dated 2 June 2016, 3 October 2016 and 28 December 2016 relating to the RCF Facility Agreement, in each case entered into between, among others, the Issuer, POUK and Barclays Bank PLC as facility agent under the RCF Facility Agreement.
“Record Time”	means 11.00 a.m. on 22 June 2017.
“Reference Date”	means 15 March 2016.

"Refinancing"	means the restructuring of the Group’s financial arrangements contemplated by the Scheme, theRestructuring Implementation Deed and the Convertible Bondholder Approvals.
"Refinancing Effective Date"	means the date on which the last of the conditions to the effectiveness of the Refinancing is satisfied.
"Registrar of Companies"	means the registrar of companies in Edinburgh, Scotland.
"Regulation S"	means Regulation S promulgated under the US Securities Act.
"Relevant Dividend Income"	has the meaning given to it in Part X (Taxation).
"Restructuring Documents"	means the Agreed Form documents and any filings, instruments and notices thereto necessary to give effect to theRefinancing, being,
	a) the Amended Finance Documents;
	b) the Amendment Agreements;
	c) the Equity Warrant Documents;
	d) the New Finance Documents; and
	e) the Restructuring Implementation Deed.
"Restructuring Implementation Deed"	means the Agreed Form restructuring implementation deed to be entered into between, among others, the Scheme Companies, the ExistingObligors and the New Obligors and the Scheme Creditors.
"Retail Bond Account Holder"	means any person recorded directly in the records of Euroclear or Clearstream as a holder of the Retail Bonds either for its own account or on behalf of its client.
"Retail Bond Account Holder Letter"	means the account holder letter for use by Retail Bond Account Holders in relation to voting at the Scheme Meetings.
"Retail Bond Amendment Agreement"	means the Agreed Form amendment agreement to be entered into between (amongst others) the Parent Company and the Retail Bond Trustee under which (i) the ExistingRetail Bond Final Terms are amended as the Amended Retail Bond Final Terms, (ii) the Existing Retail Bond Trust Deed is amended and restated as the Amended and Restated Retail Bond Trust Deed, and (iii) the Existing Retail Bond Agency Agreement is amended and restated as the Amended and Restated Retail Bond Agency Agreement, in the form scheduled to theRestructuring Implementation Deed.
"Retail Bond Global Certificate"	means a global certificate representing Retail Bonds of one or more tranches of the same series that are registered in the name of a nominee of, and (if applicable) deposited in the name of a Common Depository or lodged with a sub-custodian for a Clearing System.
"Retail Bond Trustee"	means Deutsche Trustee Company Limited (in its capacity as trustee under the Existing Retail Bond Trust Deed and the Amended and Restated Retail Bond TrustDeed).
"Retail Bondholder"	means each beneficial owner of Retail Bonds holding those Retail Bonds directly or indirectly in account(s) held with any Retail Bond Account Holder acting on the beneficial owner’s behalf as at the Record Time, including (i) any beneficial owner of Retail Bonds which is a Retail Bond Account Holder and (ii) CIN in respect of those Retail Bonds which it holds and which are represented by the CDIs.

"Retail Bonds" means the £150,000,000 5.00% notes due 2020 issued under the Issuer's £500,000,000 Euro medium term note programme with the Issuer as issuer and guaranteed by the other Existing Guarantors.

"Revolving Trigger Event" means the date at which drawn and undrawn commitments under the Super Senior Secured RCF/LC Facilities are less than US$200,000,000.

"Scheme Claims" means the Issuer Scheme Claims and the POUK Scheme Claims.

"Scheme Companies" means the Issuer and POUK and "Scheme Company" means either of them as the context requires.

"Scheme Creditors" means in respect of POUK, the POUK Scheme Creditors and in respect of the Issuer, the Issuer Scheme Creditors and "Scheme Creditor" means either one of them as the context requires.

"Scheme Meetings" means the Issuer Scheme Super Senior Meeting, the Issuer Scheme Senior Meeting, the POUK Scheme Super Senior Meeting and the POUK Scheme Senior Meeting, and "Scheme Meeting" means either one of them as the context requires.

