2024 Earnings Release

Second Quarter

2 nd QUARTER 2024 FINANCIAL HIGHLIGHTS

(All amounts in USD 1,000s unless noted otherwise)

POC financials¹	Q2 2024	Q2 2023	YTD 2024	YTD 2023
POC revenues	215,006	241,174	442,005	469,977
- Early sales	48,630	65,998	126,249	163,556
- Late sales	66,070	62,500	137,991	108,039
- Proprietary sales	100,306	112,676	177,765	198,382
POC EBITDA	121,405	131,948	264,165	251,091
POC Operating profit (EBIT)	27,626	39,254	67,221	64,480
Operating margin	13%	16%	15%	14%

Organic multi-client investments	51,856	85,874	118,829	218,666
Straight-line amortization of multi-client library	38,945	39,598	79,682	79,185
POC accelerated amortization of multi-client library	21,901	32,305	54,267	68,132
Impairment of the multi-client library	-	1,586	-	1,586
Free cash flow	9,541	-34,448	19,704	71,406

IFRS financials	Q2 2024	Q2 2023	YTD 2024	YTD 2023
Operating revenues	224,307	206,307	376,412	379,482
Amortization and impairment of multi-client library	43,128	54,883	90,378	106,708
Operating profit (EBIT)	54,644	22,992	45,198	16,181
Net Income	35,244	22,637	18,727	13,932
EPS (fully diluted) (USD)	0.27	0.18	0.14	0.11
Return on average capital employed²	7%	8%

Solid contract inflow of USD 368 million during Q2 2024 total backlog of USD 611 million (POC)
High POC early sales rate of 94%
Proprietary revenues increased approximately 30% sequentially and strong operational performance
Robust balance sheet allows for continued dividend payment USD 0.14 per share to be paid out in Q3 2024
PGS acquisition closed 1 July 2024 and will be consolidated and reported in Q3 2024

TGS EARNINGS RELEASE | 2024 Q2 1) POC (Percentage-of-Completion) Financials are based on revenues measured by applying the percentage-of-completion method to Early sales and accelerated amortization. Please refer to APM section for more details. 2) 12 months trailing.

"Without any special sales events, such as licensing rounds and transfer fees, we are satisfied with the development in multi-client revenues in the quarter. Late sales increased by 6% compared to the same quarter of last year and we continued to show strong sales of ongoing surveys with an early sales rate of 94%. Proprietary revenues increased approximately 30% sequentially and our operational performance was solid for ongoing projects. Furthermore, I'm pleased to see strong order inflow in our Acquisition business in the quarter, reflecting continued growth in demand for OBN data acquisition services. By completing the merger with PGS on 1 July, TGS is perfectly positioned to support our customers' exploration ambitions and capitalize on what we think will be a multi-year upcycle."

KRISTIAN JOHANSEN, CEO of TGS.

TGS EARNINGS RELEASE | 2024 Q2

FINANCIAL REVIEW - IFRS

Revenues amounted to USD 224.3 million in Q2 2024, an increase of 9% from USD 206.3 million in Q2 2023. Late sales amounted to USD 66.1 million in Q2 2024 versus USD 62.5 million in Q2 2023. Early sales increased to USD 57.9 million in Q2 2024 from USD 31.1 million in Q2 2023. Proprietary revenues decreased from USD 112.7 million in Q2 2023 to USD 100.3 million in Q2 2024. The Acquisition Business Unit contributed USD 92.7 million to total revenues.

REVENUE DISTRIBUTION

Source: TGS

Personnel costs were USD 32.0 million in the quarter compared to USD 33.8 million in Q2 2023. Other operating expenses amounted to USD 19.7 million compared to USD 12.0 million in Q2 2023. Other operating expenses include USD 6.2 million of extraordinary items related to the PGS merger. Cost of sales were USD 41.9 million in Q2 2024 compared to USD 63.5 million in Q2 2023.

Amortization and impairments of the multi-client library amounted to USD 43.1 million in Q2 2024 versus USD 54.9 million in Q2 2023. Of this, straight-line amortization was USD 38.9 million (USD 39.6 million in Q2 2023) and accelerated amortization was USD 4.2 million (USD 13.7 million in Q2 2023), and impairment was USD 0 million (USD 1.6 million in Q2 2023).

