TGS ASA — Earnings Release 2014

Feb 5, 2015

Q4 2014 Earnings Release

CEO COO/CFO 5 February 2015

Robert Hobbs Kristian K. Johansen

Forward-Looking Statements

All statements in 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 principal 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 forwardlooking statements for any reason.

Q4 2014 Highlights

• Net revenues were a record 298 MUSD compared to 271 MUSD in Q4 2013
• Net late sales of 226 MUSD, up 4% from 218 MUSD in Q4 2013
• Net pre-funding revenues of 62 MUSD were up 44%, funding 49% of TGS' operational multi-client investments for the quarter (126 MUSD)
• Operating profit for the quarter was 47 MUSD, 16% of net revenues, compared to 120 MUSD (44% of net revenues) in Q4 2013
• Q4 impairments of 63.9 MUSD related to the closure of Reservoir Solutions business unit and fair value assessment of non-current assets
• Adjusted for the impairments, EBIT was 111 MUSD, 37% of net revenues in Q4 2014
• Full year 2014 net revenues were 915 MUSD compared to 883 MUSD in 2013
• Full year 2014 operating profit was 295 MUSD compared to 387 million in 2013
• Two 3D vessels, three 2D vessels, one WAZ crew and four land crews operating under TGS control in Q4 2014
• TGS was also a participant in two 2D marine joint venture projects and one ocean bottom seismic JV project

Operational Highlights

Q4 2014 Operations

5

Q4 Activity – North America

East Canada

• Newfoundland Labrador 2014 37,000 km multi-client 2D survey in partnership with PGS
• Extended acquisition season resulted in more than 20% additional data being delivered
• Continuation of a multi-year program targeting Sectors announced for Newfoundland Labrador's new Scheduled Land Tender system
• Complements TGS' existing 47,500 km of 2D in this region
• Data being acquired utilizing PGS' Geostreamer® technology with data processing performed by TGS

Central Gulf of Mexico

• Snipe Phase 52 12,000 km multi-client 2D survey
• Long offset, high resolution data in ultra deep water, extending to the U.S. – Mexico boundary
• Supplements TGS' existing library in the region and provides critical well ties to a number of recent discoveries

Q4 Activity – North America

Central Gulf of Mexico

• Panfilo 11,500 km² multi-client 3D survey commenced in Q4 2014
• Deep water Lund and Henderson protraction areas of Central Gulf of Mexico
• Survey covers mainly open acreage and targets future lease rounds
• Declaration 6,000 km² multi-client M-WAZ survey commenced in Q4 2014
• Mississippi Canyon and Viosca Knoll protraction areas of the Central Gulf of Mexico
• Data being acquired orthogonal to TGS' underlying Justice WAZ 3D survey
• Long offsets to 16 km with single pass vessel configuration derived from CGG's StagSeisTM technology
• Nessie FANTM multi-client ocean bottom seismic survey commenced in Q3 2014
• Survey covers a number of existing fields and exploratory acreage in the South Timbalier protraction area of Central Gulf of Mexico
• Part of multi-year collaboration agreement with FairfieldNodal

7

Q4 Activity – Asia Pacific

New Zealand

• NWF14 17,500 km 2D multi-client survey
• Within the Reinga, Northland and Taranaki basins, offshore Northwest New Zealand
• Nine offshore permits granted to oil companies in Reinga-Northland, Taranaki, and the Pegasus basins as part of its 2014 block offer
• Consultation process for 2015 block offer underway

Australia

• Nerites Season 2 13,000 km² multi-client 3D survey
• Second season of the Nerites 3D seismic survey to fulfill work program commitment over EPP44 and EPP45 awarded November 2013
• Prospective frontier acreage with block relinquishment expected in 2019
• Solid prefunding but high amortization due to timing of relinquishments

Q4 Activity – Greenland

Greenland

• NE Greenland 2014 5,400 km multi-client 2D survey
• Part of a 13,500 km multi-year program
• Data being processed utilizing TGS' proprietary Clari-Fi™ broadband technology
• Upon completion of the program TGS' 2D multiclient library in the region will total more than 36,000 km

Q4 Activity – North America Onshore

U.S. Onshore

• Waterford 295 km² 3D multi-client survey
• Utica play, eastern Ohio
• Acquisition completed in Q4 2014
• Freeport 1,777 km² 3D multi-client survey
• Utica play, central Ohio
• Acquisition will complete in the second half of 2015
• Loyal 1,526 km² 3D multi-client survey
• STACK play, Oklahoma
• Acquisition completed in Q4 2014

Canada Onshore

• Kaybob-Bigstone 722 km² 3D-3C multi-client survey
• Duvernay fairway, West Central Alberta
• Acquisition will complete in Q1 2015