"Schemes Effective Time" means the date on which an attorney will be authorised to enter into the Restructuring Documents on behalf of the Schemes Creditors, which will occur upon the delivery of a certificated copy of the Schemes Sanction Orders to the Registrar of Companies for registration.

"Schemes Sanction Orders" means the orders of the Court sanctioning the Schemes pursuant to section 899 of the Companies Act.

"Schemes Website" means www.lucid-is.com/premiereoil, a website set up on behalf of the Issuer and POUK.

"Schemes" means each of the Issuer Scheme and the POUK Scheme, and "Scheme" means any one of them as the context requires.

"Schuldschein Finance Documents" means the Schuldschein Loan Agreements and any guarantees entered into by the Existing Guarantors in connection therewith.

"Schuldschein Lender" means a creditor in respect of any of the Schuldschein Loan Agreements, other than Deutsche Bank Aktiengesellschaft acting in its capacity as paying agent thereunder.

"Schuldschein Loan Agreements" means:

(a) the assignable loan agreement initially entered into between, amongst others, the Issuer, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$50,000,000 floating rate loan due 30 September 2020, and dated 25 September 2013;

(b) the assignable loan agreement initially entered into between, amongst others, the Issuer, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$60,000,000 floating rate loan due 1 October 2018, and dated 25 September 2013; and

(c) the assignable loan agreement initially entered into between, amongst others, the Issuer, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to a US$20,000,000 floating rate loan due 30 October 2018, and dated 28 October 2013.

"Schuldschein Loan" means a loan made under a Schuldschein Loan Agreement.

"Sea Lion" means the Sea Lion field.

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"Security Agent" . . . . . . . . . . means GLAS in its capacity as security agent under or in connection with the Amended Finance Documents and the New Finance Documents.

"Senior Creditor" . . . . . . . . . . means a creditor under the Senior Secured Debt Facilities.

"Senior Lock-up Agreement" . . . . . . . . . . means the lock up agreement dated 8 March 2017 and fully effective from 14 March 2017, between the Issuer, POUK, certain of the other Existing Obligors and New Obligors, certain participating lenders under the Existing Scheme Finance Documents and the Schuldschein Lenders.

"Senior RCF Facility" . . . . . . . . . . means the facility available under the Senior RCF Facility Agreement.

"Senior RCF Facility Agreement" . . . . . . . . . . means the RCF Facility Agreement as amended and restated in Agreed Form as a syndicated revolving and letter of credit facility agreement for up to US$1,781,032,945.80 as a consequence of the Schemes and pursuant to the RCF Amendment Agreement, in accordance with the form scheduled to the Restructuring Implementation Deed.

"Senior Scheme Creditors" . . . . . . . . . . means the Issuer Senior Scheme Creditors and POUK Senior Scheme Creditors.

"Senior Secured Cash Loan Facility" . . . . . . . . . . means the credit facility under the Senior RCF Facility Agreement, in an amount of US$1,550,000,000 (being the outstanding amount of revolving loans under the RCF Facility Agreement as at the Reference Date).

"Senior Secured Debt Facilities" . . . . . . . . . . means the following debt facilities made available to the Group under the Amended Finance Documents:

(a) the Amended and Restated USPP Notes together with the Amended and Restated USPP Note Agreements;

(b) the USPP Make-Whole Notes;

(d) the Senior Secured Facilities;

(e) the Amended and Restated Nelson Bilateral LC Facility Agreement;

(f) the Amended and Restated Term Loan Facility; and

(g) the Converted Facility.

"Senior Secured Facilities" . . . . . . . . . . means the Senior RCF Facility and the Senior Secured LC Sub-Facility.

"Senior Secured Hedging Liabilities" . . . . . . . . . . means, at any time, in respect of a Hedge Counterparty, the aggregate of:

(a) in respect of any Hedging Transaction of that Hedge Counterparty under any Hedging Agreement that has, as of the date the calculation is made, been terminated or closed out (in whole or in part) in accordance with the terms of the relevant Hedging Agreement and the Intercreditor Agreement, the amount, if any, payable to that Hedge Counterparty under that Hedging Agreement in respect of that termination or close-out (after giving effect to any applicable close-out netting and/or inter-hedging agreement netting) to the extent that amount is unpaid; and

