Electromagnetic Geoservices ASA

Share Issue/Capital Change • Nov 5, 2015

EMGS - Board of Directors proposes rights issue and amendments to bond terms

EMGS - Board of Directors proposes rights issue and amendments to bond terms

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

INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

The Board of Directors of Electromagnetic Geoservices ASA ("EMGS" or the

"Company") has resolved to call for an extraordinary general meeting (the "EGM")

in order to propose to the shareholders of the Company to increase the share

capital through the issuance of new shares with preferential and tradable

subscription rights for the shareholders with minimum gross proceeds of NOK 214

million (equivalent to ~USD 25 million) and maximum gross proceeds of NOK 278

million (equivalent to ~USD 32.5 million) (the "Rights Issue").

Further, the Board of Directors has resolved to propose to the bondholders of

the Company's outstanding bond issue FRN Electromagnetic Geoservices ASA Senior

Unsecured Callable Bond Issue 2013/2016 with ISIN NO 001 068253.7 (the "Bond

Issue") to amend certain terms of the bondholder agreement (the "Bond

Proposal").

The Rights Issue

The Rights Issue will be used to strengthen the Company's financial position and

align the Company's capital structure with the current market conditions. More

specifically, the gross proceeds from the proposed Rights Issue will be used for

two separate purposes:

i. NOK 214 million (equivalent to ~USD 25 million) will be used to strengthen

the Company's financial position and for general corporate purposes

ii. Up to NOK 64 million (equivalent to ~USD 7.5 million) will be raised to buy

back a portion of the Company's outstanding Bond Issue (the "Bond Buy-

Back"), as further described below. The amount raised for the Bond Buy-Back

depends on bondholder participation in the Bond Buy-Back and the amount to

be raised will be determined following the completion of the offer period

of the Bond Buy-Back, expected on or about 24 November 2015

The Rights Issue is fully underwritten and is provided by large existing

shareholders of the Company.

The shareholders of EMGS will receive subscription rights in relation to their

shareholding in the Company as of the end of the date of the EGM scheduled to be

held on 26 November 2015, and as registered in the VPS as of 30 November 2015.

One subscription right will give the right to subscribe for and be allocated one

new share. The subscription rights will be tradable and listed on Oslo Børs.

Oversubscription by holders of subscription rights will be allowed.

The subscription price in the Rights Issue will be NOK 0.25 per new share. Based

on the closing price of EMGS as of 4 November 2015 of NOK 0.67, the subscription

price represents a discount to the theoretical ex-rights price of between 24%

(assuming maximum deal size) and 20% (assuming minimum deal size).

Subsequent to the Rights Issue the Company's share capital will increase by

between NOK 214 million (assuming minimum deal size) and 278 million (assuming

maximum deal size) through the issuance of between 856 and 1,112 million new

shares.

The Rights Issue is subject to approval by the EGM.

Preliminary timeline and key events:

* Date of EGM: Scheduled for 26 November 2015

* Last day of trading in the EMGS share including the right to receive

subscription rights: Scheduled for 26 November 2015

* Subscription period: Early December

The indicative timeline is subject to adjustments.

The Bond Proposal

The proposed amendments to the terms of the Bond Issue are as follows:

i. Extend the maturity date by 36 months, from 27 June 2016 to 27 June 2019

ii. The Company will offer to acquire 22.86% of the Bond Issue at a price of

80% of the nominal value of each bond for a total consideration of up to

NOK 64 million

iii. Amend the denomination of the bonds from NOK 1,000,000 to NOK 1.00

iv. Waive the change of control clause in the bond agreement in connection

with the Rights Issue and the underwriting and any shareholding following

from or in connection with such Rights Issue or underwriting

v. Introduce restrictions on the ability to raise new financial indebtedness,

subject to certain exemptions as set out in the Bond Proposal to be

presented to the bondholders

vi. Negative pledge and selling restrictions on the multi-client library

Holders of more than 2/3 of the Bond Issue have pre-committed to vote in favor

of the amendments and key bondholders have undertaken to tender their bonds.

The proposed amendments will be evaluated in a bondholder meeting scheduled to

be held on 19 November 2015. Following approval of the Bond Proposal, the Bond

Buy-Back will take place.

The Bond Buy-Back will be offered to all bondholders on equal terms and the

Company will offer to acquire 22.86% of the outstanding bonds held by each

bondholder. If one or several bondholders do not wish to tender 22.86% of their

bonds pursuant to the offer, other bondholders may tender more than 22.86% of

their outstanding bonds. In case of several exceeding tenders, any outstanding

bonds available under the offer for such exceeding tenders shall be allocated

pro-rata to existing number of bonds held among the bondholders who have

delivered exceeding tenders.

Any outstanding bonds tendered in the offer shall be redeemed and cancelled, and

the number of outstanding bonds and outstanding amount under the bond agreement

reduced accordingly.

Indicative timeline and key events:

* Bondholder meeting: Scheduled for 19 November 2015

* Offer period: Within 3 business days after the Bondholder meeting and open

for no less than two and no more than three business days

* Announcement date of the result of the Bond Buy-Back: Scheduled for 25

November 2015

The indicative timeline is subject to adjustments.

Carnegie AS acts as financial adviser and Michelet & Co Advokatfirma AS acts as

legal advisor in connection with the Rights Issue and the Bond Proposal.

Contact

Stig Eide Sivertsen, EMGS Chief Executive Officer, +47 909 55 767

Charlotte Knudsen, EMGS head of investor relations, +47 97 56 19 59

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 main offices in Trondheim and Oslo,

Norway; Houston, USA; and Kuala Lumpur, Malaysia.

For more information, visit www.emgs.com

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1964262]