PGS ASA

Earnings Release • Jul 23, 2015

Second Quarter and First Half 2015 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 second quarter and first half 2015 results and the disclosures therein

Resilient MultiClient Performance

• Financial performance:
• EBITDA of USD 125.1 million
• MultiClient pre-funding revenues of USD 112.0 million
• Pre-funding level of 152%
• Liquidity reserve of USD 545.7 million
• Marine contract revenues and margin negatively impacted by the weak market
• Cost reduction program progressing ahead of plan with target increased to USD 250 million – from USD 150 million originally

Full year 2015 EBITDA expected to be in the lower range of the guided interval Full year 2013 EBITDA guidance of approximately USD 850 million

Financial Summary

210 ²¹⁶ 128 125 - USD million

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 56.9 million, USD 39.7 million in Q4 2014, USD 25.0 million in Q3 2014, USD 9.1 million in Q2 2014, USD 15 million in Q4 2013, as well as other charges of 4.7 million in Q2 2015 and 2.7 million in Q1 2015.

Order Book

Financials

Unaudited Second Quarter and First Half 2015 Results

Condensed Consolidated Statement of Operations Summary

	Q2	Q2	Percent	H1	H1	Percent
USD million (except per share data)	2015	2014	change	2015	2014	change
Revenues	255.8	337.0	-24 %	506.9	629.5	-19 %
EBITDA*	125.1	170.6	-27 %	252.6	309.2	-18 %
Operating profit (EBIT) ex impairment charges and other charges	15.9	55.0	-71 %	29.5	100.1	-71 %
Operating profit (EBIT)	(45.7)	46.2		(34.8)	91.4
Net financial items	(12.2)	(11.7)		(33.0)	(44.2)
Income (loss) before income tax expense	(57.9)	34.5		(67.9)	47.2
Income tax expense (benefit)	5.9	4.9		15.4	13.0
Net income to equity holders	(63.8)	29.7		(83.3)	34.3
EPS basic	(\$0.30)	\$0.14		(\$0.39)	\$0.16
EBITDA margin*	48.9 %	50.6 %		49.8 %	49.1 %
EBIT margin ex impairment charges	6.2 %	16.3 %		5.8 %	15.9 %

• Significant market driven revenue decline of 24% in Q2 2015 and 19% YTD
• Cash cost reductions securing a relatively unchanged EBITDA margin
• Loss related to sale and operating leaseback of PGS Apollo of USD 56.9 million in Q2 2015

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter and first half 2015 results, released on July 23, 2015.

^*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.

Q2 2015 Operational Highlights

Contract revenues MultiClient revenues

• Total MultiClient revenues of USD 145.5 million
• Pre-funding revenues of USD 112.0 million, including good sales from projects in the processing stage
• Pre-funding level of 152%
• Late sales revenues of USD 33.5 million
• Marine contract revenues of USD 84.4 million and an EBIT margin of negative 15%
• The sequential improvement of the marine contract EBIT margin versus Q1 is due to improved vessel utilization

MultiClient Revenues per Region Pre-funding and Late Sales Revenues Combined

• Resilient MultiClient sales performance in Q2 2015
• Pre-funding revenues were highest in Europe followed by Africa and North America
• Europe accounted for approximately 45% of Q2 MultiClient revenues

Sales driven by strong GeoStreamer offering in an attractive North Sea MultiClient market

Key Operational Numbers

Key Operational Numbers
	2015			2014
USD million	Q2	Q1	Q 4	Q 3	Q 2	Q 1
Contract revenues	84.4	68.8	171.8	238.6	171.5	116.0
MultiClient Pre-funding	112.0	86.6	86.4	55.4	74.8	74.2
MultiClient Late sales	33.5	56.7	120.0	63.9	60.3	64.8
Imaging	23.5	30.3	36.2	30.6	24.3	28.0
Other	2.4	8.7	15.7	5.7	6.1	9.5
Total Revenues	255.8	251.1	430.1	394.2	337.0	292.5
Operating cost	(130.7)	(123.6)	(218.3)	(212.5)	(166.4)	(154.0)
EBITDA*	125.1	127.5	211.8	181.7	170.6	138.5
Depreciation	(34.5)	(41.6)	(56.8)	(50.5)	(44.0)	(29.8)
MultiClient amortization	(74.6)	(72.5)	(155.1)	(53.9)	(71.6)	(63.7)
Impairment and loss on sale of long-term assets	(56.9)	0.0	(39.7)	(25.0)	(9.1)	0.0
Other charges/income	(4.7)	(2.7)	0.2	0.2	0.3	0.2
EBIT	(45.7)	10.9	(39.7)	52.5	46.2	45.2
CAPEX, whether paid or not Cash investment in MultiClient	(63.3) (73.6)	(41.5) (64.0)	(36.9) (57.9)	(53.1) (70.4)	(149.4) (99.6)	(131.9) (116.2)
Order book	259	394	410	466	558	610

• Q2 2015 restructuring cost of USD 4.9 million included in Other charges/income
• H1 2015 restructuring cost totals USD 7.7 million with Q1 numbers reclassified

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter and first half 2015 results released on July 23, 2015.

