TGS ASA — Investor Presentation 2021

Feb 11, 2021

Leveraging core strengths to help shape the future of energy

Capital Markets Day 11 February 2021

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 forward-looking statements for any reason.

Agenda

Time CET	Presentation
1400-1410	Introduction
1410-1430	Presentation of Q4 2020 and 2021 guidance
1430-1445	Market outlook
1445-1500	Strategic priorities
1500-1520	New Energy Solutions
1520-1535	Sustainability strategy
1535-1600	Summary and Q&A

Presentation Team

See the energy at TGS.com - ⁴ -

Introduction

Kristian Johansen, CEO

Market Volatility Since Capital Markets Day 2019

Oil price back to pre-COVID levels

Delivering on the Strategic Agenda, Despite Market Disruption

Strategic priorities as presented in CMD Feb 2019 Progress and achievements as of Feb 2021

a at d G & O	New technologies in mature basins
	Strengthening position in South Atlantic	in Latin America
	Further growth onshore
y g o ol	Expand value chain through Data & Analytics
n h c e T	Imaging quality and reputation	infrastructure

Feb 2019 Feb 2021

~11,000 km2 of modern OBN acquired in GoM and NCS

Acquisition of Spectrum and ~60,000 km2 new 3D acquired

All-time high onshore late sales in 2019 before market collapse

New analytics application added (> Million ARLAS) and instrumental in the development of unique marketplace for seismic in 2020

New management, high grading of technologies, imaging closer to

Q4 2020 Results and 2021 Guidance

Fredrik Amundsen, CFO

IFRS 15

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• The accounting standard IFRS 15 regarding revenue recognition implemented from 1 January 2018
• Implications for TGS
• Recognition of revenues related to multi-client projects postponed until projects are delivered to customers
• No amortization until completion of the project
• No impact on sales from the library of completed surveys

• Internal reporting

• TGS will continue to use the previous percentage-of-completion-method for internal segment and management reporting (referred to as Segment Reporting)
• Provides the best picture of the performance and value creation of the business

• External reporting

• Two sets of accounts: Segment Reporting and IFRS Reporting
• Main focus in external communication will be on Segment Reporting

Highlights

• Q4 2020 net revenues of USD 120.3 million

• Late sales USD 103.2 million
• Pre-funding USD 13.3 million

• Costs and capex re-set to reflect challenging market conditions

• Personnel and Other operational costs down 58% y/y
• Forward run-rate reduced ~40-45% compared to 2019 pro-forma

• Increasing return to shareholders

• Q4 2020 Free cash flow of USD 28.4 million
• Quarterly dividend increased to USD 0.14 per share
• Launching USD 20 million in share buy-back program

• 2021 financial guidance

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• Multi-client investments of approximately USD 200-230 million
• Continued sector outperformance on cash flow and ROACE
• Industry-leading distribution to shareholders

Net Revenues

Pro-forma including SPU

Operating Expenses, EBIT, MC Investments

Pro-forma including SPU

1. Personnel costs and other operating expenses excluding reported non-recurring items

2. Earnings before interest and taxes excluding reported non-recurring items

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Income Statement

Segment reporting

(MUSD)		Q4 2020	Q4 2019	Change
Net operating revenues		120.3	232.5	$-48%$
Cost of goods sold		0.9	1.3	$-27%$
Personnel cost		7.8	25.3	$-69%$
Other operational costs		6.0	16.8	$-64%$
Cost of stock options		0.0	0.0	n/a
EBITDA	88%	105.6	189.1	$-44%$
Amortization of multi-client library		167.5	119.9	40%
Depreciation		4.0	10.3	$-61%$
Operating result	$-55%$	$-65.9$	59.0	$-212%$
Financial income		$-0.1$	0.4	$-126%$
Financial expenses		0.0	$-1.2$	$-96%$
Exchange gains/losses		$-1.8$	$-1.7$	8%
Result before taxes	$-56%$	$-67.9$	56.6	n/a
Tax cost	44%	$-29.9$	5.2	n/a
Net income	$-32%$	$-37.9$	51.4	n/a
EPS (USD)		$-0.28$	0.38
EPS fully diluted (USD)		$-0.28$	0.38

