TGS ASA — Earnings Release 2015

Nov 17, 2015

TGS announces restructuring to adapt to prevailing market conditions

TGS announces restructuring to adapt to prevailing market conditions

ASKER, NORWAY (17, November 2015) - In order to further improve organizational

efficiency and competitiveness TGS is implementing global cost reduction and

efficiency plan. Furthermore, the value of selected MC surveys will be written

down to reflect more cautious market assumptions.

As advised in the 3Q report, TGS has in view of the weak market conditions

continued to review its cost base, this with the aim of identifying

organizational efficiencies, improvement potential and cost saving opportunities

across all business units and levels. On the back of the review TGS will

implement a number of measures and changes that will further improve the

company's competitiveness and support operational cash flow.

As a result of the above, TGS' global workforce will be reduced by approximately

130 people, corresponding to around 16 per cent of the total workforce. This

will reduce operating expenses by approximately USD 13 million per annum from

the beginning of 2016. A restructuring cost of USD 8 million will be charged to

the accounts for Q4 2015. This was a very difficult decision and we are

committed to assure that the employees leaving the company through this

necessary action will be treated with dignity and respect in accordance with

TGS' values.

Furthermore, TGS has also chosen to adopt more prudent assumptions with regards

to the length of the downturn in the evaluation of the multi-client library.

These assumptions are influenced by recent statements made by large oil

companies regarding reductions in E&P budgets not only for 2016 but also for

2017 and beyond. The revised assumptions will lead to total impairments for

selected surveys of approximately USD 150 million to be recognized in the Q4

2015 accounts.

The impaired surveys account for approximately 10 per cent of the total number

of surveys in the balance sheet. Hence, despite the adjusted assumptions, the

vast majority of the projects in TGS' library still have net book values that do

not warrant impairment.

The impaired surveys, which were all acquired during the peak of the market with

substantially higher cost levels than seen currently, fall into two categories:

* Projects in frontier areas where demand deterioration has been greater than

the general market demand trends.

* Projects in areas with greater political and regulatory risk, which

typically have attracted lower customer interest in the current challenging

market.

"Although the TGS library continues to perform well compared to the industry,

we have chosen to take a cautious view when evaluating the net book values. The

cost of shooting the same seismic today is dramatically lower than two to three

years ago and this has of course played a role in our assessment," says Robert

Hobbs, CEO of TGS.

As announced in October, TGS has received commitments of a Revolving Credit

Facility (RCF) of minimum USD 75 million (up from USD 50 million under the

existing facility). Closing of this facility is expected to take place within

the next two to three weeks.

With the initiatives and measures described above TGS is well positioned to

further enhance its position as the world's leading multi-client geoscience data

company. As during previous market down-turns, TGS' unique asset-light business

model combined with a robust balance sheet enables it to increase market share,

both through organic and inorganic investments, forming the basis for continued

long-term value creation and growth.

Company summary

TGS-NOPEC Geophysical Company (TGS) provides multi-client geoscience data to oil

and gas Exploration and Production companies worldwide. In addition to extensive

global geophysical and geological data libraries that include multi-client

seismic data, magnetic and gravity data, digital well logs, production data and

directional surveys, TGS also offers advanced processing and imaging services,

interpretation products, and data integration solutions.

TGS-NOPEC Geophysical Company ASA is listed on the Oslo Stock Exchange

(OSLO:TGS).

TGS sponsored American Depositary Shares trade on the U.S. over-the-counter

market under the symbol "TGSGY".

For more information visit TGS online at www.tgs.com.

Forward-looking statements

All statements in this press release 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.

Contact information

For additional information about this press release please contact:

Sven Borre Larsen

Chief Financial Officer

Tel: +47 90 94 36 73

Will Ashby Director

Finance Western Hemisphere & Investor Relations

Tel: +1 713 860 2184

Email: will.ashby@tgs.com

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

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