Depreciation for the quarter was USD 32.9 million, compared to USD 19.2 million in Q2 2023. The increase relates to increased right-of-use assets caused by long-term vessel leases entered into during 2023 and first half of 2024.

Operating profit amounted to USD 54.6 million in Q2 2024 compared to an operating profit of USD 23.0 million in the same quarter of last year.

CASH FLOW

Free cash flow was USD 9.5 million for Q2 2024 compared to USD -34.4 million in Q2 2023. Net cash flow from operations for the quarter totaled USD 89.0 million, compared to USD 56.4 million in Q2 2023. Net decrease in cash for Q2 2024 was USD 31.4 million (decrease of USD 64.4 million in Q2 2023). Cash outflows related to organic investments in the multi-client library were USD 62.4 million, compared to USD 74.7 million in Q2 2023.

DIVIDEND

It is the ambition of TGS to pay a cash dividend that is in line with its long-term underlying cash flow. When deciding the dividend amount, the TGS Board of Directors will consider expected cash flow, investment plans, financing requirements and a level of financial flexibility that is appropriate for the TGS business model. In addition to paying a cash dividend, TGS may also buy back own shares as part of its plan to distribute capital to shareholders.

Since 2016, TGS has paid quarterly dividends in accordance with the resolution made by the annual general meeting. The aim will be to keep a stable quarterly dividend through the year, though the actual level paid will be subject to continuous evaluation of the underlying development of TGS and the market.

The Board of Directors has resolved to maintain the dividend at USD 0.14 per share in Q3 2024. The dividend will be paid in the form of NOK 1.51 per share on 8 August 2024. The shares will trade ex-dividend on 25 July 2024. In Q2 2024, TGS paid a cash dividend of USD 0.14 per share (NOK 1.52 per share).

OPERATIONAL REVIEW

Contract inflow was USD 368 million in Q2 2024 compared to USD 198 million in Q2 2023. The contract backlog increased to USD 611 million (USD 970 million under IFRS) at the end of the quarter from USD 459 million (USD 827 million under IFRS) at the end of Q1 2024. The contract backlog at the end of Q2 2023 was USD 417 million (USD 624 million under IFRS).

Organic multi-client investments amounted to USD 52 million in the quarter compared to USD 86 million in Q2 2023. The largest multi-client projects ongoing in Q2 2024 were Penyu Basin in Malaysia and West Sulawesi in Indonesia.

The activity level in Acquisition improved compared to the preceding quarter and is expected to improve further over the coming two quarters. In Q2 2024, there were three active OBN operations in U.S. GoM, one in the North Sea and two in Africa. The two ongoing reservoir monitoring operations in the North Sea carried on as normal, and the Gemini source was operational in the Mediterranean through the quarter.

TGS' Digital Energy Solution business grew revenues by 62% in Q2 2024 compared to the same quarter of last year. The increase mainly relates to increased sales of digital well data products.

OUTLOOK

With continued economic growth global energy demand will increase in the coming decades. The pace of adopting alternative energy sources remains insufficient to meet ambitious transition targets. Oil and gas will therefore continue to constitute a major part of the global energy mix for the foreseeable future. Rapid depletion of existing oil and gas reserves, coupled with challenges such as cost inflation, substantial environmental challenges, and political and regulatory risks associated with undeveloped reserves, underscores the necessity of sustained exploration efforts in both mature and emerging basins.

A continued high oil price bolsters energy companies' cash flows and facilitates growth in exploration spending. As high-quality data is a prerequisite for successful exploration campaigns, the new, fully integrated and larger TGS is well positioned to benefit, enhancing its position as the leading provider of geoscience data and services. The combination of TGS and PGS forms a powerhouse in the energy sector, with a full spectrum of capabilities to support energy exploration and production on a global scale. As the industry evolves, TGS is ideally situated to serve the entire energy market with more comprehensive, advanced solutions. This integration will also enable the Company to leverage a wider pool of technological resources and expertise, significantly boosting its operational efficiency, innovation and customer engagement strategies.

TGS' New Energy Solutions business is at the forefront of providing data and insights to the energy industry through a range of innovative products, digital platforms, and software solutions. With an increasing number of countries and regions unlocking acreage for renewable energy projects and offering attractive financial incentives, the demand for TGS' products that facilitate screening, decision support, and asset management is expected to continue growing in both the short and long term.

