PGS ASA — Earnings Release 2010

Jul 29, 2010

Second Quarter and First Half 2010 Results

EBITDA Guidance Maintained

Fleet Upgrades Strengthen Competitive Platform

July 29, 2010: OSLO, NORWAY - Petroleum Geo-Services ASA ("PGS" or the

"Company") reported an EBITDA of $71.4 million (33 percent margin) in Q2 2010.

The results were impacted by significant investments in vessel upgrades and

repositioning of vessels, as earlier indicated. The upgrades further strengthen

PGS' fleet as the most cost effective in the industry.

§ Group performance: Q2 2010 revenues were $214.9 million, with a corresponding

EBIT of $5.3 million, compared to revenues of $294.3 million in Q2 2009 and an

EBIT of $32.9 million.

§ Marine: Q2 2010 revenues were lower compared to the same period last year,

primarily driven by more time spent steaming and at yard, lower prices for

Marine contract work with 2009 having benefited from activity priced before the

credit crunch, and lower MultiClient pre-funding revenues. Industry capacity

additions scheduled for 2010 continue to put pressure on conventional streamer

pricing.

§ Most of the 2010 GeoStreamer® capacity sold: Strong customer interest for

GeoStreamer® continues. Ramform Valiant was equipped with GeoStreamer® in June

and Ramform Explorer completed the same upgrade in July.

§ GeoStreamer® price uplifts: Relative pricing differentiation for GeoStreamer®

work continues to improve with margins of more than 1000 basis points above

conventional streamer margins.

§ Order book increasing: Order book increased by approximately $90 million from

Q1 2010 and total order book is now $499 million.

§ Two break-through contracts for OptoSeis: PGS has signed an agreement with

Petrobras to install a fiber-optic system at the Jubarte field, and a

collaboration agreement with Shell to develop an onshore fiber-optic exploration

and reservoir monitoring system.

§ More flexible credit facility: The Company amended its revolving credit and

Term Loan B facility in May 2010 to increase financial flexibility.

§ Negative net financial items: Foreign exchange fluctuations and amendment and

redemption of credit facilities resulted in a cost of $18.2 million in Q2 2010.

§ Organizational changes implemented: Following sale of the Onshore business

PGS implemented its new organizational structure.

§ EBITDA guidance maintained: The Company maintains its full year EBITDA

guidance of $450 million, supported by GeoStreamer® success and increased

MultiClient pre-funding revenues in the second half, offset by a weak contract

market for conventional streamers and some MultiClient late sales uncertainty.

Jon Erik Reinhardsen, Chief Executive Officer and President of PGS, commented:

"The upgrade of Ramform Explorer to become one of the most efficient vessels in

the industry will together with the GeoStreamer® upgrade of Ramform Valiant and

delivery of the new PGS Apollo pave the way for increased efficiency and reduced

exposure to the industry cycles. The second quarter was impacted by

repositioning of vessels and significant investments in vessel and GeoStreamer®

upgrades. New industry capacity will continue to put pressure on pricing in the

second half, but we remain on track to meet our current full year EBITDA

guidance."

+-----------------+-------------------+-----------------------+----------------+

|   |   |   |   |

|Key Financial | Quarter ended | Six months ended June | Year ended |

|Figures | June 30, | 30, | December |

|(In millions of +---------+---------+---------+-------------+ 31, 2009 |

|dollars, except |   |   |   |   | Audited(1)) |

|per share data) | 2010 | 2009 | 2010 | 2009 | |

| |Unaudited|Unaudited|Unaudited| Unaudited | |

+-----------------+---------+---------+---------+-------------+----------------+

|Revenues from | | | $  474.3| $  685.1| $  1,350.2|

|continuing |$  214.9 | $  294.3| | | |

|operations | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Adjusted EBITDA | 71.4| 154.1| 170.7| 360.5| 672.1|

|(as defined)( ) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|EBIT excluding | | | 40.1| 236.3| 386.9|

|special items (2)| 5.3| 81.2| | | |

|) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|EBIT | 5.3| 32.9| 39.6| 137.5| 233.3|

+-----------------+---------+---------+---------+-------------+----------------+

|Income (loss) | | | (12.4)| 129.8| 228.1|

|before income tax| (27.4)| 40.2| | | |

|expense | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Net income (loss)| (22.3)| 41.0| (6.1)| 95.2| 165.8|

|to equity holders| | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Basic earnings | | | (0.03)| 0.53| 0.88|

|per share ($ per | (0.11)| 0.22| | | |

|share) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Diluted earnings | | | (0.03)| 0.53| 0.88|

|per share ($ per | (0.11)| 0.22| | | |

|share) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Net cash provided| | | 179.3| 353.5| 676.1|

|by operating | 63.8| 208.1| | | |

|activities | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Cash investment | | | 103.8| 101.6| 183.1|

|in MultiClient | 51.7| 56.7| | | |

|library | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Capital | 52.7| 56.8| 100.6| 150.5| 231.2|

|expenditures | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Total assets | 2,690.4| 3,132.4| 2,690.4| 3,132.4| 2,929.4|

|(period end) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Cash and cash | | | 159.8| 168.1| 126.0|

|equivalents | 159.8| 168.1| | | |

|(period end) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

|Net interest | | | $  616.3| $  962.1| $  774.0|

|bearing debt | $  616.3| $  962.1| | | |

|(period end) | | | | | |

+-----------------+---------+---------+---------+-------------+----------------+

(1)) Financial information for the full year 2009 is derived from the audited

financial statements as presented in the 2009 Annual Report.

( )(2)) Impairment charges of $0.5 million in Q1 2010 and $153.6 million for the

full year 2009.

Complete Q2 2010 earnings release can be downloaded at  www.newsweb.no or

www.pgs.com

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

US Investor Services

Phone: +1 281 509 8712

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

(Norwegian Securities Trading Act)

[HUG#1434693]