Electromagnetic Geoservices ASA

Investor Presentation • May 12, 2021

Q1 2021 RESULTS

Oslo, 12th May 2021

Bjørn Petter Lindhom, CEO Anders Eimstad, CFO

Disclaimer

This quarterly presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Electromagnetic Geoservices ASA (EMGS) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the EMGS' businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Electromagnetic Geoservices ASA believes that its expectations and the information in this Report were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this Report. Electromagnetic Geoservices ASA nor any other company within the EMGS Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Report, and neither Electromagnetic Geoservices ASA, any other company within the EMGS Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Report. Electromagnetic Geoservices ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in the Report.

Q1 2021

Operational highlights

• Successful mobilisation of the Atlantic Guardian after extended period in cold-stack
• Release of USD 7.3 million held in pledged account
• Payment of all past due invoices related to Pemex project received
• Contract award for proprietary survey in Southeast Asia

Financial highlights

• Revenues of USD 1.6 million
• EBITDA of negative USD 58 thousand
• Adjusted EBITDA negative USD 1.5 million

Subsequent events

• Completion of multi-client project in Mexico
• Commencement of transit to Southeast Asia

Operations, Market and Outlook

Mexico Multi-Client project completed

• Fully prefunded Multi-Client 3D CSEM project completed on time
  • Significant challenges due to the ongoing Covid-19 pandemic
  • Minimal technical downtime despite vessel being cold-stacked for a long period of time
  • Limited weather-related downtime
• Survey consisted of 3 small 3D CSEM surveys and one regional 2D line in the Mexican Ridges area
• EMGS expects to recognize revenues of approximately USD 7 million in the 2nd Quarter
• Vessel has departed Mexico and is in route to the next project in Southeast Asia with an expected startup in early July

EMGS company update

• Transformation to low-cost setup completed
• Atlantic Guardian back in operation after nearly one year in cold-stack
• Successful execution of the Mexico Multi-Client project is a testament to the motivation, dedication and experience of the EMGS staff and contractors
• Current backlog consists of the Southeast Asia project and the Utsira High Multi-Client project in Norway
  • Expected startup in Southeast Asia beginning of July
  • The Utsira High project is expected to last one month with startup in September
• EMGS currently working on securing additional work following the Utsira High Multi-Client project

Emerging Marine Minerals market

• Marine minerals or seabed minerals have been identified as a potential supply source for minerals needed in the energy transition
• Norwegian Parliament has enacted a law governing the exploration and exploitation of seabed minerals and the NPD has announced an intention to launch the first concession round in 2023/24
• EMGS, together with NTNU, has already acquired 2 academic surveys to improve the understanding of processes leading to the formation of marine minerals
  • One survey over the Mohns Ridge and Lokis Castle,
  • One survey over the Knipovich Ridge

Johansen, S. E.; Panzner, M.; Mittet, R.; Amundsen, H. E.; Lim, A.; Vik, E.; Landrø, M. & Arntsen, B.; Deep electrical imaging of the ultraslow-spreading Mohns Ridge Nature, Nature Publishing Group, 2019 , 567 , 379

Commercial CSEM system for marine mineral detection

• Electromagnetic methods are widely used in the onshore mining business to locate ore deposits
• The use of CSEM to map marine mineral deposits has been demonstrated on research surveys
• However, these systems are not fit for large scale exploration of the vast areas along the spreading ridges
• EMGS is developing a commercial towed EM system that can provide high resolution images of the shallow subsurface for marine mineral exploration
• A prototype will be developed by modifying and upgrading our existing CSEM source and towed receiver technology

First quarter 2021 performance I Development in revenues and EBITDA

• Atlantic Guardian mobilised, transited to Mexico and began the multi-client acquisition
• EBITDA
  • USD negative 58 thousand
  • Adjusted EBITDA* of negative USD 1.5 million

Contact sales Multi-client revenues Adjusted EBITDA

Operational costs

Quarterly operational cost base* development (USD million)

Comments

• Operational costs base in Q1 21 of USD 3.1 million
  • USD 340 thousand lower than Q4 20
    • Charter hire, fuel and crew expense remains low
    • Increase in vessel and office lease expense in the first quarter is due to taking the vessel out of cold-stack and mobilising for the Mexico multi-client project.
    • Other operational expenses have increased in the first quarter as a result of increased activity

*Cost base is defined as operational costs (charter hire etc, employee expenses, other operating expenses) plus MC investments and vessel and office lease payments presented as financial leases from 1 January 2019, restructuring charges and other extraordinary items

Increase in free cash in Q1 2021

• Net increase in free cash of USD 7.9 million to USD 12.1 million
  • Change in other working capital includes USD 7.3 million released from the pledge account
  • Change in trade receivables positively affected by payment received, for all past due invoices, related to the Pemex project

Summary

• Improved cash position
  • Release of USD 7.3 million held in pledged account
  • Payment of all past due invoices related to Pemex project received
• Completion of multi-client project in Mexico
• EMGS expects to recognize approximately USD 7 million in 2nd Quarter
• Contract award for proprietary survey in Southeast Asia, transit in progress

Please e-mail questions to: emgs@emgs.com