The integration planning started in Q4 2023, and TGS is well on track to deliver synergies in line with the guidance of USD 100 million per annum. A new organizational model and executive team have been put in place with a strong focus on being a long-term partner for energy companies across multiple segments and industry verticals.

Oslo, 17 July 2024 THE BOARD OF DIRECTORS of TGS ASA

ABOUT TGS

TGS provides advanced data and intelligence to companies active in the energy sector. With leading-edge technology and solutions spanning the entire energy value chain, TGS offers a comprehensive range of insights to help clients make better decisions. Our broad range of products and advanced data technologies, coupled with a global, extensive and diverse energy data library, make TGS a trusted partner in supporting the exploration and production of energy resources worldwide. For further information, please visit www.tgs.com

TGS ASA is listed on the Oslo Stock Exchange (OSLO:TGS). In addition, TGS' shares and sponsored American Depositary Shares trade on the OTCQX Best Market in the U.S. under the symbols "TGSNF" and "TGSGY".

CONTACT FOR ADDITIONAL INFORMATION

BÅRD STENBERG, VP IR & Communication tel. +47 992 45 235

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All statements in this earnings release other than statements of historical facts 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 forward-looking statements.

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(All amounts in USD 1,000s unless noted otherwise)	Note	Q2 2024	Q2 2023	YTD 2024	YTD 2023
Revenue	4	224,307	206,307	376,412	379,482
Cost of sales - proprietary and other		41,896	63,475	76,852	121,265
Straight-line amortization of the multi-client library	5	38,945	39,598	79,682	79,185
Accelerated amortization of the multi-client library	5,6	4,183	13,700	10,696	25,936
Impairment of the multi-client library	5,6	-	1,586	-	1,586
Personnel costs		32,042	33,783	64,506	65,074
Other operating expenses		19,663	11,969	36,483	32,546
Depreciation, amortization and impairment		32,933	19,205	62,995	37,709
Total operating expenses	4	169,663	183,315	331,213	363,302

Operating profit/(loss)	4	54,644	22,992	45,198	16,181
Financial income		1,404	1,243	2,584	3,533
Financial expenses		-3,796	-3,797	-8,132	-9,870
Net exchange gains/(losses)		-3,532	296	-11,842	-722
Results from equity accounted investments		-	-	-	-1,332
Net financial items		-5,924	-2,259	-17,390	-8,390

Profit/(loss) before taxes		48,723	20,733	27,811	7,790
Taxes	7	13,479	-1,904	9,084	-6,142
Net Income		35,244	22,637	18,727	13,933

Earnings per share (USD)		0.27	0.18	0.14	0.11
Earnings per share, diluted (USD)		0.27	0.18	0.14	0.11
Other comprehensive income:
Exchange differences on translation of foreign operations		107	-27	-117	-86
Total comprehensive income for the period		35,350	22,610	18,610	13,847

CONDENSED CONSOLIDATED FINANCIAL POSITION

(All amounts in USD 1,000s unless otherwise noted)	Note	30-Jun 2024	30-Jun 2023	31-Dec 2023
Goodwill	6	384,649	384,649	384,649
Intangible assets: Multi-client library	5,6	781,550	687,310	753,084
Other intangible assets		80,262	68,289	73,020
Deferred tax assets		68,616	92,694	67,895
Buildings, machinery and equipment		146,650	146,640	131,970
Right-of-use-asset		114,789	66,676	78,184
Other non-current assets		21,640	14,612	24,679
Total non-current assets		1,598,157	1,460,869	1,513,479
Accounts receivable		106,218	160,203	93,712
Accrued revenues		88,762	86,385	63,217
Short-term interest bearing receivable	8	58,200	-	-
Inventory		8,983	8,890	12,565
Other current assets		80,597	91,639	76,700
Cash and cash equivalents		125,021	143,921	196,741
Total current assets		467,780	491,037	442,935

