Premier Oil announces that the Espinafre-1 well in Guinea Bissau is being plugged and abandoned.

The well encountered salt shallower than expected and repeated attempts to deviate the well away from the salt dome were unsuccessful due to hole stability problems in shallow formations considerably above the target reservoir.

After completion of operations on Espinafre-1, the Global Sante-Fe Rig Baltic will move to the second well in Premier's 2007 Guinea Bissau programme, Eirozes-1.

UK

The Peveril well on Blocks 39/2 & 39/7 is expected to spud on Monday 26th March targeting a 40 million barrel prospect adjacent to Premier's existing Fife area fields.

Premier's Chief Executive, Simon Lockett, said, "We are disappointed that the Espinafre-1 well was unable to reach the target horizons. However, we remain hopeful that the much larger second prospect in our Guinea Bissau programme, Eirozes, will generate success. In addition, our high impact well programme continues with the Peveril well in the UK and the Masimpur-3 well in India."