^**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.

Vessel Utilization Seismic Streamer 3D Fleet Activity in Streamer Months

• Sequential improvement of utilization from Q1 to Q2
• Utilization expected to improve further in Q3
• Approximately 50% of active 3D capacity now expected to be used for MultiClient projects for the full year 2015

77% active vessel time in Q2 2015

Group Cost* Focus Delivers Results

• Strong cost development continues with H1 2015 cost 27% down from H1 2014
• Q2 cost sequentially up from Q1 due to:
• Higher vessel utilization
• Cost deferral from Q1 to Q2 on one project
• Some one off effects benefiting Q1 cost
• The sequential cost increase from Q1 ended lower than guided due to positive cost variances, including lower variable personnel cost

Quarterly cost materially down in 2015 compared to 2013 and 2014

*Amounts show the sum of operating cost and capitalized MultiClient cash investment.

**Excludes restructuring costs.

Proactive Cost Reductions Continue in 2015

• Cash cost in 2015, including severance and restructuring costs, is now expected to be approximately USD 250 million lower than in 2014
• PGS initially targeted a reduction of USD 150 million
• Cold-stacking of Ramform Explorer and Ramform Challenger, foreign exchange, a more wide-ranging reduction in staff and continued decline in variable project costs contribute to a further reduction in costs

*Other cost reductions net includes effects of office closures/reloactions, staff reductions , other initiatives and lower project variable costs, partly offset by increased cost from planned growth measures in 2015, compared to 2014.

Consolidated Statements of Cash Flows Summary

Consolidated Statements of Cash Flows Summary
	Q2	Q2	H 1	H 1
USD million	2015	2014	2015	2014
Cash provided by operating activities	83.1	40.2	295.4	222.1
Investment in MultiClient library	(73.6)	(99.6)	(137.6)	(215.8)
Capital expenditures	(72.2)	(123.2)	(102.9)	(267.3)
Other investing activities	59.2	(25.2)	57.5	(30.3)
Financing activities	(87.8)	42.1	(109.5)	70.4
Net increase (decr.) in cash and cash equiv.	(91.3)	(165.7)	2.9	(220.9)
Cash and cash equiv. at beginning of period	148.9	208.6	54.7	263.8
Cash and cash equiv. at end of period	57.6	42.9	57.6	42.9

• H1 2015 cash flow from operations of USD 295.4 million, up 33% from H1 2014
• Significant positive YTD cash flow before financing activities
• Q2 2015 capital expenditures primarily relate to the Ramform Titan-class new builds, including the floating installment for Ramform Tethys
• USD 80 million proceeds from sale of PGS Apollo included in "Other investing activities" in Q2 2015
• USD 20 million dividend paid in Q2 2015

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter and first half 2015 results released July 23, 2015.

Balance Sheet Key Numbers – Strong Financial Position

	June 30	June 30	December 31
USD million	2015	2014	2014
Total assets	3 297.4	3 665.7	3 563.0
MultiClient Library	749.9	727.9	695.2
Shareholders' equity	1 799.9	2 012.3	1 901.6
Cash and cash equiv.	57.6	42.9	54.7
Restricted cash	82.9	97.9	92.2
Liquidity reserve	545.7	382.9	454.7
Gross interest bearing debt	1 146.6	1 243.5	1 209.1
Net interest bearing debt	995.0	1 091.5	1 048.0

• Liquidity reserve of USD 545.7 million
• Includes USD 38.1 million of export credit financing relating to the Q2 floating of Ramform Tethys which was received after quarter end
• The new builds are fully funded with USD 258.5 million of undrawn facilities to cover remaining yard payments
• Conservative policy to plan for net debt below 1xEBITDA in a strong market and 2xEBITDA in a weak market
• Shareholders' equity at 55% of total assets

Strong balance sheet – well positioned to handle the challenging market

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter 2015 results released on July 23, 2015.