Enhancing Value through Technology

• Interpretive project in the Anadarko Basin available to clients end Q1 2015
• Innovative approach to basin-wide multiclient interpretation to include:
• Formation tops derived from well data
• Data-driven temperature volume
• Pressure volume
• Total organic carbon (TOC) volume
• Complements TGS multi-client seismic and well data
• 11 basins now covered by TGS interpretive projects

Financials

Key Financials

EBIT before non-recurring items

Multi-client NBV and Investments (operational)

Cash Flow from Operations

Net Revenue Breakdown

Q4 2014 Income Statement

USD million, except EPS		Q4 2014	Q4 2013	Change in %
Net operating revenues		298	271	10%
Cost of goods sold – proprietary and other		1	2	-29%
Amortization of multi-client library	49%	143	107	33%
Gross margin		154	163	-5%
Personnel costs		2 3	2 2	1 %
Other operating expenses		2 4	1 4	76%
Cost of stock options		1	1	-9%
Impairment of Reservoir Solutions		5 4	-
Depreciation		5	5	-17%
Operating profit	16%	4 7	120	-61%
Net financial items		(12)	(3)	330%
Profit before taxes	12%	3 6	118	-70%
Tax expense		4	3 4	-89%
Net Income	11%	3 2	8 4	-62%
EPS, Undiluted		0.32	0.82	-61%
EPS, Fully Diluted		0.31	0.81	-62%

©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.

Q4 2014 Cash Flow Statement

USD million	Q4 2014	Q4 2013	Change in %
Received payments	166	239	-30%
Payments for operational expenses	(35)	(33)	-6%
Paid taxes	0.4	9	95%
Operational cash flow	131	215	-39%
Received payments from sale of tangible assets	-	1
Investments in tangible and intangible assets	(6)	(3)	-81%
Investments in multi-client library	(117)	(116)	-1%
Interest received	1	2	-53%
Interest paid	(0.5)	(0.02)	-2205%
Purchase of treasury shares	(8)	(5)	-66%
Proceeds from share offerings	0.3	0.1	274%
Change in cash balance	1	9 4	-99%

YTD 2014 Income Statement

USD million, except EPS	YTD 2014	YTD 2013	Change in %
Net operating revenues	915	883	4 %
Cost of goods sold – proprietary and other	4	2 0	-80%
Amortization of multi-client library 45%	397	330	20%
Gross margin	514	534	-4%
Personnel costs	8 8	8 1	9 %
Other operating expenses	5 6	4 5	24%
Cost of stock options	5	4	13%
Impairment of the Reservoir Solutions net assets	5 4	-
Depreciation	1 6	1 6	0 %
Operating profit 32%	295	387	-24%
Net financial items	(6)	(6)	-12%
Profit before taxes 32%	288	381	-24%
Tax expense	7 2	112	-36%
Net Income 24%	216	269	-20%
EPS, Undiluted	2.12	2.63	-19%
EPS, Fully Diluted	2.09	2.59	-19%

YTD 2014 Cash Flow Statement

USD million	YTD 2014	YTD 2013	Change in %
Received payments	859	812	6 %
Payments for operational expenses	(140)	(145)	4 %
Paid taxes	(114)	(124)	8 %
Operational cash flow	605	543	11%
Received payments from sale of tangible assets	-	1	-100%
Investments in tangible and intangible assets	(27)	(39)	31%
Investments in multi-client library	(437)	(422)	-3%
Proceeds from sale of short-term investments	5	-	N/A
Interest received	6	7	-15%
Interest paid	(0.8)	(3)	77%
Dividend payments	(145)	(142)	-2%
Purchase of own shares	(24)	(5)	-384%
Proceeds from share offerings	3	3	14%
Change in cash balance	(15)	(59)	-76%

Balance Sheet

USD million	Q4 2014	Q3 2014	Change in %	Q4 2013
Assets
Cash equivalents	256	264	-3%	281
Financial investments available for sale	-	-		4
Other current assets	521	365	43%	447
Total current assets	778	629	24%	731
Intangible assets and deferred tax asset	8 5	137	-38%	138
Other non-current assets	4 4	5 3	-18%	5 6
Multi-client library	818	837	-2%	758
Fixed assets	4 3	5 3	-18%	5 3
Total Assets	1,768	1,710	3 %	1,736
Liabilities
Current liabilities	393	317	24%	342
Non-current liabilities	7	1 9	-63%	1 7
Deferred tax liability	2 9	5 6	-49%	8 5
Total Liabilities	428	392	9 %	443
Equity	1,339	1,318	2 %	1,293
Total Liabilities and Equity	1,768	1,710	3 %	1,736
The Company holds no interest-bearing debt

Investments per Vintage

Net Revenues vs. Net Book Value per Vintage

Strong Cash Generation Delivers Shareholder Value

* Dividend yield calculated based on share price at day of announcement except for 2014 when share price was based on January 6, 2015 close

* The OSX Index (PHLX Oil Service Sector Index) is a price weighted index composed of companies involved in the oil services sector

• The Board proposes a dividend of NOK 8.5 per share to the AGM in May 2015
• In addition to a dividend, the Board authorized in 2014 a share buy back program of USD 30 million of which approximately USD 26 million has been implemented to date. The remaining USD 4 million will be purchased under the current authorization.

