THIRD QUARTER 2016 RESULTS.

Oslo, 3 November 2016 CEO Christiaan Vermeijden, CFO Hege A. Veiseth

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.

Highlights

Third quarter 2016

Geophysical spending continues to be slow
Completion of the JIP test field phase
Acquisition of multi-client data in Norway
Revenues of USD 4.5 million

Subsequent events

Reduction in global employee expenses of around 20%
New terms agreed for the Atlantic Guardian charter, 27% reduction
Provisional award in Asia, valued at USD 8 million
Late sales in Norway, valued at USD 1 million

Financial review

Third quarter key financials

Revenues of USD 4.5 million, mainly multi-client revenues
EBITDA of negative USD 6.2 million
Vessel utilisation of 52%
Multi-client projects and JIP field test

EBITDA

Operational cost base development

Capitalisation of multi-client and JIP test costs
Other operational expenses
Employee expenses
Charter hire, fuel and crew expenses

Comments

Operational costs base of USD 14.2 million
Capitalised multi-client expenses of USD 1.9 million
Capitalised JIP field test expenses of USD 1.7 million
Cost reduction program
- Current cost reduction program progressing as planned
- Further reductions in employee expenses
- New rate for the Atlantic Guardian charter
- Target a 2016 cost base of approximately USD 65 million

*Cost base is defined as total operational costs, i.e. charter hire, fuel and crew expenses, employee expenses and other operating expenses. The cost base includes multi-client and JIP field test investments, i.e. direct costs which are capitalised in the quarter. The cost base excludes capex, interest, and write down of inventory.

Free cash development

Net decrease in free cash of USD 5.5 million
Cash and cash equivalents at end of Q3 of USD 19.8 million, incl restricted cash
Restricted cash of USD 4.1 million at end of Q3

Multi-client investments

Overview of book value of multi-client library (USD million)

Uplift/late sales revenues of USD 4.0 million in Q3
Investments of USD 1.9 million in Q3
Hammerfest Basin and Loppa High Area
Preparations for the APA and 24th licensing round
Amortisation of USD 2.8 million
Straight-line amortisation
Book value of USD 32.2 million at end of Q3

Operations, Market and Outlook

Third quarter vessel operations

The Barents Sea success story continued…

Coming up: 24th licensing round!

In press releases in Q3 2016, the Ministry of Petroleum and Energy invited oil companies to nominate blocks for the 24th licensing round.
Deadline for nominations: November 30, 2016.
The announcement of the 24th licensing round is expected before summer 2017.
EMGS is in consultation with partners and customers expanding the library in anticipation.
EMGS and partners road shows (3x) held during Q3 2016. Healthy interest shown with 20+ customers attending.

	TGS
remgs
	EXPLORATION UNLEASHED
	We Can't Stop Exploring - Can You?
You are invited to TGS' Exploration Unleashed Technical Seminar in cooperation with EMGS and VBPR. Please join us for this one-day event to get our take on 24th round prospects in the Barents Sea, see examples from our latest high quality datasets and integrated products, and get the latest insight on how our exploration tools are developing.
	Please R3VP now to save your seat at your preferred location and view full agenda.
	Harstad
	25 October 2016
$10:00 - 15:20$
	OLIO
	26 October 2016
	$10.00 - 15.20$

	Stavanger
	27 October 2016 10:00 - 15:20
	Lunch will be provided.
	RSVP
		$f\ln y$

EMGS Mexico Reprocessing Project Regionally Calibrated CSEM Interpretation

"Once the prospects were drilled, an extraordinary match between proven hydrocarbons and areal distribution of resistivity was observed."

M. Arreguin Manager New Areas and Partnerships Pemex, Mexico D.F.

September 7, 2016 AAPG/SEG International Conference & Exhibition Cancun, Mexico

EMGS has over 16,000 km² of re-processed multi-client data in the Perdido and Salinas basins offshore Mexico. This regionally calibrated dataset offers a comprehensive analysis of the hydrocarbon potential for Rounds 1 and 2 of the license round. Join us in our Mexico Data Room for a hands-on preview of live data, with ties to key wells and discoveries, like Trion.

