PGS ASA — Capital/Financing Update 2016

Nov 22, 2016

Strengthening Balance Sheet to Navigate Current Market Environment

Investor Update – 22 November 2016

Disclaimer (1/2)

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The information contained in this presentation is provided as of the date of this presentation and may be updated, completed, revised and amended and may change materially in the future. In particular, any estimates, projections, forecasts, targets, prospects or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumption and are based upon the best judgment of the Company, subject to change without notice, and each recipient should satisfy itself in relation to such matters. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company, the managers or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. Any proposed terms in this document are indicative only and remain subject to contract. Neither the communication of this presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of its business.

The presentation has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of the Company or the managers or any of their respective parent or subsidiary undertakings or associated companies, or any of such person's respective directors, officers, employees, agents, affiliates or advisers, as to, and no reliance should be placed for any purpose whatsoever on the truth, fullness, accuracy, completeness or fairness of the information or opinions contained in this presentation or any other information relating to the Group or, associated companies or affiliates, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available and no responsibility or liability whatsoever is assumed by any such persons for any such information or opinions or for any errors or omissions or for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. In giving this presentation, none of the Company, the managers or any of their respective parent or subsidiary undertakings or associated companies, or any of such person's respective directors, officers, employees, agents, affiliates or advisers, or any other party undertakes or is under any obligation to amend, correct or update this presentation or to provide the recipient with access to any additional information that may arise in connection with it. None of the foregoing persons accepts any responsibility whatsoever for the contents of this presentation, and no representation or warranty, express or implied, is made by any such person in relation to the contents of this presentation. To the fullest extent permissible by law, such persons disclaim all and any responsibility or liability, whether arising in tort, contract or otherwise, which they might otherwise have in respect of this presentation. The Company obtained certain industry and market data used in this presentation from publications and studies conducted by third parties and estimates prepared by the Company based on certain assumptions. While the Company believes that the industry, market or competitive data from external sources is accurate and correct, none of the Company or the managers have independently verified such data or sought to verify that the information remains accurate as of the date of this presentation and none of the Company or the managers make any representation as to the accuracy of such information. Accordingly, reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.

This presentation contains certain financial information and operating data that has not been audited or reviewed by the Company's auditors. Such financial information and operating data is based on the Company's internal estimates, assumptions, calculations, expectations, business plans and master plans relating to its planned projects. Such financial information (such as EBITDA and related ratios) has not been prepared in accordance with IFRS and may be considered in addition to IFRS financial information but should not be used a substitute for corresponding IFRS financial information. Unless otherwise indicated, historical results of operations included in this presentation are presented on the basis of underlying results, which are derived by adjusting the results reported in accordance with the applicable accounting standards for defined special items.

The pro forma financial information in this presentation is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the transactions occurred on the dates assumed, nor is it indicative of future results of operations or financial position. The pro forma financial information has not been prepared, reviewed or audited in accordance with IFRS.

Disclaimer (2/2)

This presentation includes forward-looking statements. Forward-looking statements typically use terms such as "believes", "projects", "anticipates", "expects", "intends", "plans", "may", "will", "would", "could" or "should" or similar terminology. Statements in this presentation that are not historical facts are forward-looking statements, including statements relating to the Company's intentions, beliefs or current expectations and projections about the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, provisions, impairments, strategies and opportunities, as well as potential developments in the legal and regulatory environment to which the Group is subject and developments in the markets in which the Group operates, including changes in interest rates, inflation, foreign exchange rates, demographics, and any assumptions underlying any such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. These forward-looking statements are based on the Company's beliefs, assumptions and current expectations regarding future events and trends that affect the Company's future performance, taking into account all information currently available to the Company, and are not guarantees of future performance. Such statements are subject to significant risks and uncertainties. The Company and each of the managers expressly disclaim any obligation or undertaking to release any updates or revisions to these forward-looking statements to reflect any change in their respective expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this presentation or to update or to keep current any other information contained in this presentation. Accordingly, undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this presentation. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. Each of the managers is acting exclusively for the Company and no one else. None of the managers will regard any other person (whether or not a recipient of this presentation) as a client in relation to the matters described herein and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for the giving of advice in relation to any transaction, matter or arrangement referred to in this presentation.