Balance Sheet

Segment reporting

Balance sheet	Q4 2020	Q4 2019	Change
Goodwill	288.4	288.4	$0\%$
Multi-client library	623.9	830.8	$-25%$
Deferred tax asset	55.3	28.0	98%
Other non-current assets	114.1	75.3	52%
Total non-current assets	1,081.7	1,222.4	$-12%$
Cash and cash equivalents	195.7	323.4	$-39%$
Other current assets	494.5	551.2	$-10%$
Total current assets	690.3	874.7	$-21%$
TOTAL ASSETS	1,772.0	2,097.1	$-16%$
Total equity	1,399.0	1,625.6	$-14%$
Deferred taxes	31.1	74.6	$-58%$
Non-current liabilities	45.3	23.9	90%
Total non-current liabilities	76.4	98.5	$-22%$
Taxes payable, withheld payroll tax, social security	2.9	37.6	$-92%$
Other current liabilities	293.6	335.4	$-12%$
Total current liabilities	296.5	373.0	$-21%$
TOTAL EQUITY AND LIABILITIES	1,772.0	2,097.1	$-16%$

Cash Flow Statement

Segment reporting

(MUSD)	Q4 2020	Q4 2019	Change
Received payments	115.9	303.4	$-62%$
Payments for operational expenses	$-35.1$	$-67.6$	$-48%$
Paid taxes	$-22.1$	$-14.0$	58%
Net cash flow from operating activities	58.7	221.9	$-74%$
Investment in tangible fixed assets	$-2.1$	$-3.0$	$-30%$
Investments in multi-client library	$-30.3$	$-115.7$	$-74%$
Investments through mergers and acquisitions	0.0	0.0	n/a
Interest income	0.1	1.0	$-89%$
Net Cash Flow from investing activities	$-32.3$	$-117.7$	$-73%$
Net change in loans	0.0	$-0.1$	$-100%$
Interest expense	$-0.6$	$-0.1$	321%
Payment of dividends	$-14.7$	$-31.8$	$-54%$
Purchase of own shares	0.0	$-14.5$	n/a
Net cash flow from financing activities	$-15.2$	$-46.4$	$-67%$
Net unrealized currency gains/(losses)	4.7	$-0.2$	n/a
Net change in cash and cash equivalents	15.9	57.6	$-72%$

2020 Operational Highlights Investment Distribution

2021 Market Outlook Impacted by Uncertainty

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Backlog

1. Sales committed by customers but not yet recognized in the Segment Reporting accounts

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2021 Operational Guidance

Business Model with Counter-Cyclical Qualities

• Lean and adjustable cost base
• Asset-light few capital commitments
• Allows for continued dividend payments even during down-cycles

Financial Guidance:

• Multi-client investments of between USD 200 - 230 million
• Continued sector outperformance on cash flow and ROACE
• Industry-leading distribution to shareholders

Dividends and Share Buyback

• The Board has resolved to increase the dividend to USD 0.14 per share in Q1 2021
• Ex date 18 February 2021 payment date 4 March 2021

• In addition, the Board has authorized a USD 20 million share buyback program to be completed by May 2022 subject to renewal of the authorization given by the annual general meeting May 2020

• Quarterly dividends defined in USD from 2016. Annual dividends defined in NOK prior to 2016, converted to USD with the FX rate at ex-dividend dates

See the energy at TGS.com - ²¹ -

Summary

• Q4 2020 net revenues of USD 120.3 million

• Late sales USD 103.2 million
• Pre-funding USD 13.3 million

• Costs and capex re-set to reflect challenging market conditions

• Personnel and Other operational costs down 58% y/y
• Forward run-rate reduced ~40-45% compared to 2019 pro-forma

• Increasing return to shareholders

• Q4 2020 Free cash flow of USD 28.4 million
• Quarterly dividend increased to USD 0.14 per share
• Launching USD 20 million in share buy-back program

• 2021 financial guidance

• Multi-client investments of approximately USD 200-230 million
• Continued sector outperformance on cash flow and ROACE
• Industry-leading distribution to shareholders

Market Outlook

Kristian Johansen, CEO

A Volatile Ride

Brent oil price and EBITDA

Source: EIA, TGS

Oil price back to pre-COVID levels

Supply Shortage in the Making

• High decline rates on U.S. unconventional wells

See the energy at

• TGS research indicates that returning to Jan 2020 numbers is unlikely even with aggressive ramp up of rig count and no parent/child interference
• Supply shortage in the making will drive up oil price and E&P capex
• Biden environmental agenda could exacerbate situation

