Q4 2015 Earnings Release

Robert Hobbs 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.

Q4 2015 Highlights

Q4 net revenues of 132 MUSD compared to 298 MUSD in Q4 2014
Net late sales of 90 MUSD, down 60% from 226 MUSD in Q4 2014
Net pre-funding revenues of 37 MUSD were down 41% from Q4 2014, funding 42% of TGS' operational multi-client investments for the quarter (88 MUSD)
Operating profit for the quarter was -140 MUSD compared to 47 MUSD in Q4 2014
Impairments of 161 MUSD
Restructuring costs of 10 MUSD and other provisions of 8 MUSD
Cash flow from operations was 99 MUSD compared to 131 MUSD in Q4 2014
Cash balance of 163 MUSD at 31 December 2015 in addition to undrawn 75 MUSD Revolving Credit Facility
Full Year 2015 net revenues of 612 MUSD compared to 915 MUSD in 2014
Full Year 2015 operational investment of 502 MUSD (51% pre-funded)
Full Year 2015 operating profit of -21 MUSD compared to 295 MUSD in 2014

Operational Highlights

Q4 2015 Operations

Q4 Activity – East Canada

Flemish Pass – 4,372 km2 multi-client 3D survey

TGS' first 3D acquisition offshore East Canada in partnership with PGS
Acquisition completed in October 2015 with final data available to clients in Q3 2016
NE Newfoundland 4,800 km2 multi-client 3D survey
Survey in partnership with PGS covers Areas of Interest (AOIs) released to industry by regional authorities
Acquisition completed in late October 2015 with final data available to clients ahead of the Q4 2016 license round

SE Grand Banks / S Labrador / NE Newfoundland

28,000 km multi-client 2D surveys
Continuation of multi-year investment in partnership with PGS covering future AOIs
TGS JV library now exceeds 112,000 km of modern 2D data in this region in addition to 83,700 km of TGS vintage data

Q4 Activity – Greenland & U.S GOM

Greenland

NEG 14,500 km multi-client 2D survey
Second year of a multi-year, multi-client 2D program offshore Northeast Greenland
Ice-breaker vessel required for seismic operations
Very good operational performance resulted in acquisition of 7,300 km of data in 2015
1,800 km remain to be acquired in 2016
On completion, TGS 2D library in the basin will be more than 36,000 km

U.S Central Gulf of Mexico

Ogo FANTM multi-client Full Azimuth Nodal survey
136 shelf blocks over existing fields and exploratory acreage

Acquisition completed in Q4 2015
Part of multi-year collaboration agreement with FairfieldNodal

Q4 Activity – North America Onshore

Oklahoma

Blanchard 1,100 km2 3D multi-client survey
Designed to image complex faulting and subsurface targets over the Mississippian through Devonian intervals
Located in the core of the South Central Oklahoma Oil Play (SCOOP), which targets the prolific Woodford Shale and also covers the recently announced overlying Springer Shale interval
Acquisition completed in Q4 2015
Kingfisher 500 km2 3D multi-client survey
Acquired existing onshore seismic survey from group of oil & gas companies
Located in the core of the oil window targeting the prolific Meramec, Cana Woodford, Woodford Shale, and Hunton intervals within the commonly referenced STACK play fairway in Oklahoma
Survey is adjacent to TGS' Loyal survey which will be merged to form one seamless dataset covering approximately 2,000 km2

Q4 Activity – Mexico

Gigante 2D 186,000 km multi-client 2D survey
Regional 2D survey commenced in Q2 2015 and expected to complete in mid-2016
Survey includes world class producing trends such as the Perdido fold belt and Campeche Bay
Line ties will be made to the US Gulf of Mexico regional grids previously acquired by TGS
5 vessels were active on this survey during Q4, expect to use 4 vessels on this survey through first half of 2016
93,000 km (50%) of survey acquired with >57,000 km of fast track products available covering the proposed licensing rounds in the Campeche, Perdido and Mexican Ridges regions
Gigante Multibeam, Coring, and Geochemical Surveys
600,000 km2 survey commenced in 2015 and expected to complete in H2 2016
Survey will cover deepwater sector of the Mexican Gulf of Mexico
Interpretation of data will integrate with the seismic survey
Multibeam acquisition is >12% complete with coring activities commencing in January

Enhancing Value through Technology

Complementary Exploration Technologies

Multibeam sonar used to image seeps on the sea bottom and gas plumes in the water column
Coring 6 meter samples gathered from bathymetrically identified seeps
Jumbo Piston Cores 20 meter cores for geologic age and sedimentation rates
Heat flow Cores to constrain thermal maturity models
Geochemical Analysis performed on cores to determine character of the hydrocarbon seep
An important frontier exploration tool:
Valuable information on the structural overprint of underlying geology
Validate active petroleum systems
Determine hydrocarbon grade early in exploration phase
Facilitate understanding of sediment flow
Data will integrate with the seismic survey, well data and regional interpretation studies

