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Second Quarter and First Half 2017 Results News

Earnings Presentation

A Clearer Image | www.pgs.com

This presentation contains forward looking information
Forward looking information is based on management assumptions and analyses
Actual experience may differ, and those differences may be material
Forward looking information is subject to significant uncertainties and risks as they relate to events and/or circumstances in the future
This presentation must be read in conjunction with the press release for the second quarter and first half 2017 results and the disclosures therein

Strong MultiClient Sales Further Cost Reductions Initiated

MultiClient sales of USD 127.6 million
Late sales driven by a diverse customer base in several regions
MultiClient acquisition activity focused on the North Sea and the Eastern Mediterranean
MultiClient pre-funding level of 115%
Improvement in marine contract pricing y-o-y
EBITDA of USD 112.5 million
Commenced large MultiClient campaigns offshore East Canada
Further cost cuts of USD 50-60 million initiated

First half 2017 within scenarios envisaged during refinancing

Financial Summary

EBIT** Cash Flow from Operations

*EBITDA, when used by the Company, means EBIT excluding Other charges, impairment and loss/gain on sale of long-term assets and depreciation and amortization. **Excluding impairments and Other charges.

Order Book

Order book of USD 248 million by end Q2 2017
Of which USD 182 million relates to MultiClient
USD 96 million of new order book secured in Q2
USD 25 million of Q2/Q3 2018 work taken out of order book due to dry well causing project cancellation
Vessel booking*
~90% booked for Q3 2017
~40% booked for Q4 2017
~15% booked for Q1 2018
~5% booked for Q2 2018
Unsold Q4 2017 capacity planned to be filled as:
MultiClient ~2/3 (or ~3.5 vessels)
Contract ~1/3 (or ~1.5 vessels)

*As of July 17, 2017, based on 9 active vessels and excluding cold-stacked vessels.

Financials

Unaudited Second Quarter and First Half 2017 Results

Consolidated Statement of Profit and Loss Summary

	Q2	Q2	First half	First half	Full year
USD million (except per share data)	2017	2016	2017	2016	2016
Revenues	240.5	183.0	395.3	386.1	764.3
EBITDA*	112.5	68.8	142.6	147.5	313.3
Operating profit (loss) EBIT ex impairment and other charges, net	(8.7)	(36.2)	(92.2)	(66.3)	(137.5)
Operating profit (loss) EBIT	(17.4)	(44.6)	(111.1)	(76.1)	(180.3)
Net financial items	(20.1)	(12.9)	(29.4)	(43.4)	(82.6)
Income (loss) before income tax expense	(37.5)	(57.7)	(140.5)	(119.6)	(262.8)
Income tax expense	5.3	5.9	1.8	11.0	(31.2)
Net income (loss) to equity holders	(32.2)	(51.8)	(138.7)	(108.7)	(293.9)
EPS basic	(\$0.10)	(\$0.22)	(\$0.42)	(\$0.46)	(\$1.21)
EBITDA margin*	46.8 %	37.6 %	36.1 %	38 %	41.0 %
EBIT margin ex impairment and other charges, net	-3.6 %	-19.8 %	-23.3 %	-17 %	-18.0 %
Revenues increased compared to Q2 2016 due to higher MultiClient and contract revenues, somewhat offset by lower Imaging revenues Q2 impairment and other charges, net, of USD 6.5 million

Revenues increased compared to Q2 2016 due to higher MultiClient and contract revenues, somewhat offset by lower Imaging revenues

*EBITDA, when used by the Company, means EBIT excluding Other charges, impairment and loss/gain on sale of long-term assets and depreciation and amortization.

The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter and first half 2017 results, released on July 27, 2017.

