THIS DOCUMENT AND THE ACCOMPANYING FORM OF PROXY ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

If you have sold or otherwise transferred all of your Ordinary Shares, please forward this document, but not the accompanying personalised Form of Proxy, as soon as possible to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding of Ordinary Shares, you should retain these documents and consult the bank, stockbroker or other agent through whom the sale was effected.

The distribution of this document and/or the accompanying Form of Proxy into jurisdictions other than the United Kingdom may be restricted by local law and therefore persons into whose possession this document and/or the Form of Proxy come should inform themselves about, and observe, any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdictions.

You should read the whole of this document and all documents incorporated into it by reference in their entirety. Your attention is drawn to the letter from the Chairman which is set out in Part I of this document and which contains a recommendation from the Board that you vote in favour of the Shareholder Resolution to be proposed at the General Meeting referred to below. Part II of this document entitled "Risk Factors" includes a discussion of certain risk factors which should be taken into account when considering the matters referred to in this document.

PremierOil

PREMIER OIL plc

(Registered in Scotland with registered number SC234781)

Proposed refinancing of the Group

Circular to Shareholders and Notice of General Meeting

A Notice of General Meeting of Premier, to be held at The Grosvenor Hotel, 101 Buckingham Palace Road, London, SW1W 0SJ at 9.00 a.m. on Thursday 15 June 2017 is set out at the end of this document. Whether or not you intend to attend the General Meeting in person, you are asked to complete and return the enclosed Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by Premier's Registrar, Capita Asset Services at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU, by not later than 9.00 a.m. on Tuesday 13 June 2017 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting). Alternatively, you may appoint a proxy electronically via the internet. Instructions on how to do this can be found on the Form of Proxy. If you hold Ordinary Shares in CREST, you may appoint a proxy electronically by completing and transmitting a CREST Proxy Instruction to the Registrar, Capita (CREST participant ID number RA10) so that it is received by no later than 9.00 a.m. on Tuesday 13 June 2017 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting). Electronic Proxy Appointment is available for the General Meeting. This facility enables Shareholders to lodge their proxy appointments by electronic means on a website provided by Capita via www.capitashareportal.com. The return of the completed Form of Proxy or CREST Proxy Instruction or Electronic Proxy Appointment will not prevent you from attending the General Meeting and voting in person (in substitution for your proxy vote) if you wish to do so and are so entitled.

This document is a circular relating to the Refinancing, which has been prepared in accordance with the Listing Rules and approved by the FCA.

RBC Europe Limited (trading as RBC Capital Markets) ("RBC"), which is authorised by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting solely for Premier and for no-one else in connection with the Refinancing and will not be responsible to any person other than Premier for providing the protections afforded to clients of RBC nor for providing advice in relation to the matters described in this document. Apart from the responsibilities and liabilities, if any, which may be imposed upon RBC by FSMA or the regulatory regime established thereunder, RBC does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with Premier, and/or the Refinancing, and nothing in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. RBC accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this document or any such statement.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS ... 2
DIRECTORS, SECRETARY, REGISTERED OFFICE AND ADVISERS ... 3
PART I—LETTER FROM THE CHAIRMAN OF PREMIER ... 4
1. INTRODUCTION ... 4
2. BACKGROUND TO AND REASONS FOR THE REFINANCING ... 8
3. WORKING CAPITAL ... 10
4. CONSEQUENCES OF A FAILURE TO PASS THE SHAREHOLDER RESOLUTION ... 11
5. RISK FACTORS ... 12
6. GENERAL MEETING ... 12
7. ACTION TO BE TAKEN ... 15
8. FURTHER INFORMATION ... 15
9. RECOMMENDATION ... 15
PART II—RISK FACTORS ... 16
PART III—ADDITIONAL INFORMATION ON THE REFINANCING ... 23
PART IV—PRESENTATION OF INFORMATION ... 47
PART V—DEFINITIONS ... 48
PART VI—NOTICE OF GENERAL MEETING ... 73

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Date of this document ... 30 May 2017
Latest time for receipt of Forms of Proxy or CREST Proxy Instructions ... 9.00 a.m. on 13 June 2017
General Meeting ... 9.00 a.m. on 15 June 2017
Court Hearings to sanction the Schemes¹ ... 9.00 a.m. on 18 July 2017
Refinancing Effective Date ... 28 July 2017

All references in this document are to London times unless otherwise stated.

Future dates are indicative only and are subject to change by Premier, in which event, details of the new times and dates will be notified to the FCA and, where appropriate, to Shareholders.

¹ The Court will be requested to sanction the Schemes. The date for those hearings, which will take place as a single composite hearing, is expected to be held on or about 18 July 2017. If this date changes, the Refinancing Effective Date will also be affected.

DIRECTORS, SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors

Mike Welton (Non-Executive Chairman)
Tony Durrant (Chief Executive Officer)
Richard Rose (Finance Director)
Robin Allan (Director, North Sea and Exploration)
Anne Marie Cannon (Non-Executive Director)
Jane Hinkley (Senior Independent Non-Executive Director)
Iain Macdonald (Non-Executive Director)

Interim Company Secretary

Andy Gibb

Registered office

4th Floor
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EN

Sponsor

RBC Europe Limited
Riverbank House
2 Swan Lane
London
EC4R 3BF

Solicitors to Premier (as to English Law)

Slaughter and May
One Bunhill Row
London
EC1Y 8YY

Solicitors to the Sponsor (as to English Law)

White & Case LLP
5 Old Broad Street
London
EC2N 1DW

Auditors

Ernst & Young LLP
1 More London
London
SE1 2AF

Registrar

Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

PART I—LETTER FROM THE CHAIRMAN OF PREMIER

(Incorporated in Scotland with registered number SC234781)

Directors
Mike Welton (Non-Executive Chairman)
Tony Durrant (Chief Executive Officer)
Richard Rose (Finance Director)
Robin Allan (Director, North Sea and Exploration)
Anne Marie Cannon (Non-Executive Director)
Jane Hinkley (Senior Independent Non-Executive Director)
Iain Macdonald (Non-Executive Director)

Registered Office:
4th Floor
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EN

30 May 2017

Dear Shareholder,

PROPOSED REFINANCING OF THE GROUP

1. INTRODUCTION

As Shareholders will be aware, Premier has been in discussions with its banks, non-bank lenders, noteholders and representatives of its bondholders for some time regarding a proposed refinancing and amendment of the Group's debt obligations (the "Refinancing"). The Refinancing has been designed to:

preserve the Group's existing debt facilities
reset financial covenants
extend maturities to 2021 and beyond.

This will allow the Group the time to focus on seeking to achieve significant deleveraging while selectively investing in the business for future growth. In return, creditors will receive, amongst other things, enhanced economics, security, a revised covenant package and certain governance controls.

Production, development opportunities and operations

For the four months to 30 April 2017, Premier's producing portfolio has averaged 82.6 kboepd. A significant step up in production is expected once Premier's operated Catcher development is on-stream, which is on schedule for the fourth quarter of this year. The Board expects that this will materially enhance the Group's cash flows. The Group will prioritise these cash flows towards reducing its absolute debt levels. At the same time and where cash flows allow, Premier will seek to invest selectively in its future growth projects, such as Tolmount and Sea Lion, to deliver value to all of its stakeholders.

With rising production and 700 mmboe of discovered but undeveloped reserves and resources, Premier has considerable portfolio optionality from which to deliver future growth. Beyond Catcher, projects include infill drilling programmes, incremental developments and new projects, the most material of which are:

the Tolmount field in the Southern North Sea. Tolmount is the largest gas discovery in the region in the past 20 years with estimated resources of 520 bcf in the main structure. FEED is progressing with FID targeted for the first half of 2018 and first gas in 2020. The Group sees the potential for the development of up to 1 Tcf in the Greater Tolmount Area, including Tolmount East and Tolmount Far East.
the Sea Lion field in the Falkland Islands. The Sea Lion project as a whole has the potential to be a very significant source of value for the Group with around 400 mmboe (net to Premier) to be developed over several phases. FEED on Sea Lion Phase 1 was largely completed in 2016 and saw the breakeven cost of the project significantly lowered. The focus of the Sea Lion project is on securing funding options, which may include an equity partner, with the aim of reducing Premier's capital commitments to the development and progressing the project to the point where Premier can sanction the development phase, expected to be in 2018. If sanction were achieved in 2018, first production would be expected in 2021.
the Tuna field in Indonesia. Evaluation of potential development scenarios is ongoing, including gas offtakes via the West Natuna Transportation System to Singapore and Indonesia or through existing infrastructure to Vietnam.

