PGS ASA

Earnings Release • Feb 4, 2021

PGS ASA: Q4 and Preliminary Full Year 2020 Results

PGS ASA: Q4 and Preliminary Full Year 2020 Results

Takeaways 2020

* Segment Revenues and Other Income of $595.9 million, compared to $880.1

million in 2019

* Segment EBITDA of $397.7 million, compared to $556.1 million in 2019

* Segment EBIT (excluding impairments and other charges) of $12.2 million,

compared to $96.4 million in 2019

* Segment MultiClient pre-funding revenues of $218.6 million, with a

corresponding pre-funding level of 98%, compared to $256.5 million and

105%, respectively, in 2019

* Cash flow from operations of $366.5 million, compared to $474.3 million in

2019

* As Reported revenues and Other Income according to IFRS of $512.0 million

and an EBIT loss of $188.0 million, compared to $930.8 million and EBIT of

$54.6 million, respectively, in 2019

* Impairment charge of $108.4 million in 2020 relating to stacked vessels and

a higher estimated weighted average cost of capital used for impairment

testing

* Recorded (as Other Income) government grants relating to the Covid-19

pandemic of $38.8 million in 2020, hereof $15.5 million estimated for Q4

* Strong project execution despite logistical challenges and travel

restrictions caused by Covid-19 pandemic

* Reduced annual run rate gross cash cost by more than $200 million compared

to initial 2020 plan to compensate for a revenue reduction of 37% caused by

the Covid-19 pandemic

* Extension of all debt maturities and amortization to September 2022 and

beyond (see description in Note 11 in the Condensed Interim Consolidated

Financial Statements)

"2020 developed very differently than any of us expected. In Q1 the seismic

market quickly changed from an improving path to an abrupt downturn. Preventive

measures to reduce spreading of the coronavirus caused a dislocation in the oil

market and a significant reduction in our clients' investment plans. We reacted

swiftly by reducing cost and preserving liquidity. Gross cash cost was slashed

by more than $200 million from stacking vessels, significant downscaling of the

organization, renegotiating terms with suppliers and several other initiatives.

Further, we have worked through the year to preserve liquidity by implementing

extension of maturities and debt amortization to September 2022 and beyond.

These measures allow us to cope with this downturn and more quickly return to

generating positive cash flow and repaying debt.

MultiClient late sales in the fourth quarter benefited from a usual end-of-year

increase and license round activity in West Africa and Brazil. New acquisitions

of MultiClient data were mainly done offshore Egypt and we returned to Brazil

with one vessel to continue our Campos deep water campaign, initially started in

early 2020. During Q4 we sold well from MultiClient surveys acquired in earlier

quarters but still in the processing phase, boosting our pre-funding level to

185% on MultiClient cash investment of $33 million. Only 8% of our vessel

capacity was allocated to contract work in the quarter, a 4D project offshore

Angola.

We launched a UK Scheme of Arrangement in Q4 to implement the re-scheduling of

debt maturities and amortizations that we had agreed with an overwhelming

majority of lenders. An English court sanctioned the scheme on February 2 this

year allowing for the debt re-scheduling to be implemented. The transaction is

expected to close during February.

The order book increased during the quarter. It now stands at $202 million and

with additional bookings at the start of this year we have good visibility

through the second quarter and into the third quarter. We expect 2021 to be

slightly better than last year. The current booking and bidding activity

together with our MultiClient project pipeline, supports our cautiously positive

view and expectation of increased acquisition activity from early Q2."

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook

PGS expects the improved oil price, a likely global recovery from the Covid-19

pandemic, and the effects of deferred projects from last year to support a

gradual increase of demand for seismic services in 2021. Despite the impacts of

the Covid-19 crisis, energy consumption is expected to continue to increase

longer term with oil and gas being an important part of the energy mix as the

global energy transition evolves. Offshore reserves will be vital for future

supply and support demand for marine seismic services. The recovery of the

seismic industry is likely also to benefit from the recent industry capacity

reductions.

Based on five vessels in operation through 2020, and with reference to the

disclosed risk factors, PGS expects full year 2021 gross cash costs to be below

$400 million.

2021 MultiClient cash investments are expected to be approximately $150 million.

Approximately 45% of 2021 active 3D vessel time is expected to be allocated to

MultiClient acquisition.

Capital expenditures for 2021 is expected to be approximately $40 million.

The order book totaled $202 million on December 31, 2020 (including $89 million

relating to MultiClient). The order book was $160 million on September 30, 2020

and $322 million on December 31, 2019.