(b) in respect of any Hedging Transactions of that Hedge Counterparty under any Hedging Agreement that have, as of

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the date the calculation is made, not been terminated or closed out:

(i) if the relevant Hedging Agreement is based on an ISDA Master Agreement, the amount, if any, which would be payable to the Hedge Counterparty under that Hedging Agreement if the date on which the calculation is made was deemed to be an Early Termination Date (as defined in the Hedging Agreement) in respect of those hedging transactions resulting from an Event of Default (as defined in the Hedging Agreement) in respect of which the relevant Existing Obligor and/or New Obligor is the Defaulting Party (as defined in the Hedging Agreement); or

(ii) if the relevant Hedging Agreement is not based on an ISDA Master Agreement, the amount, if any, which would be payable to the Hedge Counterparty under that Hedging Agreement if the date on which the calculation is made was deemed to be the date on which an event similar in meaning and effect (under that Hedging Agreement) to an Early Termination Date (as defined in any ISDA Master Agreement) occurred under that Hedging Agreement in respect of those Hedging Transactions as a result of an event similar in meaning and effect (under that Hedging Agreement) to an Event of Default (as defined in any ISDA Master Agreement) for which the relevant Existing Obligor and/or New Obligor is in a position similar in meaning and effect (under that Hedging Agreement) to that of a Defaulting Party (under and as defined in the same ISDA Master Agreement),

in each case, to be calculated in accordance with the relevant Hedging Agreement, to be determined after giving effect to any applicable close-out netting and/or inter-hedging agreement netting and to be certified by the relevant Hedge Counterparty, but without the application of set-off of any credit balances of any Existing Obligor and/or New Obligor held in an account with such Hedge Counterparty, combination of accounts or similar arrangement, and excluding any Super Senior Secured Hedging Liabilities in respect of such Hedge Counterparty.

"Senior Secured LC Sub-Facility" means each letter of credit sub-facility made available, or that may be made available, under the Senior Secured RCF Facility Agreement which may be designated A, B, C or D by POUK, in an aggregate amount of US$231,023,945.80 (being the outstanding of LCs issued under the RCF Facility Agreement as at the Reference Date).

"Senior Synthetic Warrant Instrument" means the Agreed Form synthetic warrant instrument constituting the Senior Synthetic Warrants appended to the Restructuring Implementation Deed at Appendix L (Senior Synthetic Warrant Instruments).

"Senior Synthetic Warrants" means the synthetic warrants to be issued by the Issuer pursuant to the Senior Synthetic Warrant Instrument.

"Share" means a share in the Issuer other than any share which is held, issued, offered, allotted, appropriated or granted to, or for the benefit of, bona fide employees or former employees (including directors holding or formerly holding executive office) or their

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spouses, civil partners, surviving spouses, surviving civil partners or minor children or stepchildren, in each case of the Issuer or any of its subsidiary undertakings or the Issuer or any subsidiary undertakings of the Issuer in any such case in connection with any share or option scheme or plan of the Issuer (“Share Scheme”) or, in the case of any share which has not been allotted, is to be allotted in pursuance of such a Share Scheme or, in the case of any share held by the Issuer as a treasury share, is to be transferred in pursuance of such a Share Scheme, provided that the number of new shares under any such Share Scheme(s) referred to in this subparagraph (b) does not exceed 10 per cent. of the Issuer’s nominal issued share capital (on a 10 year rolling basis) at the date such new shares are issued.

“Shareholders” means the shareholders of the Issuer.

“Shareholder Resolution” has the meaning given to it in section 4 of Part XI (Additional Information).

“Solan Interest” has the meaning given to it in section 15 of Part XI (Additional Information).

“Solan” means the Solan field.

“Specified Number” means, in relation to each Equity Warrant, one Warrant Share (unless there has been an adjustment to the number of Warrant Shares issuable upon the exercise of an Equity Warrant in which case it means, in relation to each Equity Warrant, such number of Warrant Shares issuable upon the exercise of the Equity Warrant as has been determined by such adjustment).

“Streaming Deed” has the meaning given to it in section 15 of Part XI (Additional Information).

“Supplemental Agreements” means the RCF Supplemental Agreements and the Term Loan Supplemental Agreements.