Premier also has the potential for material value creation through its exploration portfolio, including in Mexico, where the first exploration well on Block 7 spudded in May 2017.

Over the past 24 months, the Group has taken considerable measures to streamline its cost base. This has resulted, amongst other things, in a significant reduction in operating expenses to under US$16/barrel of oil equivalent and reduced capital commitments from existing operations, including 29 per cent. development capital cost savings secured on the Catcher project. Such measures have made the portfolio more robust and helped position Premier to deliver cash flow and growth should a prolonged oil price recovery scenario arise.

Premier’s strong and rising production base together with its competitive cost base should allow the Group to deleverage towards a more optimal balance of debt and equity, subject to the prevailing oil price, and place Premier in a strong position to realise the potential of its future development portfolio.

Refinancing overview

The proposed terms of the Refinancing were agreed in principle with representatives of the various bank, non-bank lender, noteholder and bondholder groups in February and March, as we announced on 3 February and 1 March 2017. The final terms have now been settled and we have secured sufficient commitments from banks, non-bank lenders, noteholders and convertible bondholders in order to proceed with convening the Court and convertible bondholder meetings necessary to obtain the creditor approvals required for the Refinancing.

As part of the Refinancing, it is proposed that Premier will offer certain of the Group’s creditors the option to elect to receive equity warrants to subscribe for Ordinary Shares, synthetic warrants or a combination of both. It will also issue new equity warrants to the Group’s convertible bondholders. The synthetic warrants will entitle the holder to a fee equivalent to a proportionate share of the growth of Premier’s market capitalisation, but they will not be exercisable for Ordinary Shares. The equity and synthetic warrants are being granted to creditors as consideration for the variation of the terms of the Group’s financing arrangements. The take up of synthetic warrants will reduce creditors’ entitlements to equity warrants and vice versa.

Potential dilution

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,² representing 18 per cent. of Premier’s issued share capital on a Fully Diluted Basis. Warrant holders 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 warrants are issued and exercised for a cash price, Premier would receive approximately £47.9 million in cash proceeds. Alternatively, and at the closing share price on the Latest Practicable Date, if holders of the equity warrants elected for cashless exercise approximately 35,125,734 additional Ordinary Shares will be required to be issued, representing approximately 6 per cent. of Premier’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 shares underlying the convertible bonds, representing approximately 26 per cent. of Premier’s issued share capital on a Fully Diluted Basis and 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. Furthermore, assuming that the coupon on the convertible bonds is to be 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 bonds based on the closing share price on the Latest Practicable Date, representing 1 per cent. and 6 per cent. of Premier’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. If the coupon is fully satisfied 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 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

² This figure, and other figures based on the issued share capital of Premier as at the Latest Practicable Date, are subject to change if Premier were to issue more Ordinary Shares prior to the Entitlement Calculation Date for the warrants. Premier 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 warrants or synthetic warrants.

the convertible bonds is satisfied or funded by the issue of new Ordinary Shares (based on the closing share price and applicable foreign exchange 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 Premier'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 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 issue of these warrants and additional shares, and the changes to the convertible bond terms, require Shareholder approval and the Refinancing is conditional on obtaining this approval.

As part of the Refinancing, it is proposed that Premier will pay total fees to certain of the Group's creditors equal to $36.3m. In addition, as a result of the Refinancing, the Group's average cost of debt will increase by approximately 150 basis points.

Conditions to Refinancing

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

Shareholders approving the Shareholder Resolution set out in this document;
the Scheme Creditors approving schemes of arrangement with Premier and Premier Oil UK (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, Premier cannot be assured that a majority of Scheme Creditors in number will vote in favour of the Schemes. If the Refinancing does not complete before 31 July 2017 or such later date as the relevant members of the Group and the relevant majority of participating senior creditors agree, the lock-up agreements will lapse and the participating creditors will no longer be bound to support the Refinancing unless Premier and a sufficient majority of participating creditors under each lock-up agreement agree to extend the long-stop date. Each of the conditions set out above is interconditional such that the Refinancing is expected to proceed only if they are all satisfied.

If Shareholder approval is obtained but any one of the other conditions is not satisfied, the Board will be unable to use the authorities granted by the Shareholder approval. The Board may use the relevant authorities to issue warrants and shares only in connection with the Refinancing.

If the conditions to the Refinancing are satisfied, the Directors expect the Refinancing to complete by 28 July 2017. If the Refinancing is not successfully completed, Premier will face the prospect of insolvency as it will in all likelihood be in default under its financing arrangements. Following an insolvency event, the likely termination by counterparties of material financing arrangements and commercial contracts would likely result in significant value destruction relative to the going concern value of the Group. In these circumstances, the Directors consider that Premier's ability to continue trading would depend upon the position and action of its creditors. Section 4 of this letter sets out in greater detail what the consequences could be if the Refinancing is not successfully completed, and therefore how important it is that Shareholder approval is obtained.

Main features of Refinancing

The main features of the Refinancing concerning the Group's US$2,500,000,000 revolving credit facility, US$150,000,000 and £100,000,000 term loan facility, US$446,000,000 and €100,000,000 of US private

placement notes (of which US$298,000,000 and €60,000,000 in principal amounts are outstanding), £150,000,000 of retail bonds and US$130,000,000 of Schuldschein loans are:

preservation of existing debt facilities under which the Group will have access to approximately US$719 million for general corporate purposes of which US$370.3 million was drawn as at the Latest Practicable Date.
amendment of financial covenants (except for Retail Bondholders), including: a ratio of Covenanted Net Debt to EBITDA (the “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 onwards (in line with Premier’s unadjusted net debt to EBITDAX covenant levels in its existing facilities (the “Existing Leverage Ratio”)); a ratio of EBITDA to interest (the “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).
reset maturities to 31 May 2021.
improved creditor economics, including:
a margin uplift of 150bps over existing pricing with an additional 100bps for the Schuldschein lenders for conversion of their existing bilateral facilities into an English law syndicated facility;
amendment fees of 100bps with an additional 50bps for the Schuldschein lenders;
equity warrants representing up to 15 per cent. of Premier’s issued shares (on a Fully Diluted Basis) with an exercise price of 42.75 pence per share or synthetic warrants entitling holders to a pro rata fee calculated by reference to Premier’s share price growth or a combination of both;
crystallisation of the Make-Whole Amounts on the US private placement notes on completion of the Refinancing; and
should the Group’s Covenanted Net Debt exceed US$2.95 billion at 31 December 2018, a Supplemental PIK Fee will accrue retrospectively on the facilities at a rate determined by the amount of the Group’s Covenanted Net Debt as at the end of 2018, and will be added to the debt outstanding at the time that the Group’s Covenanted Net Debt falls below US$2.95 billion.
increased guarantor coverage and a comprehensive security package which provides priority over unsecured creditors and, for some creditors, super senior priority over secured creditors. A new intermediate holding company will be inserted directly below Premier so that creditors will have a single point of enforcement against an English company within the holding company structure.
certain milestones to be met with a view to achieving significant deleveraging.
covenants aimed at deleveraging the Group which will include the above net debt, leverage, interest cover and minimum liquidity covenants, an excess cash sweep and restrictions on the ability of the Group to pay dividends or other distributions from retained earnings as well as various other restrictive covenants.

The above terms will also apply to Premier’s Existing Bilateral LC Creditors. Premier’s Hedge Counterparties will benefit from increased guarantor coverage and the security package, with amendments being made to Premier’s cross currency swaps to reflect the adjusted maturity and pricing of the underlying debt.

The Refinancing will provide the following key terms to holders of the Group’s US$245,324,000 convertible bonds:

reset maturity to 31 May 2022.
reduced conversion price from £4.21 to 74.71 pence with anti-dilution protections.
a 2.5 per cent. coupon, to be paid, at the election of the bond issuer, in new Ordinary Shares, from the proceeds of sale of new Ordinary Shares or in cash (subject to the terms of an intercreditor agreement between Premier and its creditors).
equity warrants representing up to 3 per cent. of Premier’s issued shares (on a Fully Diluted Basis) with an exercise price of 42.75 pence per share.

conversion at the option of the bond issuer at the conversion price at any time after one year if the value of Premier's shares is at least 140 per cent. of the conversion price for 25 consecutive dealing days.

Further details of the Group's existing indebtedness and the Refinancing are set out in sections 1, 2 and 3 of Part III (Additional Information on the Refinancing) of this document.

