The FTSE 250 explorer said that its Carnaby exploration well had found oil.
Premier owns 50 per cent of the project while Cairn has a 15 per cent holding. Nautical Petroleum also has a 15 per cent slice.
The company said that it had drilled to a depth of 4,695 feet when it discovered oil.
The British explorer said that the oil was good quality, comparable with that at its Catcher discovery.
Shares in Premier jumped by more than seven per cent after the announcement.
Cairn enjoyed a boost of more than 3.5 per cent.
Chief executive Simon Lockett said: “The discovery of good quality oil in the western part of the block is encouraging and the results from the Carnaby well will be used to calibrate the remaining exploration potential.”
Premier was producing around 60,000 barrels of oil equivalent per day (boepd) at the end of last year.
It is aiming to grow production to 75,000 boepd by the close of 2012.
The company has assets in Asia and Africa as well as the North Sea.
Lockett added: “In addition, the data from the Carnaby well will contribute to the ongoing development planning for the Catcher Area, which continues to move forward, focusing on the production of oil from the previous discoveries on Block 28/9a.”
Premier employs more than 600 people across the globe. It has had a string of successes in the North Sea, which has led to a rise in its share price over the past year.