PGS ASA

Earnings Release • May 3, 2016

First Quarter 2016 Results

Earnings Presentation

• This presentation contains forward looking information
• Forward looking information is based on management assumptions and analyses
• Actual experience may differ, and those differences may be material
• Forward looking information is subject to significant uncertainties and risks as they relate to events and/or circumstances in the future
• This presentation must be read in conjunction with the press release for the first quarter 2016 results and the disclosures therein

Strong Cost Management in Face of Continued Market Uncertainty

• Q1 financial performance:
• EBITDA of USD 78.6 million
• Total MultiClient revenues of USD 125.2 million
• Pre-funding level of 124%
• Liquidity reserve of USD 496.6 million
• MultiClient revenues benefitted from sales to Azimuth Ltd.
• Excellent operational vessel performance
• On track to deliver USD 80 million in cost reductions
• Fleet productivity leadership further enhanced by the delivery of Ramform Tethys

Full year 2013 EBITDA guidance of approximately USD 850 million Focus on sales, operations, cost and cash flow discipline

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Financial Summary

EBIT** Cash Flow from Operations

*EBITDA, when used by the Company, means EBIT excluding other charges/(income), impairment and loss/gain on sale of long-term assets and depreciation and amortization. **Excluding impairment and loss on sale of long-term assets of USD 9.1 million in Q2 2014, USD 25.0 million in Q3 2014, USD 39.7 million in Q4 2014, other charges of USD 2.7 million in Q1 2015, USD 4.7 million in other charges and an impairment charge of 56.5 million in Q2 2015, USD 6.5 million in other charges and an impairment of USD 65.3 million in Q3 2015, USD 35.1 million of other charges and an impairment charge of USD 274.9 million in Q4 2015.

Order Book

Financials

Unaudited First Quarter 2016 Results

Condensed Consolidated Statement of Profit and Loss Summary

	Q1	Q1	Percent	Full year
USD million (except per share data)	2016	2015	change	2015
Revenues	203.1	251.1	-19 %	961.9
EBITDA*	78.6	127.5	-38 %	484.4
Operating profit (loss) EBIT ex impairment and other charges	(30.2)	13.6		15.8
Operating profit (loss) EBIT	(31.6)	10.9		(430.4)
Net financial items	(30.5)	(20.8)		(75.2)
Income (loss) before income tax expense	(62.2)	(10.0)		(505.5)
Income tax expense (benefit)	(5.1)	9.5		22.4
Net income (loss) to equity holders	(57.1)	(19.5)		(527.9)
EPS basic	(\$0.24)	(\$0.09)		(\$2.43)
EBITDA margin*	38.7 %	50.8 %		50.4 %
EBIT margin ex impairment and other charges	-14.9 %	5.4 %		1.6 %

• Market driven revenue decline of 19% in Q1 2016 compared to Q1 2015
• Net financial items negatively impacted by exploration expenses in Azimuth Ltd. where PGS has a 45% interest

^*EBITDA, when used by the Company, means EBIT excluding other charges/(income), impairment and loss/gain on sale of long-term assets and depreciation and amortization.

^-7- The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited first quarter 2016 results, released on May 3, 2016.

Q1 2016 Operational Highlights

Targeted pre-funding level 80-120%

Contract revenues MultiClient revenues

• Total MultiClient revenues of USD 125.2 million
• Pre-funding revenues of USD 59.9 million
• Pre-funding level of 124%
• Late sales revenues of USD 65.3 million
• Marine contract revenues of USD 59.2 million
• Negatively impacted by challenging market conditions and low pricing, partially offset by strong vessel utilization

MultiClient Revenues per Region

Pre-funding and Late Sales Revenues Combined

• MultiClient pre-funding revenues were highest in South America and Africa in Q1 2016
• All regions except Middle East and North America contributed well to MultiClient late sales

MultiClient Vintage Distribution

• The MultiClient library book value was USD 692.8 million as of March 31, 2016
• Q1 2016 amortization rate of 54%
• Moderate net book value for surveys completed 2010-2015
• New MultiClient amortization policy
• 2016 amortization expense estimated to approximately USD 300 million

