Electromagnetic Geoservices ASA

Earnings Release • Jun 2, 2015

ELECTROMAGNETIC GEOSERVICES

Madrid, EAGE conference, June 2015

Disclaimer

This quarterly presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Electromagnetic Geoservices ASA (EMGS) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the EMGS' businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Electromagnetic Geoservices ASA believes that its expectations and the information in this Report were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this Report. Electromagnetic Geoservices ASA nor any other company within the EMGS Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Report, and neither Electromagnetic Geoservices ASA, any other company within the EMGS Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Report. Electromagnetic Geoservices ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in the Report.

EMGS today

• The leading provider of electromagnetic (EM) services

• A unique and proven technology 3D platform
• Full-azimuth 3D EM
• Next generation EM equipment with Shell and Statoil
• Strong financial position
• Growing multi-client libraries in key regions
• 4 vessels in operation
• Listed at Oslo Stock Exchange

Electric resistivity has been used for centuries in well logs..

Uniquely positioned for growth

Growing the market

• Increase adoption

Multi-client – an important part of EMGS business model

• A proven business model
• Increased share of revenue
• Access to seismic data important
• Creating regional and strategic «hubs» of EM data
• Investing in future revenue and increased adoption
• Important success criteria for sales to have data to show

Multi-client revenues amounted to 31% of 2014 revenues

Multi-client data examples - important success critera for sales

Arbitrary seismic profile from Wisting and the surrounding area

Well positioned multi-client library in key regions

Profitable multi-client investments

Overview first quarter 2015

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Revenues and revenues/costs per vessel month (USD Million) Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 EBITDA (USD Million) Contract Multi-client Costs per vessel month Revenues per vessel month

Capital Structure

Balance sheet as at 31.03.15 (USD million)

• Cash at USD 38.9 million, up from USD 26.6 million end of previous quarter
• Trade receivables decreased by USD 27.1 million to USD 38.5 million
• Trade payables decreased by USD 3.9 million to USD 9.4 million
• Financing
• Forward rate agreement secures book value of bond loan to USD 46 million
• Secured additional credit facility of USD 10 million
• Net book value of multi-client library of USD 40.1 million
• Low amortisation rate due to sales from projects fully amortised
• Impairment related to Sunshine and Ceara projects of USD 2.9 million
• MC investments of USD 12.0 million in Q1

Market and outlook

License round activity – key drivers for EMGS revenue

- Annual licensing round, close Nov US Gulf of Mexico - Annual licensing round, western area close Aug - Annual licensing round, eastern area close March - Annual licensing round, close Nov Norway - Annual licensing round (23. round) close Dec - Annual APA round, close Sept Indonesia - Annual licensing round, close Dec

Canada

Mexico

North and South America region

Uruguay

• Contract with BG Group completed 17 April
• Total revenue of ~USD 28 million

US Gulf of Mexico

• Daybreak US GoM
• Radiant US GoM
• Lightning Bolt US GoM

Mexico

• Working on both contract and multi-client opportunities
• CNH awarded 7 seismic permits

Canada

• Well positioned for new projects

North and South America region – examples from Brazil

• Data set from Brazil indicates that EM is a good indicator for predicting outcome of wells

• 1900 sq.km 3D EM in Sergipe Alagoas basin

• 18 well locations within EM sensitivity window
• 11 wells were drilled after EMGS published these results in 2013
• Most recent oil discovery, 3-SES-184, announced 29 April 2015
• Major discoveries associated with high resistivity

Sergipe Alagoas basin

EMEA and Asia

Norway

• Barents Sea/ completed MC campaign
• New campaign/ APA related
• Deadline for applications 2 September
• 23rd licensing round main driver for sales revenue in Norway in 2015
• Expect related late sales Q2 and Q3
• Up-lift revenue potential Q1 2016
• Expect some contract activity during 2015, although lower than 2014

Africa

• Contract opportunities for 2H 2015

Asia

• Multi-client projects Indonesia
• Positioned for contracts in the region

Summary and outlook

• Demand for geophysical data has declined in the first quarter and outlook remains uncertain
• Delays in contract negotiations, used opportunity to invest in well positioned multi-client projects
• Target spesific geographic areas, both contract and multiclient, where budgets are allocated
• Cost reduction program initiated early Q1
• Management closely monitor market development and further initiatives will be implemented if needed
• While near-term market is challenging, the EM technology, a solid balance sheet and flexible business model position the Company for future growth in the longer term

Questions?

