Premier Oil Provides Update on its Operations in Vietnam, Egypt and Norway

Premier Oil has successfully completed operations on the appraisal sidetrack CRD-2X-ST on block 07/03, offshore Vietnam.

This sidetrack reached its planned total depth of 3,340 metres (m) in the Miocene section and intersected 18.3m of net oil pay. This compares with 34.4m of net oil pay intersected in the up dip CRD-1x well and 3.8m in the down dip CRD-2x well.

The sidetrack followed on from the CRD-2X well, as announced on 11 April 2011, which was drilled to a total depth of 3,785m and successfully tested gas and condensate in two reservoir zones in the Oligocene section. The total net condensate/gas pay in this well was 72m. This compares with 17m of net pay penetrated in the Oligocene section in the up dip CRD-1x well.

The CRD-2X-ST appraisal well completes this phase of drilling in Block 07/03 and the results will be incorporated into the assessment of the resource potential of the Cá Rống Ðo accumulation.

The CRD-2X well will now be plugged and abandoned before the Ocean General drilling rig moves to Indonesia to drill two exploration wells on the Tuna PSC operated by Premier. The first result from these wells is expected in May.

Cherry, Egypt (Premier 20%)

In Egypt, on the North Red Sea (NRS) block 1 licence, the NRS-2a exploration well has reached a total depth of 5200m and is being plugged and abandoned. The well encountered hydrocarbon shows whilst drilling but did not intersect reservoir quality sandstones. The results of the well will now be integrated with geologic, seismic and engineering data to determine if alternate opportunities exist elsewhere on the block.

Grosbeak, Norway (Premier 20%)

The Grosbeak appraisal well in Norwegian licence PL378 was spudded on the 24 April 2011 and is drilling ahead using the Songa Delta rig. The well will test previously discovered oil accumulations in Jurassic reservoir rocks as announced by Premier on 8 July 2009. Results from the appraisal well are expected in approximately three months.

Simon Lockett, Chief Executive Officer, commented

“The CRD-2x well and its sidetrack has provided valuable information to our overall understanding of the Cá Rống Ðo discovery. Further geoscience and engineering evaluations will now be undertaken before a decision is made on the commercial viability of Cá Rống Ðo.

The results from the well are encouraging both for further exploration in the block and also for our adjoining acreage in the Tuna PSC in Indonesia.

Whilst oil and gas shows in the Cherry well provide some encouragement, the results from the well need to be fully integrated into our analysis of the block before a decision can be made regarding Premier’s future participation in the licence.”

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Source:Premier Oil, April 27,2011;