	2016	2015
USD million	Q 1	Q 4	Q 3	Q2	Q1
Contract revenues	59.2	43.5	77.3	84.4	68.8
MultiClient Pre-funding	59.9	98.0	83.8	112.0	86.6
MultiClient Late sales	65.3	67.5	36.6	33.5	56.7
Imaging	16.6	18.2	21.7	23.5	30.3
Other	2.1	2.2	6.3	2.4	8.7
Total Revenues	203.1	229.3	225.7	255.8	251.1
Operating cost	(124.6)	(112.8)	(110.4)	(130.7)	(123.5)
EBITDA*	78.6	116.5	115.3	125.1	127.5
Depreciation	(40.7)	(37.6)	(27.4)	(34.5)	(41.6)
MultiClient amortization	(68.1)	(101.8)	(78.7)	(74.6)	(72.5)
Impairment and loss on sale of long-term assets		(274.9)	(65.3)	(56.9)	0.0
Other charges/income	(1.4)	(35.1)	(6.5)	(4.7)	(2.7)
EBIT	(31.6)	(332.9)	(62.7)	(45.7)	10.9
CAPEX, whether paid or not	(108.9)	(41.7)	(17.0)	(63.3)	(41.5)
Cash investment in MultiClient	(48.3)	(70.2)	(95.5)	(73.6)	(64.0)
Order book	204	240	245	259	394

**EBITDA, when used by the Company, means EBIT excluding other charges/(income), impairment and loss/gain on sale of long-term assets and depreciation and amortization.

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited first quarter 2016 results released on May 3, 2016.

• 90% active vessel time in Q1 2016
• More than 2/3 of active capacity will be used for contract work in Q2
• Slightly less than 50% of the active vessel time in 2016 will be used for MultiClient work

Focus on vessel utilization in a challenging market

* The Q1 2016 vessel allocation excludes cold-stacked vessels. In Q1 2016 the Company took delivery of Ramform Tethys and the two chartered vessels Sanco Swift and Sanco Sword . Neither of these vessels were set in operation in Q1 and hence not included in the Q1 vessel allocation.

Group Cost* Focus Delivers Results

• to come down
• Q1 costs include USD 11.5 million relating to vessels which have not yet commenced operations and stacking activities
• Cost level in Q2 expected to be in line with Q1, despite Ramform Tethys and Sanco Swift commencing operations

Quarterly cost has been reduced materially since 2014

*Amounts show the gross cash operating cost, including operating cost capitalized MultiClient cash investment and capitalized development costs. **Excludes restructuring costs.

Proactive Cost Reductions Continue in 2016

• 2015 cash cost reductions amounted to approximately USD 280 million, including restructuring cost (approximately USD 320 million if restructuring cost is excluded)
• Further significant cost reductions to bring 2016 gross cash cost down to approximately USD 715 million
• Tight cost control continues
• Initiatives implemented in 2015 to take full effect in 2016
• Delivery of Ramform Tethys in Q1 2016 adding to the cost base
• Cost discipline has high priority in 2016 with potential for further cost reduction -14-

Consolidated Statements of Cash Flows Summary

	Q1	Q1	Full year
USD million	2016	2015	2015
Cash provided by operating activities	133.3	212.4	487.9
Investment in MultiClient library	(48.3)	(64.0)	(303.3)
Capital expenditures	(114.4)	(30.7)	(164.0)
Other investing activities	(97.3)	(1.7)	40.4
Net cash flow before financing activities	(126.7)	116.0	61.0
Financing activities	161.6	(21.8)	(34.1)
Net increase (decr.) in cash and cash equiv.	34.8	94.2	26.9
Cash and cash equiv. at beginning of period	81.6	54.7	54.7
Cash and cash equiv. at end of period	116.4	148.9	81.6