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Overview of Proposed Transactions

Creating a Runway to 2020

✓ Proactive measures taken	• Managing operating costs and capital expenditures to mitigate impact of weak market conditions • Further initiatives undertaken to strengthen liquidity and balance sheet position – Liquidity management through sale and lease back of PGS Apollo – Raised USD 104 million in November 2015 from equity issuance and sale of treasury shares
PGS and its Board have established a staged plan to create a runway to 2020
✓ Step 1: Liquidity reserve secured to 2020	• Completion of two year extension of RCF to 2020 – Unchanged security package – Covenant reset to retain availability of liquidity reserve going forward – Resized RCF to match ongoing liquidity needs (i.e. reduction to USD 400m initially and then to USD 350m in September 2018) – RCF extension conditional on completion of the Equity Raise and Bond Exchange Offer
Step 2: Transactions to address 2018 Notes and delever	• PGS has initiated a capital raise (the "Equity Raise") of approx. NOK 1.9 billion (USD ~225 million) to facilitate an exchange of 2018 Notes into a 2020 maturity (the "Bond Exchange Offer") • The proposed transactions will improve balance sheet flexibility and increase long term financial visibility, through: – Reducing financial risk profile – Reducing interest costs – Delever the balance sheet – Maintaining a robust liquidity position

RCF Extension to 2020

Term	Agreement
Maturity:	September 2020 (2 year extension)
Amount:	A reduction in the RCF size to USD 400m (from current USD 500m), reducing to USD 350m from September 2018
Security Package:	Unchanged
Interest Cost (drawn):	Libor + margin of 325-625 bps + utilization fee
Restrictive Covenants:	Further restrictions on voluntary pre-payment of debt when Total Leverage Ratio is greater than 3x
Revised Total Leverage Ratio Covenant Levels:	Q4 2016	5.50x
	Q1 2017	5.50x
	Q2 2017	5.50x
	Q3 2017	5.25x
	Q4 2017	4.75x
	Q1 2018	4.25x
	Q2 2018	4.00x
	Q3 2018	3.75x
	Q4 2018	3.50x
	Q1 2019	3.25x
	Q2 2019	3.00x
	Q3 2019 onwards	2.75x

Agreed subject to successful completion of Equity Raise and Bond Exchange Offer

Creating a Runway to 2020

✓ Proactive measures taken	• Managing operating costs and capital expenditures to mitigate impact of weak market conditions • Further initiatives undertaken to strengthen liquidity and balance sheet position – Liquidity management through sale and lease back of PGS Apollo – Raised USD 104 million in November 2015 from equity issuance and sale of treasury shares
	PGS and its Board have established a staged plan to create a runway to 2020
✓ Step 1: Liquidity reserve secured to 2020	• Completion of two year extension of RCF to 2020 – Unchanged security package – Covenant reset to retain availability of liquidity reserve going forward – Resized RCF to match ongoing liquidity needs (i.e. reduction to USD 400m initially and then to USD 350m in September 2018) – RCF extension conditional on completion of the Equity Raise and Bond Exchange Offer
Step 2: Transactions to address 2018 Notes and delever	• PGS has initiated a capital raise (the "Equity Raise") of approx. NOK 1.9 billion (USD ~225 million) to facilitate an exchange of 2018 Notes into a 2020 maturity (the "Bond Exchange Offer") • The proposed transactions will improve balance sheet flexibility and increase long term financial visibility, through: – Reducing financial risk profile – Reducing interest costs – Delever the balance sheet – Maintaining a robust liquidity position

Proposed Transactions

Proposed Transactions Illustrative Structure

Bond Exchange Offer

• Proactively addressing the Dec-2018 USD 450m Notes
• Bondholders offered to exchange 50% of their bonds for cash and exchange the remaining 50% into New 2020 Notes:
• Cash consideration for the 50% settled at 95% of par, if bonds tendered before the early bird deadline
• Terms of the New 2020 Notes to remain consistent with 2018 Notes
  • +2.0% coupon step up if the Company, in the future, grants security to RCF / TLB lenders
• Final maturity and call schedule extended by 2 years
• Old Notes exchanged at par with coupon unchanged (7.375%)
• Exchange Offer conditional on 90% participation level

Equity Raise

• Private Placement: Expected to be approximately NOK 1.9 billion (USD ~225 million)
• Possible subsequent offering (through a rights issue) expected to be approximately NOK 300 million (USD ~35 million), directed at existing eligible shareholders who are not allocated shares in the Private Placement
• Use of proceeds:

1 2

• Cash component in Bond Exchange Offer
• Excess proceeds to strengthen balance sheet and liquidity position

Transactions to be launched simultaneously and are inter-conditional

1. Calculations based on 90% participation (50% extended at par with a coupon of 7.375% and 50% for cash component at a price of 95.0%) before the early bird deadline and therefore includes the early bird premium. Excess proceeds net of accrued and unpaid interest, and estimated fees and expenses (refer to page 26 for further details).