TOTAL ASSETS		2,065,937	1,951,907	1,956,414
Share capital		4,400	4,259	4,406
Other equity		1,256,117	1,210,881	1,271,170
Total equity		1,260,517	1,215,140	1,275,576
Long-term interest bearing debt	8	58,200	45,000	-
Other non-current liabilities		39,497	46,947	41,210
Non-current lease liabilities		43,777	34,553	41,331
Deferred tax liability		16,144	21,707	16,426
Total non-current liabilities		157,618	148,208	98,967
Accounts payable and debt to partners		76,106	124,421	95,049
Taxes payable, withheld payroll tax, social security and VAT		63,349	69,702	78,377
Current lease liabilities		79,341	39,253	43,877
Deferred revenue		314,944	180,628	276,064
Other current liabilities		114,062	174,555	88,506
Total current liabilities		647,802	588,559	581,872
Total liabilities		805,420	736,766	680,838
Total equity and liabilities		2,065,937	1,951,907	1,956,414

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(All amounts in USD 1,000s unless otherwise noted)	Note	Q2 2024	Q2 2023	YTD 2024	YTD 2023

Operating activities
Profit before taxes		48,723	20,733	27,811	7,790
Depreciation / amortization / impairment		76,062	74,089	153,373	144,417
Changes in accounts receivable and accrued revenues		-3,256	-82,408	-38,051	-6,268
Changes in other receivables		11,608	-12,239	2,199	-8,187
Changes in balance sheet items		-35,369	63,230	50,507	111,765
Paid taxes		-8,679	-6,989	-13,371	-14,900
Net cash flows from operating activities		89,089	56,416	182,468	234,617

Investing activities:
Investments in tangible and intangible assets		-18,529	-17,212	-41,710	-24,785
Investments in multi-client library		-62,405	-74,711	-123,882	-141,627
Interest received		1,386	1,059	2,828	3,201
Net change in interest bearing receivables	8	-	-	-58,200	-
Net cash flows used in investing activities		-79,548	-90,864	-220,964	-163,211

Financing activities: Net change in interest bearing debt	8	-	252	58,200	252
Interest paid		-2,373	-2,064	-6,063	-3,854

Dividend payments	3	-18,324	-17,620	-36,645	-35,046
Repayment of lease liabilities		-20,208	-10,501	-40,440	-22,123
Acquisition of shares		-	-	-	-54,385
Net cash flows used in financing activities		-40,905	-29,933	-24,948	-115,156
Net change in cash and cash equivalents		-31,364	-64,381	-63,444	-43,750
Cash and cash equivalents at the beginning of period		159,812	208,006	196,741	188,452
Net unrealized currency gains / (losses)		-3,424	296	-8,274	-780
Cash and cash equivalents at the end of period		125,021	143,921	125,021	143,921

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ending June 30, 2024

(All amounts in USD 1,000s unless noted otherwise)	Share Capital	Treasury Shares	Share Premium	Other Paid-In Capital	Currency Translation Reserve	Retained Earnings	Non controlling interest	Total Equity
Opening balance 1 January 2024	4,406	-16	623,965	45,248	-23,085	624,590	468	1,275,576
Net income	-	-	-	-	-	18,727	-	18,727
Translation effect	-	-	-	-	-117	-	-	-117
Total Comprehensive income	-	-	-	-	-117	18,727	-	18,610
Distribution of treasury shares	-	1	-	-	-	285	-	286
Cancellation of treasury shares held	-7	7	-	-	-	-	-	-
Cost of equity-settled long term incentives	-	-	-	-	-	2,690	-	2,690
Dividends	-	-	-	-	-	-36,645	-	-36,645
Closing balance as of 30 June 2024	4,400	-9	623,965	45,248	-23,202	609,647	468	1,260,517

For the six months ending June 30, 2023

(All amounts in USD 1,000s unless noted otherwise)	Share Capital	Treasury Shares	Share Premium	Other Paid-In Capital	Currency Translation Reserve	Retained Earnings	Non controlling interest	Total Equity
Opening balance 1 January 2023	4,259	-18	537,583	45,248	-22,539	671,373	3,856	1,239,763
Net income	-	-	-	-	-	13,932	-	13,932
Translation effect	-	-	-	-	-86	-	-	-86
Total Comprehensive income	-	-	-	-	-86	13,932	-	13,847
Distribution of treasury shares	-	1	-	-	-	595	-	595
Acquisition of Magseis ASA	-	-	-	-	-	-2,031	-3,389	-5,419
Cost of equity-settled long term incentive plans	-	-	-	-	-	1,401	-	1,401
Dividends	-	-	-	-	-	-35,046	-	-35,046
Closing balance as of 30 June 2023	4,259	-17	537,583	45,248	-22,625	650,224	468	1,215,140

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Note 1 General information

TGS ASA is a public limited company listed on the Oslo Stock Exchange. The address of its registered office is Askekroken 11, 0277 Oslo, Norway. References to TGS or the Group include TGS ASA and its subsidiaries, unless the context requires otherwise.