The equity warrants will expire at 9.00 a.m. on 31 May 2022. The equity warrants will be capable of cashless exercise at the election of the holder, in which case the exercise price will not be paid but the number of Ordinary Shares issued will be reduced accordingly. The equity warrants and synthetic warrants will be freely transferable (subject to certain restrictions) and may be held in certificated or uncertificated form and will be capable of issue into CREST. Further information about the proposed issue of warrants to Convertible Bondholders, Senior Creditors, Schuldschein Lenders and the Existing Bilateral LC Creditors can be found in sections 2, 3 and 4 of Part III of this document.

In order to help meet the New Net Leverage Ratio of 3:1 by 31 March 2019 and Covenanted Net Debt of US$2.95 billion by 31 December 2018, the Group will seek to execute a business plan, which will include taking steps towards achieving milestones focussed on disposals and farm outs of assets as well as investments in certain development projects expected to generate increased cash flows for the Group. The Group will also prioritise cash flows from an expected step up in production once Catcher is on-stream towards reducing its absolute debt levels. The pace at which the group is able to reduce the level of its leverage and net debt is also dependent, to a great extent, on the oil price.

General Meeting

A General Meeting is to be held at 9.00 a.m. on 15 June 2017 to seek approval of the Shareholder Resolution and a notice convening the General Meeting is set out at the end of this document. The purpose of this document is to provide Shareholders with more background to the Refinancing, to explain why the Directors consider it to be in the best interests of Premier and the Shareholders as a whole and to recommend that the Shareholders vote in favour of the Shareholder Resolution. The main features of the Refinancing are also described in greater detail below.

2. BACKGROUND TO AND REASONS FOR THE REFINANCING

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. 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 back to a low of US$48/bbl in early May 2017 and stood at US$53.31/bbl as at the Latest Practicable Date. 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. Premier 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 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 Solan. The impairment charges were due to the impact of the lower near-term oil price assumptions used in balance sheet tests at the year-end, and in the case of Solan, higher development costs than originally budgeted.

Premier 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 was an increase in the leverage of the Group. As at 31 December 2015, the Existing Leverage Ratio was 3.30:1 and the EBITDAX to net interest cover ratio under the Existing Finance Documents (the "Existing Interest Cover Ratio") was 8.78:1.

The Monthly Deferrals

The RCF Facility Agreement, the Existing Term Loan Facility Agreement, the USPP Note Agreements and Schuldschein Loan Agreements contain net debt to EBITDAX and EBITDAX to net interest payable financial covenants, each of which is 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 RCF Finance Documents, the Existing Term Loan Finance Documents and the USPP Finance Documents (together, with the Retail Bonds, the "Existing Scheme Finance Documents") and the Schuldschein Loan Agreements. The financial covenants were amended as follows:

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, Existing Term Loan Facility Agreement, 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 agreed between June 2016 and February 2017 as described above are referred to hereinafter as the "Monthly Deferrals". In March 2017 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.

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.

The Convertible Bondholder Lock-up Agreement was signed and dated on 28 February 2017. On 1 March 2017, the Group announced that it had agreed key terms with 47 per cent. of the Convertible Bondholders in relation to the Convertible Bond Restructuring. 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. By entering into the Convertible Bondholder Lock-up Agreement, the relevant Convertible Bondholders have undertaken to vote in favour of 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 RCF Creditors, Term Loan Lenders 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. Pursuant to this agreement, 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 Existing Bilateral LC Lock-up Agreement was signed and dated on 8 March 2017 and the Hedging Lock-up Agreement was signed and dated on 9 March 2017. Pursuant to these lock-up agreements the Existing Bilateral LC Creditors and the Hedge Counterparties have undertaken to support the Refinancing.

All of the Lock-up Agreements became fully effective on 14 March 2017. Whilst the Group has otherwise locked-up sufficient creditors to implement the Refinancing, implementation of the Schemes (and therefore of the Refinancing) requires a majority in number of Scheme Creditors to vote to approve the Schemes, and the subsequent sanction of the Schemes by the Court (as described in section 1 of Part I (Chairman's Letter). As the Retail Bondholders have not entered into a lock-up agreement and the Retail Bonds continue to trade, Premier cannot be assured that a majority of Scheme Creditors in number will vote in favour of the Schemes.

The remaining long form documentation required to implement the Refinancing has been finalised and is in 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 4 (Material Contracts entered into for the purpose of the Refinancing) of Part III (Additional Information on the Refinancing).

3. WORKING CAPITAL

Premier 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 document.

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 set out in this document; (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. Failure to satisfy these conditions will have the consequences described in section 4 below. These could include events of default under the Group's financing arrangements, cross-default, acceleration of the entirety of the Group's outstanding debt and insolvency. Premier 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 document.

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 4 of Part III (Additional Information)) 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, Premier 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.

Premier believes, based on the level of support for the Refinancing received to date, that the risk of the conditions described in (ii), (iii), (iv) or (v) 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 the Group would not have sufficient working capital for its present requirements.

CONSEQUENCES OF A FAILURE TO PASS THE SHAREHOLDER RESOLUTION

If the Shareholder Resolution is not passed by Shareholders at the General Meeting, the Directors will not be authorised to issue all of the Equity Warrants, Convertible Warrants and Ordinary Shares that Premier may be obliged to issue as a result of the Refinancing, the conditions to the Refinancing will not be satisfied and consequently the Refinancing will not proceed. In those circumstances, the parties to the Senior Lock-up Agreement would be entitled to terminate the agreement, which would cause the financial covenant deferrals referred to in section 2 of this letter to cease to be effective.

Without the financial covenant deferrals contained in the monthly waiver letters and subsequently the Senior Lock-up Agreement, Premier would have breached certain of the financial covenants contained in the USPP Note Agreements, the Schuldschein Loan Agreements, 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 Premier 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. 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 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 Premier is able to secure future financial covenant deferrals, there is a risk that Premier will not be able to repay its US$150,000,000 and £100,000,000 term loan 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 Premier 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 Shareholders do not vote in favour of the Shareholder Resolution, 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.

As noted in sections 1 and 3 above, in order for the Refinancing to be implemented there are a number of conditions that need to be fulfilled, including approval of the Shareholder Resolution. If any of the other conditions to the Refinancing are not satisfied, then the same consequences to Premier and the Shareholders outlined above could apply.

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.

In the Board's opinion, the Refinancing is in the best interests of Premier and its Shareholders because it will allow the Group to focus on seeking to achieve significant deleveraging within the time periods contemplated by the revised financial covenants while selectively investing in the business for future growth, delivering value for all stakeholders. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Shareholder Resolution to be proposed at the General Meeting.

5. RISK FACTORS

Shareholders should consider fully and carefully the risk factors associated with the Refinancing, the oil and gas industry and the operations of the Group. Your attention is drawn to the risk factors set out in Part II of this document.

6. GENERAL MEETING

The Refinancing is conditional upon, amongst other things, the approval of Shareholders at the General Meeting. Set out at the end of this document is a Notice convening the General Meeting. The General Meeting will be held at The Grosvenor Hotel, 101 Buckingham Palace Road, London, SW1W 0SJ at 9.00 a.m. on Thursday 15 June 2019. The Shareholder Resolution will be proposed as an ordinary resolution requiring a

simple majority of votes in favour to be passed. The Refinancing will not proceed unless the Shareholder Resolution is passed.

The Board considers it to be in the best interests of Premier and its Shareholders for completion of the Refinancing to occur as soon as possible. For this reason, the General Meeting is to be convened in accordance with the applicable statutory notice period rather than the 14 working days under the UK Corporate Governance Code.

Shareholder Resolution: Authority to allot shares

The Refinancing is conditional upon the passing of the Shareholder Resolution. If approved, the Shareholder Resolution will authorise:

the grant of rights to subscribe for and the 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 Board may only use the authorities conferred by the Shareholder Resolution in connection with the Refinancing.

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 Ordinary Shares. Section 551 of the Companies Act 2006 requires such authority to be granted by Premier 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 Ordinary 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 share capital (excluding treasury shares) of Premier.

The figure used for the nominal amount of the issued share capital of Premier 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 Premier in treasury.

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 Premier'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 Premier'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 18,688,962 Convertible Warrants, representing 3 per cent. of Premier'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 Premier'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 Premier's issued share capital on that 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 Premier on a Fully Diluted Basis). 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 Premier'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 Ordinary 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, Premier would receive approximately £47.9m 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 Premier'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 Premier'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 36.7 million 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 Premier'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 Ordinary 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 applicable foreign exchange 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 Premier'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 Ordinary 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.

As required by Listing Rules 9.4.4R(1) and 9.4.4R(2), the authorisations pursuant to (A) and (B) above will be in satisfaction of the requirement to obtain Shareholder approval for granting certain rights to subscribe for shares in the capital of Premier to directors or employees if any directors or employees are also Scheme Creditors or Convertible Bondholders. As at the date of this Circular, the Directors are not Scheme Creditors or Convertible Bondholders and the Directors will continue not to hold any of the Group's debt until after the Refinancing Effective Date, if at all.