Attractive Debt Structure – No Maturities Before 2018

Long term Credit Lines and Interest Bearing Debt	Nominal Amount as of June 30, 2015	Total Credit Line	Financial Covenants
USD 400.0 million Term Loan ("TLB"), Libor (minimum 0.75%) + 250 basis points, due 2021	USD 395.0 million		None, but incurrence test: total leverage ratio < 3.00:1
Revolving credit facility ("RCF"), due 2018 70 bps commitment fee on undrawn amount Libor + margin of 200-235 bps on drawn amount	USD 50.0 million	USD 500.0 million	Maintenance covenant: total leverage ratio < 2.75:1
Japanese ECF, 12 year with semi-annual installments. 50% fixed/ 50% floating interest rate	USD 251.6 million	USD 510.1 million	None, but incurrence test for loan 3&4: Total leverage ratio < 3.00:1 and Interest coverage ratio > 2.0:1
2018 Senior Notes, coupon of 7.375% and callable from 2015	USD 450.0 million		None, but incurrence test: Interest coverage ratio > 2.0:1

Operational Update and Market Comments

Unaudited Second Quarter and First Half 2015 Results

Current Market Characteristics

• Cautious spending pattern among oil companies continues to impact seismic demand
• Low visibility in all regions
• Very low prices for contract work with some further price pressure
• Further capacity reduction needed to balance the market
• The weak market is expected to continue well into 2016

PGS response – sales focus, cost reduction, cash and capacity management

Marine Contract Bidding Activity

Source: PGS internal estimate as of end June 2015. 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.

Global Supply and Demand Trends

• 15-20% decline in sq.km acquired is expected in 2015, compared to 2014
• Average 2015 streamer capacity expected down 13%, compared to 2014
• Approximately 15% additional streamer capacity reduction needed to balance supply with current market demand

Source of both graphs: PGS internal estimates. Capacity increases are calculated based on average number of streamers in one year compared to average number of

Streamer Operations July 2015

Sale and Operating Leaseback of PGS Apollo

• The only non-Ramform designed 3D vessel in the PGS fleet and best suited for such a transaction
• 10-year bareboat charter, with an option for a 5 year extension at a reduced rate
• Option to acquire the vessel after end of year 5 and 8
• The gross proceeds from the transaction amounted to USD 80 million
• PGS Apollo is the only 3D vessel to have entered the PGS 3D fleet through an acquisition, in this case Arrow Seismic ASA in 2007
• The price reflected a strong seismic market and, as a result, the recorded cost of the vessel exceeded construction cost and triggered a loss on sale in Q2 2015

Strengthens PGS liquidity and improves fleet flexibility

Good MultiClient Sales Performance from All Vintages

• Strong sales progress for all vintages
• Moderate net book values (NBV) for surveys completed 2010- 2015
• Work In Progress (WIP) approximately two years on average
• Amortization is primarily based on the ratio of cost to forecasted sales
• Full year 2015 amortization rate expected to be approximately 55%

Cap cost Accumulated revenue NBV

PGS Mexico MultiClient 2D Campaign

• PGS was the first seismic company to obtain permits and acquire data in Mexico
• 12,500 GeoStreamer line kilometers well tie program already completed with Fast Track data available
• 75,000 100,000 line kilometer program in collaboration with Schlumberger and Spectrum well underway
• Acquisition program to be completed in December 2015
• Data coverage over recently awarded acreage and proposed blocks for future licensing rounds
• Significant client interest

In Conclusion: Well Positioned to Navigate the Challenging Market

• Resilient MultiClient performance
• Robust balance sheet
• No debt maturities before 2018
• Reducing costs further
• Cost effective operations
• Improved productivity
• Attractive MultiClient library

Competitively Positioned – Performance Through the Cycle

• EBITDA in the lower range of USD 550-700 million

• MultiClient cash investments of approximately USD 300 million

• Pre-funding level above 100%

• Capital expenditures of approximately USD 225 million

• Of which almost USD 150 million for Ramform Tethys and Ramform Hyperion, both with delivery dates in 2016

Thank you – Questions?

Appendix PGS Seismic Fleet

S

Ramforms Conventional

PGS Apollo

Ramform Sterling Ramform Sovereign

Ramform Valiant Ramform Viking

Ramform Explorer – to be cold stacked in 2H 2015

2D/EM/Source

Sanco Spirit

Atlantic Explorer

PGS fleet – Flexible, with high towing capacity

- 28-

Appendix Productivity Leadership is Key for Differentiation

Significant vessel decommissioning

Source: The cash cost curve is based on PGS' internal estimates and typical number of streamer towed, and excludes GeoStreamer productivity effect. The graph shows all seismic vessels operating in the market and announced new-builds. The Ramform Titan-class vessels are incorporated with 15 streamers, S-class with 14 streamers and the V-class with 12 streamers.

Appendix Main Yard Stays Next 12 Months

Vessel	When	Expected Duration	Type of Yard Stay
Apollo	July 2015	Approximately 10 days	Upgrade of deflectors and other in-sea equipment
Sanco Spirit	October 2015	Approximately 7 days	Renewal class (vessel owner Sanco's cost)
Ramform Sterling	October 2015	Approximately 10 days	Upgrade to GeoStreamers
Ramform Valiant	October 2015	Approximately 15 days	Intermediate class
Ramform Viking	March 2016	Approximately 22 days	Main class