Electromagnetic Geoservices ASA

Earnings Release • Nov 5, 2015

EMGS reports third quarter 2015 results

EMGS reports third quarter 2015 results

Electromagnetic Geoservices ASA (EMGS) recorded revenues of USD 16.3 million in

the second quarter 2015, up from 12.1 million in the previous quarter and down

from USD 41.7 million in the corresponding quarter in 2014. Contract sales ended

at USD 9.1 million, while sales from the multi-client library ended at USD 7.2

million. The results were negatively affected by extraordinary costs related to

the Company's cost reduction program. EBITDA ended with a negative USD 10.0

million after multi-client investments of USD 8.4 million in the quarter. The

Company has done impairments of USD 3.9 million and USD 1.6 million related to

the multi-client library and equipment not in use respectively.

"We have had a difficult financial quarter, like the rest of the oil service

industry, but we have been able to reduce the underlying cost base to a level

which we deem appropriate with the current market outlook. The Company is poised

to take advantage of market opportunities with state-of-the-art technology,

current cost level and strengthened balance sheet," says CEO of EMGS, Stig Eide

Sivertsen.

During the quarter, the vessel BOA Thalassa completed the first phase of the

announced contract work in Malaysia and the vessel is currently operating on an

extension of that contract worth approximately USD 7 million. Also, the BOA

Galatea completed contract work for PEMEX in Mexico, while the Atlantic Guardian

finalised a multi-client project in the Hammerfest basin and on Nykhøgda in

Norway.

In the end of the third quarter, EMGS announced that the Company is implementing

further cost reducing measures, to bring the operational cost level in line with

the expected activity level going forward. The market outlook continues to be

difficult to predict and the Company therefore prepares for a prolonged negative

market sentiment lasting into 2016 and 2017.

Although the geophysical market is currently not very receptive in adopting new

technology, the Company believes that positive responses will materialise in

higher demand for EM services when the oil market returns to equilibrium. To

meet the current market conditions, EMGS Board and management continues the work

to reduce the Company's cost level, preserve cash and mitigate balance sheet

risk.

Please find the full report for the third quarter 2015 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.

Contacts

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#1964237]