Finding Petroleum Conference

1. If you don’t grow you go! If you don’t have the right people you don’t grow! November 2010 Finding Petroleum Conference

2. Agenda • Corporate strategy, goals and exploration strategy • The past is the key to the future? • Benchmarking • If you don’t grow you go! • Exploration organisation in a mid cap company • Developing oil finders November 2010 | Page 1

3. Target and strategy Exploration is a fundamental part of Premier’s growth strategy Target • Build three quality businesses which deliver 100 kboepd from 400 mmbbls of reserves Strategy • Attain 75 kboepd from 2P reserves • Commercialise contingent resource base • Add 200 mmboe of 2P reserves from exploration • Make value-adding acquisitions in three core areas • Maintain a conservative financing plan November 2010 | Page 2

4. Target ,strategy and Organisation Exploration organisation is consistent with the business focus Corporate (London) • Executive, Geoscience Technology and exploration new business North Sea • Norway based team • Near field primarily handled through Development Asia • NV team in Singapore • Exploration asset teams in Vietnam and Indonesia MEP • London based team with asset support in Pakistan November 2010 | Page 3

5. Premier – petroleum basin focus • Premier has a competitive advantage in value creating exploration of Rifts and Fold-belts / Forelands • Premier will continue to explore the rift basins of SE Asia and the North Sea and will look to exploit its competitive advantages in selected rifts and fold-belt basins of Africa, the Middle East and Central Asia • Premier Geoscience resources have expertise in these basin types November 2010 | Page 4

6. North Sea / West Africa Asia Middle East-Pakistan Rifts Frontal Fold Belts Exploration strategy The goal is to deliver 200 mmboe 2P reserves through the drill bitfocussing on areas where we have demonstrated skills and expertise Longer-term programme • Rift Basins: new acreage in the North Sea, Asia and Middle East • Frontal Fold-belt plays: new acreage in the Middle East and Asia $ spend Near-term programme • Asia: Nam Con Son Basin (Vietnamand Indonesia) • North Sea: UK Central North Sea and Norwegian North Sea Geography Geology November 2010 | Page 5

7. Exploration challenges • Access to new opportunities in themes of choice • Maintaining exploration focus/discipline • Managing the natural tension between growth ambitions and the production/development of existing resources • Building a geoscience organisation for the future • Delivering the 200 mmboe from the existing inventory November 2010 | Page 6

8. Annual discoveries Cumulative annual discoveries Historic performance Recent growth Future target Exploration – historic performance and future target Premier Discoveries 1986-2009 (net mmboe) 1000 • Premier began exploring in 1986, initially via entry into SE Asia • To date Premier has discovered net 800 mmboeat an overall commercial success rate of 22% • The commercial discoveries have been made in two basin types: • 1) Rifts: Southeast Asia and Norway • 2) Frontal Fold-belts: Pakistan • The success rate in these basin types is ~40% • Since 2000 the exploration success has been dominated by Rift Basin exploration in Asia and latterly in Norway and the UK • 200 mmboe net reserves additions are targetedby 2015- we are moving in the right direction Annual discoveries Cumulative annual discoveries Historic performance 900 800 700 600 500 400 300 200 100 0 1985 1990 1995 2000 2005 2010 2015 November 2010 | Page 7

9. Annual discoveries Cumulative annual discoveries Historic performance Recent growth Future target Exploration Manpower 2004 Total Geoscientists: 15 Exploration Manpower 2010 Total Geoscientists: 55 Exploration Manpower 1999 Total Geoscientists: 40 7 (47%) 8 (20%) 8 (15%) 32 (80%) 8 (53%) 47 (85%) Consultants ExplorationGeoscientists (staff) Exploration – people performance Premier Discoveries 1986-2009 (net mmboe) 1000 • Premier in the 90’s • In the peak episode of exploration success Premier had 40 geoscientists, in Asia and London • A few key consultants were employed • Premier in 2003/2004 • In the period of restructuring and low oil prices this number significantly reduced with reliance on consultants • Premier today • In 2010 the organisation has now grown (London, Norway and Asia) • Long term consultants have largely been replaced by Premier employees - primarily through recruitment from major oil companies with Play and Basin focused experience plus lateral transfers • Key “long term" consultants have been retained -specialist knowledge and Premier history Annual discoveries Cumulative annual discoveries Historic performance 900 800 700 600 500 400 300 200 100 0 1985 1990 1995 2000 2005 2010 2015 November 2010 | Page 8

10. Exploration scenarios for the future portfolio • Scenarios identified has two key drivers and four potential worlds • All four worlds have existed over the last 10 years of the industry and volatility will continue • The current world is one where only the fittest will survive • Companies with a portfolio of low cost “big” assets can afford to cherry pick and survive in a low oil price world • Individual companies, dependent on their asset base, capital structure, talent and influence can either ride the wave or deal with choppy waters x X 2010 environment November 2010 | Page 9

11. Exploration growth strategy:key factors – ideal exploration company (Woodmac) 0 50 100 CORPORATE ALIGNMENT Organisation aligned behind the role of Exploration but offers enough challenge CORE COMPETENCIES Playing to strengths key, but mustn’t stifle innovation GEOGRAPHICAL FOCUS AND CONSISTENCY Consistent focus on core geographies, to learn and evolve ideas FOLLOW ON GROWTH OPPORTUNITIES Ideally follow on but must be a balanced portfolio of options ABOVE GROUND RISK Can be used to create competitive space Too much high risk can limit value PARTNERING / RELATIONSHIPS Leveraging relationships into opportunities can be key TALENT MANAGEMENT Skills and knowledge development SUCCESSFUL TECHNOLOGY APPLICATION Less key given multiple providers, unless cutting edge FIRST MOVER / FAST FOLLOWER Key to establishing value and headroom, but you can’t change the rocks WILLINGNESS TO EXIT Must allow time to test the play, but recognise irretrievable value destruction Source: Woodmac Ideal explorer November 2010 | Page 10

