Premier Acquires Acreage in Vietnam and Egypt

Premier has been actively seeking high quality exploration opportunities in its focus areas of the UK, South and South East Asia and Africa, and is pleased to announce three separate transactions, all subject to government approval, acquiring exploration and appraisal acreage in Vietnam and Egypt:

Vietnam - Blocks 12E and 12W

Premier has reached agreement with Delek Energy Systems Ltd. to acquire a 75% interest in the Production Sharing Contracts covering blocks 12E and 12W in the Nam Con Son Basin, offshore Vietnam, located about 400 kilometres south east of Ho Chi Minh City.

The blocks are close to the boundary line with Indonesia and have very similar geology to the West Natuna Sea area, approximately 300 kilometers to the south-west, where Premier is operator of part of the West Natuna Gas Project delivering gas to Singapore. The blocks, comprising 6,887 square kilometers, contain oil and gas discoveries in the Dua and Swan fields which have been partly appraised, as well as the Canary and Lark discoveries.

Premier has committed to perform a work program involving seismic acquisition and processing, followed by contingent exploration or appraisal drilling, and will carry Delek's costs in this program.

Vietnam - Blocks 7&8/97

Premier has agreed a seismic option with Vietnam American Exploration Company (VAMEX) over blocks 7&8/97 whereby Premier will, in return for funding seismic acquisition and interpretation, have the right to earn between 45% and 67.5% equity in the blocks by funding a subsequent drilling program.

Blocks 7&8/97 are located at the southern margin of the Nam Con Son Basin. The blocks, 100% held by VAMEX through a Production Sharing Contract, cover 4,918 square kilometers, and lie on a trend of oil and gas discoveries directly south of BP's producing gas fields (Lan Tay and Lan Do). Following many years of inactivity, the agreement of the placement of the boundary line between Vietnam and Indonesia in 2003 (which is expected to be ratified shortly) will allow the blocks to be comprehensively explored.

Egypt - North West Gemsa

Premier has reached agreement with Vegas Oil and Gas S.A, a privately owned Greek oil company, to acquire a 37.5% interest in the North West Gemsa Concession in the onshore portion of the Gulf of Suez Basin in Egypt.

The North West Gemsa block lies about 300 kilometers southeast of Cairo and about 80 kilometers northwest of the Red Sea resort of Hurghada. Vegas Oil and Gas currently has a 100% interest in the concession area. Premier will fund a share of the first exploration phase of the Concession Agreement which comprises the acquisition of a three-dimensional (3D) seismic survey and a three well drilling program. It is expected that drilling will commence during the fourth quarter of this year.

The concession lies within an under explored part of the prolific Gulf of Suez Basin, in which over 10 billion barrels of reserves have been discovered, and is renowned for its world-class petroleum system. Although considered a relatively mature exploration province, recent advances in seismic technology have lead to several significant new discoveries in deeper plays which were previously hard to define.

Charles Jamieson, Chief Executive of Premier, said:

'Premier continuously searches for high quality exploration opportunities. In Vietnam, we have gained entry to a significant acreage position in an oil and gas prone area which is geologically similar to West Natuna in Indonesia where we have been a successful operator for many years. In Egypt, the Gulf of Suez is an established oil province with highly developed local infrastructure, and we bring the application of new technology to this acreage.

We look forward to exploring these prospective areas which will add to our already active drilling program this year and next.'

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