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 Premier 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.

7. ACTION TO BE TAKEN

You will find enclosed with this document the Form of Proxy for use at the General Meeting or at any adjournment thereof. You are requested to complete and sign the Form of Proxy in accordance with the instructions printed on it and return it as soon as possible to, but in any event so as to be received no later than 9.00 a.m. on Tuesday 13 June 2017 by the Registrar, Capita Asset Services at PXS, 34 Beckenham Road, Beckenham Kent BR3 4TU or electronically via the internet. Instructions on how to do this can be found on the Form of Proxy. You may also deliver the Form of Proxy by hand to Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU during usual business hours. CREST members may also choose to use the CREST electronic proxy appointment service in accordance with the procedures set out in the notice convening the General Meeting at the end of this document. The lodging of the Form of Proxy (or the electronic appointment of a proxy) will not preclude you from attending and voting at the General Meeting in person if you so wish.

8. FURTHER INFORMATION

You should read the whole of this document in respect of the Refinancing and the information incorporated by reference into it and not just rely on the summarised information contained in this Part I of this document. In particular, your attention is drawn to the risk factors set out in Part II of this document and the information incorporated by reference into this document as listed in Part IV of this document.

9. RECOMMENDATION

The Directors consider that if Shareholders do not vote in favour of the Shareholder Resolution, Premier's future would entirely depend upon the position and action of its creditors, with the consequences described in section 4 above.

The Board considers the Refinancing to be in the best interests of Premier and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Shareholder Resolution to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings which, at the Latest Practicable Date amounted to 1,350,340 Ordinary Shares in aggregate, representing approximately 0.27% per cent. of Premier's existing issued share capital.

Yours faithfully,

Mike Welton

Chairman

PART II—RISK FACTORS

Shareholders should be aware that a shareholding in Premier involves a degree of risk. The following risk factors should be considered carefully in evaluating whether to vote in favour of the Shareholder Resolution.

The risk factors in this document are included to give due prominence to the risks of the Refinancing and allow the Shareholders to make an informed decision, in accordance with the Listing Rules, and do not seek to cover all of the material risks which generally affect the Group.

The risks and uncertainties described below represent those known to the Board as at the date of this document which the Board consider to be material risks relating to the Refinancing and the Group's financing arrangements. However, these risks and uncertainties are not the only ones facing the Group. Additional risks and uncertainties that do not currently exist or that are not currently known to the Board, or that the Board currently consider to be immaterial, could also have a material adverse effect on the Refinancing or on the Group.

If any or a combination of the events described below actually occurs, the business, results of operations, financial conditions or prospects of the Group could be materially and adversely impacted. In such case, the market price of Ordinary Shares could decline and investors may lose all or part of their investment.

Shareholders should read this document as a whole and not rely solely on the information set out in this section.

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 Premier 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, Premier would have breached certain of the financial covenants contained in the USPP Note Agreements, the Schuldschein Loan Agreements, 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 Premier 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 insolvency proceedings and counterparties to material contracts would seek to exercise termination rights under those contracts.

If the Refinancing does not become effective but Premier is able to secure future deferrals, there is a risk that Premier will not be able to repay its US$150,000,000 and £100,000,000 term loan 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 Premier does not secure future 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 insolvency proceedings, which the Directors consider would likely result in no value being returned to Shareholders.

If the Refinancing does not proceed and there is a risk that Premier may be placed into insolvency procedures, expectations or sentiment that Premier would be placed into such procedures is likely to have an adverse effect on 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 they deem appropriate or at all.

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 set out in this document;
the Scheme Creditors approving the Schemes and the 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.

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 4 (Material contracts entered into for the purpose of the Refinancing) of Part III (Additional Information on the Refinancing) of this document.

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 Premier'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.

In the event of an administration or any winding-up of Premier, holders of Ordinary Shares will be only entitled to be paid distributions out of the assets of Premier available to members after the claims of all Premier's creditors have been met. Therefore, the higher Premier's level of indebtedness the more likely it is that no value will be realised for any investment in the Ordinary Shares in such a scenario.

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 3 of Part I (Chairman's Letter) 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 Premier's ability to pay dividends or other distributions from retained earnings.

If the Refinancing proceeds, existing Shareholders' interests in Premier will be diluted

Following successful completion of the Refinancing, Equity Warrants would be issued to Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors, and Convertible Warrants would be issued to Convertible Bondholders. The conversion price of the Convertible Bonds would also be reduced such that each bond is convertible into a greater number of Ordinary Shares. Existing Shareholders' interests in Premier will be diluted on the exercise of the warrants, conversion of the Convertible Bonds and/or if the Convertible Bond Issuer elects to issue new Ordinary Shares rather than pay cash interest on the Convertible Bonds. Further details are set out at section 6 (General Meeting) of Part I (Chairman's Letter) of this document. As a result, existing Shareholders would receive a lower proportion of any returns to Shareholders.

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 4 of Part I (Chairman's Letter).

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. However, its ability to do so will be constrained as a result of the Refinancing.

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 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.

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 1 of Part I (Chairman's Letter) and section 3 of Part III (Additional Information) of this document, on completion of the Refinancing, a new holding company will be inserted immediately below Premier 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 Premier 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 Premier'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.

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 Premier's share option schemes, Premier 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 Premier 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.

Premier'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 Premier 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. Premier'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 Premier and thus the ability of Premier to pay dividends or distributions to Shareholders.

Premier 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, Premier 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).

Premier 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.

Holders of equity interests in Premier may adopt hedging strategies which would negatively affect the price of the Ordinary Shares

As part of the Refinancing, Premier will issue Equity Warrants and Convertible Warrants representing in aggregate up to 18 per cent. of Premier's issued share capital on a Fully Diluted Basis. As the Equity Warrants and Convertible Warrants may be exercisable at a price below the prevailing share price at issue, there is an increased probability that warrant holders will undertake hedging or other trading strategies which may result in volatility and/or a reduction in Premier's share price for an extended period.

Furthermore, as a result of the amendment of the conversion price for the convertible bonds from £4.21 to 74.71 pence, the number of Ordinary Shares underlying the convertible bonds will increase to 30 per cent. of Premier's issued share capital on a Fully Diluted Basis and also accounting for Ordinary Shares issued on conversion. Convertible bondholders often employ hedging or other trading strategies which, if employed in this case, may result in volatility and/or a reduction in Premier's share price for an extended period.

PART III—ADDITIONAL INFORMATION ON THE REFINANCING

EXISTING GROUP INDEBTEDNESS

Further details of the Group’s principal financing arrangements, all of which are unsecured, are set out in this section 1 of this Part III (Additional Information on the Refinancing) as follows:

Section A—Group indebtedness under the Existing Scheme Finance Documents;
Section B—Group indebtedness under the other finance documents.

Section A—Group indebtedness under the Existing Scheme Finance Documents

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 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 Circular, 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. 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 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 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, 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 are guaranteed by Premier 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 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 up to 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 Circular, 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 Premier 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 will 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 Premier and the other Existing Guarantors.

The 2011 USPP Notes 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 will 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 Premier 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 Premier 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 Premier under the Retail Bonds is guaranteed by POUK and the 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 the Existing Leverage Ratio and the Existing Interest Cover Ratio. 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 Note Agreements 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.

Section B—Group 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, Premier, 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, Premier, 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, Premier, 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 Premier only. The obligations of the Convertible Bond Issuer (as issuer) and Premier (as guarantor) under the Convertible Bond are structurally subordinated to the guarantees provided by subsidiaries of Premier (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 NOR 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 Transactions 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 Transactions requires all Existing Guarantors that have acceded to the RCF Facility Agreement as guarantors to also accede to the Hedging Transactions 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 Premier 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 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 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"). 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.

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: Section A of this section 2 provides an overview of the terms of the Refinancing regarding the Scheme Creditors.
The proposals in relation to the Schuldschein Loans: Section B of this section 2 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: Section C of this section 2 provides an overview of the terms of the Refinancing as regards the Existing Bilateral LC Creditors.
The proposals in relation to the Hedging Transactions: Section D of this section 2 provides an overview of the terms of the Refinancing as regards the Hedge Counterparties.
The Convertible Bond Restructuring: Section E of this section 2 provides an overview of the terms of the Refinancing regarding the Convertible Bond Restructuring.

As a result of the Refinancing, the average cost of the Group's financings will increase by approximately 150 basis points.

