PGS ASA: Q2 2023 Update

July 11, 2023, Oslo, Norway: Based on a preliminary review, PGS expects to report Revenues and Other Income according to IFRS for Q2 2023 of approximately $156 million, compared to $273.6 million in Q2 2022. The Company expects Produced Revenues* for Q2 2023 of approximately $186 million, compared to $209.7 million in Q2 2022.

Contract revenues ended at approximately $71 million in Q2 2023, compared to $62.8 million in Q2 2022. MultiClient late sales revenues were approximately $55 million in Q2 2023, compared to $108.2 million in Q2 2022, when the Company benefited from significant transfer fees.

Estimated Produced MultiClient Pre-funding Revenues* in Q2 2023 were approximately $54 million compared to $32.6 million in Q2 2022. MultiClient pre-funding revenues based on IFRS, where revenues are recognized at the time of delivery of finally processed data, were approximately $24 million in Q2 2023, compared to $96.5 million in Q2 2022. IFRS revenues for Q2 were lower than previously estimated due to changes to delivery time for completed data.

“Our Q2 revenues confirm an improving seismic market, considering the weather related challenges we encountered in the Norwegian Sea and the Barents Sea in the early part of the Europe season, and a delayed yard stay for Ramform Sovereign in Asia Pacific.

I am pleased to see a meaningful pick up of MultiClient late sales which more than doubled sequentially from Q1. We used an overweight of 3D vessel time for MultiClient acquisition with a pre-funding level above 120% of capitalized cash cost. For contract surveys, we continue to deliver improving rates and margins.

Our contract revenues in the quarter include approximately $5 million relating to our first offshore wind site characterization survey in the Irish Sea. We are encouraged by our progress in this area. With the latest announced contract award our current Ultra High Resolution 3D system is booked on attractive work to late Q1 2024,” says President & CEO Rune Olav Pedersen, and continues:

“In July Ramform Victory commenced acquisition of a pre-funded MultiClient project in the Norwegian Sea. The vessel was scheduled to commence on the large 4D contract job in Brazil around mid-year but is now expected to steam from Norway late August. Contract scope is unchanged, and departure is postponed to avoid risk of standby time in Brazil. The schedule for Ramform Titan was impacted by a contract termination announced in June. The vessel is now mobilizing for a MultiClient program offshore Egypt. Acquisition will start later in July with duration of approximately 40 days.”

PGS routinely releases information about 3D vessel utilization after the end of each quarter. The table below summarizes Q2 2023 vessel allocation:

        
The Q2 2023 vessel statistics includes six active 3D vessels. All cold-stacked** vessels are excluded from the statistics. The comparative periods are also based on six active 3D vessels.

The Company provides this information based on a preliminary summary of Q2 2023 numbers. The Company has not completed its financial reporting and related consolidation, review and control procedures, including the final review of all sales against the established revenue recognition criteria. The estimates provided in this release are therefore subject to change and the Q2 2023 financial statements finally approved and released by the Company may deviate from the information herein.

PGS will publish its Q2 2023 earnings release on Thursday July 20, 2023, at approximately 07:00am Central European Summer Time (CEST). Presentation of the Q2 2023 results is scheduled to start at 09:30am CEST the same day.

^{*Produced Revenues, when used by the Company, means revenues and other income based on recognition of MultiClient pre-funding revenues on a Percentage-of completion (POC) basis.}

Adjustments between IFRS revenues and Produced Revenues for each quarter in 2022 and 2023 are shown in the table below:

^{**The term "cold-stacked" is used when a vessel is taken out of operation for an extended period of time. Costs are reduced to a minimum, with the vessel preserved for a long idle time, all or most in-sea seismic equipment removed from the vessel, and typically the Company does not have available crew to operate the vessel.}
        

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PGS ASA and its subsidiaries (“PGS” or “the Company”) is an integrated marine geophysics company, which operates world-wide. The Company supports the energy industry, including oil and gas, offshore renewables, carbon capture and storage. PGS’ headquarter is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information about PGS 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 2022. 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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