Electromagnetic Geoservices ASA

EMGS announce additional cost reductions

Electromagnetic Geoservices ASA (EMGS) announces that the Company implements

additional cost reduction measures reflecting the challenging market conditions

in the oil service industry.

The Company has identified and implemented comprehensive cost reductions on

terms and conditions for sub-contractors and in staff levels. The key elements

of the program are a reduction of the vessel capacity by one vessel, from three

to two vessels, and a corresponding reduction in the global employee expenses.

EMGS initiated cost reduction measures in the beginning of the first quarter

this year and further measures were announced in June. Based on the development

in revenues so far in 2015, as well as the outlook for the rest of 2015 and

2016, the Company has decided to implement further cost reductions.

The Company expects that the additional cost reductions will reduce the annual

operational cost level by approximately USD 35 million. Hence, the results from

the total reductions implemented in 2015 are expected to amount to USD 70

million, reducing the annual operational cost level to below USD 100 million.

The Company will have restructuring charges of approximately USD 2.8 million,

whereas USD 1.5 million will be booked in the third quarter and USD 1.3 million

will be booked in the fourth quarter 2015. In addition, a provision related to

loss on charter agreements of USD 4.4 million will be booked in the third

quarter 2015. The initiatives will be implemented immediately and yield effects

gradually.

Although the market conditions currently are challenging, EMGS believes that the

Company's technology and flexible business model leaves the Company well

positioned for an upturn in the market.

Contacts

Svein Knudsen, EMGS chief financial officer, +47 911 41 149

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#1955180]

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