Q2 2017 Operational Highlights

Total MultiClient revenues of USD 127.6 million
Pre-funding revenues of USD 50.2 million
Pre-funding level of 115% on USD 43.8 million of MultiClient cash investment
Late sales revenues of USD 77.4 million
Marine contract revenues of USD 95.9 million benefitting from improvement in marine contract pricing and strong operations

MultiClient Revenues per Region

Pre-funding and Late Sales Revenues Combined

Late sales revenues were dominated by Europe and South America
Pre-funding revenues were primarily from Europe and Middle East
Pre-funding revenues to increase further in Q3 as more capacity is allocated to MultiClient

MultiClient Vintage Distribution

MultiClient net book value of USD 606.7 million as of June 30, 2017
Down from USD 647.7 million at yearend 2016
Moderate net book value for surveys completed 2012-2015
Q2 2017 amortization rate of 61%
2017 amortization expense expected to be in the range of USD 350-375 million

Key Operational Numbers

		2017		2016
USD million	Q 2	Q1	Q4	Q 3	Q 2	Q 1
Contract revenues	95.9	61.4	29.3	54.2	69.9	59.2
MultiClient Pre-funding	50.2	39.7	50.9	84.3	47.2	59.9
MultiClient Late sales	77.4	39.3	52.4	63.2	46.0	65.3
Imaging	14.9	13.8	19.6	16.0	17.9	16.6
Other	2.1	0.6	1.9	6.4	2.1	2.1
Total Revenues	240.5	154.8	154.1	224.1	183.0	203.1
Operating cost	(127.9)	(124.7)	(101.0)	(111.4)	(114.2)	(124.6)
EBITDA*	112.5	30.1	53.1	112.7	68.8	78.6
MultiClient amortization and impairment	(80.5)	(70.6)	(97.6)	(86.2)	(62.9)	(68.1)
Depreciation and amortization of long-term assets (excl. MC library)	(42.9)	(44.5)	(42.0)	(31.9)	(42.1)	(40.7)
Impairment and loss on sale of long-term assets (excl. MC library)	(9.9)	0	(7.8)	(9.2)	(4.2)
Other charges, net	3.4	(8.8)	1.9	3.1	(4.2)	(1.4)
EBIT	(17.4)	(93.7)	(92.4)	(11.5)	(44.6)	(31.6)
CAPEX, whether paid or not	(12.9)	(101.6)	(28.7)	(19.0)	(51.9)	(108.9)
Cash investment in MultiClient	(43.8)	(33.6)	(47.8)	(63.0)	(41.8)	(48.3)
Order book	248	340	215	190	230	204

**EBITDA, when used by the Company, means EBIT excluding Other charges, impairment and loss/gain on sale of long-term assets and depreciation and amortization. The accompanying unaudited financial information has been prepared under IFRS. This information should be read in conjunction with the unaudited second quarter and first half 2017 results released on July 27, 2017. -11-

Vessel Utilization* Seismic Streamer 3D Fleet Activity in Streamer Months

84% active vessel time in Q2 2017
Includes new build Ramform Hyperion and re-introduction of Ramform Vanguard after warm-stack
~50% of 2017 full year active vessel time planned for MultiClient acquisition

**Group Cost* Focus Delivers Results**

-13-

Strong cost management
Sequential cost increase primarily due to more capacity in operation

Full year gross cash cost expected to be below USD 700 million

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

Cost Discipline Remains a Key Priority in 2017

2016 gross cash cost more than 40% lower than in 2014
2017 gross cash cost expected to be below USD 700 million modest increase from structurally lower level in 2016 mainly attributable to:
More operated capacity with full year operation of Ramform Tethys and delivery of Ramform Hyperion
Some increase of fuel prices
Tight cost control continues, with further USD 50-60 million of gross cash cost reductions initiated with effect from Q4 2017
Planning to cold-stack Ramform Vanguard after North Sea season

*Estimate based on 30 June 2017 USD exchange rates against currencies in PGS cost base.