Note 2 Basis for Preparation

The condensed consolidated financial statements of TGS have been prepared in accordance with IFRS® Accounting Standards, IAS 34 Financial Reporting as adopted by EU and additional requirements in the Norwegian Securities Trading Act. The condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with TGS' Annual Report for 2023, which is available at www.tgs.com.

The same accounting policies and methods of computation are followed in the condensed consolidated financial statements as compared with the annual financial statements for 2023. The condensed consolidated financial statements are unaudited.

Note 3 Share capital and equity

Ordinary shares	Number of shares
1 January 2024	131,280,458
Net change in period	-245,315
30 June 2024	131,035,143

Treasury shares	Number of shares
1 January 2024	418,630
Net change in period	-271,872
30 June 2024	146,758

The Annual General Meeting on 28 June 2024 renewed the Board of Directors' authorizations to distribute quarterly dividends on the basis of the 2023 financial statements. The authorizations are valid until 30 June 2025, unless renewed in a General Meeting prior to that date.

The Board of Directors has resolved to maintain the dividend at USD 0.14 per share in Q3 2024. The dividend will be paid in the form of NOK 1.51 per share on 8 August 2024. The share will trade ex-dividend on 25 July 2024.

In Q2 2024, TGS paid a cash dividend of USD 0.14 per share (NOK 1.52 per share).

Largest Shareholders as of 30 June 2024		Country	Account type	No. of shares	Share

1.	FOLKETRYGDFONDET	Norway Ordinary		12,172,887	9.3 %
2.	The Bank of New York Mellon	United States	Nominee	6,701,537	5.1 %
3.	PARETO AKSJE NORGE VERDIPAPIRFOND	Norway	Ordinary	5,710,595	4.4 %
4.	JPMorgan Chase Bank, N.A., London	United Kingdom	Nominee	4,596,488	3.5 %
5.	BNP Paribas	Spain	Nominee	3,312,651	2.5 %
6.	Brown Brothers Harriman (Lux.) SCA	Luxembourg	Nominee	3,216,756	2.5 %
7.	The Northern Trust Comp, London Br	United Kingdom	Nominee	3,149,702	2.4 %
8.	VPF DNB AM NORSKE AKSJER	Norway	Ordinary	2,520,656	1.9 %
9.	VERDIPAPIRFOND ODIN NORGE	Norway	Ordinary	2,385,555	1.8 %
10.	Citibank, N.A.	Ireland	Nominee	2,378,100	1.8 %
10 largest			46,144,927	35%
Total Shares Outstanding *			130,888,385	100%

Average number of shares outstanding for current quarter *
Average number of shares outstanding during the quarter	130,887,639
Average number of shares fully diluted during the quarter	132,093,464

*Shares outstanding net of treasury shares per 30 June 2024 (146 758 TGS shares), composed of average outstanding TGS shares during the quarter.

Share price information
Share price 30 June 2024 (NOK)	128.20
Market capitalization 30 June 2024 (NOK million)	16,799

Note 4 Segment information

TGS reports monthly management information to the Executive Management based on defined operating business units based on the nature of the products and services sold. Where appropriate, these operating business units are aggregated into reportable segments that form the basis of the monthly management reporting. The reportable segments are divided into five overall business units: Multi-client, Digital Energy Solutions (DES), Acquisition (ACQ), Imaging and G&A. The Group does not allocate all cost items to its reportable business units during the year.