Eastern Newfoundland CSEM Program

CSEM data in good agreement with well results, fueling interest in using CSEM to de-risk wells in the Flemish Pass and Orphan Basin.
Ongoing license round in Eastern Newfoundland may increase demand for CSEM in the region.
EMGS roadshow held during AAPG in Calgary during Q2. Follow-up meetings in Q3.

http://www.cnlopb.ca/pdfs/landissuance/nl1601legal.pdf?lbisphpreq=1

Selection of current opportunities

deadline: November 2016

Norway:

Coverage in the Barents Sea expanded in H2 2016 in anticipation of the nominations and announcements during the 24th licensing round
Nominations deadline: November 2016
Announcements expected: June 2017

US:

MC data available for annual licensing rounds
Great White data a natural extension of the Mexican Perdido area for an improved regional understanding

Mexico:

Results from PoC study delivered, creating opportunities for contract work in 2017
Reprocessed 3D MC data (16,000 sqkm), available for sale during Q4 and onwards
Round 1 deadline: December 2016

Brazil:

12,300 sqkm MC data from Sergipe-Alagoas, Foz and Ceara available for sale
Round 14 expected to be announced in 2017
East Africa (looking for prefunding):
EMGS received a provisional award in Q3 '16 from INP Mozmbique in relation to an MC agreement.
EMGS and NOCK signed an MC agreement in Q2 '16. Prefunding interest in Kenya being explored.

India:

• MC data marketing ongoing

Indonesia:

• 2,800 sqkm MC data available.

Other:

• Progress on contract opportunities for Q4 2016 / Q1 2017 in Myanmar, Vietnam and Malaysia. Provisional award received.

Market update

Early signs of improvement noted as earlier dialogues are converted in pricing requests and one provisional award (Asia).
However, caution is required as offshore geophysical spending dropped down to 2003 levels and improvements are expected to be within single digits.

"International E&P spending in 2017 to be flat to up singledigits based on preliminary estimates as the IOCs' continued focus on dividends, capital preservation and balance sheet strength will outweigh any opportunities to increase spending."

"2017 estimate assumes a 5-10% increase in E&P spending from NOCs, offset by declines for all other customer types which are expected to see declines for a 3rd straight year."

Order backlog - limited earnings visibility

*Source: Includes, ABG sundal Collier (Oct. 2016) and Barclays (Sept. 2016)

Summary and outlook

Offshore geophysical spending dropped to 2003 levels during 2016, some improvement expected in 2017
The market remains challenging and is dominated by high uncertainty to bring leads to fruition, demanding a strong focus on cost control and cost reductions
Cost reductions announced in October 2016, with some effects to yield immediately (new vessel charter agreement) and others gradually (reduction in payroll expenses)
Completion of various multi-client projects in Norway, including Hammerfest and Barents Sea. JIP sea trials completed successfully. Technical results very promising
Low level of late sales and uplifts recorded during Q3. Customers in Norway focusing on APA and the 24th licensing round
Some earlier dialogue converted into requests for pricing and one provisional award (USD 8 million)

Questions?

Appendix

Consolidated Income Statement

Amounts in USD 1 000	Q3 2016 Unaudited	Q3 2015 Unaudited	Year to date 2016 Unaudited	Year to date 2015 Unaudited	2015 Audited

Operating revenues
Contract sales	393	9,110	13,818	36,008	45,008
Multi-client pre-funding	-	2,454	-	3,546	3,546
Multi-client late sales	4,061	4,741	18,740	21,089	32,586
Total revenues	4,454	16,305	32,558	60,643	81,140

Operating expenses
Charter hire, fuel and crew expenses	2,653	9,329	11,948	20,595	32,402
Employee expenses	5,693	11,209	19,112	33,599	44,826
Depreciation and ordinary amortisation	1,678	3,459	5,721	9,973	12,679
Multi-client amortisation	2,769	2,571	8,417	4,475	8,631
Impairment of long-term assets	-	5,473	9,228	22,775	31,344
Other operating expenses	2,283	5,719	8,255	15,146	20,607
Total operating expenses	15,076	37,760	62,681	106,563	150,489

Operating profit/ (loss)	(10,622)	(21,455)	(30,123)	(45,920)	(69,349)