“Super Senior Creditor” means a creditor under the Super Senior Secured Facilities.

“Super Senior Scheme Creditors” means the Issuer Super Senior Scheme Creditors and the POUK Super Senior Scheme Creditors.

“Super Senior Secured Facilities” means the debt facilities made available to the Group under the Super Senior Secured RCF/LC Facilities and the New Wytch Farm LC Facilities.

“Super Senior Secured Hedging Liabilities” means, at any time, in relation to a Hedge Counterparty, the amount by which:

(a) the aggregate of:

(i) in respect of any Hedging Transaction of that Hedge Counterparty under any Hedging Agreement that has, as of the date the calculation is made, been terminated or closed out (in whole or in part) in accordance with the terms of the relevant Hedging Agreement and the Intercreditor Agreement, the amount, if any, payable to that Hedge Counterparty under that Hedging Agreement in respect of that termination or close-out (after giving effect to any applicable close-out netting and/or interhedging agreement netting) to the extent that amount is unpaid; and

(ii) in respect of any hedging transactions of that Hedge Counterparty under any Hedging Agreement that have, as

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of the date the calculation is made, not been terminated or closed out:

(A) if the relevant Hedging Agreement is based on an ISDA Master Agreement, the amount, if any, which would be payable to the Hedge Counterparty under that Hedging Agreement if the date on which the calculation is made was deemed to be an Early Termination Date (as defined in the relevant Hedging Agreement) in respect of those hedging transactions resulting from an Event of Default (as defined in the relevant Hedging Agreement) in respect of which the relevant Existing Obligor and/or New Obligor is the Defaulting Party (as defined in the relevant Hedging Agreement); or

(B) if the relevant Hedging Agreement is not based on an ISDA Master Agreement, the amount, if any, which would be payable to the Hedge Counterparty under that Hedging Agreement if the date on which the calculation is made was deemed to be the date on which an event similar in meaning and effect (under that Hedging Agreement) to an Early Termination Date (as defined in any ISDA Master Agreement) occurred under that Hedging Agreement in respect of those hedging transactions as a result of an event similar in meaning and effect (under that Hedging Agreement) to an Event of Default (as defined in any ISDA Master Agreement) for which the relevant Existing Obligor and/or New Obligor is in a position similar in meaning and effect (under that Hedging Agreement) to that of a Defaulting Party (under and as defined in the same ISDA Master Agreement),

in each case, to be calculated in accordance with the relevant Hedging Agreement, to be determined after giving effect to any applicable close-out netting and/or inter-hedging agreement netting (but without, for the avoidance of doubt, the application of set-off against any credit balance of such obligor held in an account with such Hedge Counterparty) and to be certified by the relevant Hedge Counterparty;

exceeds

(b) the Reference Date exposure of that Hedge Counterparty as set out in Part 1 of Schedule 2 (Reference Date Exposures and Assets) to the Intercreditor Agreement.

“Super Senior Secured RCF/LC Facilities” means the syndicated revolving and letter of credit facility made available pursuant to the terms of the Super Senior Secured RCF/LC Facility Agreement.

“Super Senior Secured RCF/LC Facility Agreement” means the RCF Facility Agreement as amended and restated in Agreed Form as a syndicated super senior revolving and letter of credit facility agreement for up to US$718,967,054.20 as a consequence of the Schemes and the RCF Amendment Agreement, in accordance with the Restructuring Implementation Deed.

