Electromagnetic Geoservices ASA

Investor Presentation • Mar 4, 2014

ELECTROMAGNETIC GEOSERVICES ASA

DNB Markets 7th Annual Oil, Offshore & Shipping Conference CEO Roar Bekker and CFO Svein Knudsen Oslo, March 2014

EMGS IN BRIEF

• EMGS is building the EM market
• Increase adoption of the technology
• Make EM an integrated part of the exploration workflow
• Delivered more than 700 surveys
• Strong technology track-record in the Barents Sea
• Flexible business model
• "Asset light"; lease vessels, own equipment
• Short lead time
• Demand-driven growth
• Listed on the Oslo Stock Exchange March 2007
• USD 145 million in full-year 2013 revenues

FINANCIAL OVERVIEW

Financial highlights 2013

• Revenues of USD 144.6 million
• EBITDA of USD 17.5 million

Expanding the multi-client segment

• Multi-client sales of USD 33.3 million in 2013
• Major investments in Brazil and Barents Sea, total MC investments of USD 32.1 million in 2013
• Net book value of USD 28.1 at year end
• Partnering with TGS

Strong financial position

• Cash at USD 56.5 million
• NIBD at USD 0.3 million
• Bond issue of NOK 350 million completed in July 2013

Revenues (USD Million)

Balance sheet as at 31.12.13 (USD million)

ACCELERATE CUSTOMER ADOPTION

Adoption = #key users	TARGET companies: NOCs & selected IOCs
	Priorities to accelerate adoption: • Deliver quality projects – secure satisfaction and build confidence • Long-term dedication & tailored strategy for each customer • Long-term contracts • Authorities & regulators • Multi-client is crucial – more companies can test and more cases to show • Cooperation with seismic companies
~20 key ~7-8 users key users Current Target 2015

PEMEX – LARGE SCALE ADOPTER OF EM

Second large long-term contract

• USD ~100 million
• Estimated to 15-16 vessel months
• Possible extensions of 2 x USD 25 million

Confirms value proposition of EM

• Portfolio optimisation, important part of PEMEX' deep water exploration program
• Boost in PEMEX's reserve replacement ratio
• Higher probability of success and better volume assessments
• Reduced finding costs

PEMEX – good showcase on how to increase penetration

• Close interaction, knowledge sharing and internal training
• 2 long-term contracts

EM INTRODUCED IN PORTFOLIO MANAGEMENT

ACCELERATE CUSTOMER ADOPTION

Multi-client projects provide good «show cases» and include sales potential

EM technology improves exploration success in Barents sea – sales potential for 2014 and beyond:

• 110 blocks (> 30,000m2) covered in the Barents Sea
• Expanded cooperation with TGS
• 57 open blocks, well positioned for the 23rd licensing round
• Strong technology track record
• EM results match drilling results in 20 of 20 wells
• Recent Wisting and Skavl discoveries confirm value of seismic and EM integration

Investment in Brazil – sales potential for 2014 and beyond:

• Brazil library will cover ~30,000 km²of 3D EM data
• Up to 8,000 km2 in Foz do Amazonas
• Combining 2D seismic and 3D EM through collaboration with Spectrum
• 11th licensing round spring 2013
• Foz do Amazonas & Ceara basin with highest interest

STRATEGIC PARTNERSHIP WITH NORTH ENERGY

Substantial multi-client sale – USD 12.1 million

• Sale of Barents Sea EM data library
• Payment in convertible bond strike price of NOK 4.15, coupon of 6% and maturity 6 months

Pre-funding of future Barents campaign – USD 1.6 million

• Commitment from North Energy to pre-fund
• Payment in cash

Sale of consulting services – USD 2.4 million

• Integration of EM into North Energy's exploration workflow
• Payment in cash

EMGS participate in private placement

• EMGS participate with NOK 20 million in North Energy's private placement
• Strengthening the cooperation
• Board member nominated by EMGS

Fits our strategy - integrating EM in the exploration workflow

VESSEL SCHEDULE

Expected vessel schedule as of 5 February 2014

SUMMARY

Building the EM market

• Deliver quality projects
• Close interaction with long-term customers
• Cooperate with seismic companies & authorities

Short-term outlook

• Good contract coverage for 1H14
• Better positioned for 2014 than 2013
• Improved order backlog
• Exploration achievements confirm technology's value proposition and increase market awareness

Long-term outlook

• Pursuing large contract opportunities
• Well positioned library of multi-client data
• Exciting investment opportunities
• Full year 2014 revenue guiding of more than USD 200 million

