PGS ASA

Capital/Financing Update • Nov 22, 2016

Petroleum Geo-Services ASA: ANNOUNCES OFFER TO EXCHANGE ANY AND ALL OF ITS 7.375% SENIOR NOTES DUE 2018 FOR A COMBINATION OF NEW 7.375% SENIOR NOTES DUE 2020 AND CASH

Petroleum Geo-Services ASA: ANNOUNCES OFFER TO EXCHANGE ANY AND ALL OF ITS 7.375% SENIOR NOTES DUE 2018 FOR A COMBINATION OF NEW 7.375% SENIOR NOTES DUE 2020 AND CASH

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR

INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN,

OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION

WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR OTHER MEASURES. THIS

ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED

HEREIN.

FOR IMMEDIATE RELEASE

For additional information, please contact:

Bård Stenberg

VP IR & Corporate Communications

+47 67 51 43 16

Petroleum Geo-Services ASA Announces Offer to Exchange

ANY AND ALL OF its 7.375% Senior Notes due 2018 FOR A COMBINATION OF

NeW 7.375% Senior Notes due 2020 AND CASH

Oslo, Norway, November 22, 2016 - Petroleum Geo-Services ASA (Oslo Stock

Exchange: PGS) ("PGS" or the "Company") today announced that it has commenced an

offer to exchange (the "Exchange Offer") any and all of its outstanding 7.375%

Senior Notes due 2018 (the "Old Notes") for total exchange consideration per

$1,000 principal amount of Old Notes comprising (i) $500 aggregate principal

amount of new 7.375% Senior Notes due 2020 to be issued by the Company (the "New

Notes") plus (ii) $475 in cash, as set forth in the table below.

Outstanding

Old Notes to Principal CUSIP Numbers Exchange Consent Total Exchange

be Exchanged Amount and ISINs Consideration((1)) Payment((1)) Consideration((1)(2))

7.375% $450,000,000 144A: 716599AC9 $500 principal $30 in cash $500 principal amount

Senior Notes   / US716599AC95 amount of of

due 2018     New Notes and New Notes and $475 in

Reg S: R69628AA4 $445 in cash cash

/ USR69628AA46

____________________

(1)  For each $1,000 principal amount of Old Notes.

(2)  Includes the Consent Payment payable to eligible holders whose Old Notes

are validly tendered and not validly withdrawn and as to which Consents to the

Proposed Amendments are delivered on or prior to the Early Tender Date (as each

such term is defined below).

The Exchange Offer is being made pursuant to the Exchange Offer and Consent

Solicitation Memorandum dated November 22, 2016 (the "Exchange Offer

Memorandum"). The Exchange Offer is scheduled to expire at 11:59 p.m., New York

City time, on December 20, 2016, unless extended by the Company (such time and

date, as the same may be extended, the "Expiration Date"). Eligible holders (as

defined in the Exchange Offer Memorandum) who validly tender and do not validly

withdraw their Old Notes by 11:59 p.m., New York City time, on December

6, 2016, unless extended by the Company (such date and time, as the same may be

extended, the "Early Tender Date"), will be eligible to receive the total

exchange consideration set forth in the table above. Eligible holders who

validly tender and do not validly withdraw their Old Notes after the Early

Tender Date but on or prior to the Expiration Date will be eligible to receive

the Exchange Consideration set forth in the table above. Eligible holders may

only withdraw their tendered Old Notes prior to 11:59 p.m., New York City time,

on December 6, 2016, unless extended or earlier terminated (the "Withdrawal

Deadline").

Eligible holders whose Old Notes are accepted for exchange in the Exchange Offer

will also receive accrued and unpaid interest in cash in respect of such

exchanged Old Notes from the last interest payment date to, but not including,

the date of settlement pursuant to the terms described in the Exchange Offer

Memorandum.

