PGS ASA

Earnings Release • Feb 15, 2016

Petroleum Geo-Services ASA : Fourth Quarter and Preliminary Full Year 2015 Results

Petroleum Geo-Services ASA : Fourth Quarter and Preliminary Full Year 2015 Results

Resilient MultiClient Performance

Financial Position Further Strengthened

Highlights 2015

* Revenues of $961.9 million, compared to $1,453.8 million in 2014

* EBITDA of $484.5 million, compared to $702.6 million in 2014

* EBITDA margin of 50% in 2015, compared to 48% in 2014, enabled by

substantial cost reductions of $318.5 million

* EBIT, excluding impairments and other charges, of $15.8 million, compared to

$177.3 million in 2014

* Cash flow from operations of $487.9 million, compared to $584.3 million in

2014

* Net interest bearing debt reduced by $53.8 million to $994.2 million and

liquidity reserve increased to $556.6 million

* MultiClient pre-funding revenues of $380.4 million with a corresponding pre-

funding level of 125%, compared to $290.7 million and 84% respectively in

2014

* Impairment and loss on sale of assets of $397.2 million recorded in 2015,

reflecting the weak market

"Our MultiClient revenues in 2015 ended at $574.7 million. With capitalized

MultiClient cash investment of $303.3 million we achieved a sales-to-investment

ratio of 1.9 last year, an industry best. This highlights the robustness of our

MultiClient business contributing the most to our full year EBITDA, which ended

close to our latest guidance of approximately $500 million.

The marine seismic contract market deteriorated significantly during 2015 and

has become extremely challenging. In this uncertain market environment we have

during 2015 focused on cash flow and increased our liquidity reserve. We have

implemented substantial reductions of cost and capital expenditures, taken

proactive steps to address oversupply and further increased our productivity

leadership and fleet flexibility.

2016 will be another difficult year for the seismic industry.  We continue to

focus on what we can control, including customer relations, costs, maintaining a

financially sound balance sheet and capitalizing on the youngest and most

productive fleet in the industry.  Our fleet productivity will further improve

when we take delivery of the Ramform Tethys in late Q1. I am convinced PGS is

well positioned to manage the challenging market."

Jon Erik Reinhardsen,

President and Chief Executive Officer

Outlook

The low oil price and continued reduction in oil companies' spending continue to

impact seismic demand and pricing negatively. PGS expects market uncertainty and

low earnings visibility to continue through 2016.

Based on the current operational projections and with reference to disclosed

risk factors, PGS expects full year 2016 group cash cost of approximately $725

million. This amount represents 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.

MultiClient cash investments are expected to be approximately $250 million, with

a pre-funding level of approximately 100%.

Approximately 50% of active 3D vessel time is planned for MultiClient

acquisition.

Capital expenditures are estimated to be approximately $250 million, of which

approximately $180 million is for the new builds Ramform Tethys and Ramform

Hyperion. The increase compared to the original guidance of $240 million is

primarily due to cut off between 2015 and 2016, with 2015 ending correspondingly

lower than guidance.

The order book totaled $240 million at December 31, 2015 (including $116 million

of committed pre-funding on MultiClient projects), compared to $245 million at

September 30, 2015 and $410 million at December 31, 2014. As of February

1, 2016 close to 100% of available capacity (which excludes stacked vessels) for

Q1 is booked, with corresponding numbers for Q2 2016, Q3 2016 and Q4 2016 being

approximately 80%, 50% and 5%, respectively.

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

|  |   |   |

|  |   |   |

|Key Financial Figures | Quarter ended December | Year ended December |

|(In USD millions, except per | 31, | 31, |

|share data) +---------+--------------+-------+-------------+

| |   |   |   |   |

| | 2015 | 2014 | 2015 | 2014 |

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

|Revenues | 229.3| 430.1| 961.9| 1 453.8|

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

|EBITDA (as defined, see Note | 116.5| 211.8| 484.4| 702.6|

|13) | | | | |

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

|EBIT ex. impairment and other | (22.9)| (0.2)| 15.8| 177.3|

|charges | | | | |

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

|EBIT as reported | (332.9)| (39.7)|(430.4)| 104.2|

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

|Income before income tax | (357.1)| (58.0)|(505.5)| 16.7|

|expense | | | | |

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

|Net income to equity holders | (334.6)| (93.6)|(527.9)| (50.9)|

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

|Basic earnings per share ($ per| (1.48)| (0.44)| (2.43)| (0.24)|

|share) | | | | |

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

|Net cash provided by operating | 121.0| 131.3| 487.9| 584.3|

|activities | | | | |

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

|Cash investment in MultiClient | 70.2| 57.9| 303.3| 344.2|

|library | | | | |

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

|Capital expenditures (whether | 41.7| 36.9| 165.7| 371.3|

|paid or not) | | | | |

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

|Total assets |  2 914.1| 3 563.0|2 914.1| 3 563.0|

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

|Cash and cash equivalents | 81.6| 54.7| 81.6| 54.7|

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

|Net interest bearing debt | 994.2| 1 048.0| 994.2| 1 048.0|

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

The complete Q4 and preliminary full year 2015 results earnings release and

presentation can be downloaded from www.newsweb.no and www.pgs.com.

FOR DETAILS CONTACT:

Bård Stenberg, VP IR & Corporate Communications

Phone: +47 67 51 43 16

Mobile: +47 992 45 235

****

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#1986002]