Images courtesy of Fugro and TDI Brooks International

Financials

Key Financials

EBIT before non-recurring items*

* Q4 2015 adjusted for multi-client impairments of USD 161 million and restructuring costs of USD 10 million

Multi-client NBV and Investments (operational)

Cash Flow from Operations

Net Revenue Breakdown

Europe 35%

Q4 2015 Income Statement

USD million, except EPS	Q4 2015	Q4 2014	Change in %
Net revenues	132	298	-56%
Cost of goods sold – proprietary and other	0.4	1	-65%
Amortization of multi-client library * 181%	230	143	61%
Gross margin	(99)	154	-164%
Personnel costs	15	23	-33%
Other operating expenses	22	24	-7%
Cost of stock options	0.2	1	-75%
Impairment of Reservoir Solutions	-	54	-100%
Depreciation	3	5	-30%
Operating profit -106%	(140)	47	-396%
Net financial items	(2)	(12)	85%
Profit before taxes -107%	(142)	36	-497%
Taxes	(20)	4	-650%
Net Income -92%	(122)	32	-479%
EPS, Undiluted	(1.20)	0.32	-480%
EPS, Fully Diluted	(1.19)	0.31	-480%

* Amortization includes non-recurring impairments of USD 161 million

Q4 2015 Cash Flow Statement

USD million	Q4 2015	Q4 2014	Change in %
Received payments from customers	140	166	-16%
Payments for operational expenses	(24)	(35)	32%
Paid taxes	(17)	0.4	-4404%
Operational cash flow	99	131	-25%
Investments in tangible and intangible assets	(1)	(6)	81%
Investments in multi-client library	(119)	(117)	-2%
Investments through mergers and acquisitons	(8)	-	N/A
Interest received	0.8	1	-31%
Interest paid	(0.1)	(0.5)	82%
Purchase of treasury shares	-	(8)	N/A
Proceeds from share issuances	0.8	0.3	128%
Change in cash balance	(27)	1	-2189%

YTD 2015 Income Statement

USD million, except EPS	YTD 2015	YTD 2014	Change in %
Net revenues	612	915	-33%
Cost of goods sold – proprietary and other	1	4	-75%
Amortization of multi-client library * 86%	507	397	28%
Gross margin	104	514	-80%
Personnel costs	63	88	-28%
Other operating expenses	47	56	-15%
Cost of stock options	2	5	-64%
Impairment of Reservoir Solutions	-	54	N/A
Depreciation	13	16	-22%
Operating profit -3%	(21)	295	-107%
Net financial items	(3)	(6)	47%
Profit before taxes -4%	(25)	288	-108%
Taxes	4	72	-95%
Net Income -5%	(28)	216	-113%
EPS, Undiluted	(0.28)	2.12	-113%
EPS, Fully Diluted	(0.28)	2.09	-113%

* Amortization includes non-recurring impairments of USD 161 million in Q4 2015

YTD 2015 Cash Flow Statement

USD million	YTD 2015	YTD 2014	Change in %
Received payments from customers	764	859	-11%
Payments for operational expenses	(103)	(140)	26%
Paid taxes	(94)	(114)	18%
Operational cash flow	567	605	-6%
Investments in tangible and intangible assets	(7)	(27)	73%
Investments in multi-client library	(504)	(437)	-15%
Investments through mergers and acquisitions	(26)	-	N/A
Proceeds from sale of short-term investments	-	5	N/A
Payments made to acquire debt instruments	(5)	-	N/A
Interest received	6	6	-2%
Interest paid	(0.2)	(0.8)	78%
Dividend payments	(113)	(145)	22%
Purchase of treasury shares	(5)	(24)	80%
Proceeds from share issuances	4	3	38%
Change in cash balance	(84)	(15)	-477%

Balance Sheet

USD million	Q4 2015	Q3 2015	Change in %	Q4 2014
Assets
Cash and cash equivalents	163	191	-15%	256
Other current assets	308	328	-6%	521
Total current assets	471	519	-9%	778
Intangible assets and deferred tax asset	90	82	9%	85
Other non-current assets	25	19	32%	44
Multi-client library	839	976	-14%	818
Fixed assets	30	33	-10%	43
Total Assets	1,455	1,630	-11%	1,768
Liabilities
Current liabilities	218	273	-20%	393
Non-current liabilities	6	2	282%	7
Deferred tax liability	33	36	-10%	29
Total Liabilities	257	311	-17%	428
Equity	1,198	1,319	-9%	1,339
Total Liabilities and Equity	1,455	1,630	-11%	1,768