• Cash provided by operating activities of USD 133.3 million in Q1 2016
• Benefited from favorable seasonal working capital development
• High capital expenditures due to delivery of Ramform Tethys
• USD 96.4 million new build CAPEX
• Other investing activities include investment in Azimuth Ltd. of USD 74.1 million

		March 31	March 31	December 31
	USD million	2016	2015	2015
	Total assets	3 029.2	3 501.0	2 914.1
	MultiClient Library	692.8	715.2	695.0
	Shareholders' equity	1 403.0	1 880.9	1 463.7
	Cash and cash equivalents (unrestricted)	116.6	148.9	81.6
	Restricted cash	89.3	79.3	71.6
	Liquidity reserve	496.6	558.9	556.6
	Gross interest bearing debt	1 326.8	1 192.8	1 147.2
	Net interest bearing debt	1 120.9	955.9	994.2
• Solid liquidity reserve of USD 496.6 million • Increased net interest bearing debt in Q1 primarily due to delivery of Ramform Tethys and drawing on the available Export Credit Financing ("ECF")
• The last Ramform Titan-class vessel, Ramform Hyperion, is fully funded with USD 129.3 million of undrawn ECF facilities to cover remaining yard payments
• Shareholders' equity at 46% of total assets

• Solid liquidity reserve of USD 496.6 million
• Increased net interest bearing debt in Q1 primarily due to delivery of Ramform Tethys and drawing on the available Export Credit Financing ("ECF")
• The last Ramform Titan-class vessel, Ramform Hyperion, is fully funded with USD 129.3 million of undrawn ECF facilities to cover remaining yard payments

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited first quarter 2016 results released on May 3, 2016.

PGS Debt Structure

Long term Credit Lines and Interest Bearing Debt	Nominal Amount as of March 31, 2016	Total Credit Line	Financial Covenants
USD 400.0 million Term Loan ("TLB"), Libor (minimum 0.75%) + 250 basis points, due 2021	USD 392.0 million		None, but incurrence test: total leverage ratio ≤ 3.00x*
Revolving credit facility ("RCF"), due 2018 40% of applicable margin in commitment fee on undrawn amount Libor + margin of 200-325 bps + utilization fee	USD 120.0 million	USD 500.0 million	Maintenance covenant: total leverage ratio ≤ 4.00x, to Q1-2017, thereafter reduced by 0.25x each quarter to 2.75x
Japanese ECF, 12 year with semi-annual installments. 50% fixed/ 50% floating interest rate	USD 364.8 million	USD 494.1 million	None, but incurrence test for loan 3&4: Total leverage ratio ≤ 3.00x and Interest coverage ratio ≥ 2.0x
2018 Senior Notes, coupon of 7.375% and callable from 2015	USD 450.0 million		None, but incurrence test: Interest coverage ratio ≥ 2.0x*

Process initiated to increase headroom under RCF Maintenance Covenant

Operational Update and Market Comments

Unaudited First Quarter 2016 Results

The Decline Curve Never Sleeps: Market Tightening Starts Playing Out

The global supply challenge

Marine Seismic Market Perspectives

• Low oil price impacts oil companies spending pattern

• The weak seismic market is expected to continue through 2016

• Streamer capacity is approximately 50% lower than at the 2013 peak – positive for supply/demand balance

• − Still, further market balance improvement needed

PGS response – Focus on sales, operations, cost and cash flow discipline

Market Activity

• Seismic demand primarily driven by:
• Positioning for strategically important license rounds
• Seismic commitments in E&P licenses
• Production seismic
• Some opportunistic spending
• Decent industry capacity utilization for Q2 and Q3
• Oil price weakness in first half of Q1 caused oil companies to postpone projects
• Negative impact on Active Tenders and All Sales Leads

Source: PGS internal estimate as of end March 2016. Value of active tenders and sales leads are the sum of active tenders and sales leads with a probability weight and represents Marine 3D contract seismic only.

