TGS ASA — M&A Activity 2020

Aug 6, 2020

TGS submits offer to acquire the multi-client data library of PGS

TGS submits offer to acquire the multi-client data library of PGS

* TGS submits a conditional offer for the multi-client data library of PGS for

a cash consideration of USD 600 million

* The offer values the multi-client data library in excess of the full

reported book value and secures PGS liquidity to repay the USD 135 million

revolving credit facility due September 2020

* TGS proposes a post-closing collaboration agreement for future PGS multi-

client projects and preferential rights for PGS to offer their 3D-fleet for

future TGS data acquisition

* A successful offer will broaden TGS´ multi-client geophysical data offering

in all major mature and frontier basins world-wide

* The offer will be financed by on-balance cash, a new term loan facility and

new equity

OSLO, NORWAY (6 August 2020) - TGS-NOPEC Geophysical Company ASA ("TGS" or the

"Company", OSE: TGS) announced today that it has submitted a conditional offer

for the purchase of the multi-client data library of PGS ASA ("PGS") (the

"Offer"). Under the Offer, PGS would, upon consummation of the sale, receive a

cash consideration of USD 600 million. In addition, TGS has proposed that the

parties enter into a post-closing collaboration agreement for future PGS multi-

client projects, which also would include certain preferential rights for PGS to

offer their 3D-fleet for future TGS data acquisition.

The proposed transaction presents an opportunity for PGS and its stakeholders to

monetize its multi-client data library in excess of its full reported value,

delivering substantial funds to PGS in what are challenging times for the entire

seismic industry. The Offer will secure the liquidity required to repay PGS' USD

135 million revolving credit facility due September 2020 and will further

significantly deleverage the company to support its continued operations and

enhance the ability to service the remaining debt.

For TGS, the acquisition of PGS' multi-client data library would broaden the

Company's offering as a multi-client geophysical data provider in all major

mature and frontier basins world-wide.

Commenting on the Offer, Kristian Johansen, CEO of TGS said:

"We see a strong complement between our existing business and the PGS data

library and the opportunity to leverage our expertise and scale to improve

returns. Concurrently, a refocused and refinanced PGS will be a world-leading

and highly innovative provider of acquisition technology and marine acquisition

capacity, providing a strong platform for creating long-term value for the

company´s stakeholders. The proposed transaction is thus aimed at safeguarding

customers' access to leading acquisition technology, high-quality data

acquisition capacity and top tier data processing capabilities, whether they

choose to purchase data through the contract model or the multi-client model. We

believe the consolidation and further partnership between our two companies

carries a strong industry logic and we look forward to initiate the dialogue

with the management and board of PGS."

Background for the Offer

Over the past years the seismic industry has seen a sharp drop in aggregate

return on capital caused by a combination of a lower oil price, a more

consolidated customer base and over-capacity on the supply side. As a result,

industry players have changed their strategy towards specialization such that

most companies have become either pure vessel operators or pure multi-client

providers. TGS has since its inception focused on an asset light multi-client

operation and has grown to become a leading global multi-client seismic company.

PGS has built a significant multi-client library and is a key player in the

seismic industry. As opposed to TGS, PGS has been an integrated operator, and is

today the only remaining player in the industry pursuing both data acquisition

and multi-client seismic strategies.

Following recent market developments, TGS is of the view that a combination of

the TGS and PGS multi-client businesses will improve the ability of the industry

to deliver best in class services to its customers while creating value for its

owners and other stakeholders. TGS strongly believes that the combination

contemplated under the Offer will deliver more scale, better data and increased

efficiencies in the seismic industry.  At the same time, the transaction would

position PGS credibly as one of the most solid in the seismic vessel and

acquisition industry, supported by a robust balance sheet and strong

technologies.

Key terms and financing of the Offer

* The Offer comprises the entirety of the multi-client data library of PGS,

including all existing data and work-in-process, as well as the contractual

arrangements associated with the foregoing (the "PGS MC Library"). The Offer

assumes an effective date of 1 July 2020.

* The Offer values the PGS MC Library at USD 600 million, with full

consideration in cash on completion, representing a meaningful premium to

the USD 565m book value (as reported by PGS in its financial report for the

2(nd) quarter of 2020).

* The transaction contemplates a post-closing collaboration between the

parties that comprises a framework arrangement for future acquisition

services by PGS to TGS as well as the opportunity for TGS to participate in

future multi-client opportunities pursued by PGS.

* The Offer is subject to a customary, limited scope, confirmatory due

diligence and entering into definitive agreements for the transaction, and

completion will be conditional upon any required approvals by an

extraordinary general meeting in TGS in respect of the equity financing of

the transaction, and other customary closing conditions, including relevant

regulatory approvals.