Operational Update and Market Comments

Q3 Results – Robust MultiClient Performance

• Revenues of USD 224.1 million
• EBITDA of USD 112.7 million
• Industry leading MultiClient performance:
• Total MultiClient revenues of USD 147.5 million
• Pre-funding level of 134%
• MultiClient accounted for 66% of revenues in Q3 2016
• Liquidity reserve of USD 417.3 million
• On track to deliver approx. USD 120 million cash cost reductions in 2016

MultiClient sales positively impacted by a higher oil price and improved cash flow among oil companies

Marine Seismic Market

• Fundamentals benefiting from a higher and more stable oil price
• Substantial improvement in oil companies' cash flow
• However, continue to expect challenging market going forward
• Increasing interest for MultiClient data
• Quarterly and regional variability is expected
• Contract market still characterized by low pricing
• Vessel utilization will be challenging over the coming winter
• Some idle time in Q4 2016 as some clients move work from Q4 into 2017

Marine Seismic Market Volume and Supply

• Industry expected to acquire approx. 340,000 sq.km of seismic in 2016
• Volume of seismic acquired will be higher in 2016 compared to 2010 and earlier
• Streamer capacity is currently approx. 40%(1) lower than at the 2013 peak
• Approx. 35% lower in 2017 summer season

PGS Response – Focus on Sales, Operations, Cost and Cash Flow Discipline

Market Activity

• Seismic demand primarily driven by:
• Positioning for strategically important license rounds
• Seismic commitments in E&P licenses
• Production seismic
• Some opportunistic spending
• MultiClient market share expected to increase
• Decent volume of leads in Africa for Q1

Order Book

^1. As of October 25, 2016, based on 7 active vessels and excluding cold-stacked vessels. Source: PGS internal estimates.

Well Positioned to Navigate the Challenging Market

Market Leading Position in Marine Seismic Industry … 1

Maintaining critical mass in a weak market

Source: PGS internal estimates.

… Supported by a World-Class Fleet and Technological Leadership Position

1

2

A Superior Fleet Advantage

• Largest world-class technologically advanced seismic fleet of 13 vessels – out of which five are in the ultra high end capacity segment, capable of towing 22-24 streamers
• Strong position in the high end 12+ streamer market segment with a current market share of approximately 40%
• Estimated to have the highest cost efficient fleet amongst its peers, measured by cash cost per streamer per day

Technological Leadership

• PGS' GeoStreamer technology was the first dual-sensor streamer in the industry
• Leading technology platform facilitating high efficiency and data quality. Combined with its suite of imaging solutions, it is capable of generating sharper, more precise imaging for complex geological structures
• GeoStreamer acquisition and imaging technology is key success factors for both strong MC 3D library and meeting clients' needs for tailor-made solutions in the contract market

3 Solid and Stable MultiClient Performance

2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD

²⁰¹⁶ MC Investments MC Revenues/MC Investments

• Strategy to increase MultiClient business from 2010 level
• Performance stabilization in a highly cyclical market
• MultiClient share of total market will continue to increase going forward
• PGS revenues dominated by MultiClient
• 66% of revenues in Q3 2016
• Most of EBITDA is generated by the MultiClient activities
• GeoStreamer, leading productivity and advanced, high quality imaging drives higher returns from library
• Retains flexibility to leverage a recovery in the marine contract market
• Marine contract player with differentiating productivity and technology

0.0

0 50

Industry Leading Operational Performance 4

HSEQ Performance: Industry

Leadership (1) Technical Downtime (2) Performance (3)

• Focused on leadership, continuous learning, culture, best practices and risk management …
• ... to drive continuous improvement of HSEQ practice
• Sharpened focus on planning and risk mitigation
• Continuous effort to reduce downtime

• Aided by "best in class" fleet and specialist vessel capability

• 1. Ratio of downtime (excluding standby, unfavorable weather, and voyage time) to time spent on survey production activities.
• 1. Ratio of actual survey production activity to available production time.

Source: PGS.

^1. TRCF: Total Recordable Case Frequency (per million man hours); LTIF: Lost Time Injury Frequency (per million man hours).

