PGS ASA

Share Issue/Capital Change • Jan 21, 2020

PGS ASA: Contemplated Private Placement to Complete Refinancing

PGS ASA: Contemplated Private Placement to Complete Refinancing

PGS ASA - CONTEMPLATED PRIVATE PLACEMENT TO COMPLETE REFINANCING

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR

INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG OR JAPAN,

OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION

WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE

SECURITIES DESCRIBED HEREIN.

PGS ASA ("PGS" or the "Company") is pleased to announce that it has received

commitments for a four-year term loan B ("TLB") in a minimum principal amount of

USD 489 million and an extension of USD 215 million of its revolving credit

facility ("RCF") by three years from its current expiry date in September 2020.

As part of the full refinancing of the Company's debt maturing in the next 18

months, the Company contemplates a Private Placement (as defined below) for

gross proceeds of up to NOK 850 million (approximately USD 95 million).

The Refinancing

The refinancing (the "Refinancing") will address upcoming maturities by:

* Extension of at least approximately 90% (USD 339 million) of the existing

USD 377 million TLB from the current maturity in March 2021 to March 2024

* USD 150 million of incremental TLB with same maturity and terms as the

extended TLB

* Extension of USD 215 million of the RCF to September 2023

* Approximately USD 95 million of new equity

The proceeds from the USD 150 million incremental TLB and the new equity will be

used to redeem the USD 212 million Senior Unsecured Notes ("SUN") due December

2020, pay transaction fees and expenses and will otherwise be used for general

corporate purposes.

The Company has received TLB and RCF commitments of USD 489 million and USD 215

million respectively, subject to completion of an equity raise of at least USD

75 million and other customary closing conditions. The Refinancing is expected

to be completed concurrently with the closing of the Private Placement.

The terms and conditions of the TLB and RCF are summarized in a company

presentation made available on the Company's website www.pgs.com. The TLB has a

floating interest at Libor + a basic margin grid of 600-700 basis points

depending on the Company's leverage ratio, which corresponds to an interest rate

of 7.60-8.60% if current 4-year Swap interest rate is applied.

Update on Fourth Quarter and Full Year 2019 Financial Numbers

The Company's fourth quarter and preliminary full year 2019 financial statements

are scheduled to be approved by the Board of Directors of PGS (the "Board") on

29 January 2020, and released to the market on 30 January 2020. Due to the

proximity of the Private Placement to the scheduled release of the financial

statements the Company provides the below draft of the key financial numbers

table to be included in the financial statements.

The Company provides this information based on the current status of completing

its fourth quarter and full year 2019 financial statements. The Company has not

completed all its financial reporting and related consolidation, review and

control procedures. The estimates provided in this release are therefore subject

to change and the fourth quarter and preliminary full year 2019 financial

statements finally approved and released by the Company may deviate from the

information herein.

The information provided below includes certain alternative performance measures

("APMs"). These APMs are consistent with those used in the Company's annual and

quarterly financial statements and reference is made to the Company's third

quarter 2019 financial statements for a definition of the APMs.

Key Financial Figures

-------------------------------------------------------------------------------

(Unaudited)       Quarter ended   Year ended

December 31,   December 31,

------------------- ------------------

(In millions of US

dollars, except per

share data)       2019   2018   2019   2018

---------------------------------------- ------------------- ------------------

Profit and loss numbers

Segment Reporting

Segment Revenues       288.4   245.2   880.1   834.5

Segment EBITDA       194.1   154.5   556.1   515.9

Segment EBIT ex.

impairment and other

charges, net       70.1   47.9   96.4   36.3

Profit and loss numbers

As Reported

Revenues       332.6   269.8   930.8   874.3

EBIT       54.2   26.3   54.6   39.4

Net financial items        (25.7)    (31.1)    (92.2)    (87.3)

Income (loss) before

income tax expense       28.5    (4.8)    (37.6)    (47.9)

Income tax expense        (17.8)    (18.7)    (34.1)    (40.0)

Net income (loss) to

equity holders       10.7    (23.5)    (71.7)    (87.9)

Basic earnings per

share ($ per share)       0.03    (0.07)    (0.21)    (0.26)

Other key numbers As

Reported by IFRS

Net cash provided by

operating activities       94.8   117.3   474.3   445.9

Cash investment in

MultiClient library       41.3   40.2   244.8   277.1

Capital expenditures

(whether paid or not)       17.7   16.1   59.1   42.5

Total assets       2,273.3   2,384.8   2,273.3   2,384.8

Cash and cash

equivalents       40.6   74.5   40.6   74.5

Net interest bearing

debt*       1,007.5   1,109.6   1,007.5   1,109.6

Net interest bearing debt, including

lease liabilities following IFRS 16*   1,204.6       1,204.6

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*Following implementation of IFRS 16, prior periods are not comparable to

December 2019

Net financial items in the fourth quarter includes a share of loss from

associated companies of USD 6.4 million.

