DnB Markets Oil, Offshore and Shipping Conference - PGS

DnB Markets Oil, Offshore and Shipping Conference
Jon Erik Reinhardsen, President & CEO
Oslo, March 8, 2012

Cautionary Statement
• This presentation contains forward looking information
• Forward looking information is based on management
assumptions and analyses
• Actual experience may differ, and those differences may
be material
• Forward looking information is subject to uncertainties
and risks which are disclosed in PGS’ Annual Report
2010
• This presentation must be read in conjunction with the
Company’s financial statements
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Leading Marine Geophysical Company
Marine
Contract
MultiClient
Operations
Data Processing
& Technology
Marine market
leadership
Diverse
MultiClient library
Productivity
leadership
Technology
differentiation
Ca 50% of 2011
Revenues
Ca 40% of 2011 Revenue
Ca 10% of 2011 Revenue
Marine Contract acquires
seismic data exclusively for oil
and gas exploration and
production companies
MultiClient initiates and
manages seismic data PGS
acquires, markets and sells to
multiple customers on a nonexclusive
basis
Operations supports Marine
Contract and MultiClient with
vessel resources and
manages fleet renewal
strategies
DP&T processes seismic data
acquired by PGS for its
MultiClient library and for
external clients on contract
and manages research and
development activities
Client focus ● Global presence ● Innovation leadership
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Financial Summary
Revenues
EBITDA
USD million
400
300
200
100
259
215
296
364
242
327
340 345
USD million
200
150
100
50
99
76
136
163
73
164
153
145
-
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
-
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
USD million
60
50
40
30
20
10
29
6
53
EBIT*
42
2
49
44 45
USD million
160
140
120
100
80
60
40
20
116
Cash Flow from Operations
105
99
81
69 66
150 150
0
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
0
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Graphs show numbers for PGS continuing business. Figures for prior periods have been restated due to change in accounting policy
*Excluding reversal of impairment of USD 1.3 million in Q4 2010 and excluding impairments of USD 2.6 million in Q4 2011, USD 79.9 million in Q3 2010 and
USD 0.5 million in Q1 2010.
EBITDA, when used by the Company, means income (loss) before income tax expense less, currency exchange gain (loss), other financial expense, other
financial income, interest expense, income (loss) from associated companies, other operating income, impairment of long-lived assets and depreciation and
amortization.
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Robust Future Demand for Oil and Gas
100
mb/d
90
80
70
60
50
40
30
20
10
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Crude oil: currently producing fields Crude oil: fields yet to be developed
Crude oil: Fields yet to be found Natural gas liquids
Unconventional oil
Source: IEA, oil production in the New Policies Scenario.
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• Oil and gas will
continue to be an
important source of
energy
• Oil production gap
will increase
dramatically –
seismic will be
important to find
and develop new
fields

Exploration and Production Spending Continues to Grow
Capital spending in USD million
900 000
800 000
700 000
600 000
500 000
400 000
300 000
200 000
100 000
Actual
Estimates
• Global E&P spending is
expected to approach USD
600 billion in 2012, a 10%
increase vs. 2011
Percentage of oil Companies in survey
increaseing/decreasing spending at
differnt WTI levels
100 %
80 %
60 %
40 %
20 %
0 %
-20 %
-40 %
-60 %
-80 %
-100 %
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
United States Canada Outside North America
WTI price as
of February
17, 2012
• E&P spending, including
seismic spending,
correlates with oil price
development
Source: All graphs and data points from Barclays Capital Global 2012 E&P Spending Outlook
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Sharp Increase in Market Activity
3 500
3 000
• Current tender activity
similar to early 2007 level
USD million
2 500
2 000
1 500
• Increase driven by
contract work in Baffin
Bay, Greenland, North
Sea and Barents Sea
1 000
500
• Current bid volumes
indicate a tighter marine
contract market in 2012
-
Active Tenders
All Sales Leads (Including Active Tenders)
• Strong GeoStreamer
interest
Source: PGS internal estimate as of end January 2012. Value of active tenders and sales leads are the sum of active tenders and sales
leads with a probability weight and represents Marine 3D contract seismic only.
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Comfortable Visibility
700
USD million
600
500
400
300
200
• Order book of USD 678
million, fuelled by the large
MultiClient project offshore
Angola
• North Sea season firming
up with expectations of a
tight marine contract market
100
0
• Strong GeoStreamer
momentum continues
Marine order book (including DP)
OptoSeis
Market activity has increased significantly