Interest income	66	108	162	325	352
Interest expense	(768)	(1,021)	(2,558)	(3,041)	(4,055)
Net gains/(losses) of financial assets and liabilities	1,295	(3,115)	(3,995)	(4,901)	(4,106)
Net foreign currency income/(loss)	(1,406)	1,655	(1,524)	2,628	4,155
Net financial items	(813)	(2,374)	(7,915)	(4,989)	(3,654)

Income/ (loss) before income taxes	(11,435)	(23,829)	(38,038)	(50,909)	(73,003)
Income tax expense	(371)	1,540	(316)	1,685	3,712
Income/ (loss) for the period	(11,064)	(25,369)	(37,722)	(52,594)	(76,715)

Consolidated Statement of Financial Position

Amounts in USD 1 000 Unaudited Unaudited Audited ASSETS Non-current assets Deferred tax asset - 1,846 - Multi-client library 32,215 53,129 42,267 Other intangible assets 2,810 4,169 3,703 Property, plant and equipment 13,560 17,867 16,773 Assets under construction 30,319 27,540 26,566 Financial assets - 1,898 1,387 Total non-current assets 78,904 106,449 90,696 Current assets Spare parts, fuel, anchors and batteries 8,621 12,716 11,754 Trade receivables 8,264 15,343 18,580 Other receivables 7,631 17,661 5,665 Cash and cash equivalents 15,718 20,223 31,749 Restricted cash 4,131 2,718 6,680 Total current assets 44,365 68,661 74,428 Total assets 123,269 175,110 165,124	30 September 2016	30 September 2015	31 December 2015

	30 September 2016	30 September 2015	31 December 2015
Amounts in USD 1 000	Unaudited	Unaudited	Audited

EQUITY
Capital and reserves attributable to equity holders
Share capital, share premium and other paid-in equity	319,233	287,635	319,038
Other reserves	901	(6,066)	(6,416)
Retained earnings	(272,377)	(210,535)	(234,652)
Total equity	47,757	71,034	77,970

LIABILITIES
Non-current liabilities
Provisions	19,045	16,875	17,371
Financial liabilities	2,368	-	-
Borrowings	34,001	635	30,848
Total non-current liabilities	55,414	17,510	48,219

Current liabilities
Trade payables	6,649	16,068	10,439
Current tax liabilies	5,324	4,733	5,257
Other short term liabilities	7,930	18,763	16,243
Financial liabilities	-	-	6,326
Borrowings	195	47,002	670
Total current liabilities	20,098	86,566	38,935

Total liabilities	75,512	104,076	87,154

Total equity and liabilities	123,269	175,110	165,124

Largest shareholders as of 2 November

Shareholder	Shares	Holding

1 SIEM INVESTMENTS INC.	7,844,249	23.92
2 PERESTROIKA AS	6,993,857	21.33
3 MORGAN STANLEY & CO. LLC	4,507,948	13.75
4 BÆKKELAGET HOLDING AS	796,250	2.43
5 STATOIL PENSJON C/O JP MORGAN	735,458	2.24
6 SPORTSMAGASINET AS	575,001	1.75
7 NHO - P665AK	404,485	1.23
8 KRISTIAN FALNES AS	400,000	1.22
9 NORDNET LIVSFORSIKRING	377,755	1.15
10 J&J INVESTMENT AS	330,000	1.01
11 DNB NAVIGATOR (II)	319,543	0.97
12 VILLA UTVIKLING AS	200,000	0.61
13 STATOIL FORSIKRING A.S	190,017	0.58
14 KOVCKI RAMADAN	160,575	0.49
15 RYGG JAN WIGGO	157,056	0.48
16 FALNES OLAV KRISTIAN	150,000	0.46
17 FLATHOLMEN AS	137,000	0.42
18 VESTVIK PRESERVERING	115,746	0.35
19 HAAV HOLDING AS	112,500	0.34
20 NORDNET BANK AB	110,981	0.34

Vessel charters

	BOA Thalassa	Atlantic Guardian
Firm Charter	1 April 2017	1 October 2021
Q3 status	Laid up, Asia	In operation, Norway
Vessel owner	BOA Offshore	North Sea Shipping
Rates	Flexible rates for when (i) in operation, (ii) idle and (iii) laid up	Fixed

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