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“Super Senior Synthetic Warrant Instrument”	means the synthetic warrant instrument constituting the Super Senior Synthetic Warrants appended in Appendix M (Super Senior Synthetic Warrant Instrument) of theRestructuring Implementation Deed.
“Super Senior Synthetic Warrants”	means the synthetic warrants to be issued by the Issuer pursuant to the Super Senior Synthetic Warrant Instrument.
“Supplemental Agreements”	means the RCF Supplemental Agreements and the Existing Term Loan Supplemental Agreements.
“Supplemental PIK Fee”	means the fee payable by the Group under the Override Agreement if it has not reduced its level of Covenanted Net Debt to US$2.95 billion or less by 31 December 2018.
“Synthetic Adjustment Event”	has the meaning given to it Part VIII (Terms and conditions of the Synthetic Warrants).
“Synthetic Warrant Document”	means:
	(a) the Synthetic Warrant Instruments;
	(b) the global warrant certificate(s) to be issued in respect of the synthetic warrants constituted by the Senior Synthetic Warrant Instrument;
	(c) the global warrant certificate(s) to be issued in respect of the synthetic warrants constituted by the Super Senior Synthetic Warrant Instrument; and
	(d) individual warrant certificates (if any) issued in respect of the Synthetic Warrants.
“Synthetic Equity Growth Fee”	has the meaning given to it in section 2 of Part VIII (Terms and Conditions of the Synthetic Warrants).
“Synthetic Warrant Instruments”	means the Senior Synthetic Warrant Instrument and the Super Senior Synthetic Warrant Instrument.
“Synthetic Warrant Holder”	means any holder of Synthetic Warrants.
“Synthetic Warrants”	means the Senior Synthetic Warrants and the Super Senior Synthetic Warrants.
“TARGET Day”	means any day on which TARGET2 is open for the settlement of payments in euro.
“TARGET2”	means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system.
“Trust Securities”	means the Equity Warrants and Synthetic Warrants held on trust for certain Scheme Creditors, Schuldschein Lenders, Existing Bilateral LC Creditors or theirNominated Recipients pursuant to the Holding Period Trust Deed.
“UK” or “United Kingdom”	means the United Kingdom of Great Britain and Northern Ireland.
“Unadmitted CDI Holder”	means a CDI Holder on whose behalf a duly completed Election Form has not been delivered to, and received by, the Information Agent before the Forms Submission Deadline, or a CDI Holder on whose behalf an Election Form has been delivered after the Forms Submission Deadline but before the Election Adjustment Deadline and the Issuer has, at its discretion, not accepted such Election Form.
“Unadmitted Scheme Creditor”	means a Scheme Creditor on whose behalf a duly completed Election Form has not been delivered to, and received by, the Information Agent before the Forms Submission Deadline, or a

Scheme Creditor on whose behalf an Election Form has been delivered after the Forms Submission Deadline but before the Election Adjustment Deadline of the Issuer has, at its discretion, not accepted such Election Form.

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“Uncertificated Securities Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time.

“US Certifications” means the affirmative confirmations, representations and warranties in paragraph (3) of Section I of Part 2 of the Election Form, which certify the relevant Scheme Creditor’s, Account Holder’s, CDI Holder’s Nominated Recipient’s or any other person’s Non-US Status or that the relevant Scheme Creditor, Account Holder, CDI Holder’s Nominated Recipient’s or any other person is a QIB or an IAI.

“US Exchange Act” means the US Securities Exchange Act of 1934, as amended.

“US Securities Act” means the US Securities Act of 1933, as amended.

“US” or “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

“USPP Finance Documents” means the USPP Notes, the USPP Note Agreements (including any waivers, amendments and supplemental agreements entered into in connection with the USPP Note Agreements (including the Monthly Deferrals)) and the subsidiary guaranty deeds signed by the Existing Guarantors and dated 9 June 2011, 27 December 2012 and 27 May 2016 (in respect of the 2011 USPP Note Agreement) and dated 15 March 2012, 27 December 2012 and 27 May 2016 (in respect of the 2012 USPP Note Agreement).

“USPP Holders” means the 2011 Holders and the 2012 Holders.

“USPP Make-Whole Notes” means the 2011 Make-Whole Notes and the 2012 Make-Whole Notes.

“USPP Note Agreements” means the 2011 USPP Note Agreement and the 2012 USPP Note Agreement.

“USPP Notes” means the 2011 Notes and the 2012 Notes.

“Voting Instructions” means voting instructions given by Scheme Creditors, Retail Bond Account Holders and Retail Bondholders (including CIN, as instructed by CDI Holders through their CREST Account Holders) pursuant to a Form of Proxy or Account Holder Letter (as applicable).

“VWAP Period” has the meaning given to it in section 2 of Part I (Information on the Refinancing).

“Warrant Agent” means Capita Registrars Limited.

“Warrant Holder” any Equity Warrant Holder or Synthetic Warrant Holder.

“Warrant Share Holder” means any holder of Warrant Shares.