Section 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 Transactions, the Existing Wytch 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 Existing Term Loan Facility Agreement, 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.

The directors of the Scheme Companies believe that this reset of financial covenants and maturities will allow the Group the time to focus on seeking to achieve significant deleveraging while selectively investing in the business for future growth.

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. 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 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 (as described in sub-section A of section 3 of this Part 3 (Additional Information), the New Watch 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 debt 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 covenants focussed on the deleveraging of the Group, which will include net debt, leverage, interest cover 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 compared to the Existing Scheme Finance Documents.

A further explanation of the aspects of the Refinancing concerning the Scheme Creditors is set out in section A of section 3 (Further Explanation of the Refinancing) of Part III (Additional Information on the Refinancing).

Section B: Proposals concerning the Schuldschein Lenders

The Refinancing as it concerns the Schuldschein Lenders will be on similar terms to the proposals concerning the Scheme Creditors described in Part A above, subject to certain differences. It will be implemented by the Schuldschein Lenders entering into an amendment and restatement agreement. A further explanation of the aspects of the Refinancing concerning the Schuldschein Lenders, including details of additional fees and margin payable to Schuldschein Lenders, is set out in section B of section 3 (Further Explanation of the Refinancing Regarding Scheme Creditors and Schuldschein Lenders) of Part III (Additional Information on the Refinancing).

Section 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: all commitments under the Existing Nelson Bilateral LC Facility Agreement as at the Refinancing Effective Date 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 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 the Senior RCF Facility, namely at 500 bps.

Section 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 Transactions 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.

Section E: The Convertible Bondholder Restructuring

In connection with the amendments summarised above in sections 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 the 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 $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. Were all of the Convertible Bonds converted at the improved conversion price, they would be convertible into 231,283,592 more Ordinary Shares in Premier than is currently the case (representing approximately 26 per cent. of the issued share capital of Premier on a Fully Diluted Basis and also accounting for Ordinary Shares issued on conversion).
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 dilutive 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 (each such date, an “Issuer Date”), 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:

Premier shall issue to each Convertible Bondholder on the applicable Issue Date, a number of Ordinary Shares equal to the Share Entitlement per US$1000 in principal amount of Convertible Bonds held by the Convertible Bondholder, where:

“Share Entitlement” = 0.625 x FX Rate / SP

“FX Rate” means the US$/£ exchange rate to be calculated as a simple average of the exchange rates quoted by Bloomberg (page GBPUSD Currency) at or around 4 p.m. GMT for each dealing day in the issue period; and

“SP” means the market price of Ordinary Shares calculated by reference to the daily VWAP of such Ordinary Shares for the 10 consecutive dealing days ending on the second dealing day prior to the Issue Date.

Fractions of Ordinary Shares will not be issued, the Share Entitlement will accordingly be rounded down to the nearest whole number and no payment will be made in lieu thereof.

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:

Premier shall pay to each Convertible Bondholder on the applicable Issue Date an amount equal to the gross proceeds of the issue into the market by it of a number of Ordinary Shares equal to the Share Entitlement for each US$1000 in principal amount of the Convertible Bonds held by the relevant Convertible Bondholder.

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 warrants representing 3 per cent. of Premier’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 Premier’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 Premier’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 Premier 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 Premier and the Convertible Bond Issuer that is subordinated to the Super Senior Secured Facilities and Senior Secured Debt Facilities (other than intercompany debt of Premier 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 Premier 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 Premier limiting the Group's indebtedness and 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 (subject to the same exclusions described above) 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 RCF/LC 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).

Section 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 Premier 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 in Section G (Summary of the Schemes) of this section 2.
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 in the 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 "Extraordinary Resolutions"). The quorum requirements applicable for the holding of a meeting of Convertible Bondholders in order to consider an Extraordinary 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 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 Transactions: 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 Transactions in respect of the Refinancing.
Existing Wytch Farm Bilateral LC Facilities and 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.

Shareholder Resolution: holders of Ordinary Shares will be asked to vote on the Shareholder Resolution at the General Meeting. Further details of the Shareholder Resolution to be proposed at the General Meeting are set out the Notice of General Meeting.

Section G: Summary of the Schemes

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 on 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 the 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 (see below), at which time an attorney will be authorised 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 having 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 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 section 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.

3. FURTHER EXPLANATION OF THE REFINANCING REGARDING SCHEME CREDITORS AND SCHULDSCHEIN LENDERS

Further details of the Refinancing as it relates to the Scheme Creditors and the Schuldschein Loans are set out in this section 3 of this Part III (Additional Information on the Refinancing) as follows:

Section A—Proposals concerning the Scheme Creditors; and
Section B—Proposals concerning the Schuldschein Lenders.

Section A—Proposals concerning the Scheme Creditors

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 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 Debt Facilities. Both the Super Senior Secured 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;	31 May 2021

	Existing maturity date	Reset maturity date
	(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.
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;	31 May 2021
	(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.
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 focussing on the disposal of 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 Debt Facilities and the Senior Secured Debt Facilities.

As noted in section A of section 1 (Existing Group indebtedness) of Part III (Additional Information on the Refinancing), 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 Premier on a Fully Diluted Basis with an exercise price of 42.75 pence, and freely tradeable (subject to certain restrictions) and exercisable from their issuance until 31 May 2022. The Equity Warrants will be afforded customary anti-dilution protections in respect of their value (“Customary Anti-Dilution Protections”) including, among other things, protection against any Adjustment Events, but shall not be secured nor have any priority ranking as debt. Holders of Equity Warrants may elect for cashless exercise of all or any number of their Equity Warrants, in which case, the number of Equity Warrants they receive on exercise shall be reduced accordingly to account for the exercise price which would otherwise have been paid;
Synthetic Warrants: synthetic warrants representing, in aggregate, a fee equivalent to up to 15 per cent. 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 Premier on 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
Combination: 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 Premier’s issued share capital on a Fully Diluted Basis. This would reduce to 6 per cent. of Premier’s issued share capital on a Fully Diluted Basis 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 RCF/LC Facilities and the Senior Secured Debt Facilities as at the Refinancing Effective Date.

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 Covenanted 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 Obligor (other than the Brazilian Guarantor) granting (among other things): (i) 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.

Section B—Proposals concerning the Schuldschein Lenders

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 Section 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.

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.

4. MATERIAL CONTRACTS ENTERED INTO FOR THE PURPOSE OF THE REFINANCING

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 (see below).

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 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 fully effective on 14 March 2017 and its terms will apply until the earliest of: (i) the date on which it is terminated (as to which, see below), (ii) 31 July 2017 or such later date as the relevant members of the Group and the relevant majority of Participating Senior Creditors agree 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 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 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 Premier, 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 Creditors 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.

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 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 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.

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 an 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.

Equity Warrant Instrument

Premier will execute the Equity Warrant Instrument and thereby agree to issue up to 93,443,462 registered Equity Warrants to the Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors on the Refinancing Effective Date. Each Equity Warrant shall confer the right, but not the obligation, to subscribe in cash for one Ordinary Share (subject to adjustment as outlined below). The key terms of the Equity Warrant Instrument are summarised below.

The Equity Warrants will expire on 31 May 2022.

The exercise price will be £0.4275 per Ordinary Share (subject to adjustment as outlined below). A holder of the Equity Warrants may elect for cashless exercise of all or any number of the Equity Warrants it holds, in which case the number of Ordinary Shares received upon exercise will be reduced accordingly.

The Equity Warrants will benefit from customary anti-dilution protections, and the exercise price may be adjusted following certain dilutive events. Should a dilutive event occur whilst any Equity Warrants are outstanding, Premier will instruct its auditor or an independent expert to determine the required adjustment to the exercise price to be paid or to the number of Ordinary Shares to be issued upon exercise of an Equity Warrant. The auditor or independent expert will consider the economic effect of the dilutive event on the outstanding Equity Warrants when determining a suitable adjustment. As far as possible, adjustments will be made to the exercise price payable upon exercise of an Equity Warrant rather than the number of Ordinary Shares to be issued. No adjustment will be made to the extent it would result in the exercise price falling below the nominal value of one Ordinary Share. In this instance, any further adjustment required will instead be effected by increasing the number of Ordinary Shares issuable upon exercise of an Equity Warrant.

Equity Warrants may only be exercised by a holder of the Equity Warrants who either:

is not located in the United States (within the meaning of Regulation S); or
is located in the United States if it confirms its status as a QIB or IAI.

The Equity Warrants will be freely transferable subject to certain restrictions contemplated by the Equity Warrant Instrument.

