Q2 2016 Earnings Release

CEO CFO

4 August 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.

Q2 2016 Highlights

Q2 net revenues of 114 MUSD compared to 140 MUSD in Q2 2015
Net late sales of 84 MUSD, up 4% from 82 MUSD in Q2 2015
Net pre-funding revenues of 26 MUSD were down 50% from Q2 2015, funding 42% of TGS' operational multi-client investments for the quarter (62 MUSD)
Improved performance in Q2 2016 compared to preceding quarters as oil companies willingness to invest in seismic data has improved slightly
Operating profit for the quarter was 22 MUSD compared to 36 MUSD in Q2 2015
Personnel and other operating costs reduced by 25% (30% excluding restructuring costs and impairments) from Q2 2015
Cash flow from operations was 9 MUSD compared to 86 MUSD in Q2 2015
Cash balance of 162 MUSD at 30 June 2016 in addition to undrawn 75 MUSD Revolving Credit Facility
Quarterly dividend maintained at USD 0.15 per share

New Project Announced – 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 will utilize WesternGeco's proprietary Q-Marine* point-receiver marine seismic system combined with the proprietary multivessel, Dual Coil Shooting acquisition technique, which will provide broadband, longoffset, 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

Operational Highlights

Q2 2016 Operations

Q2 Activity – Mexico

Gigante 2D – 186,000 km multi-client 2D survey

Regional 2D survey commenced in Q2 2015 and expected to complete in early Q4 2016
Survey covers the proposed license rounds in the Perdido, Campeche and Mexican Ridges regions
Line ties will be made to the US Gulf of Mexico regional grids previously acquired by TGS
160,000 km of 2D data acquired at end Q2 2016 with a significant amount of fast-track data already delivered to clients

Gigante Multibeam, Coring, and Geochemical Surveys

600,000 km2 survey commenced in 2015 and expected to complete in Q4 2016
More than 50% of data acquired at end Q2 2016
Interpretation of data will integrate with the 2D seismic survey and enhance the value proposition to clients

Q2 Activity – East Canada

Newfoundland Labrador 2016 Season

36,000 km multi-client 2D survey in partnership with PGS – commenced in Q2 2016
2,000 km2 multi-client 3D survey in partnership with PGS – will commence in Q3 2016
TGS-PGS JV library in this region will exceed 148,000 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)

Q2 Activity – Australia and Europe

Northwest Shelf Renaissance - 8,000km multiclient 2D survey

Long offset, broadband 2D seismic data as well as magnetic and gravity data
Designed to provide enhanced imaging through to the deeper stratigraphic section of the Dampier, Beagle and Bedout Sub Basins and Exmouth Plateau
Ties recent and deep wells with TGS' existing 3D coverage in the Carnarvon Basin
Traverses the proposed 2016 Australian Offshore Petroleum Exploration Acreage Release areas
Fast track data will be available November 2016 with the final data available Q2 2017

Europe – proprietary P-Cable survey

Proprietary P-Cable survey in Barents Sea
Builds on TGS' experience with multi-client P-Cable acquisition in the Barents Sea
Acquisition is expected to complete during Q3 2016.

TGS Launches New Digital Information Products

R360

Modern eCommerce tool to enable simpler integration of geologic data with customer systems
Allows clients to perform data reconnaissance, identification and selection through a map-based interface with purchase and data delivery online

Digital Petrodata GEONEWS

Provides E&P, financial and investment community professionals with a quick and easy way to access pertinent and timely oil & gas industry data
Deep tagging of articles allows creation of very focused queries and email alerts
Data is spatially located with detailed attributes and analysis functionality

Please visit www.tgs.com for a free trial of GEONEWS!

