Electromagnetic Geoservices ASA

Report Publication Announcement • Aug 20, 2015

EMGS reports second quarter 2015 results

EMGS reports second quarter 2015 results

Electromagnetic Geoservices ASA (EMGS) recorded revenues of USD 12.1 million in

the second quarter 2015, down from 32.3 million in the previous quarter and from

USD 42.5 million in the second quarter 2014. Contract sales ended at USD 4.8

million, while sales from the multi-client library ended at USD 7.3 million. The

results were negatively affected by extraordinary costs related to the Company's

cost reduction program. EBITDA ended with a negative USD 6.0 million after a

multi-client investment of USD 14.0 million. An impairment of goodwill related

to the OHM acquisition in 2011 of USD 14.4 million resulted in a net loss for

the second quarter 2015 of USD 26.0 million.

"In the second quarter we were, as expected, more affected by the challenging

market conditions than in the previous quarter. We had planned for a higher

contract utilisation in the quarter, but negotiations were delayed. During the

quarter, we have therefore invested in what we consider to be good and timely

multi-client projects, as we see these as important for the future development

of our Company," says CEO of EMGS, Bjarte Bruheim.

During the quarter, EMGS announced and implemented a cost reduction program

including a 20% reduction in headcount and a reduction from three to four

vessels by taking out the EM Leader from mid-May. In addition, the Company

announced that the capital expenditures for 2015 would be reduced.

The Company's three other vessels were mainly operating on multi-client projects

in Norway, US Gulf of Mexico and in Indonesia.

In the second half of 2015, EMGS will perform the announced contract work for an

oil company in Malaysia and re-start its work for Pemex in Mexico. The Company

also expects further contract work in Asia.

The market outlook is currently hard to predict. Contract negotiations are

delayed and the oil companies' spending and budgets are further revised and

reduced. As a consequence, EMGS Board and management will continue the work to

reduce the Company's cost level and capital expenditures. Still, the Company

experience good progress on the adoption of the EM technology. The interest from

oil companies is increasing, although challenged by reduced budgets. The

continuous pressure on these companies to cut costs and increase efficiency,

also require them to improve their success rates in exploration.

Please find the full report for the second quarter and first half 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

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.

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