Convertible Warrant Instrument

Premier will execute the Convertible Warrant Instrument and thereby agree to issue approximately 18,688,692 registered Convertible Warrants to the Convertible Bondholders on the Refinancing Effective Date. Each Convertible Warrant shall confer the right, but not the obligation, to subscribe in cash for one Ordinary Share (subject to adjustment). The key terms of the Convertible Warrant Instrument (including the price payable upon exercise of a Convertible Warrant) are substantially the same as those set of the Equity Warrant Instrument.

Synthetic Warrant Instruments

Premier will execute the Senior Synthetic Warrant Instrument and the Super Senior Synthetic Warrant Instrument and thereby agree to create and issue up to 93,443,462 registered Synthetic Warrants to the Scheme Creditors, Schuldschein Lenders and Existing Bilateral LC Creditors on the Refinancing Effective Date. The key terms of the Senior Synthetic Warrant Instrument and the Super Senior Synthetic Warrant Instrument are summarised below.

The Synthetic Warrants will confer on each holder the right to receive a payment in cash from or on behalf of Premier of a proportionate share of a fee, equivalent to up to 15 per cent., depending on the ratio of Synthetic Warrants to Equity Warrants issued, 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 share) and the Market Capitalisation of Premier 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").

"Market Capitalisation" used for the purposes of calculating the fee, will at the sole discretion of Premier, in the case of a Calculation Date that arises under paragraph (i) or (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 fee in the case of a Calculation Date that arises under paragraph (iii) or, unless the calculation date arises as a result of a change of control, paragraph (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 Premier 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 Premier 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 Premier 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 Premier; and
iv. "Excluded Calculation Items" means:

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);
the value as at the Calculation Date of shares issued pursuant to the terms of the Convertible Bonds;
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;
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
the value as at the Calculation Date of shares in Premier issued pursuant to a share scheme.

In certain circumstances, each holder of the Synthetic Warrants will also be entitled to receive interest on its proportionate share of any fee to which it is entitled. Where the Calculation Date precedes the date on which the fee becomes payable, the fee will be capitalised and shall accrue interest.

The Synthetic Warrants will benefit from customary anti-dilution protections, and the fee payable may be adjusted following certain dilutive events. Should a dilutive event occur before one of the events triggering payment described above occurs, Premier will instruct its auditor or an independent expert to determine (at the time the fee is due to be calculated) the required adjustment to the calculation of the fee. The auditor or independent expert will consider the economic effect of the dilutive event on the Synthetic Warrant when determining a suitable adjustment.

Payment will be credited to the CREST accounts of holders of the Synthetic Warrants represented by a global synthetic warrant certificate. Holders of the Synthetic Warrants represented by an individual synthetic warrant certificate must, at their own expense, execute and deposit a duly completed payment request at the specified office of the Warrant Agent in order to claim payment. The warrant agent will provide a written notice to each holder of Synthetic Warrants that the fee has become payable, the total amount of the fee, the share of the fee and any interest payable to each holder and reminding the holder of its obligation to submit a request for payment in order to receive its share of the fee. Premier will notify any holder who has not submitted a payment request within 2 months after the fee becomes payable that the fee is payable and such holder must submit such payment request to receive payment. If on the date which is 12 months after the fee becomes payable, Premier has still not received a payment request for any one or more Synthetic Warrants, Premier will

send a cheque for the relevant amount to the name and address recorded for such Synthetic Warrants on the synthetic warrant register.

The Synthetic Warrants will be freely transferable subject to certain restrictions contemplated by the Synthetic Warrant Instruments.

CONSENTS

RBC has given and not withdrawn its written consent to the issue of this document and the references herein to its name in the form and context in which they appear.

PART IV—PRESENTATION OF INFORMATION

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute “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” or “should” or, in each case, their negative or other variations or comparable terminology. Shareholders should specifically consider the factors identified in this document, which could cause actual results to differ, before making any decision whether to vote in favour of the Shareholder Resolution. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group, 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 numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Such risks, uncertainties and other factors are set out more fully in the section entitled “Risk Factors” in Part II of this document. These forward-looking statements speak only as at the date of this document. Premier expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in Premier’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by the FCA, the London Stock Exchange, applicable laws, the Listing Rules and the Disclosure and Transparency Rules and the Market Abuse Regulation.

The statements above relating to forward looking statements should not be construed as a qualification on the opinion of Premier as to working capital set out in section 3 of Part I of this document.

Premier will comply with its obligation to publish supplementary prospectuses containing further updated information required by law, the Prospectus Rules, the Listing Rules, the Disclosure and Transparency Rules or by any regulatory authority but assumes no further obligation to publish additional information.

PRESENTATION OF CURRENCIES

Unless otherwise indicated, all references to “GBP”, “£”, “pounds”, “sterling”, or “pounds sterling” are to the lawful currency of the United Kingdom and all references to “USD”, “$”, “US$”, “US dollars” or “United States dollars” are to the lawful currency of the United States.

RESERVES AND RESOURCES

Statements in this document relating to the Group’s reserves are to proved and probable (“2P”) reserves and all references to contingent resources are to discovered hydrocarbons that are potentially recoverable (“2C”) resources but not yet considered mature enough for commercial development due to technological or business hurdles. Unless otherwise stated, such statements have been prepared using the classification system set out in the Petroleum Resources Management System published in 2007 and jointly sponsored by the Society of Petroleum Engineers, the American Association of Petroleum Geologists, the World Petroleum Council and the Society of Petroleum Engineers.

ROUNDING

Percentages in tables have been rounded and accordingly may not add up to 100 per cent. Certain financial data have also been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.

PART V—DEFINITIONS

In this document, unless the context otherwise requires or otherwise expressly provides:

“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
(c) the US$ 9.63% series C make-whole notes due 31 May 2021.

“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 amendment and restatement agreement to be entered into between (amongst others) POUK, the Parent Company and each 2011 Holder amending and restating the 2011 USPP Note Agreement and the 2011 Notes.

“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;
(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 amendment and restatement agreement to be entered into between (amongst others) POUK, Premier and each 2012 Holder amending and restating the 2012 USPP Note Agreement and the 2012 USPP Notes.
“2012 USPP Note Agreement”	means the note purchase and guaranty agreement dated 15 March 2012 entered into between POUK, Premier and the note purchasers listed therein.
“Account Holder Letter”	means a Retail Bond Account Holder Letter or a CREST Account Holder Letter.
“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 Event”	means any one of:
	(a) an allotment or issue of shares (or instruments or rights convertible or exchangeable into shares) at a discount to market value (excluding allotments or issues of shares on exercise of Equity Warrants or, in certain circumstances, conversions of Convertible Bonds);
	(b) a re-designation or amendment of the terms of any security or instrument such that it becomes convertible or exchangeable into a share at a discount to market value;
	(c) a re-designation or amendment of the terms of any security or instrument (but generally excluding Convertible Bonds) such that it is converted or exchanged into or becomes a share at a discount to market value;
	(d) a sub-division or consolidation or reclassification of ordinary shares;
	(e) a cancellation or reduction of Premier’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 shares (other than the Equity Warrants or the Convertible Warrants) which are convertible or

exchangeable into or may be re-designated as shares at a discount to market value; or

(h) any distribution of income, capital, profits or reserves in cash, assets or other property.

“Amended and Restated 2012 USPP Agreement” means the 2012 USPP Note Agreement as amended and restated as a consequence of the Schemes and pursuant to the 2012 USPP Amendment Agreement.

“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.

“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.

“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.

“Amended and Restated Term Loan Facility Agreement” means the Existing Term Loan Facility Agreement as amended and restated as a consequence of the Schemes and pursuant to the Existing Term Loan Amendment Agreement.

“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;

(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 ImplementationDeed.
"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 BondFinal 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.
"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.
"Articles of Association" or "Articles"	means the articles of association of Premier as adopted from time to time.
"Board"	means the board of directors of Premier.
"boe"	means barrels of oil equivalent.
"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, theprincipal financial centre of the country of that currency, or, in relation to any date for payment or purchase of euro, any TARGET Day.
"Calculation Date"	has the meaning given to it in section 4 of Part III ( Additional Information ).
"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 Shelfpursuant 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.

“CDP” means The Central Depository (Pte) Limited.

“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) Premier 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 amendment and restatement agreement in respect of the Schuldschein Loan Agreements.

“Converted Facility Agreement” means the US$130,000,000 English law governed term loan facility agreement which will, as part of the Refinancing and pursuant to the Converted Amendment Agreement, replace the Schuldschein Loan Agreements.

“Converted Facility” means the facility under the Converted Facility Agreement.

