Electromagnetic Geoservices ASA

Earnings Release • Aug 18, 2016

EMGS reports second quarter 2016 results

EMGS reports second quarter 2016 results

Electromagnetic Geoservices ASA (EMGS) recorded revenues of USD 15.1 million in

the second quarter 2016, up from USD 12.1 million in the second quarter 2015 and

from USD 13.0 million in the first quarter 2016. Contract sales totalled USD

0.4 million, while multi-client sales amounted to USD 14.7 million. The Company

has reduced its quarterly cost base, consisting of all operational costs

including multi-client investments, from USD 32.0 million in the second quarter

last year to USD 14.7 million this quarter. EBITDA ended at USD 2.8 million. The

Company has done multi-client impairments of USD 9.2 million in the second

quarter. Free cash increased with USD 1.2 million from the previous quarter.

"We continue to be challenged by a very difficult market wherein opportunities

are being pushed back as the oil industry is re-adjusting its level of spending.

However, a combination of a reduced cost base, increased efficiency as a result

of recent restructuring measures, will put us in a strong position when the

market turns." says CEO of EMGS, Christiaan Vermeijden.

During the quarter, the vessel BOA Thalassa commenced on a multi-client project

in India. The vessel has been laid up at a reduced rate since 1 May with the

crews temporarily laid off. The Atlantic Guardian has acquired data on multi-

client projects in the Hammerfest basin, in the Norwegian Sea and in the North

Sea in the second quarter 2016. Following this, the vessel started the

mobilisation of a Joint Industry Project. During the second quarter, EMGS and

the owner of the EM Leader, agreed to terminate the vessel's charter agreement

as of 1 June 2016, to the commercial benefit for both parties.

The market outlook for oil services continues to be challenging and is

characterised by high uncertainty. Oil companies have continued to announce

further reductions in their spending for 2016 compared to 2015 as a response to

the sharp decline in oil price. The interest in the EM technology from the oil

companies is healthy, although challenged by reduced budgets and uncertain

timelines.

Please find the full report for the second quarter 2016 enclosed. The results

will be presented at 10:00 CET today at the Company's premises in Dronning Mauds

gate 15 in Oslo. The presentation will be published at 09:30 CET.

Contact

Hege Veiseth, CFO, +47 99 21 67 43

About EMGS

EMGS, the marine EM market leader, uses its proprietary electromagnetic (EM)

technology to support oil and gas companies in their search for offshore

hydrocarbons. EMGS supports each stage in the workflow, from survey design and

data acquisition to processing and interpretation. The company's services enable

the integration of EM data with seismic and other geophysical and geological

information to give explorationists a clearer and more complete understanding of

the subsurface. This improves exploration efficiency and reduces risks and the

finding costs per barrel.

EMGS operates on a worldwide basis with offices in Trondheim, Oslo, Houston,

Villahermosa, Rio de Janeiro and Kuala Lumpur.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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