PGS ASA

Earnings Release • Jul 18, 2019

PGS ASA: Second Quarter 2019 Results

PGS ASA: Second Quarter 2019 Results

Solid Order Intake - Continued Market Improvement

Highlights Q2 2019

* Segment Revenues of $215.6 million, compared to $199.4 million in Q2 2018

* Segment EBITDA of $135.2 million, compared to $136.0 million in Q2 2018

* Segment EBIT of $17.7 million, compared to $13.6 million in Q2 2018

* Contract revenues of $94.4 million, compared to $29.7 million in Q2 2018

* Segment MultiClient pre-funding revenues of $66.8 million, with a

corresponding pre-funding level of 102%, compared to $94.0 million and 116%

in Q2 2018

* MultiClient late sales revenues of $45.6 million, compared to $68.7 million

in Q2 2018

* Cash flow from operations of $108.1 million, compared to $121.7 million in

Q2 2018

* Order book of $300 million, an increase of $62 million from Q1, and an

increase of $113 million compared to Q2 2018

* As Reported revenues according to IFRS of $192.4 million and EBIT loss of

$7.3 million, compared to $239.7 million and positive $30.5 million in Q2

2018

"Our order book increased by 26% in the second quarter. Pricing for recent

contract awards is consistent with our earlier indication of more than 35%

increase of 2019 prices compared to 2018 average.

Contract revenues of close to $100 million in the quarter benefitted from a

strong price increase and good vessel productivity. I am pleased that we are

back to making a solid profit and generating significant cash flow from our

contract activities. Our MultiClient late sales did not benefit from any

specific license rounds or transfer fees in the quarter, and were lower than

normal. We expect late sales to pick up again in the second half of the year.

The seismic market continues to improve. The order book increase in the quarter

is mainly driven by a higher volume of contract work. At the same time we are

progressing on firming up MultiClient programs for the second half. We are now

fully booked for the third quarter, and also fully booked for seven vessels in

the fourth quarter, which is one additional vessel compared to the six vessels

we operated last winter season.

In May we initiated a refinancing which was subsequently withdrawn due to a

negative change in capital market conditions. We expect to generate positive

cash flow and reduce net debt in 2019.  Our existing capital markets debts still

have 17 and 20 months to maturity and are at attractive terms. We expect to

refinance these facilities in 2019."

Rune Olav Pedersen,

President and Chief Executive Officer

Outlook

PGS expects significant cash flow generation among clients and an increase in

exploration and production spending, including offshore spending, to contribute

to further recovery of the marine seismic market fundamentals going forward.

Contract seismic is the activity currently benefitting the most from the

improvement, driven by more 4D acquisition and generally higher demand for new

proprietary seismic data.

Based on current operational projections and with reference to disclosed risk

factors, PGS expects full year 2019 gross cash costs of approximately $550

million. This number takes into account an approximately $50 million reduction

from the implementation of IFRS 16 in 2019. See Note 16 for a description of the

effects from implementation of IFRS 16.

2019 MultiClient cash investments are expected to be approximately $225 million.

Approximately 50% of 2019 active 3D vessel time is currently expected to be

allocated to MultiClient acquisition.

Capital expenditure for 2019 is expected to be approximately $70 million.

The order book totaled $300 million at June 30, 2019 (including $65 million

relating to MultiClient)*. The order book was $238 million at March 31, 2019 and

$187 million at June 30, 2018.

(*The order book as of June 30, 2019, includes $27 million related to a service

and support agreement in Japan up to the next annual renewal.)

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

|  |   |   |   |

| | | | |

|  | Quarter ended | Year to date | Year ended |

| | June 30, | June 30, |December 31,|

|  +-------+-------+-------+-------+------------+

| | | | | | |

|Consolidated Key Financial | | | | | |

|Figures | | | | | |

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

|share data) | 2019 | 2018 | 2019 | 2018 | 2018 |

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

|Profit and loss numbers Segment | | | | | |

|Reporting |  |  |  |  |  |

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

|Segment Revenues | 215.6| 199.4| 357.5| 397.2| 834.5|

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

|Segment EBITDA | 135.2| 136.0| 201.8| 228.4| 515.9|

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

|Segment EBIT ex. Impairment and | | | | | |

|other charges, net | 17.7| 13.6| (11.7)| (9.1)| 36.3|

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

|  |  |  |  |  |  |

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

|Profit and loss numbers As | | | | | |

|Reported |  |  |  |  |  |

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

|Revenues | 192.4| 239.7| 321.7| 441.0| 874.3|

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

|EBIT | (7.3)| 30.5| (49.9)| 23.2| 39.4|

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

|Net financial items | (31.8)| (15.7)| (53.8)| (38.0)| (87.3)|

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

|Income (loss) before income tax | | | | | |

|expense | (39.1)| 14.8|(103.7)| (14.7)| (47.9)|

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

|Income tax expense | (9.8)| (4.4)| (10.4)| (14.5)| (40.0)|

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

|Net income (loss) to equity | | | | | |

|holders | (48.9)| 10.4|(114.1)| (29.2)| (87.9)|

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

|Basic earnings per share ($ per | | | | | |

|share) | (0.14)| 0.03| (0.34)| (0.09)| (0.26)|

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

|  |  |  |  |  |  |

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

|Other key numbers As Reported: |  |  |  |  |  |

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

|Net cash provided by operating | | | | | |

|activities | 108.1| 121.7| 227.6| 195.1| 445.9|

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

|Cash Investment in MultiClient | | | | | |

|library | 65.7| 81.3| 127.8| 135.0| 277.1|

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

|Capital expenditures (whether | | | | | |

|paid or not) | 19.2| 8.3| 30.7| 12.3| 42.5|

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

|Total assets |2,371.7|2,386.3|2,371.7|2,386.3| 2,384.8|

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

|Cash and cash equivalents | 33.2| 24.4| 33.2| 24.4| 74.5|

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

|Net interest bearing debt* |1,035.7|1,145.3|1,035.7|1,145.3| 1,109.6|

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

|Net interest bearing debt, | | | | | |

|including lease liabilities | | | | | |

|following IFRS 16* |1,256.2|  |1,256.2|  |  |

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

(*Following implementation of IFRS 16, prior periods are not comparable to March

2019.)

A complete version of the Q2 2019 earnings release and earnings presentation can

be downloaded from www.newsweb.no (http://www.newsweb.no) and www.pgs.com

(http://www.pgs.com).

FOR DETAILS, CONTACT:

Bård Stenberg, SVP IR & Communication

Phone:  +47 67 51 43 16

Mobile:  +47 99 24 52 35

****

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 and the PGS share is listed

on the Oslo stock exchange (OSE: PGS). For more information on Petroleum Geo-

Services visit www.pgs.com (http://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 2018. 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.