PGS Petroleum Geo Svcs Asa New

Slow Start to 2017
Significant Order Book Increase

Highlights Q1 2017

• Revenues of $154.8 million, compared to $203.1 million in Q1 2016
• EBITDA of $30.1 million, compared to $78.6 million in Q1 2016
• EBIT, excluding impairments and other charges, a loss of $83.5 million, compared to a loss of $30.2 million in Q1 2016
• MultiClient pre-funding revenues of $39.7 million with a corresponding pre-funding level of 118%, compared to $59.9 million and 124% respectively in Q1 2016
• MultiClient late sales of $39.3 million, compared to $65.3 million in Q1 2016
• Cash flow from operations of $30.0 million, compared to 133.3 million in Q1 2016
• Completed subsequent offering, following the Company's Q4 2016 refinancing, resulting in gross proceeds of approximately $35 million
• Ramform Hyperion delivered, which completes the new build program and related capex

"Our financial performance in Q1 2017 reflects the challenging winter season, with weak utilization, low prices for marine contract work and low MultiClient investment activity. However, our order book has increased sequentially by almost 60% to the highest level in two years. The increase is primarily due to more secured pre-funding for our MultiClient projects, and a higher volume of contract jobs combined with increased prices.

The price increase comes primarily as a result of our strong position in the 4D production seismic market and some industry capacity constraints in Q2 and Q3. A majority of the $340 million order book is scheduled for execution this year, and the order book duration is in line with previous quarters.

While it may still be too early to conclude that the market has turned, the increased order book and visibility makes me increasingly confident that we will be able to deliver 2017 in accordance with our plan."

Jon Erik Reinhardsen,
President and Chief Executive Officer

Outlook
PGS expects the improved cash flow among clients, combined with growing limitations on streamer availability in the industry, to benefit marine 3D seismic market fundamentals going forward. The Company expects the volume of marine 3D seismic acquired by the industry to increase in 2017 compared to 2016, partly driven by an increase in 4D streamer monitoring surveys and more MultiClient 3D projects.

Based on the current operational projections and with reference to disclosed risk factors, PGS expects full year 2017 gross cash cost to be approximately $700 million.  

MultiClient cash investments are expected to be $250-275 million, with a pre-funding level of approximately 100%.

Approximately 50% of the 2017 active 3D vessel time is expected to be allocated to MultiClient acquisition.

Capital expenditure for 2017 is expected to be approximately $150 million, of which approximately $87 million relates to the completion of Ramform Hyperion, and was paid in Q1 2017.

The order book totaled $340 million at March 31, 2017 (including $196 million relating to MultiClient), compared to $215 million at December 31, 2016 and $204 million at March 31, 2016.

A complete version of the Q1 2017 earnings release and presentation can be downloaded from www.newsweb.no and www.pgs.com.

Petroleum Geo-Services ("PGS" or "the Company") is a focused Marine geophysical company that provides a broad range of seismic and reservoir services, including acquisition, imaging, interpretation, and field evaluation. The Company's MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. The Company operates on a worldwide basis with headquarters in Oslo, Norway.

PGS has a presence in 17 countries with regional centers in London, Houston and Kuala Lumpur. Our headquarters is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS).

For more information on Petroleum Geo-Services visit www.pgs.com.

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The information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to the demand for seismic services, the demand for data from our multi-client data library, the attractiveness of our technology, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions. For a further description of other relevant risk factors we refer to our Annual Report for 2016. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and PGS disclaims any and all liability in this respect.

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