Premier has agreed to acquire an interest of 17.715 per cent in Wytch Farm (the "Wytch Farm Assets") for an initial cash consideration of $96 million. This follows a pre-emption notice received from BP on 18 May 2011. Premier intends to finance the acquisition from available cash resources.

The proposed transaction will increase Premier's interest in the Wytch Farm Assets from 12.38 per cent to an aggregate 30.1 per cent, adding approximately 12.5 mmboe of 2P and 2C reserves and resources as at 1 January 2011. The field is currently producing approximately 13,000 boepd (gross). Premier will support the transition of operatorship to Perenco UK Limited ("Perenco"), which will on completion of the transaction hold a 50.1 per cent interest in the Wytch Farm Assets.

The acquisition is in line with Premier's stated strategy of acquiring high-quality assets in existing core areas and utilises its strong balance sheet. It provides an attractive opportunity to increase Premier's existing interests in a material package of producing oil assets with significant upside potential.

Tags: Premier Oil