TGS Well Intel

US Pausing of New Oil and Gas Leases

• Oil and gas high importance for US economy and labor market
• GoM production compares well on emission intensity compared to other basins

Source: US Department of Energy

US Pausing of New Oil and Gas Leases

• GoM exploration trends

• Shift from frontier to infrastructure-led exploration
• Licensing rounds less important
• More focus on technology

• Potential consequences of permanent ban

• More active asset transfer market
• Re-allocation of funds from US to other basins
• Positive oil price implications

• TGS exposure to US federal land and waters

• 17% of multi-client library
• Mostly Ocean Bottom Node data
• 19% of 2020 net revenues

"If conditions in the U.S. become so onerous that it really disincentivizes investment, we've got other places where we can take those dollars."

Mike Wirth, CEO, Chevron 4Q20 Earnings Conference Call 29 January 2020

NBV multi-client library

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Oil and Gas to Remain Important in the Long-term

• Oil and gas to remain an important part of the energy mix in the foreseeable future
• Declining consumption of oil to be partly offset by relative stability of gas demand
• Strong growth in renewables to replace coal in the long-term

Solid curves = Sustainable Development Scenario (SDS): Designed to meet the energy-related UN's Sustainable Development Goals to achieve: universal access to affordable, reliable and modern energy services by 2030; a substantial reduction in air pollution, and effective action to combat climate change. The SDS is fully aligned with the Paris Agreement to hold the rise in global average temperature to "well below 2 °C and pursuing efforts to limit it to 1.5 °C".

Stapled curves = Stated Policies Scenario (STEPS): It incorporates IEA's assessment of stated policy ambitions, including the energy components of announced stimulus or recovery packages (as of mid-2020) and the Nationally Determined Contributions under the Paris Agreement. This scenario assumes that the pandemic is brought under control over the course of 2021.

Source: IEA

How to Cover Gap Between Supply from Onstream Fields and Future Demand?

Oil and gas

Gap to be covered by:

• Fields currently under development
• Discoveries in the pre-FID stage
• Exploration

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

Wood Mackenzie scenario description:

• The energy transition outlook (ETO) represents Wood Mackenzie's base case view of the energy world, broadly consistent with a 3°C global warming view.
• The accelerated energy transition 2-degree scenario (AET-2) represents how the world can augment efforts towards deep decarbonization with a credible pathway to reach a 2°C global warming trajectory by 2050.

Source: Wood Mackenzie

Exploration a Competitive Alternative

• Significant share of proven undeveloped resources is unlikely to be developed
• Best resources already developed
• Increasing cost
• Environmentally challenging
• High political and regulatory risk
• Remote areas
• Exploration in prolific basins is competitive with other sources of incremental production
• Proven exploration plays
• Declining cycle time
• More and better use of technology
• Strong outlook for a viable exploration market in the long-term, even in the more optimistic energy transition scenarios

Average point-forward cost of gas supply

"[…]Exploration's costs are competitive because alternatives have higher development costs. Explorers, on average, tend to find better resources through exploration than the legacy assets that still await development."

Exploration's future in a low-cost, low-carbon world Wood Mackenzie, June 2020

Strong Growth in Renewable Energy

• Strong growth in renewable energy needed to replace energy sources with higher GHG emissions
• Average annual investments in renewables must be 20 times higher in the coming 20-year period compared to the past 5- year period to meet the SDS scenario

CCS Important Enabler for the Energy Transition

*Projects at an advanced stage of planning for 2020-30

Source: IEA

• Strong growth in Carbon Capture and Storage (CCS) is a pre-requisite for meeting the goals of the Paris Agreement
• Several projects in advanced planning stage long pipeline of potential additional projects around the world

Summary: Key Energy Market Trends

• International Oil Companies (IOCs) concentrating exploration efforts on fewer basins
• National Oil Companies (NOCs) becoming more important in international exploration
• Continued focus on Infrastructure-Led Exploration (ILX)
• Digitization driving efficiency improvements in exploration and production
• Strong growth in energy transition enablers