Streamer Operations April 2016

Ramform Tethys Delivered – Enhancing Fleet Productivity Further

• Ramform Tethys delivered March 16, 2016
• Ramform Tethys enhanced from the two first Ramform Titan-class vessels with further improved equipment handling and increased engine power
• Improved productivity, safety and stability are advantages of Ramform Titan-class vessels
• The majority of PGS awarded contracts are production based – benefitting the Ramform Titan-class
• The youngest and most productive fleet in the industry

Ramform Tethys – setting a new standard for seismic operations for the next 25 years

PGS Fleet Strategy: Buliding the Youngest and Most Productive Fleet in the Industry

to buy back after year 5 and 8

High-end Ramforms - Flexible Capacity

High-end Conventional on Charter

The Ultra High-end Ramforms

Ramform Hyperion Ramform Tethys Ramform Atlas Ramform Titan Ramform Sterling Ramform Sovereign

Ramform Viking

Ramform Valiant

Ramform Vanguard

Ramform Challenger

Ramform Explorer

• Combination of chartered high capacity conventional 3D vessels and temporarily coldstacked first generation Ramform vessels:

Construction In operation Option period

• Improves fleet flexibility
• Chartered capacity with staggered expiry structure
• Gives a competitive edge in the current market
• Positions PGS well to take advantage of a market recovery

Significantly reduced capex requirement going forward

Focus on Continuous Improvement to Stay Best in Class

Sharpened focus on planning and risk mitigation

Continuous efforts to improve safety and operational performance

Azimuth Ltd. Fully Operational E&P Company:

Holds 48 Licences and Employs ~ 60 E&P Professionals

Azimuth is backed by Seacrest Capital Group, a leading private equity group with high quality largely US based investors

• Library for equity has been a part of the PGS strategy since 2011
• PGS' investments in Azimuth Ltd. has over time largely been cash neutral, corresponding to data sales and services purchased by Azimuth Ltd.
• PGS has a right, but no obligation to invest in Azimuth Ltd.
• Q1 investment of USD 74.1 million intended to maintain minority ownership in Azimuth Ltd. of 45% for the next two years without further investments
• Q1 MultiClient revenues of USD 56 million (USD 37 million in MultiClient late sales)

All Azimuth sales done at arm's length

• Gross cash cost of approximately USD 715 million

– Of which approximately USD 230 million to be capitalized as MultiClient cash investments

• MultiClient cash investments of approximately USD 230 million

• Pre-funding level of approximately 100%
• Slightly less than 50% of active 3D vessel time planned for MultiClient
• Capital expenditures of approximately USD 225 million
• Of which new build capex of approximately USD 165 million

In Conclusion: Competitively Positioned to Navigate Current Market Environment

• Strong utilization in a challenging market
• Solid MultiClient performance in light of market conditions
• Enhancing fleet productivity and flexibility
• Capitalizing on the youngest and most productive fleet in the industry
• Solid liquidity reserve
• Process initiated to increase headroom under RCF Maintenance Covenant

Focus on sales, operations, cost and cash flow discipline

Thank you – Questions?

Appendix Active vessels = Ultra High-end Ramforms and High-End Conventional Vessels

The Ultra High-end Ramforms

Ramform Titan Ramform Atlas Ramform Tethys Ramform Hyperion Scheduled delivery Q1 2017

2D/EM/Source

Ramform Sterling Ramform Sovereign

High-end Conventional on Charter

PGS Apollo

Sanco Swift Delivery Q1 2016

Delivery Q1 2016 Sanco Spirit

Atlantic Explorer

High-end Ramforms – Flexible Capacity

Ramform Explorer (cold stacked Q3 2015)

Ramform Challenger (cold stacked Q4 2015)

Ramform Valiant (cold stacked Q4 2015)

Ramform Viking (cold stacked Q4 2015)

Ramform Vanguard (planned cold stacking Q4 2016)

All vessels equipped with GeoStreamer, 3.5 years average vessel age of active vessels

Appendix Main Yard Stays* in 2016

Vessel	When	Expected Duration	Type of Yard Stay
Ramform Titan	June 2016	Approximately 3 days during transit or portcall	Intermediate class
Atlantic Explorer	November 2016	Approximately 5 days in total	Intermediate class

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