The Company holds no interest-bearing debt

Investments per Vintage

Net Revenues vs. Net Book Value per Vintage

New amortization policy

Due to an amendment to IAS 38 Intangible assets, the amortization method for the seismic multi-client libraries will change with effect from 1 January 2016:
During the work in progress (WIP) phase, amortization will continue to be based on total cost versus forecasted total revenues of the project.
After a project is completed, a straight-line amortization is applied. The straight-line amortization will be assigned over a remaining useful life, which for most projects is expected to be 4 years. The straight-line amortization will be distributed evenly through the financial year independently of sales during the quarters.
TGS expects amortization of approximately 290 MUSD in 2016
Case Study:
20 MUSD Investment
40 MUSD Forecast Sales

	WIP	Vintage Yr 1	Vintage Yr 2	Vintage Yr 3	Vintage Yr 4
Sales MUSD	10.0	10.0	8.0	8.0
Amortization Method	Sales Based (50%)	Straight Line	Straight Line	Straight Line	Straight Line
Amortization MUSD	5.0	3.75	3.75	3.75	3.75
Gross Profit MUSD	5.0	6.25	4.25	4.25	0.25

Strong Cash Generation Delivers Shareholder Value

3.7% 3.5% 3.9% 4.0% 4.9% 5.2% 4.2% 2010 2011 2012 2013 2014 2015 2016* Year of Payment

*2016 Dividend Yield (based on assumption of flat quarterly dividends which is subject to continuous evaluation)

Shareholder authorization to distribute quarterly dividend payments from Q1 2016
The ex-dividend date will normally be seven days after the announcement of the dividend in connection with the release of quarterly financial statements*
Payment date 14 days after the ex-dividend date

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

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
USD 0.15 per share dividend (NOK 1.30) to be paid on 23 February 2016 (shares will trade exdividend on 9 February)

*Q2 – Q4 2016 dividends subject to AGM authorization on 10 May 2016

Outlook

Challenging Market for Exploration

2015 proved to be a very challenging year for E&P industry, with global E&P spending declining by 20-30%
Low oil prices continue to put pressure on oil company returns and several large players have guided further spending reductions in 2016
Higher uncertainty than usual with respect to late sales which are normally heavily dependent on oil companies' E&P spending. TGS expects 2016 late sales to move in line with or slightly better than general E&P spending trends
Expect multi-client investments of approximately 220 MUSD in 2016 (down >50% from 2015)
Chickadee 190 km2 3D multi-client survey announced in January 2016
Full-azimuth multi-component (3C) 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 commenced in Q1 2016

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 2016, 3 more rounds proposed by 2019

Africa, Middle East, Asia Pacific

Ongoing uncertainty on timing of African licensing rounds
Australia Feb & Apr 2016 (bids due)
New Zealand Mar 2016 (Block Offer launch)
Indonesia 2016 (bids due)

Europe / Russia

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

Backlog

Historical Backlog (MUSD) 2012 - 2015

2016 Projects Schedule

d Lan	Canada Crew		Chickadee
----------	-------------	--	-----------	--	--	--	--	--	--	--	--	--

TGS Strategy

Source: Company data, Peer Reports and Analyst estimates

TGS approach during down cycle:

Asset-light, focused
Strong balance sheet
163 MUSD cash at 31 Dec 2015
75 MUSD Revolving Credit Facility
145 MUSD backlog
Counter-cyclical
Attractive vessel rates
Turnkey contracts & risk transfer
M&A opportunities
Maintain discipline
Cost Reduction Program
Strict Prefunding hurdles
Focus on investment quality

Summary

Q4 net revenues of 132 MUSD
Full Year 2015 net revenues of 612 MUSD
Full Year 2015 operational investment of 502 MUSD (51% pre-funded)
Full Year 2015 operating profit of -21 MUSD following impairments, restructuring costs and other provisions
Challenging seismic market with further reductions in oil company spending expected in 2016
Measures implemented to improve competitiveness and support operational cash flow
2016 multi-client investments expected to be reduced by more than 50%
However, long-term future of asset-light, focused multi-client business remains strong
TGS has a backlog of 145 MUSD
Cash balance of 163 MUSD at 31 December 2015 in addition to undrawn 75 MUSD Revolving Credit Facility
Counter-cyclical investment with disciplined focus on investment quality positions TGS benefit when market recovers and grow market share
Guidance for 2016
TGS expects multi-client investments of approximately 220 MUSD
Multi-client investments are expected to be prefunded 45 to 50%