The net cash provided by operating activities for the fourth quarter 2019

reflects a revenue profile related increase of accounts receivable and accrued

revenues by USD 124.3 million, which will benefit first part of 2020.

The order book totaled USD 322 million at December 31, 2019 compared to USD 163

million at December 31, 2018.

The Private Placement

As part of the Refinancing, the Company is contemplating a private placement

(the "Private Placement") of new ordinary shares (the "New Shares") for gross

proceeds of up to NOK 850 million (approximately USD 95 million based on a

currency exchange rate of USD/NOK 8.9477). The net proceeds from the Private

Placement, together with the proceeds of the incremental TLB, will be used to

repay existing debt, and will otherwise be used for general corporate purposes.

The Private Placement is directed towards investors subject to, and in

compliance with, applicable exemptions from relevant prospectus or registration

requirements. PGS has retained Nordea Bank Abp, filial i Norge, J.P. Morgan

Securities PLC, Pareto Securities AS, ABN Amro Bank N.V., Barclays Bank PLC and

DNB Markets, a part of DNB Bank ASA as Joint Bookrunners in the Private

Placement (collectively, the "Managers").

The subscription price for the New Shares (the "Subscription Price") will be

determined by the Board based on an accelerated bookbuilding process. The

application period for the Private Placement will commence today, 21 January

2020 at 16:30 hours CET and is expected to close on 22 January 2020 at 08:00

hours CET. The Company, after consultation with the Managers, reserves the right

to at any time and in its sole discretion resolve to close or to extend the

application period or to cancel the Private Placement in its entirety without

further notice. The minimum order size and allocation in the Private Placement

will be the NOK equivalent of EUR 100,000, provided that PGS may, at its sole

discretion, offer and allocate an amount below EUR 100,000, pursuant to any

applicable exemptions from the prospectus requirement being available.

Allocation of the New Shares will be determined after the expiry of the book-

building process by the Board's sole discretion, where the Board will focus

primarily on existing shareholding in the Company, but also take into account

other criteria such as (but not limited to) timeliness of the application, price

leadership, relative order size, sector knowledge, perceived investor quality

and investment horizon. The New Shares will be allocated by the Board on a

conditional basis subject to, inter alia, the Company's shareholders resolving

to issue the New Shares at the EGM (as defined below). No guarantee can be given

that such resolution will be passed.

Completion of the Private Placement by delivery of New Shares to investors is

conditional upon, inter alia, (i) the Company raising a minimum of the NOK

equivalent of USD 75 million, (ii) the corporate resolutions of the Company

required to implement the Private Placement, including the approval by the

Company's Board and an extraordinary general meeting in the Company (the "EGM")

to be called for shortly after the conditional allocation in the Private

Placement to issue the Offer Shares (the "Conditions"). The EGM will be called

for shortly after the conditional allocation in the Private Placement and is

contemplated held on 13 February 2020. Investors being allocated shares in the

Private Placement and who hold shares in the Company as of the date of the EGM

undertake to vote in favour of the Private Placement and any Subsequent Offering

(as defined below) at the EGM. The Private Placement will be cancelled if the

mentioned Conditions are not fulfilled or waived.

The Company will announce the result of the Private Placement, the number of

shares allocated in the Private Placement and the Subscription Price in the

Private Placement through an announcement expected to be published before

opening of trading on Oslo Børs, tomorrow, 22 January 2020.

Settlement for the Private Placement is expected to occur on a delivery versus

payment basis. The shares delivered to the subscribers are thus expected to be

tradable upon delivery. The settlement date is expected to be shortly after the

EGM.

Subject to the pricing of the Private Placement, the Company has agreed to a

lock-up period, commencing on the date hereof and continuing until 90 days after

closing of the Private Placement, for issuance of, among other things, equity

securities, subject to customary exemptions (including the subsequent offering

referred to herein.

The contemplated Private Placement involves the setting aside of the

shareholders' preferential rights to subscribe for the New Shares. The Board is

of the opinion that the Private Placement structure will be required to secure

the minimum equity raise condition to the completion of Refinancing, reduce

execution and completion risk, allow for the Company to raise capital more

quickly, raise capital at a lower discount compared to a rights issue and

without the underwriting commissions normally seen with rights offerings.

Furthermore, the Board has put much emphasis on allocation criteria for existing

shareholdings in the Company.

The Subsequent Offering

Subject to inter alia (i) completion of the Private Placement, (ii) relevant

corporate resolutions including approval by the Board and the EGM, (iii)

prevailing market price of PGS' shares being higher than the Subscription Price,

and (iv) approval of a prospectus by the Norwegian Financial Supervisory

Authority (the "Prospectus"), PGS will consider to carry out a subsequent

offering (the "Subsequent Offering") of new shares in the Company. A Subsequent

Offering will be, if made, and on the basis of the Prospectus, be directed

towards eligible shareholders in PGS who (i) are shareholders in the Company as

of the day of the expiry of the bookbuilding period for the Private Placement,

as registered as shareholders in PGS' register of shareholders with the

Norwegian Central Securities Depositary (Nw. Verdipapirsentralen) (the "VPS") as

of 23 January 2020, (ii) are not allocated New Shares in the Private Placement,

and (iii) are not resident in a jurisdiction where such offering would be

unlawful or, for jurisdictions other than Norway, would require any prospectus,

filing, registration or similar action (the "Eligible Shareholders"). The

Eligible Shareholders are expected to be granted non-tradable allocation rights.