5 Fleet Capacity Provides Flexibility Throughout the Cycle

High-end Ramforms - Flexible Capacity

Ramform Vanguard - warm stacked

Ramform Valiant - cold stacked Ramform Viking - cold stacked

Ramform Challenger - cold stacked

Ramform Explorer - cold stacked
*With possibility to buy back after year 5 and 8

• Combination of chartered high capacity conventional 3D vessels and temporarily coldstacked first generation Ramform vessels:
• Improves fleet flexibility
• Chartered capacity with staggered expiry structure
• Gives a competitive edge in the current market
• Positions PGS well to take advantage of a market recovery

Significantly reduced capex requirement going forward

Proactive Cost Reductions Continue in 2016 5

• 2015 cash cost (1) reductions amounted to approximately USD 280 million, including restructuring cost (approximately USD 320 million if restructuring cost is excluded)
• Further significant cost reductions will bring 2016 gross cash cost down to approx. USD 675 million
• Incremental cost reduction from earlier guidance driven by further capacity adjustments and other cost initiatives
• Tight cost control continues
• Cost discipline a key priority

^1. Gross cash costs are defined as the sum of reported net operating expenses (excluding depreciation, amortization, impairments and other charges (income)) and the cash operating costs capitalized as investments in the MultiClient library as well as capitalized development costs.

Additional Transaction Information

• The Company intends to launch the following liability management process on the existing 2018 Notes
• The terms of the Exchange Offer set out in this presentation are qualified in their entirety by the full terms and conditions of the Exchange Offer which will be set out in the Exchange Offer Memorandum
• The Bond Exchange Offer and the Equity Raise are inter-conditional

• Participation = consent to strip all of the restrictive covenants, all of the reporting covenants and certain events of default on the 2018 Notes not tendered

Exchange Offer conditional on 90% participation level

1. Cash component includes a consent fee payment of 6% of Old Notes, which will be payable only to eligible holders who validly tender and do not validly withdraw their Old Notes prior to the Early Tender Date. After the Early Tender Date, eligible holders will not receive the consent fee and therefore receive a Cash Component (in addition to the Exchange component) amounting to 89% of Old Notes.

Key Effects of The Proposed Transactions (1)

0.0x 1.0x 2.0x 3.0x 4.0x

3

Capital market debt (USDm)

Net leverage (3)

• Reduction in leverage as equity proceeds primarily used for deleveraging
• Liquidity reserve benefits from RCF extension to 2020
• Projected interest savings to December 2018 of USD 30.5m from bond buy back

Highlights Key Effects

Transactions will improve balance sheet flexibility, creating a runway to 2020 allowing PGS to pursue its strategic objectives

• 1. Calculations based on 90% participation (50% extended at par with a coupon of 7.375% and 50% for cash component at a price of 95.0%).
• 1. Excess proceeds net of accrued and unpaid interest, and estimated fees and expenses.
• 1. Net leverage = Net Debt / LTM Sep-16 EBITDA of USD 376.6m. "Net debt" means long-term and short-term debt (including the current portion of long-term debt and gross of deferred loan costs) less cash and equivalents (other than restricted cash).
• 1. Excludes restricted cash of USD 100.2m.

Impact of the Transactions

Sources of Funds	Amount (USDm)
Private Placement	225.0
Total Sources	225.0
Uses of Funds	Amount (USDm)
Partial Repayment of Notes due 2018	192.4
Accrued and unpaid interest	8.7
Additional Liquidity	13.7
Estimated Fees and expenses	10.2
Total Uses	225.0

Sources and Uses (1) Pro Forma Debt Maturity Profile

Pro forma Capitalization (2)

	Actual		PF
(USD in millions)	30-Sep-16	Adj.	30-Sep-16	Coupon / Margin	Maturity
Cash & Equivalents (3)	(77.3)	--	(77.3)	--
Revolving Credit Facility (5)	160.0	(13.7)	146.3	L+325-625	September 2020
Term Loan B	390.0	--	390.0	L+250	March 2021
Export Credit Financing	386.1	--	386.1		2025, 2027
Senior Notes (existing)	450.0	(405.0)	45.0	7.375%	December 2018
New Notes	--	202.5	202.5	7.375%	December 2020
Total Debt	1,386.1		1,169.9
Net Debt (3)	1,308.8		1,092.6
Net Debt (3)/ EBITDA(4)	3.48x		2.90x

Note: Calculations for the transaction are based on the assumption of 90% participation in the tender and exchange process of which 50% for exchange and 50% for cash component at a price of 95.0%.

1. Subsequent to these transactions a participation fee will be payable to the extending RCF banks of 1% on the extended commitments.

