Acquisition of E.ON UK North Sea Assets. 13 January 2016

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1 Acquisition of E.ON UK North Sea Assets 13 January 2016

2 Acquisition background Premier has agreed to acquire E.ON s UK North Sea assets for a consideration of $120m plus working capital adjustments; the acquisition will be funded from existing cash resources Proposed transaction continues Premier s track record of capturing long term value through acquisition at low points in the oil price cycle Brings immediate cash generative production, tax synergies and is materially covenant accretive with rapid payback meeting Premier s stated acquisition criteria Adds stable UK gas revenues to the portfolio rebalancing commodity exposure Following sale of Norwegian North Sea assets this in line with our strategy of focusing on our core regions; further strengthening Premier s position in UK North Sea with its associated tax benefits The transaction is subject to shareholder, US Private Placement and bondholder approval Jan 2016 P1

3 Rationale for the acquisition Compelling valuation c. 15mboepd of net production in 2016 and c.64mmboe of net reserves and resources acquired, at an implied cost of c.$1.9/boe accelerate Premier s existing UK tax loss position of c.$3.5 billion potential to generate significant cost synergies through the merger of the two UK business units Quality asset base in a core area for Premier increases Premier s presence in the Central North Sea including a stake in the world class longlife Elgin/Franklin asset and related fields consolidates our interest in Huntington (pro-forma 100%) and assume operatorship with potential to reduce costs and optimise production enlarges Premier s long-term UK portfolio with the highly attractive Tolmount Area development Jan 2016 P2

4 Financial benefits of the acquisition Strong net cash flow in 2016 and 2017 even at current oil/gas prices c. 15mboepd of net production and associated cash flow added on completion Assets being acquired with a valuable hedging portfolio in 2016 and : 32% estimated gas 63p/therm, 33% estimated liquids $97/bbl 2017: 21% estimated gas 57p/therm Materially covenant accretive (Net Debt to EBITDAX) Expected additional covenant headroom in excess of $5oom at 30 June 2016 and at 31 Dec 2016, at current oil and gas prices Financed out of existing cash flow with rapid payback period of around 2 years Share abandonment cost exposure with the seller on Ravenspurn North & Johnston c. 250m of historic tax paid can be offset against future decommissioning expenditure Jan 2016 P3

5 E.ON UK assets Central North Sea Producing Fields - Elgin-Franklin (1), Huntington (2), Scoter & Merganser (5) Southern Gas Basin Main producing field - Babbage (3) Late-life - Ravenspurn North & Johnston (3), CMS area (6) Pre-development - Tolmount (4) Near-field Exploration - Babbage area (3), Tolmount area (4) West of Shetlands Exploration licences, expiry 1/1/2017 (9) Jan 2016 P4

6 Elgin-Franklin 5.2% of Total-operated HPHT gas/condensate fields Current production: >110kboepd (6kboepd net) Expected production over 110kboepd through to 2019 Mid-life asset with 15 years production history and 20 years expected production life Operating costs of c$8/boe in 2016 World class asset with long-term production Jan 2016 P5

7 Huntington E.ON operated Central North Sea oil field in which Premier has an existing stake Premier interest will now go to 100% Produced via a leased FPSO owned and operated by Teekay Current Production: c.15kboepd Opportunity to reduce costs and enhance production Value opportunities Re-negotiate the FPSO lease and reduce other operating costs to extend field life Incremental production through sidetracking an existing water injector to a more optimal location for pressure support Jan 2016 P6

8 Babbage Area 47% of E.ON operated Babbage dry gas field Online 2010, currently 5 production wells Plans to operate unmanned Infill well opportunity Near-field exploration portfolio Ravenspurn North Johnston Decommissioning of Ravenspurn North and Johnston expected in Mechanism agreed with E.ON to share decommissioing costs above a threshold level to an agreed cap Babbage In-field and near-field growth opportunity Jan 2016 P7

9 Tolmount 50% of E.ON operated Gas discovery Resources up to 1Tcf (gross) Main field >500Bcf, East Tolmount Bcf Sanction (FID) 2017, First gas 2019/2020* Two development options, both with access to upside and 3 rd party business Standalone to shore Acquire and tie-back to York platform Acquisition being worked and expected in conjunction with concept selection Peak production estimated at mmcfd (gross) Significant industry interest during E.ON sales process *per current operator development Largest Southern Gas Basin discovery in recent years Jan 2016 P8

10 Conclusion Excellent opportunity to capture long-term value in a low oil price environment Materially covenant accretive, financed out of existing cash resources, and acquiring high quality assets with a valuable hedging position in 2016 and 2017 Immediate cash generative production, tax synergies and covenant accretion with rapid payback Continues our focus on our core regions; strengthening Premier s position in UK North Sea and associated tax benefits Initial soundings from lender group supportive Shareholder circular expected to be issued in due course Jan 2016 P9