+-------------------------------------------+-----------------+----------------+

|  |   |   |

| | | |

|  | Quarter ended | Year ended |

| | December 31, | December 31, |

|  +--------+--------+--------+-------+

| | | | | |

|Consolidated Key Financial Figures |   |   |   |   |

|(In USD millions, except per share data) | 2020 | 2019 | 2020 | 2019 |

+-------------------------------------------+--------+--------+--------+-------+

|Profit and loss numbers Segment Reporting |  |  |  |  |

+-------------------------------------------+--------+--------+--------+-------+

|Segment Revenues and Other Income | 172.8|   288.4| 595.9| 880.1|

+-------------------------------------------+--------+--------+--------+-------+

|Segment EBITDA ex. other charges, net | 129.6|   194.1| 397.7| 556.1|

+-------------------------------------------+--------+--------+--------+-------+

|Segment EBIT ex. impairment and other | | | | |

|charges, net | 20.4|    70.1|  12.2| 96.4|

+-------------------------------------------+--------+--------+--------+-------+

|  |  |  |  |  |

+-------------------------------------------+--------+--------+--------+-------+

|Profit and loss numbers As Reported |  |  |  |  |

+-------------------------------------------+--------+--------+--------+-------+

|Revenues and Other Income | 207.7|  332.6| 512.0| 930.8|

+-------------------------------------------+--------+--------+--------+-------+

|EBIT | (21.6)| 54.2| (188.0)| 54.6|

+-------------------------------------------+--------+--------+--------+-------+

|Net financial items, other | (31.3)|  (25.7)| (118.4)| (92.2)|

+-------------------------------------------+--------+--------+--------+-------+

|Income (loss) before income tax expense | (52.9)| 28.5| (306.4)| (37.6)|

+-------------------------------------------+--------+--------+--------+-------+

|Income tax expense | (7.4)|  (17.8)|  (15.1)| (34.1)|

+-------------------------------------------+--------+--------+--------+-------+

|Net income (loss) to equity holders | (60.3)| 10.7| (321.5)| (71.7)|

+-------------------------------------------+--------+--------+--------+-------+

|Basic earnings per share ($ per share) | (0.16)| 0.03|  (0.85)| (0.21)|

+-------------------------------------------+--------+--------+--------+-------+

|  |  |  |  |  |

+-------------------------------------------+--------+--------+--------+-------+

|Other key numbers As Reported by IFRS: |  |  |  |  |

+-------------------------------------------+--------+--------+--------+-------+

|Net cash provided by operating activities | 57.1| 94.8| 366.5| 474.3|

+-------------------------------------------+--------+--------+--------+-------+

|Cash Investment in MultiClient library | 33.0| 41.3| 222.3| 244.8|

+-------------------------------------------+--------+--------+--------+-------+

|Capital expenditures (whether paid or not) | 11.4| 17.7| 36.1| 59.1|

+-------------------------------------------+--------+--------+--------+-------+

|Total assets | 2,093.8| 2,301.7| 2,093.8|2,301.7|

+-------------------------------------------+--------+--------+--------+-------+

|Cash and cash equivalents | 156.7| 40.6| 156.7| 40.6|

+-------------------------------------------+--------+--------+--------+-------+

|Net interest bearing debt | 937.6| 1,007.5| 937.6|1,007.5|

+-------------------------------------------+--------+--------+--------+-------+

|Net interest bearing debt, including lease | | | | |

|liabilities following IFRS 16 | 1,096.2| 1,204.6| 1,096.2|1,204.6|

+-------------------------------------------+--------+--------+--------+-------+

A complete version of the Q4 2020 earnings release and presentation can be

downloaded from www.newsweb.no (http://www.newsweb.no) and www.pgs.com

(http://www.pgs.com).

The Q4 2020 webcast can be accessed from this link:

https://channel.royalcast.com/landingpage/hegnarmedia/20210204_5/

(https://eur04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fchannel.royal

cast.com%2Flandingpage%2Fhegnarmedia%2F20210204_5%2F&data=04%7C01%7CBard.Stenber

g%40pgs.com%7C4b03c831d9eb4a4f81bf08d8b958c3e2%7C51d05d6147e9480b93b298dc84f1ed0

6%7C1%7C0%7C637463138197450768%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQI

joiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=vu9IM7q7tGz7Pism2QpgNguVB

BHXJf1tBPc2QIfLhR8%3D&reserved=0)

FOR DETAILS, CONTACT:

Bård Stenberg, SVP IR & Communication

Mobile:  +47 99 24 52 35

****

PGS (or "the Company") is a focused Marine geophysical company that provides a

broad range of seismic and reservoir services, including acquisition, imaging,

interpretation, and field evaluation. The Company's MultiClient data library is

among the largest in the seismic industry, with modern 3D coverage in all

significant offshore hydrocarbon provinces of the world. The Company operates on

a worldwide basis with headquarters in Oslo, Norway and the PGS share is listed

on the Oslo stock exchange (OSE: PGS). For more information on PGS visit

www.pgs.com (http://www.pgs.com).

****

The information included herein contains certain forward-looking statements that

address activities, events or developments that the Company expects, projects,

believes or anticipates will or may occur in the future. These statements are

based on various assumptions made by the Company, which are beyond its control

and are subject to certain additional risks and uncertainties. The Company is

subject to a large number of risk factors including but not limited to the

demand for seismic services, the demand for data from our multi-client data

library, the attractiveness of our technology, unpredictable changes in

governmental regulations affecting our markets and extreme weather conditions.

For a further description of other relevant risk factors we refer to our Annual

Report for 2019 and the Q4 2020 earnings release. As a result of these and other

risk factors, actual events and our actual results may differ materially from

those indicated in or implied by such forward-looking statements. The

reservation is also made that inaccuracies or mistakes may occur in the

information given above about current status of the Company or its business. Any

reliance on the information above is at the risk of the reader, and PGS

disclaims any and all liability in this respect.