12. Exploration growth strategy:key factors – minding the gap 0 50 100 CORPORATE ALIGNMENT Exploration Director appointment Board and Exco alignment CORE COMPETENCIES Thematic approach GEOGRAPHICAL FOCUS AND CONSISTENCY Core BU’s and thematic approach FOLLOW ON GROWTH OPPORTUNITIES Pay based approach ABOVE GROUND RISK PARTNERING / RELATIONSHIPS Partner alignment Improved regional data TALENT MANAGEMENT Recruitmentand career development Less reliance on consultants SUCCESSFUL TECHNOLOGY APPLICATION FIRST MOVER / FAST FOLLOWER WILLINGNESS TO EXIT Exit non strategic arease.g. Philippines Ideal explorer Premier (EMF assessment 2009) November 2010 | Page 11

13. Benchmarking lessons • Material exploration success creates value • Stay focussed to areas of expertise (Cairn model) and don’t give up! • Premier has successfully explored rifts and frontal fold belts • Acquisitions can jump start exploration success, but keep the people not just the assets (Tullow) • Consider acquisitions in focus areas, for both subsurface and human resources • Oilexco was a success in this respect • Taking above ground risk with low geologic risk can create share value (Heritage model) • Premier has a proven track record in this type of exploration (Vietnam and historically, Pakistan and Myanmar) • Improvement is required in Premiers performance to ensure value creation and investor recognition-People and process November 2010 | Page 12

14. Functional charter: exploration November 2010 | Page 13

15. Geoscience technology team structure Exploration Director ChiefGeoscientist Group Exploration Coordinator Licence Administrator ChiefGeophysicist Chief Development Geologist Special Projects Specialist OperationsGeophysicist Direct Indirect November 2010 | Page 14

16. Exploration team structure – Asia and North Sea Exploration Director Business Unit Manager Exploration Manager Licence Administrator Business Plan BD Support Exploration New Venture Leader Lead Geoscientist (in either group) Current Assets Leader Operations Team Regional Basin Master Evaluation Team Evaluation Team Direct Indirect Functional • NB. Exploration Manager is primarily focused to license, people and external stake holder management • Not internal Coaching / leadership • Lead Geoscientist can be NV or existing asset focussed, subject to business plan requirements • Coaching and technical leadership role November 2010 | Page 15

17. Percentage man hours spentper key exploration activity November 2010 | Page 16

18. Developing the oil finders • Nautilus Program • Annual field trips- Global involvement • Training junior geoscientists • Overseas staff- UK MSc’s • ExploHub • Specialised internal courses ( with external expert support) • Play analysis • Seismic attributes- Geophysical Forum formed • Learning on the job • The fundamental way to learn • Requires coaches and mentors November 2010 | Page 17

19. ExploHub Mission statement: To provide a unique exploration training environment that will prepare exploration geoscientists for the challenge of discovering the Earth’s remaining hydrocarbon resources. November 2010 | Page 18

20. To develop oil finders take time Andrew Lodge – a career in exploration! (Cum mmboe) 1600 • 1978 to 1990 • Geophysicist in BP • Learning to explore • Specialising in Sequence Stratigraphy • 1990 to 2000 • Exploration manager in BHP • Significant discoveries in Pakistan • 2000 to 2009 • VP Exploration in Hess • Discoveries in Europe, North Africa and Australia/Asia • 2009 to Present • Exploration Director Premier 1400 1200 1000 800 600 400 Premier recuits a samml number graduates 200 0 Asia Asia Asia Asia Asia Asia Asia Asia Asia Asia Africa Africa Africa Africa Africa Africa Europe Europe Europe Europe Europe S. America 1978 1990 2000 2009 November 2010 | Page 19

21. Premier recruits people with various experience levels • Graduate recruitment • Occasional recruitment, primarily to nationals in existing Business units • Primarily external training development • Lead Geoscientists • 10 to 12 year major company experience • People primed to turn learning's to reality • Coaches and Leaders of the futures • 20 year Plus+ geoscientists • Employed in key expert or functional roles- Premier employees and long term consultants- have had success in multiple plays or basins • Premier seeks to develop all exploration geoscientists to contribute to organic growth of the company Andrew Lodge – a career in exploration! (Cum mmboe) 1600 1400 1200 1000 800 * 600 400 * 200 * 0 Asia Asia Asia Asia Asia Asia Asia Asia Asia Asia Africa Africa Africa Africa Africa Africa Europe Europe Europe Europe Europe S. America 1978 1990 2000 2009 November 2010 | Page 20

22. North Sea / West Africa Asia Middle East-Pakistan Rifts Frontal Fold Belts Exploration strategy The goal is to deliver 200 mmboe of reserves through the drill bitfocussing on areas where we have demonstrated skills and expertise Longer-term programme • Rift Basins: new acreage in the North Sea, Asia and Middle East • Frontal Fold-belt plays: new acreage in the Middle East and Asia Near-term programme • Asia: Nam Con Son Basin (Vietnamand Indonesia) • North Sea: UK Central North Sea and Norwegian North Sea $ spend Geography Geology Talent management is afundamental to success • Premier is focussed to growth of reserves, value AND its people ……but it will time and effort to succeed November 2010 | Page 21