“Warrant Shares” means the Ordinary Shares issuable upon the exercise of Equity Warrants, as the same may be adjusted from time to time in accordance with the terms of the Equity Warrants.

“Warrants” means the Equity Warrants and/or the Synthetic Warrants (as the context requires).

“Wytch Farm” means any interest of any member of the Group in the areas known as the Wytch Farm Field and the Wareham Field.

APPENDIX II—TECHNICAL TERMS

Glossary of Technical Terms

The following definitions shall apply to the technical terms used herein:

“2C” ……………………………… best estimate of quantity of hydrocarbons recoverable from a discovery that is not currently considered to be commercially viable
“2P” ……………………………… proven and probable
“3D” ……………………………… three dimensional
“barrels of oil in place” ……………… the total estimated volume of oil contained in a reservoir (will be higher than the estimated recoverable reserves of oil in the reservoir)
“/bbl” ……………………………… per barrel
“boe” ……………………………… barrels of oil equivalent
“BOEPD” ……………………………… barrels of oil equivalent per day
“BOPD” ……………………………… barrels of oil per day
“BCF” ……………………………… billion cubic feet
“BBTud” ……………………………… billion British thermal units per day
“carried” ……………………………… one party agrees to pay another party’s costs on a project in return for earning an equity interest in that project
“Cost Recovery Oil” ……………… a share of net oil production in each quarter up to a maximum percentage of net production specified under a PSC allocated to recovering certain permitted costs incurred by contractors
“Cost Recovery Petroleum” ……………… a share of net petroleum production in each quarter up to a maximum percentage of net production specified under a PSC allocated to recovering certain permitted costs incurred by contractors
“DBEIS” ……………………………… Department for Business, Energy and Industrial Strategy
“DBIS” ……………………………… Department for Business, Innovation and Skills
“DECC” ……………………………… Department of Energy and Climate Change
“DPL” ……………………………… development and production leases
“E&P” ……………………………… international exploration and production sector
“farm-in” ……………………………… acquisition of part of a company’s interest in a property
“farm-out” ……………………………… dilution of part of an interest in a property
“FEED” ……………………………… front end engineering and design
“FPSO” ……………………………… floating production, storage and offloading vessel
“GSA” ……………………………… gas sales agreement
“GSPA” ……………………………… gas sales and purchase agreement
“HSFO” ……………………………… high sulphur fuel oil
“infill drilling” ………………………… drilling of new wells between the existing well locations of a producing field, in order to improve or accelerate recovery
“ITT” ……………………………… invitation to tender
“jacket” ……………………………… steel legs of an offshore platform which are usually installed first, followed by the topsides which are installed on top

187

"KBOEPD"	thousand barrels of oil equivalent per day
"Mineral Ordinance"	The Offshore Mineral Ordinance 1994, as amended
"MMBBLS"	million barrels
"MMBOE"	million barrels of oil equivalent
"MMCFD"	million cubic feet per day
"MMSCFD"	million standard cubic feet per day
"MOIT"	Ministry of Industry and Trade
"MSCF"	thousand standard cubic feet
"OGA"	Oil and Gas Authority
"OGDCL"	Oil and Gas Development Company
"operated interest"	an equity interest in a licence held via a joint venture in which the Group is the nominatedoperator of the licence
"PCA"	petroleum concession agreements
"play"	recognised prospective trend of potential prospects, but which requires more dataacquisition and/or evaluation to define specific leads or prospects
"Prospective Resource"	means estimated volumes associated with undiscovered accumulations of resources
"PRT"	petroleum revenue tax
"PSC"	production sharing contract
"RFCT"	ring fence corporation tax
"spud"	to begin drilling
"tied back"	the connection of a well to the relevant processing facilities
"topsides"	modules that are installed above sea level on an offshore platform which may include accommodation, thedrilling package, power supply, and processing equipment
"UKCS"	UK continental shelf
"WNTS"	means the West Natuna Transportation System pipeline

APPENDIX III—INFORMATION INCORPORATED BY REFERENCE

This Prospectus should be read and construed in conjunction with certain documents previously published and filed with the FCA. These documents shall be deemed to be incorporated into, and form part of, this Prospectus. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in this document. To the extent that any information incorporated by reference itself incorporates any information by reference, either expressly or impliedly, such information does not form part of this document for the purposes of the Prospectus Rules.

