PGS ASA — Capital/Financing Update 2010

Nov 15, 2010

PGS strengthens capital base to invest in fleet expansion

-          Launches fifth generation Ramform series to provide for vessel

renewal and growth

-          Raises up to NOK 1.7 billion in private placement to maintain

strong balance sheet and strategic flexibility

-          Dividend program to be implemented from financial year 2011

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Oslo, Norway, November 15, 2010:

Petroleum Geo-Services ASA ("PGS" or the "Company") has decided to effect a

private placement, directed towards professional Norwegian and international

investors, after the close of Oslo Børs today. The private placement comprises

of up to 19,799,998 new shares, with the price to be determined through an

accelerated book-building process. For detailed information about the private

placement, please refer to the separate press release issued by PGS today.

The equity issue is initiated in connection with the launching of a program to

renew and expand PGS' industry leading fleet of seismic vessels by building two

fifth generation Ramform vessels. The Company expects that the new vessels will

cost approximately USD 250 million each, including construction follow-up,

commissioning and a comprehensive seismic package. The Company expects that the

yard contract will include the option for two further identical vessels. PGS is

currently in discussions with several qualified yards and expects to enter into

a final contract early 2011. Delivery of the first vessel is expected in Q1

2013 with the second vessel expected to be delivered one year later.

PGS has chosen to raise funds by means of an equity issue in order to maintain

its robust financial profile and strategic flexibility. This will ensure that

the Company is positioned to proactively manage any period of weakness in the

seismic market and finance the new build program and any subsequent exercising

of options for additional vessels.

To demonstrate the Company's commitment to return value to its shareholders over

the business cycle, PGS has further concluded to initiate a dividend program

from 2011, with a recommendation to the 2012 AGM for the payment of dividend for

the financial year 2011. Further details will be presented in conjunction with

the Company's reporting of its results for Q4 2010.

PGS President and CEO, Jon Erik Reinhardsen commented:

"Our decision to renew and expand our fleet comes at a time when we expect

growth in seismic demand. We are electing to raise equity to preserve our

financial strength and strategic flexibility. We are dedicated to deliver

shareholder value from this investment through increased earnings and

introduction of a dividend program. "

These fifth generation Ramform vessels will further enhance PGS' position as a

leader in 3D seismic acquisition productivity and efficiency. The vessels are

designed to utilize and extract the full potential from the flagship

GeoStreamer® technology. PGS expects that all of its 3D fleet will be equipped

with GeoStreamer® by end 2013.

The vessel design is based on the demonstrated strengths of the current Ramform

fleet, while improving capabilities along a number of key parameters. The new

vessels will include a significantly upgraded GeoStreamer® based seismic package

and are designed to take the full benefits of the GeoStreamer® towing

efficiency. The vessels will further strengthen PGS' leading position in the

fast growing High Density segment of the market, where large spreads, long

streamers and towing efficiency are the key success factors. The High Density

segments are driven by deep water exploration and production in geologically

complex areas such as Brazil, West Africa and the Gulf of Mexico. Our

GeoStreamer® technology is also opening up new markets in mature basins, such as

the North Sea, where the higher fidelity data can reveal new geological plays.

Further information on the new build program will be given at PGS' Capital

Markets Day in Oslo on December 14, 2010.

***

FOR DETAILS, CONTACT:

Tore Langballe, SVP Corporate Communications

Phone: +47 67 51 43 75

Mobile: +47 90 77 78 41

Bård Stenberg, Investor Relations Manager

Phone: +47 67 51 43 16

Mobile: +47 99 24 52 35

About PGS:

Petroleum Geo-Services (PGS) offers a broad range of products including; seismic

and electromagnetic services, data acquisition, processing, reservoir

analysis/interpretation and multi-client library data. We help oil companies to

find oil and gas reserves offshore worldwide.

For more information on Petroleum Geo-Services, please visit www.pgs.com.

The information included herein contains certain forward-looking statements that

address activities, events or developments that the Company expects, projects,

believes or anticipates will or may occur in the future. These statements are

based on various assumptions made by the Company, which are beyond its control

and are subject to certain additional risks and uncertainties. The Company is

subject to a large number of risk factors including but not limited to the

demand for seismic services, the demand for data from our MultiClient data

library, the attractiveness of our technology, unpredictable changes in

governmental regulations affecting our markets and extreme weather conditions.

For a further description of other relevant risk factors we refer to our Annual

Report for 2009. As a result of these and other risk factors, actual events and

our actual results may differ materially from those indicated in or implied by

such forward-looking statements. The reservation is also made that inaccuracies

or mistakes may occur in the information given above about current status of the

Company or its business. Any reliance on the information above is at the risk of

the reader, and PGS disclaims any and all liability in this respect.

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

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