Concurrently with the Exchange Offer, the Company is soliciting consents (the

"Consents") to certain proposed amendments (the "Proposed Amendments") to the

indenture governing the Old Notes (the "Old Notes Indenture") on the terms and

conditions set forth in the Exchange Offer Memorandum (the "Consent

Solicitation"). The Proposed Amendments will eliminate substantially all of the

restrictive covenants, all of the reporting covenants and certain of the events

of default in the Old Notes Indenture, if adopted. In order to effect the

Proposed Amendments, Consents must be received from holders representing not

less than a majority in aggregate principal amount of the outstanding Old Notes

(as determined in accordance with the Old Notes Indenture). Eligible holders who

validly tender their Old Notes will be deemed to have consented to the Proposed

Amendments. Eligible holders may not tender their Old Notes in the Exchange

Offer without delivering Consents to the Proposed Amendments and may not deliver

Consents to the Proposed Amendments without tendering their Old Notes in the

Exchange Offer.

The consummation of the Exchange Offer is subject to satisfaction or waiver of

certain conditions, including, among others, (a) the closing of the concurrent

private placement of new shares on terms and conditions satisfactory to the

Company in its sole discretion, (b) the effectiveness of certain proposed

amendments to the Company's existing revolving credit facility as described in

the Exchange Offer Memorandum and (c) the receipt of valid tenders of Old Notes,

not withdrawn, and Consents, not revoked, of not less than 90% of the aggregate

principal amount of outstanding Old Notes in the Exchange Offer. The private

placement of new shares is subject to customary conditions, including approval

thereof by an extraordinary general meeting of the Company, which is currently

expected to be held in approximately three weeks and the receipt of valid tender

of Old Notes of not less than 90% of the aggregate principal amount of

outstanding Old Notes in the Exchange Offer. Prior to launching the Exchange

Offer, the Company received commitments from eligible holders representing

$251,660,000, or approximately 55.9%, of the aggregate principal amount of

outstanding Old Notes to tender their Old Notes in the Exchange Offer.

The Company reserves the right, subject to applicable law and the terms set

forth in the Exchange Offer Memorandum, to (i) extend the Early Tender Date, the

Expiration Date or the Withdrawal Deadline, (ii) modify, extend or terminate the

Exchange Offer and/or the Consent Solicitation or (iii) otherwise amend the

Exchange Offer and/or the Consent Solicitation in any respect. In addition, the

Company may, in its sole discretion, waive certain conditions to the Exchange

Offer.

Background and Rationale

To maintain a robust financial position through the ongoing uncertainty, PGS has

established a financial plan which seeks to strengthen its liquidity position

even further by proactively addressing the December 2018 maturity of the Old

Notes, de-leveraging the balance sheet and reducing interest costs. In November

2016, PGS successfully completed the first step of its financial plan through

the extension of maturity of the existing revolving credit facility to September

18, 2020 and reduced the commitments thereunder to $400 million upon the

effectiveness of the RCF Amendments and to $350 million from September 18, 2018

through the execution of an amendment agreement and extension request, each to

be entered into in connection with the Exchange Offer. As a second step, PGS is

seeking to address the 2018 maturity of the Old Notes through the Exchange

Offer, the cash consideration for which will be financed from a portion of the

proceeds raised in the concurrent private placement of new shares in the

Company. The Exchange Offer is conditional upon the closing of the private

placement.

Indicative Timetable

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

|Date |Calendar Date |

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

|Commencement Date  |November 22, 2016 |

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

|Early Tender Date  |11:59 p.m., New York City time, on December 6, 2016, |

| |unless extended. |

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

|Withdrawal Deadline |11:59 p.m., New York City time, on December 6, 2016, |

| |unless extended or earlier terminated. |

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

|Expiration Date  |11:59 p.m., New York City time, on December 20, 2016, |

| |unless extended. |

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

|Settlement Date  |Three business days after the Expiration Date, unless|

| |extended, assuming all conditions to the Exchange Offer|

| |have been satisfied or waived, currently expected to be|

| |December 23, 2016. |

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

The complete terms and conditions of the Exchange Offer and the Consent

Solicitation are described in the Exchange Offer Memorandum, copies of which may

be obtained by eligible holders by contacting Lucid Issuer Services Limited, the

information agent for the Exchange Offer, at Tankerton Works, 12 Argyle Walk,

London WC1H 8HA, United Kingdom or +44 (0)20 7704 0880 or pgs@lucid-is.com.

