Petroleum Geo-Services ASA: Q4 and Preliminary Ful

Strong Full Year MultiClient Performance Refinancing Successfully Completed

Highlights 2016

• Revenues of $764.3 million, compared to $961.9 million in 2015
• EBITDA of $313.4 million, compared to $484.4 million in 2015
• EBIT, excluding impairments and other charges, of negative $137.5 million, compared to a profit of $15.8 million in 2015
• MultiClient pre-funding revenues of $242.3 million with a corresponding pre-funding level of 121%, compared to $380.4 million and 125% respectively in 2015
• MultiClient late sales of $226.8 million, compared to $194.3 million in 2015
• Cash flow from operations of 320.9 million, compared to 487.9 million in 2015
• Completed refinancing to reduce debt and extend maturities to 2020
• Gross cash cost further reduced by $130.8 million compared to 2015
• Solid operational performance
• Continue to strengthen imaging capabilities
• Ramform Tethys delivered. Moderate remaining capital expenditure to complete new build program in Q1 2017

"In 2016, our MultiClient revenues amounted to $469.1 million. With capitalized MultiClient cash investment of $201.0 million we achieved a sales-to-investment ratio of 2.3 times, a positive trend compared to last year when the ratio was 1.9 times. Our ability to maintain a robust pre-funding level of more than 120% and the 17% increase in late sales from 2015 were driven by the Ramform vessels' productivity advantage, our superior GeoStreamer technology and a strong and focused organization.

As a result of low activity levels and continued excess supply of vessels, the marine contract market remained challenging through 2016. To improve cash flow we have continued our efforts to reduce costs. Gross cash cost for the full year 2016 ended at $662.3 million, down $130.8 million compared to 2015, and more than 40% lower than our gross cash cost in 2014."

Jon Erik Reinhardsen, President and Chief Executive Officer

Outlook

PGS expects the higher and more stable oil price and improved cash flow among clients, combined with an increasing constraint on available streamers in the industry, to benefit the 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 expected increase of 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. The increase from 2016 is primarily driven by more operated capacity and an expected increase in fuel prices, partly offset by further cost reductions.  

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

Approximately 55% of the 2017 active 3D vessel time is expected to be allocated to MultiClient acquisition.

Capital expenditure is expected to be approximately $150 million, of which approximately $85 million relates to completion of the new build Ramform Hyperion .

The order book totaled $215 million at December 31, 2016 (including $113 million relating to MultiClient), compared to $190 million at September 30, 2016 and $240 million at December 31, 2015.

The Q4 and preliminary full year 2016 results, as well as the CMD presentation can be downloaded from www.newsweb.no or www.pgs.com. 

FOR DETAILS CONTACT: Bård Stenberg, VP IR & Corporate Communications Phone: +47 67 51 43 16 Mobile: +47 992 45 235

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

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