			Digital Energy
(All amounts in USD 1,000s)	Multi-client	Acquisition	Solutions	Imaging	G&A	Elimination	Total
Q2 2024
Operating revenues	111,219	92,687	21,656	11,425	-	-12,680	224,307
Straight-line amortization	-35,232	-	-3,713	-	-	-	-38,945
Accelerated amortization / impairment	-3,764	-	-419	-	-	-	-4,183
Cost of sales - proprietary and other	-14	-40,445	-1,489	-	21	31	-41,896
Other operating cost	-6,882	-39,878	-12,521	-14,158	-23,416	12,217	-84,638
Operating profit	65,328	12,363	3,513	-2,733	-23,396	-432	54,644

Q2 2023
Operating revenues	85,496	113,955	16,180	11,143	-	-20,467	206,307
Straight-line amortization	-35,931	-	-3,667	-	-	-	-39,598
Accelerated amortization / impairment	-15,243	-	-42	-	-	-	-15,286
Cost of sales - proprietary and other	-639	-68,740	326	6	-42	5,614	-63,475
Other operating cost	-6,026	-27,637	-13,342	-14,246	-17,284	13,578	-64,957
Operating profit	27,658	17,578	-546	-3,077	-17,346	-1,274	22,992

Note 5 Multi-client library

(All amounts in USD millions)	30-Jun 2024	30-Jun 2023	YTD 2024	YTD 2023
Opening balance net book value	772.8	656.3	753.1	575.3
Inorganic multi-client investments	-	-	-	-
Organic multi-client investments	51.9	85.9	118.8	218.7
Amortization and impairment	-43.1	-54.9	-90.4	-106.7
Closing balance net book value	781.5	687.3	781.5	687.3

Net MC revenues	124.0	93.6	198.6	181.1
Amort. in % of net MC revs.	35%	59%	45%	59%

Multi-client library consists of assets from both Multi-client and Digital Energy Solution segments.

Note 6 Evaluation of estimates and assumptions

Multi-client library and Goodwill

TGS reviews the carrying value of its multi-client libraries and goodwill when there are events and changes in circumstances that indicate that the carrying value of these assets may not be recoverable. TGS has not identified any impairment triggers in 2024. Goodwill is tested annually for impairment, as per IAS 36.

Key inputs and assumptions in the impairment model have been revisited as part of the process of evaluating whether any impairment triggers have been identified.

The underlying estimates that form the basis for the sales forecast depend on a number of variables, such as the number of oil and gas exploration and production (E&P) companies operating in the area with potential interest in the data, overall E&P spending, expectations regarding hydrocarbons in the area, oil price, whether licenses will be awarded in the future, expected farm-ins to licenses, relinquishments, etc. These variables are subject to underlying uncertainties.

Management has evaluated the carrying amount of the net assets of the Group in respect of the market capitalization, changes in interest rates and assumptions applied in the WACC, as well as the developments and expected developments in the oil price. The developments through Q2 2024 did not reveal any new factors considered to trigger an impairment analysis. Following internal reporting from TGS business units, evidence available does not indicate that the economic performance of multi-client libraries or the related sales forecasts are worse, or significantly changed, from the assumptions utilized in the impairment tests during the preceding quarter.

Note 7 Tax

TGS reports tax charges in accordance with the Accounting Standard IAS 12. Taxes are computed based on the USD value of the appropriate tax provisions according to local tax regulations. The tax charges are influenced not only by local profits, but also by fluctuations in exchange rates between the respective local currencies and USD. This computation makes it difficult to predict tax charges on a quarterly or annual basis.

TGS' corporate income tax rate is a weighted average rate primarily based on the tax rates of Norway (22%), Brazil (34%) and the US (21%). The tax expense for Q2 2024 was USD 13.5 million (USD -1.9 million in Q2 2023), corresponding to a tax rate of 27.7% (-9.2% in Q2 2023).

Tax exposure

TGS operates in a range of tax jurisdictions with complex considerations and legislation concerning both indirect and direct taxation, including Brazil and Argentina. Thus, uncertainties exist related to reported tax liabilities and exposures. Recognized taxes (both direct and indirect) are based on all known and available information and represent TGS' best estimate as of the date of reporting.

The jurisdictions in which TGS operates are also subject to changing tax regulations which may impact assessments, for instance concerning the recoverability of credits. Furthermore, tax authorities may challenge the calculation of both taxes and credits from prior periods. Such processes and proceedings may result in changes to previously reported and calculated tax positions, which in turn may lead to TGS having to recognize operating or financial expenses in the period of change.

