Q1 2016 Earnings Release

CEO CFO

21 April 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.

Q1 2016 Highlights

Q1 net revenues of 64 MUSD compared to 172 MUSD in Q1 2015
Net late sales of 38 MUSD, down 47% from 72 MUSD in Q1 2015
Net pre-funding revenues of 23 MUSD were down 76% from Q1 2015, funding 43% of TGS' operational multi-client investments for the quarter (53 MUSD)
Operating profit for the quarter was -21 MUSD compared to 37 MUSD in Q1 2015
Reflects the new amortization policy for seismic surveys effective from 1 January 2016
Personnel and other operating costs reduced by 28% from Q1 2015 (adjusted for 2.1 MUSD non-recurring severance costs)
Cash flow from operations was 145 MUSD compared to 260 MUSD in Q1 2015
Free cash flow (after operational investments) of 63 MUSD
Cash balance of 210 MUSD at 31 March 2016 in addition to undrawn 75 MUSD Revolving Credit Facility
Quarterly dividend maintained at USD 0.15 per share (subject to renewal of the Board authorization at AGM on 10 May 2016)

Operational Highlights

Q1 2016 Operations

Q1 Activity – Asia Pacific

Offshore Malaysia - Award of Permit

A consortium comprising TGS, PGS and Schlumberger WesternGeco won the tender for the rights to undertake the first multi-client seismic program offshore Sabah, Malaysia
Number of proven hydrocarbon accumulations with exploration and drilling progressing into deeper frontier waters
This large basin will benefit from modern, high resolution broadband seismic acquisition and processing technologies necessary to understand both the existing play concepts and new potential plays

Q1 Activity – North America Onshore

Chickadee – 206 km2 3D multi-client survey

Full-azimuth multicomponent (3C-3D) data
Eastwards expansion of TGS' successful Kaybob-Bigstone surveys in the Duvernay fairway, West Central Alberta
Building on track record with clients and extending TGS' dominance in area of high activity
Acquisition completed in Q1 2016

Q1 Activity – Mexico

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

Regional 2D survey commenced in Q2 2015 and expected to complete in late Q3 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
More than 120,000 km of 2D data acquired at end Q1 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
Interpretation of data will integrate with the 2D seismic survey and enhance the value proposition to clients

Financials

Net Revenues

Late sales revenues

Prefunding revenues

⁹ ⁹ ⁵ ⁵ ⁵ -45% Y/Y

Proprietary revenues

Total revenues

Net Revenue Breakdown

Operating Expenses, EBIT, Free Cash Flow

Operating expenses *

* Include personnel costs and other operating expenses. Adjusted for non-recurring items.

EBIT before non-recurring items

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

Free cash flow

Amortization and impairment *

Multi-client library

Operational investments and prefunding ratio

Multi-client library - NBV

Net revenues vs net book value – year of completion

270 381 609 427 59 457 0 100 200 300 400 500 600 700 2012 2013 2014 2015 2016 YTD WIP 37% 59% 24% 2% 16% 69% Investments – year of completion

Original investments Net Book Value

Q1 2016 Income Statement

USD million, except EPS		Q1 2016	Q1 2015	Change in %
Net revenues		64	172	-63%
Cost of goods sold – proprietary and other		0.01	0.5	-97%
Amortization of multi-client library	102%	62	105	-41%
Gross margin		2	67	-97%
Personnel costs		13	17	-20%
Other operating expenses		7	9	-18%
Cost of stock options		0.05	0.5	-91%
Depreciation		3	4	-16%
Operating profit	-33%	-21	37	-157%
Net financial items		1	-1	175%
Profit before taxes	-32%	-20	36	-156%
Taxes		-0.1	7	-102%
Net Income	-32%	-20	29	-170%
EPS, Undiluted		-0.20	0.28	-171%
EPS, Fully Diluted		-0.20	0.28	-171%

Q1 2016 Cash Flow Statement

USD million	Q1 2016	Q1 2015	Change in %
Received payments from customers	175	337	-48%
Payments for operational expenses	(27)	(31)	14%
Paid taxes	(3)	(45)	93%
Operational cash flow	145	260	-44%
Investments in tangible and intangible assets	(3)	(2)	-17%
Investments in multi-client library	(82)	(151)	46%
Payments made to acquire debt instruments	-	(5)	N/A
Interest received	0.3	2	-86%
Interest paid	(0.01)	(0.02)	56%
Dividend payments	(15)	-	N/A
Purchase of treasury shares	-	(5)	N/A
Proceeds from share issuances	0.1	2	-91%
Change in cash balance	45	101	-55%

