Q3 2016 Earnings Release

CEO CFO 28 October 2016

Kristian Johansen Sven Børre Larsen

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.

Q3 2016 Highlights

Q3 net revenues of 113 MUSD compared to 169 MUSD in Q3 2015
Net late sales of 67 MUSD, down 26% from 90 MUSD in Q3 2015
Net pre-funding revenues of 39 MUSD were down 47% from Q3 2015, funding 58% of TGS' operational multi-client investments for the quarter (68 MUSD)
Following a strong sequential improvement in market conditions from Q1 to Q2, fundamentals remained stable during Q3
Operating profit for the quarter was 11 MUSD compared to 46 MUSD in Q3 2015
Cash flow from operations was 91 MUSD compared to 121 MUSD in Q3 2015
Cash balance of 173 MUSD at 30 September 2016 in addition to undrawn 75 MUSD Revolving Credit Facility
Quarterly dividend maintained at USD 0.15 per share

New Project Announced – North West Africa

North West African Atlantic Margin NWAAM2017

Over 11,500 km of multi-client 2D seismic in partnership with PGS
Designed to infill, extend and complement the TGS NWAAM2012 2D survey which helped with recent commercial discoveries in the basin
A 12 km deep-tow streamer will enable the recording of high quality broadband 2D seismic data
Confirms TGS commitment to the leading frontier basin in Africa, where TGS already has over 28,000 km of 2D data and over 18,000 km² of 3D data

Operational Highlights

Q3 2016 Operations

Q3 Activity – U.S. Gulf of Mexico

Revolution XII and XIII

~7,150 km² (306 blocks) multi-client 3D survey in collaboration with WesternGeco
Located in Green Canyon, Atwater Valley and Ewing Bank protraction areas of the Central Gulf of Mexico
Survey utilizes WesternGeco's proprietary Q-Marine* point-receiver marine seismic system combined with the proprietary multi-vessel, Dual Coil Shooting acquisition technique, which will provide broadband, long-offset, full-azimuth data

*Mark of Schlumberger

Track record of success in Central GOM

Expansion of TGS-WesternGeco WAZ surveys in U.S Central GOM; first survey Freedom was acquired in 2008
WAZ data has proven critical to improve illumination and imaging of the sub-salt and other complex geologic features
This part of the Gulf of Mexico continues to see the highest activity level and benefits from significant near-term lease turnover

Q3 Activity – Mexico

Gigante 2D: ~186,000 km multi-client 2D survey

Regional 2D survey commenced in Q2 2015 with acquisition completed in early Q4 2016
Survey covers the proposed license rounds in the Perdido, Campeche and Mexican Ridges regions
Line ties made to the US Gulf of Mexico regional grids previously acquired by TGS
Significant amount of fast-track data delivered to clients

Gigante Multibeam, Coring, and Geochemical Surveys

~600,000 km² survey commenced in 2015 with coring to be completed in Q1 2017
More than 90% of data acquired at end Q3 2016
Interpretation of the data will integrate with the 2D seismic survey and enhance the value proposition to clients

Q3 Activity – East Canada

Newfoundland Labrador 2016 Season

38,000 km multi-client 2D survey in partnership with PGS – data acquisition to complete in Q4 2016
~2,000 km² multi-client 3D survey in partnership with PGS – data acquisition completed in Q3 2016
TGS-PGS JV library in this region will exceed 150,000 km of 2D data and 11,000 km² of 3D data in addition to 83,700 km of TGS vintage data, an expansive well log library and advanced multi-client interpretation products

A bright spot in an otherwise challenging exploration market

Recent exploration success
Highly successful 2015 license round (nine companies participated with CAD 1.2 billion successful commitments)
Two 2016 Calls for Bids issued over approximately 3.3 million hectares in Jeanne d'Arc and Eastern Newfoundland regions (bids due 9 November 2016)

Q3 Activity – Australia and Greenland

NW Shelf Renaissance: ~8,000 km multi-client 2D survey

Long offset, broadband 2D seismic data as well as magnetic and gravity data
Ties recent and deep wells with TGS' existing 3D coverage in the Carnarvon Basin
25% of the survey within blocks available in the 2016 Australian Offshore Petroleum Exploration Acreage Release areas
Acquisition completed in Q3 2016 with fast-track data expected to be available December 2016 and final data available Q3 2017

Northeast Greenland: ~15,000 km multi-client 2D survey

Completed final year of a multi-year, multi-client 2D project
Final data expected to be available in Q1 2017
On completion, TGS 2D library in the basin will be more than 40,000 km

Strategic Library Acquisitions

Dolphin library acquisition

Agreement in principle to buy the majority of the Dolphin MC library together with PGS
Enhancing TGS' already strong position in areas such as the Barents Sea, the North Sea, NW Africa and Australia
Limited initial cash outlay
Definitive agreement expected in the near future

TGS is actively seeking consolidation opportunities through strategic library acquisitions

Polarcus library 2015
Dolphin library 2016
Other opportunities monitored closely

Financials

Net Revenues

Late sales revenues

Prefunding revenues

Proprietary revenues

Total revenues

Net Revenue Breakdown

Operating Expenses, EBIT, Free Cash Flow

Operating expenses *

* Include personnel costs and other operating expenses. Adjusted for restructuring costs and larger impairments of operating items

* Q1-Q3 2016 reflects the new amortization policy effective from 1 January 2016

Free cash flow *

* Defined as cash flow from operational activities minus operational cash investments in multi-client projects

Amortization and impairment *

Multi-Client Library

Operational investments and prefunding ratio

Multi-client library - NBV

Net revenues vs net book value – year of completion

©2016 TGS-NOPEC Geophysical Company ASA. All rights reserved.

