TGS ASA — Earnings Release 2020

Apr 8, 2020

TGS - Preliminary Q1 2020 Net Revenues and Business Update

TGS - Preliminary Q1 2020 Net Revenues and Business Update

ASKER, NORWAY (8 April 2020) - Based on preliminary reporting from operating

units, TGS management expects net segment revenues* for the first quarter of

2020 to be approximately USD 152 million. Multi-client Investments for the

quarter are expected to be approximately USD 138 million with a prefunding rate

of 61%.

The first months of 2020 have demonstrated how our industry can be impacted by

unexpected events that have a dramatic impact on economic growth. The COVID-19

virus has led to an unprecedented decline in global demand for oil and gas. On

top of that, the price war between Russia and Saudi Arabia has further

exacerbated the situation. As a result, the oil price has seen a dramatic drop

from trading in the high $60s per barrel in early January to below $23 per

barrel the last days of March.

E&P companies have reacted quickly to the market turmoil and all of them have

already announced significant cuts in capital expenditure. Exploration spending

can to a certain degree be considered discretionary, hence there is an

expectation that the Company's subsurface data products will be subject to

significant spending cuts. As a result, TGS expects a very challenging market in

2020, where data licensing and pre-commitments to new projects may be deferred

until clients have more visibility of an improvement in market conditions.

TGS' asset light business model allows the Company to reduce investments quickly

to adapt to changes in demand. As a result of the significant changes in client

spending and to preserve cash, the Company has decided to reduce 2020 multi-

client investments to approximately USD 325 million from an original guidance of

approximately USD 450 million. Further, the Company has taken actions to reduce

operating cost. Through centralization of offices, a global salary freeze,

temporary cessation of employee bonuses and right sizing of the organization,

TGS expects a reduction in cash operating cost of approximately 35% compared to

2019 proforma numbers*.  The significant reduction in operating costs and

capital expenditures will protect the balance sheet during the unprecedented

market conditions and position TGS uniquely to improve its competitive position

in the future.

TGS' ambition of returning the Company's value creation to shareholders through

a combination of quarterly cash dividends and share buybacks remains firm. The

dividend policy states an ambition to maintain a stable quarterly dividend

through the year, but the actual level paid will be subject to continuous

evaluation of market outlook, cash flow expectations, and balance sheet

development. Due to the unprecedented decline in client demand, the Board of

Directors has decided to reduce the Q1 quarterly dividend payable in May from

USD 0.375 per share to USD 0.125 per share.  Before concluding on dividend

distribution in the coming quarters, the Board will continue to evaluate the

situation in accordance with the Company's dividend policy and further

developments of COVID-19.

"Recent geopolitical events and the impact of COVID-19 have put significant

pressure on the global economy. While it remains uncertain how these factors

could impact the future, history shows that an asset light business model with a

flexible cost base is a great advantage. TGS remains committed to delivering

industry leading returns and is well prepared to take further actions to rapidly

adjust cost and capital expenditure to changes in the marketplace", says

Kristian Johansen, CEO of TGS.

TGS will host a conference call today at CEST 15.00 where CEO Kristian Johansen

will be available for Q&A. Attendees may want to call 5-10 minutes before CEST

3:00 pm to ensure registration and access.

Telephone conference dial-in details:

Norway: +47 23500236

United Kingdom: +44 3333009030

USA: +1 8335268384

For more information, visit TGS.com (http://www.tgs.com) or contact:

Sven Børre Larsen

EVP Strategy and M&A

+47 90 94 36 73

investor@tgs.com

* 2019 proforma operating cost of USD 150 million (excluding restructuring

charges, transaction costs and larger impairments of operating items)

About TGS

TGS provides multi-client geoscience data to oil and gas Exploration and

Production companies worldwide. In addition to extensive global geophysical and

geological data libraries that include multi-client seismic data, magnetic and

gravity data, digital well logs, production data and directional surveys, TGS

also offers advanced processing and imaging services, interpretation products,

and data integration solutions.

Forward Looking Statement

All statements in this press release 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 product 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 forward-looking statements for any reason.

For more information, visit TGS.com (http://www.tgs.com/).