PGS ASA

Earnings Release • Oct 17, 2019

PGS Q3 2019 Results

PGS Q3 2019 Results

Strong Earnings Improvement in a Recovering Market

Highlights Q3 2019

* Segment Revenues of $234.2 million, compared to $192.1 million in Q3 2018

* Segment EBITDA of $160.2 million, compared to $132.8 million in Q3 2018

* Segment EBIT of $38.0 million, compared to a loss of $2.7 million in Q3 2018

* Contract revenues of $76.3 million, compared to $34.3 million in Q3 2018

* Segment MultiClient pre-funding revenues of $94.9 million, with a

corresponding pre-funding level of 125%, compared to $95.7 million and 94%

in Q3 2018

* MultiClient late sales revenues of $53.9 million, compared to $56.0 million

in Q3 2018

* Cash flow from operations of $151.9 million, compared to $133.3 million in

Q3 2018

* Order book of $336 million in Q3 2019, more than a doubling compared to Q3

2018

* As reported revenues according to IFRS of $276.5 million and an EBIT of

$50.3 million, compared to $163.4 million and an EBIT loss of $10.4 million

in Q3 2018

"Our contract revenues more than doubled from Q2 2018 and continue to benefit

from an improving market environment. For completed and secured 2019 work, our

prices are on average close to 40% higher than the 2018 average.

We used a majority of our Q3 capacity on attractive and well pre-funded

MultiClient projects in the North Atlantic region, as well as certain parts of

Asia Pacific. Total MultiClient sales in Q3 were in line with our expectations.

High sales from surveys in the processing phase contributed to a high pre-

funding level in Q3, and brings our pre-funding expectation for the full year to

be in the high-end of our targeted range of 80-120%.

Q3 was another quarter with strong utilization, and we experience significantly

higher demand, compared to last year. Our order book is up sequentially, and we

are confident in achieving good utilization for all eight active vessels during

the coming winter season."

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook

PGS expects the significant cash flow generation among clients and an increase

in exploration and production spending, including offshore spending, to

contribute to a continuing recovery of the marine seismic market fundamentals.

Contract seismic is the activity currently benefitting the most from the

improvement, driven by more 4D acquisition and generally higher demand for new

proprietary seismic data.

Based on current operational projections, with eight vessels in operation

through year-end, and with reference to disclosed risk factors, PGS expects full

year 2019 gross cash costs of approximately $575 million.

2019 MultiClient cash investments are expected to be approximately $250 million.

Approximately 50% of 2019 active 3D vessel time is currently expected to be

allocated to MultiClient acquisition.

Capital expenditure for 2019 is expected to be approximately $60 million.

The order book totaled $336 million at September 30, 2019 (including $102

million relating to MultiClient). The order book was $300 million at June

30, 2019 and $144 million at September 30, 2018.

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

|  |   |   |   |

| | | | |

|  | Quarter ended | Year to date | Year ended |

| | September 30, | September 30, |December 31,|

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

| | | | | | |

|Consolidated Key Financial | | | | | |

|Figures | | | | | |

|(In USD millions, except per |   |   |   |   |   |

|share data) | 2019 | 2018 | 2019 | 2018 | 2018 |

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

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

|Reporting |  |  |  |  |  |

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

|Segment Revenues | 234.2| 192.1| 591.7| 589.3| 834.5|

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

|Segment EBITDA | 160.2| 132.8| 361.9| 361.3| 515.9|

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

|Segment EBIT ex. Impairment and | | | | | |

|other charges, net | 38.0| (2.7)| 26.2| (11.7)| 36.3|

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

|  |  |  |  |  |  |

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

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

|Reported |  |  |  |  |  |

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

|Revenues | 276.5| 163.4| 598.2| 604.5| 874.3|

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

|EBIT | 50.3| (10.4)| 0.4| 13.0| 39.4|

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

|Net financial items | (12.9)| (18.2)| (66.7)| (56.2)| (87.3)|

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

|Income (loss) before income tax | | | | | |

|expense | 37.4| (28.6)| (66.3)| (43.3)| (47.9)|

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

|Income tax expense | (5.9)| (6.8)| (16.3)| (21.2)| (40.0)|

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

|Net income (loss) to equity | | | | | |

|holders | 31.5| (35.4)| (82.6)| (64.4)| (87.9)|

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

|Basic earnings per share ($ per | | | | | |

|share) | 0.09| (0.10)| (0.24)| (0.19)| (0.26)|

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

|  |  |  |  |  |  |

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

|Other key numbers As Reported: |  |  |  |  |  |

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

|Net cash provided by operating | | | | | |

|activities | 151.9| 133.3| 379.5| 328.6| 445.9|

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

|Cash Investment in MultiClient | | | | | |

|library | 75.7| 101.9| 203.5| 236.9| 277.1|

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

|Capital expenditures (whether | | | | | |

|paid or not) | 10.2| 14.1| 40.9| 26.4| 42.5|

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

|Total assets |2,262.4|2,397.2|2,262.4|2,397.2| 2,384.8|

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

|Cash and cash equivalents | 36.0| 44.4| 36.0| 44.4| 74.5|

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

|Net interest bearing debt* |1,015.9|1,149.0|1,015.9|1,149.0| 1,109.6|

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

|Net interest bearing debt, | | | | | |

|including lease liabilities | | | | | |

|following IFRS 16* |1,220.3|  |1,220.3|  |  |

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

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

September 2019.

A complete version of the Q3 2019 earnings release and earnings presentation can

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

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

FOR DETAILS, CONTACT:

Bård Stenberg, SVP IR & Communication

Phone:  +47 67 51 43 16

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 2018. 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.