The subscription period in the Subsequent Offering is expected to commence

shortly after publication of the Prospectus, expected in H1 2020, and the

subscription price in the Subsequent Offering will be the same as in the Private

Placement. PGS will issue a separate stock exchange notice with further details

on the Subsequent Offering if and when finally resolved.

Advokatfirmaet BAHR AS acts as legal advisor to the Company in connection with

the Private Placement. Advokatfirmaet Thommessen AS act as legal advisor to the

Managers in connection with the Private Placement.

Contacts:

Bård Stenberg, SVP IR & Corporate Communication

Mobile:  +47 99 24 52 35

***

IMPORTANT NOTICE

This announcement is not and does not form a part of any offer to sell, or a

solicitation of an offer to purchase, any securities of PGS. The distribution of

this announcement and other information may be restricted by law in certain

jurisdictions. Copies of this announcement are not being made and may not be

distributed or sent into any jurisdiction in which such distribution would be

unlawful or would require registration or other measures. Persons into whose

possession this announcement or such other information should come are required

to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be

registered under the U.S. Securities Act of 1933, as amended (the "Securities

Act"), and accordingly may not be offered or sold in the United States absent

registration or an applicable exemption from the registration requirements of

the Securities Act and in accordance with applicable U.S. state securities laws.

The Company does not intend to register any part of the offering or their

securities in the United States or to conduct a public offering of securities in

the United States. Any sale in the United States of the securities mentioned in

this announcement will be made solely to "qualified institutional buyers" as

defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only

directed at qualified investors in that Member State within the meaning of the

Prospectus Regulation, i.e., only to investors who can receive the offer without

an  approved prospectus  in such  EEA Member  State. The expression "Prospectus

Regulation" means Regulation 2017/1129 as amended together with any applicable

implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons

in the United  Kingdom that are (i) investment professionals falling within

Article 19(5) of the Financial Services  and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities,

and other persons to whom this announcement may lawfully be communicated,

falling within Article 49(2)(a) to (d) of the Order (all such persons together

being referred to as "relevant persons"). This communication must not be acted

on or relied on by persons who are not relevant persons. Any investment or

investment activity to which this communication relates is available only for

relevant persons and will be engaged in only with relevant persons. Persons

distributing this communication must satisfy themselves that it is lawful to do

so.

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "believe", "expect", "anticipate",

"strategy", "intends", "estimate", "will", "may", "continue",  "should" and

similar expressions. The forward-looking statements in this release are based

upon various assumptions, many of which are based, in turn, upon further

assumptions. Although the Company believes that these assumptions were

reasonable when made, these  assumptions are inherently  subject to significant

known and unknown risks, uncertainties, contingencies and other important

factors which are difficult or impossible to predict and are beyond its control.

Actual events may differ significantly from any anticipated development due to a

number of  factors, including without limitation, changes in investment levels

and need for the Company's services, changes in the  general economic, political

and market conditions in the markets in which the Company operate, the Company's

ability to attract, retain and motivate qualified personnel, changes in the

Company's ability to engage in commercially acceptable acquisitions and

strategic investments, and changes  in laws and regulation and the potential

impact of legal proceedings and actions. Such risks, uncertainties,

contingencies and other important factors could cause actual events to differ

materially from the expectations expressed or implied in this release by such

forward-looking statements. The Company does not provide any guarantees that the

assumptions underlying the forward-looking statements in this announcement are

free from errors nor does it accept any responsibility for the future accuracy

of the opinions expressed in this announcement or any obligation to update or

revise the statements in this announcement to reflect subsequent events. You

should not place undue reliance on the forward-looking statements in this

document.

The information, opinions and forward-looking statements contained in this

announcement speak only as at its date, and are subject to change without

notice. The Company does not undertake any obligation to review, update,

confirm, or to release publicly any revisions to any forward-looking statements

to reflect events that occur or circumstances that arise in relation to the

content of this announcement.

Neither the Managers nor any of their respective affiliates makes any

representation as to the accuracy or completeness of this announcement and none

of them accepts any responsibility for the contents of this announcement or any

matters referred to herein.

This announcement is for information purposes only and is not to be relied upon

in substitution for the exercise of independent judgment. It is not intended as

investment advice and under no circumstances is it to be used or considered as

an offer to sell, or a solicitation of an offer to buy any securities or a

recommendation to buy or sell any securities in the Company. Neither the

Managers nor any of their respective affiliates accepts any liability arising

from the use of this announcement.

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act.