Q1 2016 Balance Sheet

USD million	Q1 2016	Q4 2015	Change in %
Assets
Cash and cash equivalents	210	163	29%
Other current assets	189	308	-39%
Total current assets	399	471	-15%
Intangible assets and deferred tax asset	92	90	2%
Other non-current assets	16	25	-37%
Multi-client library	830	839	-1%
Fixed assets	28	30	-7%
Total Assets	1,364	1,455	-6%
Liabilities
Current liabilities	168	218	-23%
Non-current liabilities	5	6	-22%
Deferred tax liability	29	33	-12%
Total Liabilities	201	257	-22%
Equity	1,163	1,198	-3%
Total Liabilities and Equity	1,364	1,455	-6%

The Company holds no interest-bearing debt

Strong Cash Generation Delivers Shareholder Value

Historical NOK dividends converted to USD using FX rate on ex-dividend date

Dividend Paid* (2010 – 2016) Dividend Yield (2010 – 2016)

*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 subject to a renewal of the Board's authorization to distribute quarterly dividends at the AGM on 10 May 2016. The share is expected to trade ex-dividend on 18 May 2016 with payments due on 1 June 2016

Outlook

Challenging Market for Exploration

E&P spending likely to decline 20-30% this year
There are currently few tangible signs that a recovery is imminent and the market for seismic data is likely to remain weak in 2016
Oil companies are likely to prioritize their seismic spend in areas with more favorable economics and payback times as well as areas where they have current work programs and license obligations
This could result in greater variability of seismic spend between quarters and across regions in the near term

License Round Activity and TGS Positioning

North & South America

Central GOM Mar 2016 (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 next round expected 2016/17
Mexico Round 1(L04) in Dec 2016, 3 more rounds proposed by 2019

Africa, Middle East, Asia Pacific

Ongoing uncertainty on timing of African licensing rounds
Australia Jun 2016 (2016 round launch)
New Zealand Sep 2016 (bids due)
Indonesia 2016 (bids due)

Europe / Russia

Norway APA Sep 2016 (bids due)
Norway 23rd Round Mid 2016 (awards due)
UK 29th Round Q4 2016 (expected)
Greenland Dec 2016, 2017, 2018 (bids due)

Newfoundland Labrador Call for Bids

Prolific offshore area with 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
The modern TGS-PGS JV library in this region exceeds 112,000 km of 2D data and 9,172 km2 of 3D data in addition to 83,700 km of TGS vintage data

Backlog

Historical Backlog (MUSD) 2012 - 2016

2016 Projects Schedule

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Akademik Shatskiy Aquila Explorer Hawk Explorer Osprey Explorer Northern Explorer Harrier Explorer Fugro Multibeam TDI Brooks Coring Greenland Mexico 2D & Other Mexico Mexico Mexico Mexico Mexico Mexico Mexico

Canada Crew	Chickadee
-------------	-----------	--	--

NSA EUR AMEAP

Flexible business model with counter-cyclical qualities

Oil price

• Down ~60% since summer of 2014

Oil company returns(1)

Only ~1% in 2015
Down ~16%-points since peak in 2011

E&P spending

Down 20-30% in 2015
Expected down another 20-30% in 2016

TGS late sales

47% down in 2015
47% down y/y in Q1 16

TGS prefunding revenue(2)

• Expected down ~60% in 2016

Vessel day rates

• Down 50% last three years

Risk mitigation

Vessel owners accepting turnkey contracts
Risk sharing with vessel owners

TGS cash opex

• Run-rate down ~25% y/y as a result of cost cuts

TGS investments(2)

• Expected down almost 60% in 2016

TGS cash tax

• Significantly reduced as a result of weak P&L results

Resilient cash flow profile in weak markets

1. Source: Nordea. Average of 10 large integrated oil companies
1. Based on TGS guidance: 2016 MC investments of approximately MUSD 220, prefunding of 45-50%

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 break-even 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
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

Energy Starts with Us!

TGS will be THE leading energy information company with the BEST people, quality and service!

Summary

Q1 net revenues of 64 MUSD
Q1 operational investment of 53 MUSD (43% pre-funded)
Q1 operating loss of 21 MUSD
Cash flow from operations of 145 MUSD driving increase in cash balance to 210 MUSD
Quarterly dividend maintained at USD 0.15 per share (subject to renewal of the Board authorization at AGM on 10 May 2016)
Challenging seismic market continues with further reductions in oil company spending
Oil companies are likely to prioritize their seismic spend in areas with more favorable economics and payback times as well as areas where they have current work programs and license obligations
This could result in greater variability of seismic spend between quarters and across regions 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
Guidance for 2016 remains unchanged:
TGS expects multi-client investments of approximately 220 MUSD
Multi-client investments are expected to be prefunded 45% to 50%