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

200 250

Amortization and impairment *

* Q1 and Q2 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

Multi-client library

Operational investments and prefunding ratio

Multi-client library - NBV

Net revenues vs net book value – year of completion

Investments – year of completion

Q2 2016 Income Statement

USD million, except EPS		Q2 2016	Q2 2015	Change in %
Net revenues		114	140	-18%
Cost of goods sold – proprietary and other		0.8	0.1	1435%
Amortization of multi-client library	62%	69	74	-6%
Gross margin		44	66	-33%
Personnel costs		11	17	-37%
Other operating expenses		9	9	-3%
Cost of stock options		0.3	0.9	-61%
Depreciation		3	3	-7%
Operating profit	19%	22	36	-39%
Net financial items		-0.3	2	-116%
Profit before taxes	19%	21	37	-43%
Taxes		5	13	-65%
Net Income	15%	17	24	-31%
EPS, Undiluted		0.17	0.24	-29%
EPS, Fully Diluted		0.17	0.24	-29%

Q2 2016 Cash Flow Statement

USD million	Q2 2016	Q2 2015	Change in %
Received payments from customers	28	141	-80%
Payments for operational expenses	(19)	(25)	25%
Paid taxes	-	(29)	100%
Operational cash flow	9	86	-89%
Investments in tangible and intangible assets	(1)	(3)	57%
Investments in multi-client library	(44)	(162)	73%
Interest received	0.3	2	-82%
Interest paid	(0.3)	(0.003)	-10467%
Dividend payments	(14)	(99)	86%
Proceeds from share issuances	2	0.03	5271%
Change in cash balance	-48	-175	73%

Balance Sheet

USD million	Q2 2016	Q1 2016	Change in %	Q4 2015
Assets
Cash and cash equivalents	162	210	-23%	163
Other current assets	255	189	35%	308
Total current assets	417	399	5%	471
Intangible assets and deferred tax asset	92	92	0%	90
Other non-current assets	16	16	3%	25
Multi-client library	823	830	-1%	839
Fixed assets	26	28	-7%	30
Total Assets	1,375	1,364	1%	1,455
Liabilities
Current liabilities	171	168	2%	218
Non-current liabilities	4	5	-9%	6
Deferred tax liability	33	29	14%	33
Total Liabilities	208	201	3%	257
Equity	1,167	1,163	0%	1,198
Total Liabilities and Equity	1,375	1,364	1%	1,455

The Company holds no interest-bearing debt

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 to be paid on 25 August 2016 (shares will trade ex-dividend on 11 August 2016)

Outlook

Challenging Market for Exploration

E&P spending likely to decline 20-30% this year
While seeing some signs of improvement in oil companies' willingness to invest in seismic data during Q2 2016, the market is expected to remain challenging in the near term
Seismic data is largely a type of discretionary spending that oil companies can quickly turn on and off depending on prevailing strategies and market conditions
High variability of seismic spending between quarters and across regions is expected to continue going forward

License Round Activity and TGS Positioning

North & South America

Central GOM Mar 2017 (5-Year Plan)
Western GOM Aug 2016 (5-Year Plan)
Newfoundland & Labrador Nov 2016 (Scheduled Land Tenure)
Nova Scotia Q4 2016 (3-Year Rolling Plan)
Canada Onshore at least monthly
Brazil Mid-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 Q3 2016 (2016 round launch)
New Zealand Sep 2016 (bids due)
Indonesia Aug & Oct 2016 (bids due)

Europe / Russia

Norway APA Sep 2016 (bids due)
Norway 23rd Round May 2016 (blocks awarded)
UK 29th Round Oct 2016 (bids due)
Greenland Dec 2016, 2017, 2018 (bids due)

Backlog

Historical Backlog (MUSD) 2012 - 2016

2016 Projects Schedule

2D & Other

Land

TGS Strategy: Cost efficient, focused and quickly reacting!

Investment focus in areas of low break-even oil price, fast payback and client activity
Payback time combined with breakeven oil price highlights regions that E&P companies will likely prioritize when oil price starts to materially recover
TGS will maintain a clear portfolio strategy with strict minimum targets for prefunding and expected returns

Personnel and other operating costs*

* Adjusted for restructuring costs and larger impairments of operating items

Fast and flexible track record; reacting quickly to seize advantage
Maintain focus on core business
React quickly to size the company to the level of business activity
Ongoing initiative to further reduce number of management layers
Reward structure drives strong alignment between company and employees

Summary

Q2 net revenues of 114 MUSD
Q2 operational investment of 62 MUSD (42% pre-funded)
Q2 operating profit of 22 MUSD
Cash balance of 162 MUSD in addition to undrawn 75 MUSD Revolving Credit Facility
Quarterly dividend maintained at USD 0.15 per share
Despite seeing some signs of improvement in oil companies' willingness to invest in seismic data during Q2 2016, the market is expected to remain challenging and volatile in the near term
However, 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 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%