“Convertible Bond Amendment and Restatement Agreement” means the supplemental trust deed, which is available on the Schemes Website, pursuant to which, on the Refinancing 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, Premier 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 the Convertible 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, Premier, POUK and certain Participating Convertible Bondholders.
“Convertible Bondholder Meeting”	means a meeting of the Convertible Bondholders convened in accordance with the Convertible Bond Trust Deed in connection with the Refinancing (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 Premier and constituted by the Convertible Bond Trust Deed.
“Convertible Warrant Instrument”	means the warrant instrument executed by the Premier by way of deed poll in connection with the issue of the Convertible Warrants.
“Convertible Warrants”	means the warrants representing 3 per cent. of Premier’s issued 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 Manual” means the document entitled “CREST Manual” issued by Euroclear UK & Ireland Limited.

“CREST Proxy Instruction” has the meaning given in the “Notes” to the Notice of General Meeting.

“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 in section A of section 3 (Further Explanation of the Refinancing) of Part III (Additional 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.

“Dated Brent” means Platts Dated Brent, a benchmark assessment of the price of physical, light North Sea crude oil.

“Directors” means the directors whose names appear on page 3 of this document.

“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.

“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.

“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 share warrants instrument constituting the Equity Warrants.

“Equity Warrants” . . . . . . . . . . . means warrants equivalent to up to 15 per cent. of the issued share capital of Premier on a Fully Diluted Basis, issued pursuant to the Equity Warrant Instrument the terms of which are summarised in section 4 of Part III (Additional Information on the Refinancing).

“EUI” . . . . . . . . . . . . . . . . . means Euroclear UK & Ireland Limited.

“EURIBOR” . . . . . . . . . . . . . . . means the Euro Interbank Offered Rate.

“Euroclear” . . . . . . . . . . . . . . . means Euroclear Bank S.A./N.V.

“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 amendment and restatement agreement to be entered into between (amongst others) the Existing Bilateral LC Creditors, Premier, 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.

“Existing Bilateral LC Lock-up Agreement” . . . . . . . . . . . means the lock-up agreement dated 8 March 2017 and fully effective from 14 March 2017 between Premier, 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 Parent Company, 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;

(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 Premier, 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 Retail Bond Agency Agreement” means the agency agreement relating to the Retail Bond entered into by, amongst others, Premier, 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 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 Parent Company 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 Term Loan Creditor”	.	means a “Lender” under and as that term is defined in the Existing Term Loan Facility Agreement.
“Existing Term Loan Amendment Agreement”	.	means the 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.
“Existing Term Loan Facility Agreement”	.	means the term loan facility agreement dated 29 November 2013, entered into between, amongst others, Lloyds Bank plc as facility agent, Premier, and POUK and Premier Oil Holdings Limited as borrowers.
“Existing Term Loan Finance Document”	.	means a “Finance Document” as defined in 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 Agreements”	.	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, Premier;
		(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.
“Expenditure Budget”	.	means 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.

"Form of Proxy" ... means the form of proxy for use at the General Meeting which accompanies this document.

"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 Premier to be held on 9.00 a.m. on 15 June 2017 pursuant to which Shareholders 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.

"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 Premier 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 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 Premier, 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.

“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.

“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

(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 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.

“ISDA Master Agreement” means the 1992 ISDA Master Agreement or the 2002 ISDA Master Agreement.

“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.
“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”	means the London Interbank Offered Rate.
“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 66 ^{ 2 } / { 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 66 ^{ 2 } / { 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.

“Monthly Deferrals” means the monthly deferrals of the covenants in relation to the Group’s Existing Leverage Ratio and Existing Interest Cover Ratio, as further described in section 2 (Background to and reasons for the Refinancing) of Part I (Letter from the Chairman of Premier).

“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) Premier, 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 the 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.

“New Finance Documents” means the new finance documents, set out in the Schedules to the Restructuring Implementation Deed and to be 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 as further described in section 3 of Part III (Additional Information on the Refinancing).

“New Guarantors” means, with effect from the Refinancing Effective Date, NewCo, Premier, 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 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 section 3 (Further Explanation of the Refinancing) of Part III (Additional Information on the Refinancing).

“New Obligors” means the New Borrowers and the New Guarantors.

“New Security Documents” means the 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 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 Premier.

“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.

“Notice of General Meeting” means the notice of General Meeting set out in Part VI of this document (Notice of General Meeting).

“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 Premier.

“Override Agreement” means the English law override agreement to be entered into between, amongst others, Premier, 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.

“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.

“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 Claims to consider the POUK 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.

“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.

“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.

“Premier Scheme” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the proposed scheme of arrangement pursuant to Part 26 of the Companies Act between Premier 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.

“Premier Scheme Claims” . . . . . . means any claim in respect of any Liability of Premier 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 Premier 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).

“Premier 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 Premier as at the Record Time, including each of their transferees, assignees and successors after the Record Time.

“Premier Scheme Senior Meeting” . . . . . . means the meeting of the Premier Senior Scheme Creditors in respect of the Premier Senior Scheme Claims to consider the Premier Scheme.

“Premier Scheme Super Senior Meeting” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the meeting of the Premier Super Senior Scheme Creditors in respect of the Premier Super Senior Scheme Claims to consider the Premier Scheme.

“Premier Senior Scheme Claims” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means Premier Scheme Claims excluding 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) on or after the Reference Date.

“Premier Senior Scheme Creditors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the Premier Scheme Creditors with Premier Senior Scheme Claims.

“Premier Super Senior Scheme Claims” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means Premier 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.

“Premier Super Senior Scheme Creditors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means Premier Scheme Creditors with Premier Super Senior Scheme Claims.

“Private Creditor Adviser” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means legal advisors to the Participating Senior Creditors.

“Private Creditors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the RCF Creditors, the Schuldschein Lenders, the Existing Term Loan Creditors, USPP Holders and the Creditors under the Amended and Restated Nelson Bilateral LC Facility and New Wytch Farm LC Facilities.

“QIB”	means a “qualified institutional buyer” as defined in Rule 144A under the US Securities Act.
“RCF”	means the credit facilities made available under the RCF Facility Agreement.
“RCF Amendment Agreement”	means the amendment and restatement agreement to be entered into between (amongst others) Premier, 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.
“RCF Creditor”	means a “Lender” under, and as that term is defined in, the RCF Facility Agreement.
“RCF Facility Agreement”	means the credit facility agreement dated 7 July 2014 and entered into between, among others, Premier, POUK, Premier Oil Holdings Limited, Premier Oil Exploration and Production Limited and Barclays Bank PLC (as facility agent).
“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, Premier, 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”	has the meaning given in section 1 (Introduction) of Part I (Letter from the Chairman of Premier).
“Refinancing Effective Date”	means the date on which the last of the conditions to the effectiveness of the Refinancing is satisfied.
“Registrar”	means Capita Asset Services.
“Registrar of Companies”	means the registrar of companies in Edinburgh, Scotland.
“Regulation S”	means Regulation S promulgated under the US Securities Act.
“Restructuring Documents”	means the documents and any filings, instruments and notices thereto necessary to give effect to the Refinancing, 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 restructuring implementation deed to be entered into between, among others, the Scheme Companies, the Existing Obligors 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 supplemental trust deed to be entered into between (amongst others) Premier and the Retail Bond Trustee under which(i) the Existing Retail Bond Final Terms are amended, (ii) theExisting Retail Bond Trust Deed is amended and restated as theAmended and Restated Retail Bond Trust Deed, and (iii) theExisting Retail Bond Agency Agreement is amended and restatedas the Amended and Restated Retail Bond Agency Agreement.
“Retail Bond Finance Documents”	means the Retail Bond Trust Deed, the Retail Bonds and any bearer coupons in relation to any Retail Bonds in the form of bearer bonds.
“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 aCommon Depository or lodged with a sub-custodian for a Clearing System.
“Retail Bond Trust Deed”	means the trust deed constituting the Retail Bonds entered into between, among others, Premier and the Retail Bond Trustee, dated 18 November 2013.
“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 Trust Deed).
“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 theRecord 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 Premier’s £500,000,000 Euro medium term note programme with the Parent Company as issuer and guaranteed by the other ExistingGuarantors.
“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 Premier Scheme Claims and the POUK Scheme Claims.
“Scheme Companies”	means Premier 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 Premier, the Premier Scheme Creditors and “SchemeCreditor” shall mean either one of them as the context requires.
“Scheme Meetings”	means the Premier Scheme Super Senior Meeting, the Premier 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 theSchemes 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/premieroil, a website set up on behalf of Premier and POUK.
"Schemes"	means each of the Premier Scheme and the POUK Scheme, and
"Schuldschein Finance Documents"	"Scheme" means any one of them as the context requires.
"Schuldschein Lender"	means the Schuldschein Loan Agreements and any guarantees entered into by the Existing Guarantors in connection therewith.
"Schuldschein Loan Agreements"	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.
	means:
	(a) the assignable loan agreement initially entered into between, amongst others, Premier, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to aUS$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, Premier, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to aUS$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, Premier, POUK and Deutsche Bank Aktiengesellschaft (as paying agent), relating to aUS$20,000,000 floating rate loan due 30 October 2018, and dated 28 October 2013.
"Schuldschein Loan"	means a loan made pursuant to a Schuldschein Loan Agreement.
"Sea Lion"	means the Sea Lion field.
"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 Premier, POUK, certain of the other Existing Obligors and NewObligors, 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 as a syndicated revolving and letter of credit facility agreement for up to US$1,781,032,945.80 as aconsequence of the Schemes and the RCF Amendment Agreement.
"Senior Scheme Creditors"	means the Premier 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 RCFFacility 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;
(c) the Amended Retail Bonds:
(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 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/LC Facility Agreement which may be designated A, B, C or D by POUK.