The Offer will be financed by on-balance cash, a new term loan facility of USD

200 million and new equity. TGS, with its very robust balance sheet, has seen

strong support for the debt financing of the Offer and is in the position to

execute on such in a timely basis to secure the completion of the Offer. As for

the equity financing, TGS will revert with further details of the structure of

such financing in due course. TGS remains committed to maintaining a strong

financial position and its existing dividend policy.

The Offer as presented to PGS is non-binding at this juncture and may be

withdrawn by TGS at its sole discretion at any time until definitive agreements

in respect of the Offer are entered into.

Timeline

The Offer presented to PGS is valid until 16 August 2020. The transaction

contemplated by the Offer is subject to transaction documentation being

finalized and executed, and TGS is prepared to swiftly enter into discussions

with PGS with the aim of securing a definitive agreement in an expeditious

manner. While the timeline is not under the full control of TGS, the Company

believes that, with a mutual commitment to a process, a definitive agreement

could be entered into by the end of August. Closing of a transaction is subject

to satisfaction of all relevant closing conditions, including the receipt of

necessary regulatory approvals or expiration of statutory waiting periods, and

would occur as soon as possible thereafter. Although a full analysis has not yet

been completed, TGS foresees no material issues in relation to the securing of

regulatory approvals, i.a. in view of the moderate size of acquired annual sales

relative to the USD 4+ billion total seismic market, and is confident that all

conditions for completion would be satisfied. TGS expects that completion of the

transaction could take place in 60-90 days after the signing, subject to timing

of regulatory approvals.

Advisors

ABG Sundal Collier ASA is engaged as financial advisor and Advokatfirmaet

Thommessen AS is acting as legal counsel to the Company in connection with the

Offer.

Kristian Johansen, CEO of TGS, will host a conference call to discuss the Offer

at 15:00 (CEST) on 7 August.

Dial-in details:

PIN Code for all countries: 938720

Norway: + 47-21-956342

Sweden: +46-8-1241-0952

Denmark: +45 7876 8490

UK: +44-203-7696819

USA: +1 646-787-0157

Please dial in 5-10 minutes prior to the call to ensure that you will be

connected in time.

For further information, please contact:

Sven Børre Larsen

Head of Business Development and M&A

Tel: +47 909 43 673

E-mail: sven.larsen@tgs.com

Fredrik Amundsen

CFO

Tel: +47 995 89 882

E-mail: fredrik.amundsen@tgs.com

About TGS

TGS-NOPEC Geophysical Company ASA (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.

For more information visit TGS online at www.tgs.com

Important Notice

This announcement is not and does not form a part of any offer to sell, or a

solicitation of an offer to purchase, any securities of the Company.

Neither this announcement nor any copy of it may be made or transmitted into the

United States, or distributed, directly or indirectly, in the United States.

Neither this announcement nor any copy of it may be taken or transmitted

directly or indirectly into Australia, Canada, Japan, Hong Kong, New Zealand or

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compliance with applicable securities laws. Any failure to comply with this

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distribution of this announcement in other jurisdictions may be restricted by

law and persons into whose possession this announcement comes should inform

themselves about, and observe, any such restrictions. This announcement does not

constitute, or form part of, an offer to sell, or a solicitation of an offer to

purchase, any securities in Australia, Canada, Japan, South Africa, Hong Kong,

New Zealand or the United States or in any jurisdiction to whom or in which such

offer or solicitation is unlawful.

The securities referred to in this announcement have not been and will not be

registered under the U.S. Securities Act of 1933, as amended (the "Securities

Act"), or any securities laws of any state or other jurisdiction of the United

States and may not be offered or sold within the United States except pursuant

to an exemption from, or in a transaction not subject to, the registration

requirements of the Securities Act and in compliance with applicable state law.

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This announcement is an advertisement and does not constitute a prospectus for

the purposes of the Prospectus Regulation (EU) 2017/1129 (as amended, together

with any applicable implementing measures in any Member State, the "Prospectus

Regulation"). In any EEA Member State that has implemented the Prospectus

Regulation, this communication is only addressed to and is only directed at

qualified investors in that Member State within the meaning of the Prospectus

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(ii) are investment professionals falling within Article 19(5) of the U.K.

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amended) (the "Order") or (iii) high net worth companies, and other persons to

whom it may lawfully be engaged with, falling within Article 49(2)(a) to (d) of

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similar expressions. The forward-looking statements in this release are based

upon various assumptions, many of which are based, in turn, upon further

assumptions. Although the Company believes that these assumptions were

reasonable when made, these assumptions are inherently subject to significant

known and unknown risks, uncertainties, contingencies and other important

factors which are difficult or impossible to predict and are beyond its control.

Such risks, uncertainties, contingencies and other important factors could cause

actual events to differ materially from the expectations expressed or implied in

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The information, opinions and forward-looking statements contained in this

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5-12 the Norwegian Securities Trading Act