Electromagnetic Geoservices ASA

Investor Presentation • Jul 25, 2019

COMPANY UPDATE AND Q2 2019 RESULTS

Oslo, 25 July 2019

Bjørn Petter Lindhom, CEO Hege Veiseth, 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.

Operations, Market and Outlook

Q2 2019 Highlights

Operational highlights

• Ongoing USD 24 million proprietary survey offshore Borneo for Petronas
• Two fully pre-funded multi-client surveys in Norway
• Acquisition contract awarded by Pemex with a contract value of USD 73 million and a minimum value of USD 29 million
• Proprietary acquisition contract from BP of USD 6 million awarded
• Backlog of USD 97 million at the end of the quarter

Financial highlights

• Revenues of USD 14.5 million
• EBITDA of USD 6.8 million
• Adjusted EBITDA of USD 2.1 million

Well calibration projects

• Key part of our strategy to establish CSEM as an integral part of the exploration workflow
• Good progress on well calibration projects for Equinor and un-named major
• Expect to sign up 3rd major
• Internal results points towards a prediction strength of around 80%

Examples of CSEM responses:

Significant discoveries with resistive anomaly: Troll, Fram East, Fram West, Askeladden, Bay du Nord, Wisting, Hanssen, Njord, Trion, Peon, Havis, Grane, Xerelete

Dry, shows and technical discoveries without resistive anomaly: 31/3-4, Mirus, Darwin, Melanocetus, 7120/8-4, Bjaaland, 7324/7-1S, Exploratus 101, 7219/9-1, Etzil-1

Increased interest for EM in Africa

• Mauritania & Senegal cross-border survey for BP and partners
• Marks a return of CSEM to Africa and to the prolific MSGBC basin
• Will be first survey for BP in more than 10 years
• Start of acquisition planned for Q1 2020
• EMGS expects to acquire additional data in Africa during 2020

Vessel Update and Backlog

Second quarter 2019 performance I Increase in revenues and EBITDA

Key financial metrics Quarterly development (USD million)

• Revenues
  • USD 14.5 million
  • Proprietary work in South East Asia and multi-client revenues in Norway
• Vessel utilisation of 73%
  • Two vessels on charter
• EBITDA
  • USD 6.8 million
  • Adjusted EBITDA* of USD 2.1 million

*Adjusted EBITDA includes capitalised multi-client expenses and vessel and office lease expenses

9

Operational costs

Quarterly operational cost base* development (USD million)

Comments

• Operational costs base in Q2 19 of USD 12.4 million
  • Higher than Q2 2018 and Q1 2019 as a result of higher activity level

• Cost control

• Strong focus on cost optimisation

*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

Capitalised multi-client expenses

• Charter hire, fuel and crew expenses
• Vessel and office lease expenses
• Other operational expenses
• Employee expenses

Decrease in free cash in Q2 2019

Quarterly free cash development (USD million) Comments

• Net decrease in free cash of USD 3.9 million to USD 5.8 million
  • Adjusted EBITDA of USD 2.1 million
  • Trade receivables increased by USD 5.7 million to USD 7.9 million
  • USD 0.6 million in interest-payments on convertible bond
  • Total investments of USD 2.2 million

Summary

• Second quarter 2019 revenues of USD 14.5 million and adjusted EBITDA of USD 2.1 million
• Vessel utilisation of 73%
• Atlantic Guardian has arrived in Mexico and data acquisition on the Pemex contract expected to start today
• Order backlog at USD 97 million at end of Q2 2019

Atlantic Guardian alongside in Coatzacoalcos Mexico