Strategic Priorities

Kristian Johansen, CEO

Strategic Priorities

Leveraging Library to Create Exploration Upside

• International oil companies focusing exploration efforts on fewer areas – leave gaps that may be filled by smaller oil companies
• The largest subsurface data library in the world combined with leading geoscience competency puts TGS in a unique position to support exploration opportunities
• Capital light approach using existing data and competencies
• Data-for-equity swaps
• Overriding Royalty Interest deals (ORRIs)
• Direct ownership in exploration acreage but only in pre-drilling phase
• Limited use of cash
• No direct exposure towards drilling or production

Building on Core Skillsets to Support Energy Transition

• Establish business unit New Energy Solutions – to capitalize on energy transition trends through data and insights
• Leveraging existing data and core competencies to build broad offering to support decision making processes
• Carbon Capture and Storage (CCS)
• Deep Sea Mineral exploration (DSM)
• Renewable energy
  • Geothermal
  • Wind
  • Solar

Organizing to Deliver on Strategy

TGS ASA

Leveraging core strengths to help shape the future of energy

New Energy Solutions

Jan Schoolmeesters, EVP Operations & NES

New Energy Solutions From Data to Insights

• Energy transition requires massive investments in industries that contribute to removing GHG emissions
• Capital intensity combined with long pay-back requires high precision in investment decisions
• Providing a path from data to insights creates significant value
• TGS leveraging core skillsets to help shape the future of energy by facilitating for more informed and better investment decisions

Leveraging Core Strengths

• Data library
• World's largest integrated subsurface data library
• Geoscience skills
• Leading geoscience environment
• Strong understanding of the subsurface

• Digitalization

• Data processing competency
• High-performance computing capacity
• Data analytics and software development skills
• Cloud-based solutions

• Data management

• Structuring and handling of large data volumes

• Data capturing

• Collecting unique and exclusive data using different technologies
• Collecting and improving public data

• Global presence

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• 40 years of experience working in international markets

TGS.com - ⁴² -

• Data covering basins across the globe

The New Energy Solutions Offering

NES ECOSYSTEM

News, Insights, Analysis

From Data to Insights - Geothermal Application Example

Assessing Geothermal Energy Potential with Analytics Ready Well Data

Site Screening and Investment Decision Support

• Assessment of O&G wells for geothermal energy co-production
• Geothermal Energy Recovery Factor
• Converting thermal energy in place to electricity generation potential

From Data to Insights – CCS Application Example

From Data to Insights – Wind Application Example

Key Attributes:

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• Worldwide Coverage
• 12,000 windfarms
• 5,000 offshore wind turbines
• 200 active offshore windfarm areas, operator or co-operator information
• 100 potential future windfarm areas
• Key metadata integrated from TGS NES news service
• Free access to basic information

Explore relationships between wind resources and wind farm specifics, leading to an improved understanding of the energy output potential.

The NES Ecosystem – Our Delivery Platform

• An industry portal of comprehensive new energy data
• Supporting our client's digital transformation and energy transition goals
• E-commerce enables subscription services

A Path to Growth

Organic Growth

• Solid base for expanding data and insights solutions
• Recruitment of subject matter experts in renewables

Partnerships

• Building momentum with companies in all segments, including platform and application development

Inorganic Growth

• Identifying value add companies
• High potential to fast-track growth for Wind and Solar

Summary and Way Forward

Existing subsurface product offering has significant potential to accelerate in growing new energy markets

Core strengths in combining data, AI and compute power enables fast development and commercialization of products and services

On track for organic growth, to be supplemented by partnerships and M&A

Sustainability Strategy

Tanya Herwanger, EVP Staff & Support

Helping to Shape a Sustainable Future

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We believe it is our responsibility to help our customers, shareholders and communities in which we live and work to shape a sustainable energy future.

TGS.com - ⁵¹ -

What We have Accomplished

Set targeted goals

• Carbon Emissions
• Gender Diversity
• Employee Engagement
• Human Rights
• Supplier Management

• Integrating ESG in investment decisions

• Executive ownership & oversight

• New ESG function
• Senior Leader assigned

• Building a team

• Improved reporting & transparency

• Adopted carbon neutral solutions in our data centers
• Strengthened our supplier management
• Published our commitment to Human Rights
• Advocating for industry standards to measure & report emissions from field operations

See the energy at TGS.com - ⁵² -

What We Plan To Do

• Climate Change
• Diversity & Inclusion
• Health & Safety

• Reporting

• Work toward carbon neutrality by 2030 (scope 1 & 2)

