TGS ASA — Earnings Release 2010

May 6, 2010

Earnings Release Q1 2010

Robert Hobbs
Chief Executive Officer

TGS

---

Forward-Looking Statements

All statements is this presentation other than statements of historical fact, are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. These factors include TGS' reliance on a cyclical industry and principle customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data products at costs commensurate with profitability. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.

TGS

---

Financial Highlights

• Net revenues were 148.2 MUSD, up 109% from Q1 2009
• Net late sales of 73.4 MUSD were up 145% from last year
• Net pre-funding of 69.6 MUSD were up 102%, funding 72% of our multi-client investment for the quarter (96.2 MUSD)
• Average amortization rate for the multi-client library was 47% compared to 51% in Q1 2009
• Operating profit for the first quarter was 58.8 MUSD, 40% of net revenues. This is up 197% from Q1 2009
• Cash flow from operations before multi-client investments were 106.3 MUSD, up 11% from Q1 2009
• Earnings per share (fully diluted) were USD 0.40 vs. USD 0.13 Q1 last year, up 211%
• Bought back 335,000 shares in the market for 7.2 MUSD

TGS

---

Income Statement

		Q1 2010	Q1 2009	Change	%
Net Operating Revenues		148.2	70.8	77.5	109%
COGS - Proprietary & Other		0.8	0.4	0.4	120%
MC Amortization	47%	67.3	32.6	34.7	107%
Gross Margin		80.1	37.8	42.3	112%
Other Operating Expenses		18.9	15.1	3.8	25%
Cost of Stock Options		0.8	0.7	0.1	20%
Depreciation		1.6	2.2	(0.6)	-29%
Operating Profit	40%	58.8	19.8	39.0	197%
Net Financial Items		1.4	1.2	0.2	17%
Pre-tax Profit	41%	60.2	21.0	39.2	187%
Taxes		18.2	7.8	10.4	133%
Net Income	28%	42.0	13.2	28.8	219%
EPS, undiluted		0.41	0.13	0.28	217%
EPS, fully diluted		0.40	0.13	0.27	211%

TGS

---

Balance Sheet

	3/31/2010	%	12/31/2009	%
Assets
Cash	281.9	24%	243.5	21%
Investments Available for Sale	26.4	2%	27.2	2%
Other Current Assets	306.5	26%	339.8	30%
Total Current Assets	614.8	52%	610.5	53%
Intangible Assets & LT Receivables	87.2	7%	88.3	8%
MC Library	453.2	39%	424.3	37%
Fixed Assets	19.9	2%	21.2	2%
Total Assets	1,175.1	100%	1,144.3	100%
Liabilities
Current Liabilities	225.9	19%	231.6	20%
Deferred Tax Liability	69.8	6%	72.8	6%
Equity	879.4	75%	839.9	73%

TGS

---

Cash Flow Statement

	Q1 2010	Q1 2009
Payments from Sales Received	150.5	130.1
Operational Costs Paid	(21.0)	(20.9)
Gain/(Loss) from Currency Exchange	1.1	(0.5)
Taxes Paid	(24.4)	(12.8)
Operational Cash Flow	106.3	95.9
Investments in Fixed Assets	(1.0)	(1.6)
Investments in Multi-Client	(64.6)	(48.6)
Net change in Short-Term Investments & Deposits	0.9	33.1
Financial Income	0.3	0.8
Net Change in Long-term loans	-	0.7
Financial Expense	(0.0)	(0.5)
Purchase of own Shares	(7.2)	-
Paid in Equity	3.7	0.4
Change in Cash Balance	38.4	80.3

TGS

---

Multi-Client Library

TGS

---

Accounting Principles for Multi-Client Library

• Accounting standards recommend to match revenues and costs in time
• TGS capitalizes the direct costs of surveys as investments in the Balance Sheet and amortizes them over 5 years (including the first year – WIP) as a function of expected ratio sales/investment
• If sales are lower than expectations, a minimum amortization kicks in:
• Maximum NBV one year after completion is 60%, then 40%, then 20%, then zero
• At the end of the fourth year after survey completion, each survey is fully amortized

TGS

---

Net Book Value vs. Investments per Vintage

• in relation to allowed Net Book Value at year end

TGS

---

Q1 Net Revenues vs. Net Book Value per Vintage

TGS

---

Operational Highlights

TGS

---

Net Revenue Breakdown

Q1 2010

Q1 2009

Q1 2010

Q1 2009

12

TGS

---

Net Revenue Breakdown

Q1 2010

Q1 2009

TGS

---

Q1 3D Operations

14

TGS

---

Q1 2D Operations

15

TGS

---

GOM WAZ Programs

• Acquisition complete
• Freedom – 16,600 km²
• Liberty – 3,050 km²
• TGS 50% Owned
• Acquisition in progress
• Justice – 7,800 km²
• TGS 100% Owned

TGS

---

Deepwater Horizon Incident

• TGS chartered WAZ vessels rendered assistance on April 20 immediately after incident
• Acquisition of Justice resumed on April 21
• WAZ crew advised to leave the project area on April 30
• WAZ crew temporarily mobilized to new project area adjacent to TGS-owned WAZ survey to commence operations
• Situation under constant review
• Will return to Justice when safe

TGS

---

TGS Depth Imaging Available for Norway Round 21

• Hoop Fault Complex MC 3D (2600 km²)
• Pre-stack depth migration available for 21st round

TGS

---

TGS Database Baffin Bay - Greenland

• Greenland round
• 14 blocks on offer
• Deadline May 1
• Announcement expected in Q3

TGS

---

TGS Database Baffin Bay - Greenland

• Greenland round
• 14 blocks on offer
• Deadline May 1

• Announcement expected in Q3

• Database

• 27,400 km MC 2D
• 27,400 km of gravity
• 53,500 km of aeromag
• Regional Geo Atlas
• Sea floor sampling
• 2010 infill MC 2D planned

TGS

---

West Africa 3D – A Key New Exploration Play

• Sierra Leone
• 2,500 km² available
• Liberia
• 9,000 km² available
• 4,000 km² acquisition complete
• 5,000 km² acquisition in progress
• 30,000 km of 2D available

TGS

---

2010 Expansion of Indonesia Deep Program

• Multi-client 2D
• S Salawati – 2,200 km
• Halmahera – 630 km
• South Java – 4,000 km
• NW Sumatra – 3,200 km (in progress)
• Industry's only multi-client data library across the Sundaland Margin

TGS

---

Browse Basin FMB Study

• Principal depositional environment maps for all major sequences
• Data utilized
• 30,000 of 2D seismic
• Sequence stratigraphic interpretation of over 70 wells

TGS

23

---

24
TGS

Outlook

---

Outlook

• Market for multi-client data is in recovery
• Record Q1 late sales for TGS
• High levels of pre-funding and operational activity on current projects

TGS

---

Backlog

TGS

---

Outlook

• Market for multi-client data is in recovery
• Record Q1 late sales for TGS
• High levels of pre-funding and operational activity on current projects
• Vessels secured for investment plan in 2010 were chartered at attractive rates
• Significant newbuild vessel capacity remains to be released to the market
• TGS project activity well-suited to capitalize on market recovery and upcoming license rounds
• Greenland
• UK
• Norway
• GOM
• Portfolio of attractive opportunities is growing

TGS

---

Expectations for 2010

• Multi-client investments USD 270 – 300 million
• Average pre-funding 50 – 60%
• Average multi-client amortization rate 37 – 43%
• Net revenues USD 560 – 600 million
• Contract revenues of approximately 5% of total revenues

TGS

---

TGS Performs in all Cycles

TGS