PGS ASA

Earnings Release • Oct 23, 2015

Petroleum Geo-Services ASA : Third Quarter 2015 Results

Petroleum Geo-Services ASA : Third Quarter 2015 Results

Proactive Management in an Uncertain Market

Highlights Q3 2015

* Revenues of $225.7 million, compared to $394.2 million in Q3 2014

* EBITDA of $115.3 million, compared to $181.7 million in Q3 2014

* EBIT, excluding impairments and other charges, of $9.1 million, compared to

$77.3 million in Q3 2014

* Cash flow from operations of $71.3 million, compared to $230.7 million in Q3

2014

* MultiClient Pre-funding revenues of $83.8 million with a corresponding pre-

funding level of 88%, compared to $55.4 million and 79% respectively in Q3

2014

* Cost reduction program ahead of plan

* Total Leverage Ratio requirement for Revolving Credit Facility increased  to

4.00:1 through Q1 2017, with no dividend to be paid for 2015

* Ramform Explorer and Challenger in process of being cold-stacked and Ramform

Viking to be stacked end October

* Entered into attractive charter agreements for Sanco Swift and Sanco Sword,

leading to cold-stacking of Ramform Vanguard and Ramform Valiant

* Agreement to postpone delivery of Ramform Hyperion to Q1 2017

* Full year EBITDA expected to be approximately $500 million

"MultiClient pre-funding revenues for the first three quarters were solid at

$282.4 million, with a corresponding pre-funding level of 121% highlighting the

attractiveness of our projects, and the reduced earnings volatility we get from

our increased MultiClient focus.

Despite a sequential improvement in the marine contract EBIT margin, we

experienced a further market deterioration over the summer, mainly driven by

intense competition in preparation for the weaker winter season. Contract

revenues and margin through Q4 and Q1 will be adversely impacted.

We have taken further steps to adapt to the current challenging market

environment. We have negotiated an amendment to the financial covenants for our

Revolving Credit Facility, creating significantly more headroom and preserving

our strong liquidity reserve.  We continue to cut costs and reduce capital

expenditures to optimize cash flow. With the cold-stacking of Ramform Viking and

other initiatives taken in Q3, our estimated cost reduction for 2015 is now

increased to approximately $320 million. We have implemented a significant

reduction of 2015 CAPEX and further, benefiting 2016 CAPEX, agreed with the

shipyard to postpone the delivery of Ramform Hyperion to Q1 2017, subject to

approval from the ECA financing banks.

In order to position our fleet for the future and address the industry's vessel

oversupply, we have entered into agreements to charter the two vessels Sanco

Sword and Sanco Swift, both among the most competitive conventional vessels in

the seismic industry."

Jon Erik Reinhardsen,

President and Chief Executive Officer

Outlook

The low oil price, reduced oil company spending and intense competition for work

among seismic companies impact pricing and utilization negatively. PGS expects

market uncertainty and low earnings visibility to continue well into 2016.

Based on the current operational projections and with reference to disclosed

risk factors, PGS expects full year 2015 EBITDA to be approximately $500

million.

MultiClient cash investments are expected to be approximately $285 million, with

a pre-funding level above 100%.

Somewhat above 50% of active 3D capacity is expected to be used for MultiClient

in 2015.

Capital expenditures are estimated to be approximately $175 million, of which

approximately $130 million is for the new builds Ramform Tethys and Ramform

Hyperion.

The order book totaled $245 million at September 30, 2015 (including $103

million of committed pre-funding on MultiClient projects), compared to $259

million at June 30, 2015 and $466 million at September 30, 2014. As of October

19, 2015 approximately 85% of available capacity (which excludes stacked

vessels) for Q4 is booked, with corresponding numbers for Q1 2016, Q2 2016 and

Q3 2016 being approximately 50%, 55% and 10%, respectively.

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

|  |   |   | Year ended |

|  |   |   | December 31, |

|Key Financial | Quarter ended | Nine months ended | |

|Figures | September 30, | September 30, | |

|(In USD millions, +-------+-------------+-------+-------------+--------------+

|except per share |   |   |   |   |   |

|data) | 2015 | 2014 | 2015 | 2014 | 2014 |

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

|Revenues | 225.7| 394.2| 732.6| 629.5| 1 453.8|

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

|EBITDA (as defined,| 115.3| 181.7| 368.0| 309.2| 702.6|

|see Note 13) | | | | | |

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

|EBIT ex. impairment| 9.1| 77.3| 38.7| 100.1| 177.3|

|and other charges | | | | | |

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

|EBIT as reported | (62.7)| 52.5| (97.5)| 91.4| 104.2|

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

|Income before | (80.5)| 27.4|(148.4)| 47.2| 16.7|

|income tax expense | | | | | |

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

|Net income to |(110.0)| 8.4|(193.3)| 34.3| (50.9)|

|equity holders | | | | | |

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

|Basic earnings per | (0.51)| 0.04| (0.30)| 0.16| (0.24)|

|share ($ per share)| | | | | |

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

|Net cash provided | 71.3| 230.7| 366.7| 222.1| 584.3|

|by operating | | | | | |

|activities | | | | | |

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

|Cash investment in | 95.5| 70.4| 233.1| 215.8| 344.2|

|MultiClient library| | | | | |

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

|Capital | 17.0| 53.1| 121.8| 281.3| 371.3|

|expenditures | | | | | |

|(whether paid or | | | | | |

|not) | | | | | |

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

|Total assets |3 246.6| 3 685.5|3 246.6| 3 665.7| 3 563.0|

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

|Cash and cash | 82.3| 90.4| 82.3| 42.9| 54.7|

|equivalents | | | | | |

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

|Net interest |1 068.4| 1 039.5|1 068.4| 1 091.5| 1 048.0|

|bearing debt | | | | | |

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

The complete Q3 2015 earnings release and presentation can be downloaded from

www.newsweb.no and www.pgs.com.

FOR DETAILS, CONTACT:

Bård Stenberg, VP Corporate Communications

Phone:  +47 67 51 43 16

Mobile:  +47 99 24 52 35

Rune Olav Pedersen, General Counsel & SVP Legal, Communications and Marketing

Phone:  +47 67 51 57 06

Mobile:  +47 90 81 63 37

Petroleum Geo-Services ("PGS" or "the Company") is a focused Marine

geophysical company that provides a broad range of seismic and reservoir

services, including acquisition, imaging, interpretation, and field

evaluation. The Company's MultiClient data library is among the largest in the

seismic industry, with modern 3D coverage in all significant offshore

hydrocarbon provinces of the world. The Company operates on a worldwide basis

with headquarters in Oslo, Norway.

PGS has a presence in 19 countries with regional centers in London, Houston

and Kuala Lumpur. Our headquarters is in Oslo, Norway and the PGS share is

listed on the Oslo stock exchange (OSE: PGS).

For more information on Petroleum Geo-Services 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 multi-client 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 2014. 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 to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1960917]