Q3 2016 Income Statement

USD million, except EPS		Q3 2016	Q3 2015	Change in %
Net revenues		113	169	-33%
Cost of goods sold – proprietary and other		5	0.1	8222%
Amortization of multi-client library	70%	7 4	9 9	-25%
Gross margin		3 4	7 1	-52%
Personnel costs		1 2	1 4	-19%
Other operating expenses		8	8	5 %
Cost of stock options		0.2	0.1	94%
Depreciation		3	3	9 %
Operating profit	10%	1 1	4 6	-76%
Net financial items		2	-2	214%
Profit before taxes	11%	1 3	4 4	-70%
Taxes		1 1	4	220%
Net Income	2 %	2	4 0	-96%
EPS, Undiluted		0.02	0.40	-95%
EPS, Fully Diluted		0.02	0.39	-95%

Q3 2016 Cash Flow Statement

USD million	Q3 2016	Q3 2015	Change in %
Received payments from customers	110	145	-24%
Payments for operational expenses	(25)	(23)	-7%
Paid taxes	6	(1)	552%
Operational cash flow	9 1	121	-24%
Investments in tangible and intangible assets	(2)	(1)	-63%
Investments in multi-client library	(62)	(72)	14%
Investments through mergers and acquisitions	-	(19)	100%
Interest received	0.7	1	-43%
Interest paid	(0.03)	(0.06)	53%
Dividend payments	(17)	(14)	-19%
Proceeds from share issuances	-	2	-100%
Change in cash balance	1 1	1 7	-36%

Balance Sheet

USD million	Q3 2016	Q2 2016	Change in %	Q4 2015
Assets
Cash and cash equivalents	173	162	7 %	163
Other current assets	275	255	8 %	308
Total current assets	449	417	8 %	471
Intangible assets and deferred tax asset	8 8	9 2	-4%	9 0
Other non-current assets	2 1	1 6	27%	2 5
Multi-client library	816	823	-1%	839
Fixed assets	2 3	2 6	-11%	3 0
Total Assets	1,397	1,375	2 %	1,455
Liabilities
Current liabilities	198	171	16%	218
Non-current liabilities	7	4	59%	6
Deferred tax liability	3 7	3 3	12%	3 3
Total Liabilities	242	208	16%	257
Equity	1,155	1,167	-1%	1,198
Total Liabilities and Equity	1,397	1,375	2 %	1,455

Dividend stable at USD 0.15 per share

*2016 Dividend Yield annualized based on the weighted yield at the time of announcement of quarterly dividends

Shareholder authorization to distribute quarterly dividend payments from Q1 2016
Aim to keep a stable quarterly dividend through the year
Actual quarterly dividend level paid will be subject to continuous evaluation of market outlook, cash flow expectations and balance sheet development
Q1 2016: USD 0.15 per share dividend paid on 23 February 2016
Q2 2016: USD 0.15 per share dividend paid on 1 June 2016
Q3 2016: USD 0.15 per share dividend paid on 25 August 2016
Q4 2016: USD 0.15 per share dividend to be paid on 18 November 2016 (shares will trade ex-dividend on 4 November 2016)

Outlook

Challenging Market for Exploration

Second consecutive 20%+ decline in E&P spending expected this year
Most initial E&P Spending surveys indicate a further decline in offshore spending in 2017
Early sign of improvement industry seismic late sales have recovered somewhat from the low in Q1 16
Seismic demand likely to remain weak into 2017 with high volatility from quarter to quarter

License Round Activity and TGS Positioning

North & South America

Central GOM Mar 2017 (5-Year Plan)
Central & Western GOM Aug 2017 (2017-22 Plan)
Newfoundland & Labrador Nov 2016 (Scheduled Land Tenure)
Nova Scotia 27 Oct 2016 (3-Year Rolling Plan)
Canada Onshore at least monthly
Brazil 2H 2017
Mexico Round 1(L04) in Dec 2016, Round 2 announced for 2017, 2 more rounds proposed by 2019

Africa, Middle East, Asia Pacific

Ongoing uncertainty on timing of African licensing rounds
Australia Dec 2016, Feb & Mar 2017 (bids due)
New Zealand Dec 2016 (awards expected)
Indonesia Direct proposal (bids closed Aug 2016); Regular tender (bids due Nov 2016)

Europe / Russia

Norway APA Q1 2017 (block awards)
Norway 24th Round Nov 2016 (nominations due)
UK 29th Round 26 Oct 2016 (bids due)
Greenland Dec 2016, 2017, 2018 (bids due)

Backlog

Historical Backlog (MUSD) 2012 - 2016

2016 Projects Schedule

Summary

Q3 net revenues of 113 MUSD
Positive cash flow further strengthens balance sheet
Cash balance of 173 MUSD in addition to undrawn 75 MUSD Revolving Credit Facility
Quarterly dividend maintained at USD 0.15 per share
Continued challenging market conditions, but early signs of improvements
Long-term future of asset-light, focused multi-client business remains strong
Cost control, disciplined counter-cyclical investment and balance sheet strength positions TGS to enhance its leading position
Updated 2016 guidance:
New operational multi-client investments of approximately 220 MUSD (down from 230 MUSD)
Additional multi-client investments expected from sales of existing surveys with risk sharing arrangements
Multi-client investments are expected to be prefunded 40% to 45%