PGS ASA

Regulatory Filings • Oct 26, 2017

Petroleum Geo-Services ASA: Centralize - Simplify - Streamline Into Two Business Areas

Petroleum Geo-Services ASA: Centralize - Simplify - Streamline Into Two Business Areas

October 26, 2017: Oslo, Norway, Petroleum Geo-Services ASA ("PGS" or "the

Company") announces a new centralized, simplified and streamlined organization,

which builds on the two business areas: Sales & Services and Operations &

Technology.

Over the last years fundamentals in the seismic industry have changed

significantly. The market is smaller, weaker and more uncertain than before, and

the MultiClient share of acquisition has increased considerably. At the same

time the world has become more digital and clients have centralized their

decision making process. The new PGS organization addresses these changes.

Further the Company's vessel capacity will be more flexible. Going forward PGS

intends to operate a fleet of eight vessels, of which two will be used

selectively to address demand swings and market seasonality. The cost base for

the Company will be reduced to a baseline of six vessels, while the flexible

capacity will be managed and crewed by a combination of regular and temporary

employees.

"This downturn has been longer and lower than anyone anticipated. We think the

worst is behind us, but I cannot bet the Company on a market recovery. We need

to change what we can control ourselves. The reorganization, combined with more

flexible vessel capacity makes us better positioned to address the current

market environment and improve cash flow and profitability," says Rune Olav

Pedersen, President & CEO of PGS.

PGS expects the overall gross cash cost for the Company to be reduced by at

least $100 million in 2018, which should be sufficient to deliver positive cash

flow after debt servicing next year, assuming a similar market in 2018 as in

Fewer business areas will result in a reduction of the executive management

team, from six to four. Sverre Strandenes, currently EVP MultiClient, will be

EVP and responsible for Sales & Services, while Per Arild Reksnes, currently EVP

Operations, will be EVP and lead Operations & Technology. Gottfred Langseth will

continue as EVP & CFO.

Sales & Services will contain three departments: Sales, New Ventures and

Imaging. Sales will promote and sell all products and services through a

coordinated customer and marketing approach. New Ventures will be responsible

for building new MultiClient programs worldwide and evaluate other cash

generating opportunities across the PGS product lines, including strategic

positioning in new basins. Imaging is producing the final seismic data to

internal and external customers. Imaging will become more closely integrated

with all of PGS business activities. The external focus will be on the high-end

markets.

Operations & Technology will include the following six departments: Project

Planning & Bidding, Project Delivery, Maritime, Technical, Operations Geophysics

and Geoscience & Engineering. Project Planning & Bidding will plan and calculate

all acquisition surveys and prepare bids for proprietary work. Project Delivery

will be responsible for execution of all seismic acquisition projects.

Maritime, Technical, and Operations Geophysics will jointly manage and operate

our vessels, seismic equipment and technology. Geoscience & Engineering develops

new technologies that improve operational efficiency and imaging quality.

The Company plans to implement the new structure by year-end 2017. Restructuring

cost is estimated to be approximately $40 - 50 million and is expected to be

recorded mainly in Q4 2017.

For details, contact:

Bård Stenberg, VP IR & Corporate Communications

Mobile: +47 992 45 235

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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.

PGS has a presence in 17 countries with regional centers in London, Houston and

Kuala Lumpur. The headquarters is 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.

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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.