Any statement contained in a document which is incorporated by reference shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein (or in a later document which is incorporated by reference herein) modifies or supersedes such earlier statement (whether expressly, by implication or otherwise).

The table below lists the documents of which certain parts are incorporated by reference into, and form part of, this Prospectus. Except as set forth below, no other portion of the below documents is incorporated by reference into this Prospectus.

The following documents are available for inspection in accordance with section 20 of Part XI (Additional Information).

Document	Information incorporated by reference	Page number in this document
2016 Annual Report and Financial Statements .	Chief Executive Officer’s Review, pages 18 – 21	101
	Financial Review, pages 48 – 53	101
	Directors’ Remuneration Report, pages 99 – 100, 103 – 105, 112, 118 – 121	100, 144 – 145
	Independent auditors’ report, pages 126 – 132	102
	Consolidated Income Statement, page 141	102
	Consolidated Balance Sheet, page 143	102
	Consolidated Statement of Changes in Equity, page 144	102
	Consolidated Cash Flow Statement, page 145	102
	Notes to the Consolidated Financial Statements, pages 146 – 172	102
2015 Annual Report and Financial Statements .	Chief Executive Officer’s Review, pages 22 – 25	101
	Financial Review, pages 50 – 55	101
	Significant issues considered by the Audit and Risk Committee, pages 80 – 82	N/A
	Independent auditors’ report, pages 119 – 123	102
	Consolidated Income Statement, page 132	102
	Consolidated Balance Sheet, page 134	102
	Consolidated Statement of Changes in Equity, page 135	102
	Consolidated Cash Flow Statement, page 136	102
	Notes to the Consolidated Financial Statements, pages 137 – 164	102

189

Document	Information incorporated by reference	Page number in this document
2014 Annual Report and Financial Statements .	Chief Executive’s Review, pages 8 – 11	101
	Financial Review, pages 48 – 52	101
	Significant issues considered by the Audit and Risk Committee, pages 78 – 79	N/A
	Independent auditors’ report, pages 132 – 137	102
	Consolidated Income Statement, page 138	102
	Consolidated Balance Sheet, page 140	103
	Consolidated Statement of Changes in Equity, page 141	103
	Consolidated Cash Flow Statement, page 142	103
	Notes to the Consolidated Financial Statements, pages 143 – 168	103

190

191

THE ISSUER

Head Office:
c/o Premier Oil plc
23 Lower Belgrave Street
London SW1W 0NR

Registered Office:
c/o Premier Oil plc
4th Floor, Saltire Court
20 Castle Terrace
Edinburgh EH1 2EN

BROKER

RBC Europe Limited
RBC Europe Limited
Riverbank House
2 Swan Lane
London
EC4R 3BF

LEGAL ADVISERS TO THE ISSUER

Slaughter and May
One Bunhill Row
London
EC1Y 8YY

LEGAL ADVISERS TO THE BROKER (AS TO ENGLISH LAW)

White & Case LLP
5 Old Broad Street
London
EC2N 1DW

INDEPENDENT AUDITORS OF THE GROUP

Ernst & Young LLP
1 More London
London
SE1 2AF

Merrill Corporation Ltd, London
17-14073-5

AI assistant

Harbour Energy PLC — Capital/Financing Update 2017

4658_rns_2017-05-30_718463f4-03b7-4117-81ff-da6e63a72a81.pdf

PREMIER OIL PLC

TABLE OF CONTENTS

SUMMARY

RISK FACTORS

SECTION A: RISKS RELATING TO THE REFINANCING AND THE GROUP'S FINANCING ARRANGEMENTS

The Refinancing is subject to a number of conditions that must be satisfied in order for it to proceed

The lock-up agreements may be terminated in accordance with their terms on the occurrence of certain, specified events

Changes to the Group's corporate structure might give rise to tax in some of the jurisdictions in which the Group operates

SECTION B: RISKS RELATING TO THE OIL AND GAS INDUSTRY

Further volatility or decreases in hydrocarbon prices may adversely affect the Group's business, prospects, results of operations, financial condition and its ability to meet its refinancing obligations

