PGS ASA

Earnings Release • Feb 1, 2018

Petroleum Geo-Services ASA: Fourth Quarter and Preliminary Full Year 2017 Results & CMD presentation

Petroleum Geo-Services ASA: Fourth Quarter and Preliminary Full Year 2017 Results & CMD presentation

Highlights 2017

* Revenues of $838.8 million, compared to $764.3 million in 2016

* EBITDA of $374.1 million, compared to $313.4 million in 2016

* EBIT, excluding impairments and other charges, a loss of $147.1 million,

compared to a loss of $137.5 million in 2016

* Net loss of $523.4 million, impacted by impairments and other charges of

$177.0 million related primarily to reorganization and ceasing activities

that do not currently generate cash

* MultiClient pre-funding revenues of $299.4 million with a corresponding pre-

funding level of 140%, compared to $242.3 million and 121% in 2016

* MultiClient late sales of $235.0 million, compared to $226.8 million in 2016

* Cash flow from operations of $281.8 million, compared to $320.9 million in

2016

* Liquidity reserve of $257.3 million at year-end 2017, compared to $271.7

million in 2016

* Ramform Hyperion delivered, the last new-build in a series of four Ramform

Titan-class vessels

* Rune Olav Pedersen appointed new President & CEO

* Settled all ongoing disputes related to ISS Service tax for licensing of

MultiClient data with the tax authorities of Rio de Janeiro

* Implemented a centralized, simplified and streamlined organization to reduce

annual gross cash cost by more than $100 million

"We experienced a strong finish to our MultiClient sales from all regions in Q4,

making the full year MultiClient performance an improvement from 2016. Our

capitalized MultiClient investments ended at $213.4 million. We achieved a

sales-to-investment ratio of close to 2.5 times, continuing on the positive

trend from 2016 when the ratio for the year was 2.3 times.

The marine contract market was challenging in 2017 with significant seasonal

swings. To address the continued difficult market fundamentals we implemented a

centralized, simplified and streamlined organization in Q4, combined with

improved flexibility for vessel and imaging capacity.

The reorganization has been executed according to plan and we commenced

operating in the new organization from 1 January 2018. We are confident that we

will reduce the full year gross cash cost by more than $100 million in 2018,

compared to 2017, which together with lower capital expenditure should position

us well to achieve our target of delivering positive cash flow after debt

service this year."

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook

Petroleum Geo-Services ASA ("PGS" or the "Company") expects the higher oil

price, improved cash flow among clients and unsustainable reserve replacement

ratios to benefit the marine 3D seismic market fundamentals going forward. While

the Company expects the market sentiment to improve during 2018, there is a risk

that a market recovery will take some time. For this reason the Company is

planning its cost and capital expenditures for 2018 targeting a positive cash

flow post debt service in a flat market compared to 2017.

Based on the current operational projections and with reference to disclosed

risk factors, PGS expects full year 2018 gross cash cost below $575 million.

2018 MultiClient cash investments are expected to be approximately $250 million.

More than 50% of the 2018 active 3D vessel time is expected to be allocated to

MultiClient acquisition.

Capital expenditure for 2018 is expected to be approximately $50 million.

The order book totaled $135 million at December 31, 2017 (including $101 million

relating to MultiClient), compared to $167 million at September 30, 2017 and

$215 million at December 31, 2016. The Company has seen increased order intake

in January and expects to be able to book and operate eight 3D vessels from Q2

2018 in accordance with its base 3D vessel operation plan.

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

|  |   |   |   |

|  |   | Year ended | Year ended |

|  | Quarter ended |December 31,|December 31,|

|Key Financial Figures | December 31, | | |

|(In USD millions, except per share +-------+-------+------------+------------+

|data) |   |   |   |   |

| | 2017 | 2016 | 2017 | 2016 |

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

|Revenues | 235.9| 154.1| 838.8| 764.3|

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

|EBITDA | 122.8| 53.1| 374.1| 313.3|

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

|EBIT ex. impairment and other | (24.5)| (65.5)| (147.1)| (137.5)|

|charges, net | | | | |

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

|EBIT as reported |(159.2)| (92.4)| (383.6)| (180.3)|

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

|Income (loss) before income tax |(191.5)|(118.7)| (468.1)| (262.8)|

|expense | | | | |

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

|Net income (loss) to equity holders |(194.8)|(156.1)| (523.4)| (293.9)|

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

|Basic earnings per share ($ per | (0.58)| (0.61)| (1.55)| (1.21)|

|share) | | | | |

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

|Net cash provided by operating | 84.3| 64.7| 281.8| 320.9|

|activities | | | | |

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

|Cash investment in MultiClient | 54.0| 47.8| 213.4| 201.0|

|library | | | | |

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

|Capital expenditures (whether paid | 23.4| 28.7| 154.5| 208.6|

|or not) | | | | |

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

|Total assets |2,482.8|2,817.0| 2,482.8| 2,817.0|

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

|Cash and cash equivalents | 47.3| 61.7| 47.3| 61.7|

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

|Net interest bearing debt |1,139.4|1,029.7| 1,139.4| 1,029.7|

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

A complete version of the Q4 and preliminary full year 2017 earnings release 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 2016. 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.