PGS ASA

Earnings Release • Apr 25, 2019

PGS: First Quarter 2019 Results

PGS: First Quarter 2019 Results

Weak Q1 2019 Results - Full Year Intact

Highlights Q1 2019

* As Reported revenues according to IFRS of $129.3 million and EBIT loss of

$42.5 million, compared to $201.3 million and EBIT loss of $7.3 million in

Q1 2018

* Segment Revenues of $141.9 million, compared to $197.8 million in Q1 2018

* Segment EBITDA of $66.6 million, compared to $92.3 million in Q1 2018

* Segment EBIT, a loss of $29.3 million, compared to a loss of $22.7 million

in Q1 2018

* Total Segment MultiClient prefunding revenues of $30.0 million, with a

corresponding prefunding level of 48%, compared to $58.6 million and 109% in

Q1 2018

* MultiClient late sales revenues of $60.9 million, compared to $83.5 million

in Q1 2018

* Cash flow from operations of $119.4 million, compared to $73.4 million in Q1

2018

* Liquidity reserve of $205.4 million, an increase of $45.9 million, or 29%,

compared to previous quarter

* In process of completing sale of Ramform Sterling to JOGMEC, including a

service agreement of up to 10 years with annual renewals. First part of

sales price received in March 2019, net $44.6 million cash flow impact

* Order book of $238 million, an increase of $75 million, compared to previous

quarter

"Segment MultiClient prefunding revenues in Q1 2019 were impacted by an

overweight of low prefunded surveys in the mix. This will reverse in the coming

quarters, and the prefunding level for the full year 2019 is expected to be in

the upper half of the targeted range 80-120%.

The order book increased by 46% in the first quarter. I am confident, based on

the improved visibility for vessel utilization, MultiClient prefunding and

contract revenues that we will be able to deliver a significant improvement in

cash flow and profitability in 2019, compared to 2018.

Pricing for contract work booked to date is now more than 35% higher than the

average rate in 2018. The price increase is a combination of a general market

improvement, more 4D work and our ability to build an attractive project

portfolio. The higher prices will primarily benefit our contract revenues in the

second and third quarters."

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook

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

exploration and production spending, including offshore spending, to contribute

to further recovery of the marine seismic market fundamentals going forward.

Contract seismic is likely the activity that will benefit most from the

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

proprietary seismic data.

Based on current operational projections and with reference to disclosed risk

factors, PGS expects full year 2019 gross cash costs of approximately $550

million. This number takes into account an approximately $50 million reduction

from the implementation of IFRS 16 in 2019. See Note 16 for a description of the

effects from implementation of IFRS 16.

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

More than 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 $85 million, which

includes the reactivation of Ramform Vanguard.

The order book totaled $238 million at March 31, 2019 (including $90 million

relating to MultiClient). The order book was $163 million at December 31, 2018

and $211 million at March 31, 2018.

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

|  |   |   |

|  | Quarter ended | Year ended |

|  | March 31, |December 31,|

|Consolidated Key Financial Figures +-------+-------+------------+

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

| | 2019 | 2018 | 2018 |

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

|Profit and loss numbers Segment Reporting |  |  |  |

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

|Segment Revenues | 141.9| 197.8| 834.5|

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

|Segment EBITDA | 66.6| 92.3| 515.9|

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

|Segment EBIT ex. Impairment and other charges, | (29.3)| (22.7)| 36.3|

|net | | | |

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

|  |  |  |  |

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

|Profit and loss numbers As Reported |  |  |  |

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

|Revenues | 129.3| 201.3| 874.3|

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

|EBIT | (42.5)| (7.3)| 39.4|

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

|Net financial items | (22.0)| (22.3)| (87.3)|

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

|Income (loss) before income tax expense | (64.5)| (29.6)| (47.9)|

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

|Income tax expense | (0.6)| (10.4)| (40.0)|

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

|Net income (loss) to equity holders | (65.1)| (40.0)| (87.9)|

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

|Basic earnings per share ($ per share) | (0.19)| (0.12)| (0.26)|

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

|  |  |  |  |

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

|Other key numbers As Reported: |  |  |  |

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

|Net cash provided by operating activities | 119.4| 73.4| 445.9|

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

|Cash Investment in MultiClient library | 62.1| 53.7| 277.1|

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

|Capital expenditures (whether paid or not) | 11.5| 4.0| 42.5|

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

|Total assets |2,497.6|2,501.9| 2,384.8|

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

|Cash and cash equivalents | 90.4| 38.4| 74.5|

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

|Net interest bearing debt* |1,051.7|1,150.7| 1,109.6|

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

|Net interest bearing debt, including lease |1,282.9|  |  |

|liabilities following IFRS 16* | | | |

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

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

A complete version of the Q1 2019 earnings release and earnings presentation can

be downloaded from www.newsweb.no and www.pgs.com.

FOR DETAILS, CONTACT:

Bård Stenberg, SVP IR & Communication

Phone:  +47 67 51 43 16

Mobile:  +47 99 24 52 35

****

Petroleum Geo-Services ("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 Petroleum Geo-Services visit 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.

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.