Electromagnetic Geoservices ASA

Earnings Release • Jun 16, 2015

EMGS implements further cost reductions

EMGS implements further cost reductions

Electromagnetic Geoservices ASA (EMGS) announce that the Company implements

further cost reductions reflecting the challenging market conditions in the oil

service industry.

As communicated in the first quarter report, the Company initiated cost

reduction measures in the beginning of the first quarter. These measures have

proven successful. However, due to further delays in contract negotiations and

lower than expected demand for EM data, EMGS Management has decided to implement

an additional cost reduction program.

The key elements of the program include a reduction of EMGS global headcount

including consultants by 20% and a reduction of the vessel capacity by one

vessel (from four to three). In addition, the Company expects to reduce its

capital expenditures by approximately 50% in 2015 compared to the guidance given

in the fourth quarter 2014 report.

The Company expects annual cost savings of a total of approximately USD 35

million compared to 2014 cost level, as a result of the cost programs initiated.

Restructuring charges of approximately USD 1.3 million, in addition to a

provision related to loss on the EM Leader charter agreement of USD 1.5 million

will be booked in the second quarter 2015. The key elements of the program will

be effective from the beginning of the third quarter 2015.

Although the near-term market is challenging, EMGS believes that the Company's

unique technology, solid financial position and flexible business model makes

the Company well positioned for future growth in the longer term.

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#1928856]