Note 8 Interest bearing liabilities

On 9 February 2023, TGS entered into an amended and restated revolving credit facility (RCF) which provides for borrowings, on a revolving basis, of up to USD 150 million with an interest rate of SOFR +3.0% per annum. A temporary increase of USD 100 million for a period of 15 months under the RCF became effective as of 1 July 2024.

On 31 January 2024, TGS entered into a commitment of USD 60 million to refinance PGS ASA Super Senior loan, on market terms and secured on equal terms to the existing Super Senior loan. The loan agreement was signed in Q1 2024. Transaction price was at 98% and payment of USD 58.2 million was made 18 March 2024. TGS funded the payment by drawing down on the RCF and has recorded a short-term interest receivable in the balance sheet.

On 24 June 2024, with references to PGS USD 75 million loan (the "Notes"), TGS entered into agreements with the Notes holders for the assignment of the Notes at par. Payment of USD 70.3 million was made 1 July 2024. TGS funded the payment by drawing down on the RCF on 1 July 2024.

(All amounts in USD millions)	30-Jun 2024	30-Jun 2023
Nominal value drawn bank facility	58,200	45,000
Total	58,200	45,000
Long term	58,200	-
Short term	-	45,000

Financial covenants bank facility (RCF)

The conditions below are only tested if Liquidity (as defined in the RCF) on the relevant testing date is below USD 100 million:

Equity Ratio > 50 percent
Leverage Ratio: Net interest-bearing debt/EBITDA for relevant period must be at or below 1.00
Liquidity: The Liquidity of the group at all times must be at least USD 75 million
Operational Capex: EBITDA minus Operational Capex must be above zero

TGS is in compliance with all financial covenants as of 30 June 2024.

Note 9 Business combinations

On 1 July 2024, TGS announced that the TGS and PGS Merger was formally completed. The combination of the two companies is to establish the premier energy data company. Creating a stronger and more diversified geophysical company and data provider to the energy value chain, driven by technology and innovation. The combined entity will offer a robust position in all verticals: Muli-client, acquisition, imaging and new energy.

	01-Jul
Purchase price allocation	2024
Share price TGS	129.6
New TGS shares (million)	65.2
Value of shares (USD million)	794.7
Cash consideration (USD million)	18.2
Purchase price (USD million)	813.0
PGS equity 30 June 2024	462.2
Fair value adjustments to be allocated to net assets
acquired and goodwill	350.8

At the date of preparation of these consolidated interim financial statements, the purchase price allocation is in the process of being determined. The analysis is expected to be completed in the next few months.

The total consideration for the PGS acquisition amounts to USD 813 million. Adjusted for PGS equity as of 30 June 2024, an amount of USD 350.8 million will be allocated as part of the purchase price allocation. The fair value adjustments currently identified in the preliminary purchase price allocation relate to the multi-client library, recognition of previously unrecognized tax losses, customer relationships, contingent liabilities, leasing and debt, the residual amount will be allocated to goodwill.

DEFINITIONS – ALTERNATIVE PERFORMANCE MEASURES

TGS' financial information is prepared in accordance with IFRS. In addition, TGS provides alternative performance measures to enhance the understanding of TGS' performance. The alternative performance measures presented by TGS may be determined or calculated differently by other companies.

Early Sales

Early sales are defined as multi-client revenues committed prior to completion and delivery of a survey. Revenue is recognized at the point in time when the licenses are transferred to the customers, which would typically be upon completion of processing of the surveys and granting of access to the finished surveys or delivery of the finished data, independent of services delivered to clients during the project phase.

Late Sales

Late sales are defined as multi-client revenues from sales of completed data. Revenue is recognized at a point in time, generally upon delivery of the final processed data to the customers.

Proprietary Sales

Proprietary sales are defined as revenues related to services that TGS performs on behalf of customers. Revenues are recognized over time, normally on a percentage of completion basis.

Percentage-of-completion (POC) Revenues & POC Early Sales Revenues

POC Revenues are measured by applying the percentage-of-completion method to Early sales, added to Late sales and Proprietary sales. POC Early Sales Revenue are measured by applying the percentage-of-completion method to Early sales only.