2. Figures exclude accrued and unpaid interest and unamortized deferred debt issuance costs.

3. "Net debt" means long-term and short-term debt (including the current portion of long-term debt and gross of deferred loan costs) less cash and equivalents (other than restricted cash). Cash & equivalents excludes restricted cash of USD 100.2m. "Net interest bearing debt" was per 30-Sep-16, USD 1,208.6 m

4. LTM Sep-16 EBITDA of USD 376.6m.

5. Total commitment for the RCF to be reduced to \$400m as of 30 September 2016 and to USD 350m from September 2018.

6. Industry leading MultiClient performance

7. Improved cash flow
8. Reducing debt and strengthening the equity base and maturity profile of debt and credit facilities
9. Substantial cost reductions continue
10. Industry leading fleet with lowest cash cost per streamer
11. Significantly improved Imaging performance and technology

Focus on sales, operations, cost and cash flow discipline

Thank you – Questions?

Appendix The PGS Fleet

Ramform Titan Ramform Atlas Ramform Tethys Ramform Hyperion Scheduled delivery Q1 2017

The Ultra High-end Ramforms

Ramform Sterling Ramform Sovereign

High-end Conventional on Charter

PGS Apollo

Sanco Swift

Sanco Sword - rigging postponed until ²⁰¹⁷ Sanco Spirit

2D/EM/Source

Atlantic Explorer

High-end Ramforms – Flexible Capacity

Ramform Explorer (cold stacked Q3 2015)

Ramform Challenger (cold stacked Q4 2015)

Ramform Valiant (cold stacked Q4 2015)

Ramform Viking (cold stacked Q4 2015)

(warm-stacked Q3 2016)

All vessels equipped with GeoStreamer, - approximately 4.5 years average vessel age of active vessels

Appendix PGS Pre-transaction Debt Structure

Long term Credit Lines and Interest Bearing Debt	Nominal Amount as of September 30, 2016	Total Credit Line	Financial Covenants
USD 400.0 million Term Loan ("TLB"), Libor (minimum 0.75%) + 250 basis points, due 2021	USD 390.0 million		None, but incurrence test: total leverage ratio ≤ 3.00x(1)
Revolving credit facility ("RCF"), due 2018 40% of applicable margin in commitment fee on undrawn amount Libor + margin of 200-325 bps + utilization fee	USD 160.0 million	USD 500.0 million	Maintenance covenant: total leverage ratio ≤ 5.50x, to Q1-2017, 5.00x Q2-17, 4.5x Q3-17, 3.25x Q4-17, thereafter reduced by 0.25x each quarter to 2.75x by Q2-18
Japanese ECF, 12 year with semi annual installments. 50% fixed/ 50% floating interest rate	USD 386.1 million	USD 477.3 million	None, but incurrence test for loan 3&4: Total leverage ratio ≤ 3.00x(1) and interest coverage ratio ≥ 2.0x(1)
December 2018 Senior Notes, coupon of 7.375% and callable from 2015	USD 450.0 million		None, but incurrence test: interest coverage ratio ≥ 2.0x(1)

Appendix Key Risk Factors (1/2)

Risks Relating to the Group and the Industry in which the Group Operates

• The performance of the Group's business largely depends on the level of capital expenditures by the oil and gas industry, which can be significantly affected by volatile oil and natural gas prices.
• The Group's order book (or backlog) estimates are based on certain assumptions and are subject to unexpected adjustments and cancellations and thus may not be timely converted to revenues in any particular fiscal period, if at all, or be indicative of the Group's actual operating results for any future period.
• The Group is subject to intense competition in the markets where the Group carries out its operations, which could limit the Group's ability to maintain or increase the Group's market share or to increase the Group's prices to reach profitable levels.
• The revenues the Group derives from marine seismic acquisition vary significantly during the year.
• The Group's business is subject to laws and regulations in various jurisdictions, and the requirements of, changes in or violations of such laws or regulations may adversely affect the Group's business and profitability.