Consolidated Statements of Cash Flows Summary

	Q2	Q2	First half	First half	Full year
USD million	2017	2016	2017	2016	2016
Cash provided by operating activities	49.4	42.4	79.4	175.8	320.9
Investment in MultiClient library	(43.8)	(41.8)	(77.4)	(90.1)	(201.0)
Capital expenditures	(17.1)	(67.0)	(124.7)	(181.4)	(218.2)
Other investing activities	(3.7)	(2.9)	17.8	(100.2)	(109.5)
Net cash flow before financing activities	(15.2)	(69.3)	(104.9)	(195.9)	(207.8)
Financing activities	29.7	2.4	96.5	164.0	187.9
Net increase (decr.) in cash and cash equiv.	14.5	(66.9)	(8.4)	(31.9)	(19.9)
Cash and cash equiv. at beginning of period	38.8	116.6	61.7	81.6	81.6
Cash and cash equiv. at end of period	53.3	49.7	53.3	49.7	61.7

Cash flow from operating activities of USD 49.4 million in Q2 2017
Y-o-Y increase due to higher earnings, partially offset by a significant increase in accounts receivables as a result of high revenues in the second half of the quarter which will benefit cash flow in Q3 2017

Balance Sheet Key Numbers

	June 30	June 30	December 31
USD million	2017	2016	2016
Total assets	2,860.1	2,970.3	2,817.0
MultiClient Library	606.7	686.1	647.7
Shareholders' equity	1,250.9	1,350.3	1,359.4
Cash and cash equivalents (unrestricted)	53.3	49.7	61.7
Restricted cash	111.5	95.0	101.0
Liquidity reserve	228.3	429.7	271.7
Gross interest bearing debt	1,290.1	1,352.3	1,191.4
Net interest bearing debt	1,126.2	1,207.6	1,029.7

Liquidity reserve of USD 228.3 million
Drawings on the Revolving credit facility increased by USD 60 million in Q2 for working capital fluctuations, the Company expects to reduce drawing in Q3
Total leverage ratio of 4.39:1 as of June 30, 2017, compared to 4.88:1 as of March 31, 2017
Shareholders' equity at 44% of total assets

Summary of Debt and Drawing Facilities

Long-term Credit Lines and Interest Bearing Debt	Nominal Amount as of June 30, 2017	Total Credit Line	Financial Covenants
USD 400.0 million Term Loan ("TLB"), Libor (minimum 0.75%) + 250 basis points, due 2021	USD 387.0 million		None, but incurrence test: total leverage ratio ≤ 3.00x*
Revolving credit facility ("RCF"), due 2020 Libor + margin of 325-625 bps (linked to TLR) + utilization fee	USD 225.0 million	USD 400.0** million	Maintenance covenant: total leverage ratio ≤ 5.50x, to Q2-2017, 5.25x Q3-17, 4.75x Q4-17, 4.25x Q1-18, thereafter reduced by 0.25x each quarter to 2.75x by Q3-19
Japanese ECF, 12 year with semi-annual instalments. 50% fixed/ 50% floating interest rate	USD 440.1 million		None, but incurrence test for loan 3&4: Total leverage ratio ≤ 3.00x and Interest coverage ratio ≥ 2.0x
December 2020 Senior Notes, coupon of 7.375%	USD 212.0 million		None, but incurrence test: Interest coverage ratio ≥ 2.0x*
December 2018 Senior Notes, coupon of 7.375%	USD 26.0 million		None

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Titan-class Acquisition Platform Global News Malaysia's First MultiClient 3D Sr

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Operational Update and Market Comments I News

Unaudited Second Quarter and First Half 2017 Results

A Clearer Image | www.pgs.com

Streamer Operations July 2017

Marine Seismic Market

Substantial improvement in oil companies' cash flow
No negative change in client behavior despite oil price fluctuations during Q2
Pockets of opportunity for Q2/Q3 contract pricing owing to more 4D production seismic and capacity constraints in some regional markets
Outlook
Currently low and competitive contract bidding activity for Q4
Improved bid pipeline for Q1/Q2 2018