(All amounts in USD 1,000s)	Total
Q2 2024

Operating revenues	224,307
PoC Revenue Early Sales	48,630
Performance obligations met during the quarter	-57,930
POC Revenue	215,006

Q2 2023
Operating revenues	206,307
PoC Revenue Early Sales	65,998
Performance obligations met during the quarter	-31,131
POC Revenue	241,174

POC Early Sales Rate (%)

POC Early sales rate (%) means POC Early Sales Revenue as a percentage of organic multi-client investments in new projects, an important measure for TGS as it provides indication of the prefunding levels for projects in progress.

EBIT (Operating Profit)

Earnings before interest and tax is an important measure for TGS as it provides an indication of the profitability of the operating activities. The EBIT margin presented is defined as EBIT (Operating Profit) divided by revenues.

EBITDA

EBITDA means earnings before interest, taxes, depreciation, and amortization. TGS uses EBITDA because it is useful when evaluating operating profitability as it excludes amortization, depreciation and impairments related to investments that occurred in the past. Also, the measure is useful when comparing the Group's performance to other companies.

(All amounts in USD 1,000s)	Q2 2024	Q2 2023	YTD 2024	YTD 2023
Net income	35,244	22,637	18,727	13,932
Taxes	13,479	-1,904	9,084	-6,142
Net financial items	5,924	2,259	17,390	8,390
Depreciation, amortization and impairment	32,933	19,205	62,995	37,709
Amortization and impairment of multi-client library	43,128	54,883	90,378	106,708
EBITDA	130,708	97,080	198,574	160,597

Straight-line Amortization

Straight-line amortization is defined as amortization of the value of completed data on a straight-line basis over the remaining useful life.

Accelerated Amortization

Following the adoption of the straight-line amortization policy for completed surveys, recognition of accelerated amortization of a library may be necessary in the event that sales on a survey are realized disproportionately sooner within that survey's useful life.

POC Accelerated Amortization

Accelerated amortization of multi-client library is calculated on percentage of completion basis.

Return on average capital employed

Return on average capital employed (ROACE) shows the profitability compared to the capital that is employed by TGS, and it is calculated as operating profit (12 months trailing) divided by the average of the opening and closing capital employed for a period of time.

Capital employed is calculated as equity plus net interest-bearing debt. Net interest-bearing debt is defined as interest bearing debt minus cash and cash equivalents. TGS uses the ROACE measure as it provides useful information about the performance under evaluation.

	30-Jun	30-Jun
(All amounts in USD 1,000s)	2024	2023
Equity	1,260,517	1,215,140
Interest bearing debt	58,200	45,000
Cash	125,021	143,921
Net interest bearing debt	-66,821	-98,921
Capital employed	1,193,696	1,116,220

Average capital employed	1,154,958	994,358
Operating profit (12 months trailing)	82,286	91,951
ROACE	7%	8%

Free cash flow

Free cash flow when calculated by TGS is Cash flow from operational activities minus cash from investing activities excluding impact from investing activities related to Mergers and Acquisitions.

(All amounts in USD 1,000s)	Q2 2024	Q2 2023	YTD 2024	YTD 2023
Net cash flow from operating activities	89,089	56,416	182,468	234,617
Net cash flow from investing activities	-79,548	-90,864	-220,964	-163,211
Excluding Investments through mergers and acquisitions	-	-	58,200	-
Free cash flow	9,541	-34,448	19,704	71,406

Contract Inflow

Contract inflow is defined as the aggregate value of new customer contracts entered into in a given period

Contract Backlog

Contract backlog is defined as the aggregate unrecognized value of all customer contracts as of a given date.

Responsibility Statement

We confirm to the best of our knowledge that the condensed interim financial statements for the period 1 January to 30 June 2024 has been prepared in accordance with IAS 34 – Interim Financial Reporting as adopted by EU, and additional requirements found in the Norwegian Securities Trading Act, Norwegian Accounting Act, and gives a true and fair view of the Group's consolidated assets, liabilities, financial position and result for the period. We also confirm to the best of our knowledge that the financial review gives a true and fair view of important events that have occurred during the period of 1 January to 30 June 2024, and their impact on the interim financial statements, any major related parties transactions, and a description of the principal risks and uncertainties.

Oslo, 17 July 2024

THE BOARD OF DIRECTORS of TGS ASA

__________________ __________________ __________________

Christopher Finlayson Luis Araujo Bettina Bachmann Chair of Board of Directors Board member Board member