APPENDIX

VESSEL CHARTERS AND YARD STAYS

	BOA Thalassa	BOA Galatea	Atlantic Guardian	EM Leader	EM Express
Firm Charter	December 2015	July 2015	1 March 2016	Standby in Las Palmas (charter until 3 December 2013)	Standby in Bergen at no cost to EMGS.
Options	1 x 1 year	2 x 1 year	3 x 1 year	Optional 1-, 3-, 6- or 12-month charters until 9 March 2015	Optional 3-, 6- or 12-month charters until 9 May 2014. Vessel owner has the option to terminate the agreement.
Yard stays		~ 14 days in Q2/Q3 2014: 5 year class renewal	~ 5 weeks in Q2/ Q3 2014		Not applicable

MARKET UPDATE

Order book (USD Million)

Contract coverage

• Contract for Apache in Australia
• Two vessels operating for Pemex

Multi-client sales

• Sales to North Energy in Q1
• Developed opportunities in Norway, US GoM and Canada

Contract opportunities

• Contract negotiations in Norway, Brazil, Angola, India and Southeast Asia

Continued focus on large NOC contracts

• Targeting to close 1-2 major contracts in 2014

CONSOLIDATED INCOME STATEMENT

USD million	QUARTER ENDING		YEAR ENDING
	31.12.2013	31.12.2012	31.12.2013	31.12.2012
Contract sales	40.1	34.6	111.3	176.1
Multi-client sales	4.8	10.4	33.3	24.7
Total revenues	44.9	45.0	144.6	200.8
Charter hire, fuel and crew expenses	20.3	12.7	51.2	68.8
Employee expenses	12.9	16.2	54.3	55.1
Other operating expenses	5.1	6.0	21.5	21.1
EBITDA	6.5	10.1	17.5	55.9
Depreciation and ordinary amortisation	4.3	4.1	17.5	13.9
Multi-client amortisation	1.1	4.3	12.3	12.7
EBIT	1.1	1.7	(12.3)	29.2
Net financial items	0.3	(2.9)	(0.9)	(11.3)
Profit /(loss) before tax	1.4	(1.2)	(13.2)	17.9
Income tax expense	0.1	(0.5)	1.9	6.0
Net profit /(loss)	1.3	(0.7)	(15.1)	11.9

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

USD million		YEAR ENDING
	31.12.2013	31.12.2012
ASSETS
Goodwill	14.4	14.4
Multi-client library	28.1	14.1
Intangible assets	3.4	4.9
Property, plant and equipment	27.7	32.3
Assets under construction	19.2	10.9
Total non-current assets	92.8	76.6
Trade receivables	31.5	47.0
Other current assets	29.4	27.8
Cash and cash equivalents	55.3	39.3
Restricted cash	1.2	8.5
Total current assets	117.5	122.6
TOTAL ASSETS	210.3	199.2
EQUITY AND LIABILITIES
Total equity	102.2	114.0
Total non-current liabilities	67.3	52.1
Trade payables	15.9	9.6
Current tax liability	2.3	2.4
Other short term liabilities	22.4	19.8
Borrowings	0.1	1.3
Total current liabilities	40.8	33.1

TOTAL EQUITY AND LIABILITIES 210.3 199.2

CONSOLIDATED STATEMENT OF CASH FLOW

USD million	YEAR ENDING
	31.12.2013	31.12.2012
Net cash flow from operating activities	57.6	28.7
Net cash flow from investing activities	(51.1)	(42.8)
Net cash flow from financial activities	9.5	(4.5)
Net increase in cash	16.0	(18.5)

LARGEST SHAREHOLDERS (AS OF 5 FEBRUARY)

	SHAREHOLDER	SHARES	HOLDING
1	FIDELITY FUNDS	11 505 317	5.76 %
2	MORGAN STANLEY & CO S/A MSCO CLIENT EQUI	10 574 938	5.29 %
3	SKAGEN GLOBAL	10 124 112	5.07 %
4	ODIN OFFSHORE	8 473 631	4.24 %
5	ODIN NORGE	7 838 224	3.92 %
6	VERDIPAPIRFONDET DNB	7 700 000	3.86 %
7	CLEARSTREAM BANKING	6 222 541	3.12 %
8	SKAGEN VEKST	5 029 207	2.52 %
9	VERDIPAPIRFONDET DNB	4 859 407	2.43 %
10	J.P. MORGAN CHASE BA A/C US RESIDENT NON	4 554 314	2.28 %
11	MOMENTUM INVESTMENTS	3 875 000	1.94 %
12	STATOIL PENSJON C/O JP MORGAN CHASE	3 783 655	1.89 %
13	SKAGEN GLOBAL II	3 282 333	1.64 %
14	SUNDT AS	3 026 833	1.52 %
15	JPMORGAN CLEARING CO A/C CLEARING ACCOUNT	3 006 833	1.51 %