The Company has retained Arctic Securities AS, Barclays Bank PLC and J.P. Morgan

Securities LLC as Lead Dealer Managers and ABN AMRO Securities (USA) LLC, DNB

Markets, a part of DNB Bank ASA, Nordea Bank Danmark A/S and The Royal Bank of

Scotland plc as Co-Managers for the Exchange Offer. Any questions concerning the

terms and conditions of the Exchange Offer should be directed to the Lead Dealer

Managers: Arctic Securities AS (Europe: +47 21 01 31 00;  US: +1 (212)

597 5555; arctic.credit.sales@arctic.com), Barclays Bank PLC (Europe: +44 (0)

20 3134 8515; US: +1 (212) 528-7581; US Toll Free: +1 (800) 438-3242;

liability.management@barclays.com) and J.P. Morgan Securities LLC (Europe: +44

(0) 20 7134 2468; US Toll Free: + 1 (866) 834-4666; emea_lm@jpmorgan.com).

The New Notes have not been, and will not be, registered under the

U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or the

securities laws of any other jurisdiction and may not be offered or sold,

directly or indirectly, in the United States, absent registration under or an

exemption from, or in a transaction not subject to, the registration

requirements of, the U.S. Securities Act. No public offering of the New Notes is

being made in the United States or in any other jurisdiction. Accordingly, the

Exchange Offer is only being made to, and Consents are only being solicited

from, registered holders of Old Notes who are (i) "qualified institutional

buyers" within the meaning of Rule 144A under the U.S. Securities Act and (ii)

persons other than "U.S. persons" who are located outside the United States, as

those terms are defined in Rule 902 of Regulation S under the U.S. Securities

Act, and, if such holders are located in the European Economic Area, Qualified

Investors (as such term is defined under Directive 2003/71/EC (as amended))

(collectively, the "eligible holders"). Only eligible holders of Old Notes who

certify to the foregoing will be authorized to receive and review the Exchange

Offer Memorandum and to participate in the Exchange Offer and the Consent

Solicitation.

Arctic Securities AS, Barclays Bank PLC, J.P. Morgan Securities LLC, ABN AMRO

Securities (USA) LLC, DNB Markets, a part of DNB Bank ASA, Nordea Bank Danmark

A/S and The Royal Bank of Scotland plc (together, the "Dealer Managers") are

each acting exclusively for the Company and for no-one else in connection with

any transaction mentioned in this announcement and will not regard any other

person (whether or not a recipient of this announcement) as a client in relation

to any such transaction and will not be responsible to any other person for

providing the protections afforded to their respective clients, or for advising

any such person on the contents of this announcement or in connection with any

transaction referred to in this announcement. The contents of this announcement

have not been verified by the Dealer Managers.

This announcement is for informational purposes only and does not constitute an

offer to sell or a solicitation of an offer to buy the New Notes nor an offer to

purchase Old Notes or a solicitation of Consents in the United States or any

jurisdiction. The Exchange Offer is being made solely by, and pursuant to, the

terms set forth in the Exchange Offer Memorandum. The Exchange Offer is not

being made to persons in any jurisdiction in which the making or acceptance

thereof would not be in compliance with the securities, blue sky or other laws

of such jurisdiction.

Forward-Looking Statements

This release contains certain forward-looking statements regarding the future

events or the future financial performance of PGS. These statements reflect

management's current views with respect to future events or financial

performance, and are based on management's                  current assumptions

and information currently available and are not guarantees of the Company's

future performance. The timing of certain events and actual results could differ

materially from those projected or contemplated by the forward-looking

statements due to a number of factors including, but not limited to those

inherent to operating in a highly regulated industry, strong competition,

commercial and financial execution, economic conditions, among others.

About PGS

PGS is a leading marine seismic survey and data processing company operating in

all of the major oil and natural gas offshore basins worldwide.

PGS' ordinary shares trade on the Oslo Stock Exchange under the symbol 'PGS'.

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.