If the Group is unable to replace its proved plus probable reserves as it produces, the Group's reserves will decline

The Group faces uncertainty as to the estimation of reserves, resources and production profiles and these may prove inaccurate

Hydrocarbon exploration, development and production operations may be affected by operational hazards or other factors which may result in unforeseen liabilities and adversely affect future cash flows

The hydrocarbons supply chain sector has undergone contraction which may affect the Group’s ability to source capital equipment from third party contractors

Business acquisitions and farm-ins may give rise to integration and other issues

Environmental legislation or campaigns against the production and use of fossil fuels may have material adverse effects on the hydrocarbons industry

Potential health, safety, environment and security "HSES" risks may materialise

As a result of the UK's vote to withdraw from the European Union, macroeconomic instability may affect the hydrocarbons industry

The Group may face interruptions or delays in the availability of infrastructure, including pipelines and storage facilities, on which its exploration and production activities are dependent; production performance may also differ from that forecast

The Group may not be able to take forward development projects required to convert its reserves and resources into production and may face delays or cost overruns in executing development projects

Political, security, economic, legal, regulatory and social uncertainties and changes to the Group's relationships with governments, regulators and communities where it operates may affect the Group's business in key territories in which it operates

The timing and costs of the Group’s decommissioning arrangements are uncertain

The actions of the Group's joint ventures and partners may be outside of the Group's control

The Group's insurance and indemnities may not adequately cover all risks and expenses

The Group's ability to operate depends on satisfying licensing and other regulatory requirements

The Group may be subject to currency fluctuations and exchange controls

Hedging activities may inadequately protect the Group from hydrocarbon price, exchange rate and interest rate volatility

The Group may be unable to implement successfully the Refinancing or its business strategy

Potential litigation may adversely affect the Group's activities

The Group may be subject to labour disturbances

The Scheme Companies' performance is dependent on the performance of their subsidiaries

SECTION D: RISKS RELATING TO THE EQUITY WARRANTS

The market price of the Ordinary Shares may fluctuate and may decline below the Exercise Price specified in the Equity Warrants

An active and liquid market for the Equity Warrants may not develop

Any future share issues may dilute existing shareholdings

Any future share issues may reduce the price of Ordinary Shares and make it more difficult for Shareholders to sell their Ordinary Shares at a price they deem appropriate

The Issuer's ability to pay dividends on the Ordinary Shares will depend on the availability of distributable financial reserves and will be restricted by covenants under the Group's financing arrangements

Exchange rate fluctuations may impact the price of Ordinary Shares or the value of any dividends paid

1. General

2. Information for United States and other overseas Creditors

Accordingly:

3. Presentation of financial information

4. Rounding

5. Currencies

6. Forward-looking statements

7. Profit forecasts

8. Third party information

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Impact on the Group's financial performance

The Group's indebtedness under the other finance documents

The Monthly Deferrals and the Supplemental Agreements

Negotiations on the terms of the Refinancing

Term Sheets and Lock-up Agreements

2. OVERVIEW OF THE REFINANCING

Deleveraging the Group

Improved creditor economics

Equity Warrants and Synthetic Warrants

New Security

PART B: PROPOSALS CONCERNING THE SCHULDSCHEIN LOANS

PART C: PROPOSALS CONCERNING THE EXISTING WYTCH FARM BILATERAL LC FACILITIES AND THE EXISTING NELSON BILATERAL LC FACILITY AGREEMENT

PART D: PROPOSALS CONCERNING THE HEDGING TRANSACTIONS

PART F: IMPLEMENTATION OF THE REFINANCING

PART G: SUMMARY OF THE SCHEMES

Scheme Conditions

PART II—DESCRIPTION OF THE ISSUER AND THE GROUP

Overview

The Group’s reserves and production by country

Strategy

History and development of the Group

Key strengths

Long-life production profile supported by substantial reserves

Good quality long-term gas contracts

Large equity stakes and operatorships in high quality projects with optionality to deliver future value

Experienced production and development operator of medium-sized oil projects

Liquidity

Experienced management team with deep oil and gas industry and finance knowledge

Organisational structure

Harbour Energy PLC Capital/Financing Update 2017