Market Activity

Encouraging leads development for 2018
Seismic demand primarily driven by:
Positioning for strategically important license rounds
Seismic commitments in E&P licenses
Significant increase in production seismic, especially in North Sea, West Africa and Brazil
Overall relative MultiClient activity expected to continue to increase

Marine Seismic Market Volume and Supply

Seismic acquisition volume in 2017 expected to be in line with volume in 2016
2017 survey mix more focused on smaller and more capacity intensive 4D production monitoring surveys and more MultiClient 3D surveys
Increased seasonal variations as geographical areas for winter activity have shrunk, while North Atlantic summer season activity is more resilient
2017 summer season capacity ~35-40% lower than 2013 peak
− Good supply/demand balance during summer season

Global streamer pool continues to shrink

Production Seismic is Growing Significantly PGS has Premium Offering and Strong Market Share

Source: PGS internal estimates.

Strong MultiClient Sales from a Diverse Customer Base

PGS sold MultiClient data to more than 70 different clients world wide in Q2
Distributed over 90 projects
PGS high quality GeoStreamer MultiClient data library attracts strong client interest, generating industry leading sales performance

Industry Leading MultiClient Performance

Strategic priority since 2010 to increase weighting of the MultiClient business
Brings greater stability to overall Group performance in a highly cyclical market
MultiClient share of total market will continue to increase going forward
Revenues currently dominated by MultiClient
52% of revenues in 1H 2017, will increase significantly in 2H
Q2 2017 sales/investment of 2.9x
Most of EBITDA is generated by 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

• Group gross cash cost below USD 700 million

– Of which ~USD 250 million to be capitalized as MultiClient cash investments

• MultiClient cash investments of ~USD 250 million

Pre-funding level ~100%
Active 3D vessel time planned for MultiClient of ~50%

• Capital expenditures of ~USD 150 million

– Including new build capex of ~USD 89 million

In Conclusion: Competitively Positioned to Navigate Current Market Environment

Strong MultiClient sales
Benefitting from improvement in marine contract pricing y-o-y
Well positioned in the 4D market
Competitive contract bidding for Q4
Improved bid pipeline for Q1/Q2 2018
Further cash cost cuts of USD 50-60 million initiated
Planning to cold-stack Ramform Vanguard after North Sea season

Thank You – Questions?

COPYRIGHT

The presentation, including all text, data, photographs, drawings and images (the "Content") belongs to Petroleum Geo-Services ASA, and/or its subsidiaries ("PGS") and may be protected by Norwegian, U.S., and international copyright, trademark, intellectual property and other laws. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior written permission by PGS and applicable acknowledgements. In the event of authorized reproduction, no trademark, copyright or other notice shall be altered or removed. © 2015 Petroleum Geo-Services ASA. All Rights Reserved.

Appendix **Main Yard Stays* Next Six Months**

Vessel	When	Expected Duration	Type of Yard Stay
PGS Apollo	August 2017	7 days	Intermediate classing and major engine overhaul
Ramform Hyperion	August 2017	6 days	Guarantee work

-29- *Yard stays are subject to changes.

Appendix: Fleet Structure Provides Flexibility Through the Cycle

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

Appendix: PGS Fleet Best Positioned on the Industry Cost Curve

PGS retains lead on lowest cash cost per streamer
Ramform vessels best positioned for both large, and streamer intensive (4D) surveys

Source: PGS internal estimates. The cash cost curve is based on typical number of streamer towed, and excludes GeoStreamer productivity effect. The graph shows all seismic vessels operating in the market. The Ramform Titan-class vessels are incorporated with 16 streamers, S-class with 14 streamers.

Redundancy

3 propellers, each with 2 motors - fully operational with 2 propellers.

2 engine rooms, each with 3 generators fully operational with 1 engine room.

All Weather

Widening the weather window and extending the seasons in northern and southern hemispheres without compromising HSEQ.