“Senior Secured RCF/LC Facility” . . . means the Senior Secured Cash Loan Facility and the Senior Secured LC Sub-Facility.

“Senior Synthetic Warrant Instrument” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the synthetic warrant instrument constituting the Senior Synthetic Warrants.

“Senior Synthetic Warrants” . . . . . means the synthetic warrants to be issued by Premier pursuant to the Senior Synthetic Warrant Instrument.

“Shareholder Resolution” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the resolution set out in the Notice of General Meeting.

“Shareholders” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means the shareholders of Premier.

“Solan” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . means a creditor under the Super Senior Secured Facilities.

“Super Senior Scheme Creditors” . . . means the Premier 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 inter-hedging 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 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.

"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 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.

"Super Senior Synthetic Warrant Instrument" means the synthetic warrant instrument constituting the Super Senior Synthetic Warrants.

"Super Senior Synthetic Warrants" means the synthetic warrants to be issued by Premier pursuant to the Super Senior Synthetic Warrant Instrument.

"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, as further described in section 3 (Further Explanation of the Refinancing) of Part III (Additional Information on the Refinancing).

"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 Warrant Instruments” . . . means the Senior Synthetic Warrant Instrument and the Super Senior Synthetic Warrant Instrument.

“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.

“Term Loan Lender” . . . . . . . . . means a “Lender” under and as that term is defined in the Existing Term Loan Facility Agreement.

“UK” or “United Kingdom” . . . . . means the United Kingdom of Great Britain and Northern Ireland.

“Uncertificated Securities Regulations” . . . . . . . . . means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time.

“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.

“VWAP” . . . . . . . . . . . . . . . means the arithmetic average of the volume weighted average price of the Ordinary Shares.

“Warrant Agent” . . . . . . . . . . . means Capita Registrars Limited.

“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 the Synthetic Warrants.

“Wytch Farm” . . . . . . . . . . . . means any interest of any member of the Group in the areas known as the Wytch Farm Field and the Wareham Field.

PART VI—NOTICE OF GENERAL MEETING

NOTICE OF GENERAL MEETING

PREMIER OIL PLC

(Registered in Scotland with registered number SC234781)

NOTICE IS HEREBY GIVEN that a General Meeting of Premier Oil plc (the “Company”) will be held at The Grosvenor Hotel, 101 Buckingham Palace Road, London, SW1W 0SJ on Thursday 15 June 2017 at 9.00 a.m. for the purpose of considering and, if thought fit, passing the resolution set out below which will be proposed as an ordinary resolution of the Company (meaning that, to be passed, more than half the votes cast must be in favour of it). Words and expressions defined in the circular of the Company dated 30 May 2017 (a copy of which has been produced to the meeting and initialled by the chairman of the meeting for the purpose of identification only (the “Circular”)) shall, unless otherwise defined herein, have the same meaning in this Notice.

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.

By order of the Board

Andy Gibb
Interim Company Secretary
30 May 2017

Registered Office
4th Floor, Saltire Court
20 Castle Terrace
Edinburgh EH1 2EN

Notes:

Attending the General Meeting and asking questions

To be entitled to attend and vote at the General Meeting (the “Meeting”) (and for the purpose of the determination by the Company of the votes that may cast), shareholders must be registered in the Register of Members of the Company at close of business on Tuesday 13 June 2017 (or, in the event of any adjournment, close of business on the date which is two days before the time of the adjourned Meeting). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting.

Any member attending the Meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if (a) to do so would involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered.

Appointing a proxy

Shareholders are entitled to attend, speak and vote at the Meeting and may appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder.

The Articles of Association provide that:

(i) if a member appoints more than one proxy and the proxy forms appointing those proxies would give those proxies the apparent right to exercise votes on behalf of the member in a general meeting over more shares than are held by the member, then each of those proxy forms will be invalid and none of the proxies so appointed will be entitled to attend, speak or vote at the relevant general meeting; and

(ii) if a member submits more than one valid proxy appointment in respect of the same share, the appointment received last (regardless of its date or the date on which it is signed) before the latest time for the receipt of proxies will take precedence. If it is not possible to determine the order of receipt, none of the forms will be treated as valid.

A proxy need not be a member of the Company. A vote withheld is not a vote in law, which means that the vote will not be counted in the proportion of votes "for" and "against" a Shareholder Resolution. Where a proxy has been appointed by a member, if such member does not give any instructions in relation to that Shareholder Resolution that member should note that their proxy will have authority to vote on the Shareholder Resolution as he/she thinks fit.

Any power of attorney or any other authority under which the form of proxy is signed (or a duly certified copy of such power or authority) must be included with the proxy form. In the case of a member which is a company, the form of proxy should either be sealed by that company or signed by someone authorised to sign it.

A form of proxy which may be used to make such appointment and give proxy instructions accompanies this notice. If you do not have a form of proxy and believe that you should have one, or if you require additional forms, please contact Capita Asset Services on 0871 664 0300 if calling from within the UK (calls cost 12p per minute plus network extras) or +44 (0)371 664 0300 if calling from outside the UK. Lines are open between 9.00 a.m. and 5.30 p.m., Monday to Friday.

To be valid, forms of proxy must be lodged by one of the following methods by 9.00 a.m. on Tuesday 13 June 2017:

in hard copy form by post to the Registrar at Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, BR3 4TU; or
in the case of CREST members or CREST Personal Members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out below; or
by submitting your proxy appointment electronically via the internet. Instructions on how to do this can be found on the form of proxy.

The return of a completed form of proxy or any CREST Proxy Instruction (as described below) will not prevent a shareholder attending the Meeting and voting in person if he/she wishes to do so.

CREST members

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by utilising the procedures described in the CREST Manual (available to members at www.eurolear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Capita Asset Services (ID: RA10) by 9.00 a.m. on Tuesday 13 June 2017. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat an instruction as invalid in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Nominated persons and information rights

Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Meeting.

If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.

However, the statement of the rights of shareholders in relation to the appointment of proxies described above does not apply to Nominated Persons. The rights described in those paragraphs can only be exercised by shareholders of the Company.

Joint holders and corporate representatives

In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's Register of Members in respect of the joint holding (the first-named being the most senior).

Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

Share capital

As at 26 May 2017 (being the last business date prior to the publication of this Notice) the Company's issued Ordinary share capital consisted of 510,824,261 Ordinary Shares, carrying one vote each. Therefore the total voting rights in the Company as at 26 May 2017 were 510,824,261.

Queries and access to information

Except as provided above, members who have general queries about the Meeting should use the following means of communication (no other methods of communication will be accepted): calling Capita Asset Services’ shareholder helpline on 0871 664 0300 (calls cost 12p per minute including VAT plus network extras, lines are open 9.00 a.m. to 5.30 p.m., Monday to Friday) or from outside of the United Kingdom: +44 (0)371 664 0300. You may not use any electronic address provided either (a) in this Notice of General Meeting, or (b) in any related documents (including the Chairman’s letter and form of proxy) to communicate with the Company for any purposes other than those expressly stated.

If you would like to request a copy of this notice in an alternative format such as in large print or audio, please contact Premier’s Registrar, Capita Asset Services, on 0871 664 0300 (calls cost 12p per minute including VAT plus network extras, lines are open 9.00 a.m. to 5.30 p.m., Monday to Friday) or from outside of the United Kingdom: +44 (0)371 664 0300.

A copy of this notice, and other information required by Section 311A of the Companies Act 2006, can be found at www.premier-oil.com.

Merrill Corporation Ltd, London
17-14073-1