Outlook

©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved. 23

Outlook

Macro Outlook

Recent oil price development to result in decreased exploration spend from customers

EUR

• Norwegian 23rd Licensing Round bids due 2 December 2015
• Further CSEM investment in partnership with EMGS
• 2015 season of Greenland 13,500 km multi-year program to commence in Q3

NSA

• BOEM five-year plan (2017-2022) proposal includes 10 lease sales in GOM and one Atlantic lease sale
• TGS positioning for high GOM lease turnover 2017 2019
• Continued strong interest in Newfoundland Labrador's scheduled land tender system
• Vessels secured for entry into Mexico (subject to permit)
• Three onshore projects announced for 2015

AMEAP

• 13,000 km² Nerites Season 2 expected to complete in Q2 2015
• 17,500 km 2D multi-client survey in Northwest New Zealand to complete in Q2 2015
• Awaiting further Africa license round announcements

License Round Activity and TGS Positioning

North & South America

• Central GOM Mar 2015 (5-Year Plan)
• Western GOM Aug 2015 (5-Year Plan)
• Alaska Offshore 2016 & 2017 (5-Year Plan)
• Newfoundland & Labrador Scheduled Land Tenure system
• Nova Scotia 2015, 2016 & 2017 (3-Year Plan)
• Canada Onshore at least monthly
• Brazil 2015 (expected)
• Mexico 2015 (Round 1 phased across 2015)

Africa, Middle East, Asia Pacific

• Madagascar 2015 (expected)
• Sierra Leone 2015 (expected)
• Liberia Harper Basin 2015 (expected)
• Australia Feb 2015 & Apr 2015 (bids due)
• Indonesia 2015 (expected)
• New Zealand Sept 2015 (bids due)

Europe / Russia

• Norway APA 2014 Round awards announced in Q1 2015
• Norway 23rd Round 2H 2015 (bids due)
• United Kingdom 2016 (expected)
• Greenland three rounds planned 2016-18

Backlog

Historical Backlog (MUSD) 2011 - 2014

©2015 TGS-NOPEC Geophysical Company ASA. All rights reserved.

2015 Projects Schedule

		Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
AZ W &	Sanco Swift		Australia
	Sanco Sword		Australia
D 3	Polarcus Adira		Gulf of Mexico
	CGG StagSeisTM Crew	Gulf of Mexico
N	Ogo FAN						Gulf of Mexico JV
B O	Nessie FAN	Gulf of Mexico
	Akademik Shatskiy								Greenland
	Atlantic Guardian(CSEM)	NW Eur	EMGS JV
Other &	Aquila Explorer		New Zealand
D 2	Osprey Explorer	Gulf of Mexico
	PGS JV								Canada (provisional, to be confirmed)
w	Canada Crew	Kaybob-Bigstone
Cre d	Ohio Crews (2)					Freeport
Lan	Oklahoma Crew					Blanchard

Letter of Award with Seabird Exploration provides access to up to six seismic vessels over a period of approximately 36 months in Mexico and US Atlantic waters (subject to issuance of seismic acquisition permits from relevant authorities)

Summary

• Record Q4 net revenues of 298 MUSD with highest ever net late sales of 226 MUSD
• Full year 2014 Guidance achieved with net revenues of 915 MUSD
• Full year 2015 investment of 462 MUSD
• Recent oil price development to result in decreased exploration spend from customers
• However, long-term future of asset-light, focused multi-client business remains strong and TGS has record high backlog entering into 2015
• Guidance for 2015
• TGS expects multi-client investments of approximately 420 MUSD and additional Capex of 15 MUSD
• TGS targets revenues of approximately 750 MUSD
• TGS targets an EBIT of approximately 260 MUSD
• The Board will propose to the AGM in May a dividend of NOK 8.5 per share

TGS Performs in all Cycles

• Average EBIT margin above 40% stable EBIT performance through the cycles
• ROCE significantly above WACC substantial value creation in any industry cycle

*Peer group includes CGG, Geokinetics, ION Geophysical, PGS, Western Geco, Dolphin, Polarcus Source Platou Markets and TGS

Thank you

www.tgs.com