Fuel Capacity

Providing flexibility and endurance.

$Space = Flexibility$

Towing & Handling

24 reel and streamer capacity and back

deck automation provides flexibility.

rapid deployment and safe retrieval

Three times larger than modern conventional vessels, the Titans offer

a highly efficient work environment

with ample space for equipment.

maintenance and accommodation.

Power Additional power enables more in-sea and onboard equipment.

Performance Results

104m

Ramform Titan - Zero maritime downtime and only 2.7% seismic downtime to date. Total so.km acquired by Titan-class vessels is 89,712 sq. km

Records Rapid Deployment

16 streamers (each 8.1 km) safely deployed in just 73 hours.

Large Spread

13.75 sq. km fan spread with 18 streamers (each 7.05 km) x 100 m separation (130 m at tail end).

Fast Acquisition

Highest production 175 sq.km in a day (average for this survey = 139 sq. km/day).

Safety

Stable platform minimizes

Space to work, redundancy

risk of fatigue, trips and falls.

HSEQ

Layout supports One Culture operations improving all aspects of HSEO.

Health

in power and propulsion, 2 stern-launched workboats, Social zones, gym, stability rested crews perform better. back-deck automation.

Cost/Streamer

Ultra high capacity seismic vessels are more cost effective.

All Survey Types

Titan-class vessels cover all the bases from highly efficient reconnaissance exploration surveys to the detailed resolution required for 4D production seismic.

Larger spreads and faster turnaround mean fewer days on each job and leaves a smaller environmental footprint. DNV GL Clean Design - max S0x content of <2.5%. Reactive catalysts reduce NO_X emissions by 90%

Environment

Quality Superior platform to

deploy the best dualsensor technology - 100% GeoStreamer. Equipped with streamer and source steering.

More Measurements - Fewer Assumptions - Better Decisions

Dual Sensors

Prestack Deghosting - More Options

Complementary recordings facilitate deghosting by wavefield separation at all water depths.

Deghosting using dual-sensor measurements with their complementary ghost spectra eliminates frequency gaps, and provides access to separate wavefield components for advanced processes like PGS SWIM, FWI and Reflection Tomography.

Broader Bandwidth - Sharper Boundaries

Rich low frequency content reduces sidelobe artifacts, providing clearer reservoir details.

Impedance from

Oil charged reservoir

Water wet sands.

GeoStreame

Impedance

om well log

De-risking with Precise Rock Properties

GeoStreamer prestack deghosting provides reliable attributes for better understanding of rock and fluid distribution. Improved attribute computations reduce uncertainty and enable more precise estimation of reserves.

Monitoring Reservoir Changes

Wavefield reconstruction enables high repeatability for both legacy surveys and future 4D monitoring independent of sea-state. This reveals more subtle production-related changes.

Proven in all Play Types

SUB-SALT Improved signal recovery and amplitude characterization.

SUB-BASALT Clearer sub-basalt imaging and intrabasalt layer definition.

CLASTICS Reliable reservoir properties without the need for well control.

CARBONATES Detailed mapping of internal structures and better porosity prediction.

INJECTITES Resolution of complicated geometries and identification of true geological impedance boundaries.

Experience that counts 450 OOO I acquired worldwide Aug 2016

PGSSWIM

Extending Illumination and Angular Diversity

GeoStreamer data and SWIM imaging

Separated Wavefield Imaging (SWIM) is an innovative depth-imaging technology that uses both up- and down-going wavefields, recorded by GeoStreamer® dual hydrophone and motion sensors.

source results in the survey area having increased source sampling and improved angular diversity and illumination.

SWIM + Survey Geometries

as super-wide tow. For narrow azimuth surveys in shallow water SWIM yields better sampled data in the angle domain. WIDE AZ IMUTH The extra subsurface

NARROW AZIMUTH TO WIDE TOW SWIM

enables the design and use of cost

effective acquisition geometries such

illumination of sea-surface reflections combined with Wide Azimuth (WAZ) acquisition facilitates the imaging of salt flanks and other steeply dipping structures.