Appendix

Diversified portfolio with different characteristics

	EMGS multi-client project portfolio
Return targets	<2.0x	2.0x – 2.5x	>2.5x
Prefunding requirements	70-150%	50-70%	0-50%
Uplift potential	No	Some	Yes
Project characteristics	- Awarded acreage - Fewer customers - Potential farm-ins - Available seismic data	- Mainly open acreage - Regular license rounds - Established MC areas - Many customers - Available seismic data	- Open acreage - Early stage - Many customers - Available seismic data

Income statement

USD million	Quarter ending		Year ending
	31.03.2015	31.03.2014	31.12.2014	31.12.2013
Contract sales	22.1	46.4	137.2	111.3
Multi-client sales	10.2	14.9	60.8	33.3
Total revenues	32.3	61.3	198.0	144.6
Charter hire, fuel and crew expenses	7.6	20.6	61.3	51.2
Employee expenses	13.1	15.7	55.2	54.3
Other operating expenses	4.4	4.6	22.5	21.5
EBITDA	7.2	20.4	59.0	17.5
Depreciation and ordinary amortisation	3.2	4.3	16.3	17.5
Multi-client amortisation and impairment	3.3	3.3	14.6	12.3
EBIT	0.7	12.8	28.1	(12.3)
Net financial items	(1.9)	(1.1)	3.1	(0.9)
Profit /(loss) before tax	(1.1)	11.7	31.2	(13.2)
Income tax expense	0.1	3.4	5.3	1.9
Net profit /(loss)	(1.2)	8.2	25.9	(15.1)

Financial position

USD million	Period ending
ASSETS	31.03.2015	31.03.2014
Goodwill	14.4	14.4
Deferred tax asset	3.0	1.9
Multi -client library	40.1	28.0
Other intangible assets	3.0	2.9
Property, plant and equipment	16.8	24.3
Assets under construction	33.2	20.9
Financial assets	2.2	4.0
Total non -current assets	112.8	96.4
Trade receivables	38.5	41.8
Other current assets	34.5	41.9
Cash and cash equivalents	38.2	47.1
Restricted cash	0.7	1.0
Total current assets	111.9	131.8
TOTAL ASSETS	224.6	228.2
EQUITY AND LIABILITIES
Total equity	122.4	112.1
Total non -current liabilities	62.4	69.4

Trade payables	9.4	16.2
Current tax liability	4.7	5.5
Other short term liabilities	24.5	21.6
Borrowings	1.2	3.5
Total current liabilities	39.9	46.7
TOTAL EQUITY AND LIABILITIES	224.6	228.2

Cash flow

USD million	Period ending
	31.03.2015	31.03.2014
Net cash flow from operating activities	28.1	(0.7)
Net cash flow from investing activities	(14.6)	(9.7)
Net cash flow from financial activities	(0.5)	2.2
Net increase/(decrease) in cash	13.0	(8.2)

Largest shareholders (as of 6 May)

	Shareholder	Shares	Holding
1	SIEM INVESTMENTS INC	22,926,866	11.48
2	PERESTROIKA AS	18,889,449	9.46
3	Morgan Stanley & Co. MS & CO LLC MSCO CLI	18,582,500	9.30
4	ODIN OFFSHORE	9,651,299	4.83
5	CLEARSTREAM BANKING	7,551,706	3.78
6	ODIN NORGE	7,522,609	3.77
7	VERDIPAPIRFONDET DNB	5,157,708	2.58
8	SKAGEN VEKST	5,029,207	2.52
9	VERDIPAPIRFONDET DNB	4,916,670	2.46
10	STATOIL PENSJON C/O JP MORGAN CHASE	4,568,645	2.29
11	J.P. Morgan Chase Ba SPECIAL TREATY LENDI	2,672,385	1.34
12	SUNDT AS	2,426,833	1.21
13	VPF NORDEA AVKASTNIN C/O JPMORGAN EUROPE	2,137,190	1.07
14	SPORTSMAGASINET AS	2,000,000	1.00
15	DNB NAVIGATOR (II)	1,961,343	0.98

Vessel charters and yard stays

	BOA Thalassa	BOA Galatea	Atlantic Guardian	EM Leader
Firm Charter	December 2015	July 2016	1 March 2016	8 December 2016
Options		1 x 1 year	3 x 1 year	2 x 1 year
Vessel owner	BOA Offshore	BOA Offshore	North Sea Shipping	Seatrans

Electromagnetics in the E&P workflow

Probability of Economic Success & Volumetrics