Electromagnetic Geoservices ASA

Earnings Release • May 7, 2015

FIRST QUARTER 2015 RESULTS.

Oslo, 7 May 2015, CFO Svein Knudsen

Disclaimer

This quarterly presenta0on includes and is based, inter alia, on forward-looking informa0on and statements that are subject to risks and uncertain0es that could cause actual results to differ. Such forward-looking informa0on and statements are based on current expecta0ons, es0mates and projec0ons about global economic condi0ons, the economic condi0ons of the regions and industries that are major markets for Electromagne0c Geoservices ASA (EMGS) and its subsidiaries. These expecta0ons, es0mates and projec0ons are generally iden0fiable by statements containing words such as "expects", "believes", "es0mates" or similar expressions. Important factors that could cause actual results to differ materially from those expecta0ons include, among others, economic and market condi0ons 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 regula0ons, interest rates, fluctua0ons in currency exchange rates and such other factors as may be discussed from 0me to 0me. Although Electromagne0c Geoservices ASA believes that its expecta0ons and the informa0on in this Report were based upon reasonable assump0ons at the 0me when they were made, it can give no assurance that those expecta0ons will be achieved or that the actual results will be as set out in this Report. Electromagne0c Geoservices ASA nor any other company within the EMGS Group is making any representa0on or warranty, expressed or implied, as to the accuracy, reliability or completeness of the informa0on in the Report, and neither Electromagne0c 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 resul0ng from your use of the informa0on in the Report. Electromagne0c Geoservices ASA undertakes no obliga0on to publicly update or revise any forward-looking informa0on or statements in the Report.

Overview first quarter 2015

• Experience progress, but delays in contract nego0a0ons
• Norwegian mul0-client library con0nue to perform well
• 23rd licensing round in Norway, EMGS well posi0oned
• APA rounds provide upli^ revenues
• EM Leader working for BG Group in Uruguay through the quarter
• Cost reduc0on measures ini0ated in Q1

Key figures Q1

• Revenues of USD 32.3 million
• Contract revenues of USD 22.1 million
• Mul0-client revenues of USD 10.2 million
• EBITDA of USD 7.2 million
• Net loss of USD 1.2 million

Revenues and revenues/costs per vessel month (USD Million)

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 addi0onal credit facility of USD 10 million
• Net book value of mul0-client library of USD 40.1 million
• Low amor0sa0on rate due to sales from projects fully amor0sed
• Impairment related to Sunshine and Ceara projects of USD 2.9 million
• MC investments of USD 12.0 million in Q1

Vessel u0lisa0on first quarter 2015

Market and outlook

Mul0-client – an important part of EMGS business model

• A proven business model
• Increased share of revenue
• Access to seismic data important
• Crea0ng regional and strategic «hubs» of EM data
• Inves0ng in future revenue and increased adop0on
• Important success criteria for sales to have data to show

Diversified pormolio with different characteris0cs

	EMGS mul0-client project pormolio
Return targets	<2.0x	2.0x – 2.5x	>2.5x
Prefunding requirements	70-150%	50-70%	0-50%
Upli^ poten0al No		Some	Yes
Project characteris0cs	- Mainly open acreage - Awarded acreage - Open acreage - Regular license rounds - Fewer customers - Early stage - Established MC areas - Poten0al farm-ins - Many customers - Many customers - Available seismic data - - Available seismic data		Available seismic data

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 mul0-client opportuni0es
• CNH awarded 7 seismic permits
• Final confirma0on on acreage included in round 1 expected shortly

Canada

• Well posi0oned for new projects

North and South America region – examples from Brazil

• Data set from Brazil indicates that EM is a good indicator for predic0ng outcome of wells

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

• 18 well loca0ons within EM sensi0vity window
• 11 wells were drilled a?er EMGS published these results in 2013
• Most recent oil discovery, 3-SES-184, announced 29 April 2015
• Major discoveries associated with high resis0vity

Sergipe Alagoas basin

EMEA and Asia

Norway

• Barents Sea/ completed MC campaign
• New campaign/ APA related
• Deadline for applica0ons 2 September
• 23rd licensing round – main driver for sales revenue in Norway in 2015
• Expect related late sales Q2 and Q3
• Up-li^ revenue poten0al Q1 2016
• Expect some contract ac0vity during 2015, although lower than 2014

Africa

• Contract opportuni0es for 2H 2015

Asia

• Mul0-client projects Indonesia
• Posi0oned for contracts in the region

Market update

Contract opportuniHes

• Expect to keep one vessel in Asia in 2015
• Opening up of Mexican shelf expected to increase ac0vity
• Focus on na0onal oil companies (NOCs), o^en invest through cycles
• Target specific areas where IOC budgets are allocated

MulH-client projects

• Con0nue to invest in key mul0-client libraries
• Increased adop0on
• Future revenue streams
• Collabora0on with seismic companies

Summary and outlook

• Demand for geophysical data has declined in the first quarter and outlook remains uncertain
• Delays in contract nego0a0ons, used opportunity to invest in well posi0oned mul0-client projects
• Target spesific geographic areas, both contract and mul0 client, where budgets are allocated
• Cost reduc0on program ini0ated early Q1
• Management closely monitor market development and further ini0a0ves will be implemented if needed
• While near-term market is challenging, the EM technology, a solid balance sheet and flexible business model posi0on the Company for future growth in the longer term

Ques0ons?

Appendix

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
Mul0-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 opera0ng expenses	4.4	4.6	22.5	21.5
EBITDA	7.2	20.4	59.0	17.5
Deprecia0on and ordinary amor0sa0on	3.2	4.3	16.3	17.5
Mul0-client amor0sa0on 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 posi0on

USD million	Period ending
ASSETS	31.03.2015	31.03.2014
Goodwill	14.4	14.4
Deferred tax asset	3.0	1.9
Mul0-client library	40.1	28.0
Other intangible assets	3.0	2.9
Property, plant and equipment	16.8	24.3
Assets under construc0on	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 equity	122.4	112.1
Total non-current liabiliHes	62.4	69.4
Trade payables	9.4	16.2
Current tax liability	4.7	5.5
Other short term liabili0es	24.5	21.6
Borrowings	1.2	3.5
Total current liabiliHes	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 operaHng acHviHes	28.1	(0.7)
Net cash flow from invesHng acHviHes	(14.6)	(9.7)
Net cash flow from financial acHviHes	(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	Atlan0c Guardian	EM Leader
Firm Charter	December 2015	July 2016	1 March 2016	8 December 2016
Op0ons		1 x 1 year	3 x 1 year	2 x 1 year
Vessel owner	BOA Offshore	BOA Offshore	North Sea Shipping	Seatrans