Reduce Acquisition Footprint

Turning the receiver spread into virtual sources vs and receiver arrays reduces source sampling in the crossline direction from the distance between sail lines to that between streamers. Using SWIM in shallow water fills in gaps in near-surface coverage successfully reducing the acquisition footprint (AF).

Further Uses

SWIM has been successfully applied to seabed data such as ocean bottom node and cable recordings. SWIM can increase the shallow image area of the seabed and the underlying sediments by up to 700%.

IMPROVED MULTIPLE REMOVAL

SWIM enables the generation $\sqrt{V}$ of detailed shallow overburden images that are a requirement for some data-driven 3D SRME multiple removal methods.

REDUCING DRILLING RISK Superior illumination of the overburden using SWIM provides highresolution images suitable for shallow hazard work, helping to identify drilling risks.

ACQUISITION SOLUTIONS

RAMFORM + GEOSTREAMER = EFFICIENCY + QUALITY

The unique combination of GeoStreamer® technology and Ramform® vessels delivers a premium imaging product to locate and derisk your prospect

3D SpreadControl

· Infill management · Efficient deployment & recovery
· Improved 4D repeatability

· Efficient deployment & recovery

· Improved 4D repeatability

Source Steering

· Infill management

Continous Recording

· Improved source sampling · Increased vessel speed
· Flexible record length

REC

Define Challenge and Select Technology

Tailored acquisition geometries make it easier to solve imaging challenges. Subsurface complexity and geophysical objectives determine the acquisition and imaging solutions to produce the best quality images in the most effective way.

$\ast$

Multi

Azimuth

(MAZ)

Coverage Options

From single sail line to the ultimate full azimuth coverage. Target illumination increases with each additional pass and direction.

Single Vessel Survey:

Leading the Industry

and

seismic

TOWED STREAMER

Reducing drilling risk

Barents Sea

EM-response

Hydrocarbon saturation

$EM +$ seismic $=$ reduced risk

Improved hydrocarbon saturation estimates

Resistivity

Hydrocarbon saturated rocks are typically highly resistive. Geologists access local resistivty data from well logs.

Sight & sound Complementary data add new layers of

comprehension: a bit like adding sight to sound. While seismic is the best measure of lithology, EM is more sensitive to changes in fluids

Drilling success with EM

Independent inversions

Seismic data can be inverted for velocity and for acoustic impedance. Inversion of EM data provides resistivity. Correlating all three improves drilling success

Havis 250 MMbor Wisting 132 MMboe Skrugard 286 MMboe Norvarg 189 MMboe Skavl 35 MMboe

Hanssen 15-56MMboe

Salina 38 MMboe

Mercury 6-12 MMboe

Atlantis minor gas

Apollo drv

Heilo dry

Wisting alt.dry

Darwin drv

Byrkje dry

Bonna drv

Eik drv

Goliat 238 MMbor

70%

SUCCESS

These wells all looked

7 of 10 had significant

hydrocarbon volumes.

good on seismic. Where

EM response was high (blue),

Operational 101

Towed streamer acquisition produces high density 2D or 3D EM data fast. The operation is very similar to seismic, making it easy to install, operate and even combine.

Multipurpose EM can de-risk frontier Northern Europe is the region prospects, reveal drilling hazards, or with greatest EM coverage identify missed tail end production.

Global

so far. but feasibility studies around the world show this technology has global notential

May 2016

How and when

Acquisition speed up

to 200 sq. or line km

Adding EM to seismic

EM data / day

Improve ranking of prospects by adding 2D or 3D EM data to existing seismic data. Enhance EM resolution by using the seismic to guide the EM inversion

Acquire EM and 2D GeoStreamer data efficiently and simultaneously with the same vessel to plan new 3D seismic.