Risks Relating to the Business of the Group

• Current economic uncertainty and the volatility of oil and natural gas prices could have a significant adverse effect on the Group's financial condition, the Group's results of operations, the Group's cash flows and the Group's ability to borrow.
• The Group is subject to risks related to the Group's international operations that could harm the Group's business and results of operations.
• The Group is exposed to significant risks in relation to compliance with anti-corruption laws and regulations and economic sanction programs.
• The Group may be required to post performance bonds or guarantees for certain obligations, which the Group may be unable to provide, or if the Group does provide, may be called under circumstances that the Group believes to be improper.
• The Group invests significant amounts of money in acquiring and processing seismic data for the Group's MultiClient data library without knowing precisely how much of the data the Group will be able to sell or when and at what price the Group will be able to sell the data.
• The amounts the Group amortizes from the Group's MultiClient data library each period may fluctuate significantly, and these fluctuations can have a significant effect on the Group's results of operations.
• The high fixed costs of the Group's operations could result in operating losses.
• The Group's results of operations may be significantly affected by currency fluctuations.
• The Group's working capital needs are difficult to forecast and may vary significantly, which could result in additional financing requirements that the Group may not be able to meet on satisfactory terms, or at all.
• The Group performs a portion of its contract seismic work under turnkey arrangements. If the Group bids too low on these contracts, the Group could incur losses on projects and experience reduced profitability.
• The Group's profitability and cash flow is negatively impacted by excess capacity in the Group's industry.
• The Group's results of operations may be affected by fluctuations in fuel costs.
• The Group has had losses in the past and there is no assurance of the Group's profitability for the future. The Group's ability to fund ongoing activities and implement its business plans may be adversely impacted if the Group does not generate sufficient cash flow from operations or if it is unable to obtain debt financing on commercially reasonable terms.
• Technological changes and new products and services are frequently introduced in the market, and the Group's technology could be rendered obsolete by these introductions, or the Group may not be able to develop and produce new and enhanced products on a cost-effective and timely basis.
• The Group depends on proprietary technology and is exposed to risks associated with the misappropriation or infringement of that technology.
• Claims may be asserted against the Group for violation of the intellectual property rights of third parties, particularly the Group's competitors.
• The Group's business experience extreme weather and other hazardous conditions.
• The nature of the Group's business subjects the Group to significant ongoing operating risks for which the Group may not have adequate insurance or for which the Group may not be able to procure adequate insurance on acceptable terms, if at all.

Appendix Key Risk Factors (2/2)

Risks Relating to the Business of the Group (continued)

• The Group is a multinational organization subject to taxation in many jurisdictions around the world and the Group could be obligated to pay additional taxes in various jurisdictions.
• The value of the Group's deferred tax assets could become impaired, which could materially and adversely affect the Group's results of operations.
• The Group is dependent upon a small number of significant clients that may vary between years.
• Disruptions to the Group's supply chain may adversely affect the Group's ability to deliver its products and services to the Group's clients.
• The Group's future pension costs and required levels of contributions could be unfavorably impacted by changes in actuarial assumptions and future market performance of plan assets, which could adversely affect the Group's financial condition and results of operations.
• Organized strikes or work stoppages by unionized employees may have a material adverse effect on the Group's business, financial condition and results of operations.
• The Group's failure to attract and retain qualified employees, including the Group's senior management, may materially adversely affect the Group's future business and operations.
• The service life of the Group's vessels may be shorter than anticipated.

Risks Relating to the Shares

• The price of the shares in the Company (the "Shares") may fluctuate significantly.
• The Company's ability to pay dividends is dependent on the availability of distributable reserves and the Company may be unwilling to pay any dividends in the future regardless of availability of distributable reserves.
• Future sales, or the possibility for future sales of substantial numbers of Shares may affect the Shares' market price.
• Future issuances of Shares or other securities in the Company may dilute the holdings of shareholders and could materially affect the price of the Shares.
• Pre-emptive rights to secure and pay for Shares in any additional issuance may be unavailable to U.S. or other shareholders.
• Investors may be unable to exercise their voting rights for Shares registered in a nominee account.
• Investors may have difficulty enforcing any judgment obtained in the United States and other jurisdictions than Norway against the Company or its directors or officers in Norway.
• Norwegian law may limit shareholders' ability to bring an action against the Company.
• The transfer of the Shares is subject to restrictions under the securities laws of the United States and other jurisdictions.
• Shareholders outside Norway are subject to exchange risk.

Risks Relating to Financing and Market Risk

• The Group's substantial debt could adversely affect the Group's financial health.
• The Group's RCF contains, and future credit facilities may contain, one or more financial covenants which the Group could fail to meet.
• The Group may be able to incur substantially more debt.
• The Group's ability to generate cash depends on many factors beyond the Group's control, and the Group may not be able to generate cash required to service the Group's debt.
• Restrictions imposed by the indenture governing the Old Notes and the New Notes and the Group's outstanding debt may limit the Group's ability to take certain actions.