• Expand our commitment to public initiatives

• Strengthen our policies and practices to deliver on commitments

• Incorporate emissions analysis into project investment decisions

• Drive the advancement of ESG standards in the seismic sector
• Track, report and promote environmental efficiencies in marine and land operations

Recognition & Momentum

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Summary

CEO, Kristian Johansen

Different Cycles – Different Priorities

What TGS May Look Like After 2030

TGS today:

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• World's leading subsurface data company
• Asset light and multi-client business model

• 95% of revenues from oil & gas

• Emissions (scope 1 & 2): 23.4 kilotons of CO2e
• New strategy launched February 2021

TGS Long-term ambition

• World's leading energy data company
• Asset light and multi-client business model
• Revenues reflecting overall energy mix
• Carbon neutral
• High portion of recurring revenues

TGS.com - ⁵⁷ -

Questions & Answers

Thank you

Appendix

Income Statement IFRS

(MUSD)		Q4 2020	Q4 2019	Change
Net operating revenues		142.9	218.8	-35%
Cost of goods sold		0.9	1.3	$-27%$
Personnel cost		7.8	25.3	$-69%$
Other operational costs		6.0	16.8	-64%
EBITDA	90%	128.1	175.5	$-27%$
Amortization of multi-client library		172.7	95.6	81%
Depreciation		4.0	10.3	$-61%$
Operating result	$-34%$	$-48.5$	69.6	$-170%$
Financial income		0.1	0.8	-87%
Financial expenses		$-0.3$	$-0.6$	-56%
Exchange gains/losses		$-1.8$	$-1.7$	8%
Result before taxes	$-35%$	$-50.4$	68.1	$-174%$
Tax cost	48%	$-24.1$	$-3.6$	578%
Net income	$-18%$	$-26.3$	71.7	$-137%$
EPS (USD)		$-0.22$	0.60	$-137%$
EPS fully diluted (USD)		$-0.22$	0.60	$-137%$

Balance Sheet

IFRS

Balance sheet	Q4 2020	Q4 2019	Change
Goodwill	288.4	292.0	$-1%$
Multi-client library	917.5	1,091.3	$-16%$
Deferred tax asset	113.5	33.2	242%
Other non-current assets	114.1	77.8	47%
Total non-current assets	1,433.5	1,494.3	$-4%$
Cash and cash equivalents	195.7	323.4	$-39%$
Other current assets	392.0	386.9	1%
Total current assets	587.7	710.3	$-17%$
TOTAL ASSETS	2,021.2	2,204.6	-8%
Total equity	1,249.6	1,545.8	$-19%$
Deferred taxes	29.0	40.4	$-28%$
Non-current liabilities	45.3	23.9	90%
Total non-current liabilities	74.3	64.3	16%
Taxes payable, withheld payroll tax, social security	2.9	42.5	$-93%$
Other current liabilities	694.4	552.0	26%
Total current liabilities	697.3	594.5	17%
TOTAL EQUITY AND LIABILITIES	2,021.2	2,204.6	-8%

Reconciliation

IFRS

	04 2020		04 20 20
(All amounts in USD 1,000s)	As reported	Adjustments	Segment
Net revenues	142,897	$-22,575$	120,322
Amortization and impairment of multi-client library	172,662	$-5.141$	167,521
Total operating expenses	191,373	$-5,141$	186,232
Taxes	$-24,148$	$-5,776$	$-29,923$
Net income	$-26,288$	$-11,658$	$-37,946$

	$31 - Dec-20$		$31 - Dec-20$
(All amounts in USD 1,000s)	As reported	Adjustments	Segment
Multi-client library	917,502	$-293,650$	623,852
Deferred tax asset	113,468	$-58,120$	55,348
Total non-current assets	1,433,475	$-351,770$	1,081,704
Accrued revenues	108,737	102,547	211,284
Total current assets	587,711	102,547	690,258
Equity	1,249,578	149,465	1,399,043
Deferred taxes	28,984	2,113	31,096
Total non-current liabilities	74,292	2,113	76,404
Accounts payable and debt to partners	140,078	58,514	198,592
Other current liabilities	551,804	$-459,314$	92,489
Total current liabilities	697,316	$-400,800$	296,516

Multi-Client Library TGS/SPU Consolidated (Q1 2018 – Q4 2019)

1. Operational multi-client seismic investments

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