Healthy Growth in Demand for Seismic
Number of streamers
Total 3D volume in '000 sq.km.
450
400
350
300
250
200
150
100
50
0
700
600
500
400
300
200
100
2006 2007 2008 2009 2010 2011 2012 E
• From 2006 to end 2011 demand
for seismic has grown by more
than 70% measured in sq.km.
– HD3D is growing quicker than the
general market
• Growth in ‘12 is expected to be in
excess of 10%
• Expected capacity increases
– 6% increase in 2012
– 6% increase in 2013
0
Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13
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Four Basins Driving 2012 Demand Growth
• The North Sea: Major discoveries in 2011
positive for the 2012 season
– Higher prices being achieved
• Angola: Production Sharing Contracts (“PSC”)
signed
– Significant seismic activity in pre-salt regions
• Gulf of Mexico: All major seismic companies
have been awarded seismic permits
– Central Lease sale scheduled for June 20, 2012
• Brazil: Currently good activity
– Launch of license round 11 expected to increase
interest further
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Return on Capital Employed
60 %
55 %
50 %
45 %
• Historically strong returns
over the cycle
40 %
35 %
30 %
25 %
• Returns below cost of
capital in 2010 and 2011
– Expected to improve in
2012
20 %
15 %
10 %
5 %
• Weighted average cost of
capital is estimated to 9-
10% (after tax)
0 %
2005 2006 2007 2008 2009 2010 2011 FC 2012 E
Return on Cap empl
Post tax return
Return on capital employed is calculated as EBIT (excluding impairments and other operating income/expense) as a percentage of average net capital
employed (sum of shareholder’s equity and net interest bearing debt adjusted for net assets on discontinued operations). Post tax return is calculated by
deducting the reported tax expense from EBIT. Adjustments have been made to exclude Onshore and Production which have been discontinued in the
period. 2005 is N GAAP all other years are IFRS based.
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PGS - Proactive Allocation to MultiClient and Contract
MC 3D GeoStreamer data
MC 3D data
MegaSurveys
2D GeoStreamer lines
• MultiClient margin is less volatile
over the cycle compared to
contract work
• PGS seeks to optimize profitability
– More Marine Contract in a strong
market
– More MultiClient in a weak market
– MultiClient pre-funding target is
80-120 %
16/2-8 Aldous Major South
16/2-6 Avaldsnes
16/1-8 Luno
• Internal pull for capacity where
margin and cash flow get priority

An Industrialized Player in a Growing and Maturing Market
• Conservative balance sheet with ability
to handle all market conditions
– Ability to invest in technology, library
and capacity through the cycle
– Ability to pay dividend
• A cost efficient and modern fleet that
attracts customers and delivers
profitability
• Differentiation through technology
Competitively Positioned – Performance Through the Cycle
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Continuously Ahead of Competition
1992 - 1996
1998 - 1999 2007 - 2009
2012 - 2014
Competition
4 – 6 streamers
6 – 8 streamers 8 - 12 streamers
10 10 - - 14 14 streamers
PGS
8 - 12 streamers
12 - 18 streamers
12 – 22 streamers
14 - 24 streamers
Improved safety and cost efficiency
More streamers, longer streamers and wider & denser streamer spreads
HD3D market growth and GeoStreamer demand
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Favorably Positioned on the Industry Cost Curve
Relative cash cost efficiency per streamer per day
PGS Ramform vessels
Other PGS vessels
Competitors’ vessels
PGS fleet is positioned to generate the industry’s best margins
Source: The cash cost curve is based on PGS’ internal estimates and typical number of streamer towed, and excludes GeoStreamer productivity effect. The
graph shows all seismic vessels operating in the market and announced new-builds. The Ramform 9&10 are incorporated with 15 streamers, S-class with 14
streamers and the V-class with 12 streamers.
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PGS’ Fleet Overview
Ramforms
Conventional
5 th Gen
2 ordered & option on 2 more PGS Apollo
S-class
Ramform Sterling
Ramform Sovereign
Atlantic Explorer
V-class
Ramform Valiant Ramform Viking Ramform Vanguard
Pacific Explorer
2D
Nordic Explorer
Ramform Challenger
Ramform Explorer
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Sanco Spirit

GeoStreamer GS
A Second Layer of Differentiation
Source Receiver Source Receiver Source Receiver
• GeoStreamer GS removes both source and receiver ghosts – the only
ghost free acquisition solution
• A step change in bringing higher resolution and better seismic images at
deeper targets
• Deeper streamer tow significantly increases weather window for seismic
acquisition
End 2012 all GeoStreamer vessels will be equipped with GeoSource (GS)
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Next Innovation: Imaging with Primaries and Multiples
– A New World for processing
• Using Up and Down going
wavefields will lead to radical
improvements in
– sub-surface imaging
– quality and accuracy improvements
for modeling reservoir parameters
15 km
SEG salt model - One Source Location
Illumination by Primaries
Illumination by Multiples

Summary Outlook for 2012
• Q1 2012 will be challenging due to
steaming, idle time for low-end vessel
and weak pricing
• Bidding activity has increased sharply
• Comfortable backlog established
• Higher prices achieved in the North Sea
– Spill over to other markets expected
• Differentiation increasingly important
– Data quality
– Productivity
• Strong GeoStreamer demand
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PGS – A Focused Marine Seismic Company
• Productivity & scale
– Building new 5 th generation Ramform
vessels
– Leading 3D MultiClient library return
• Leading edge Data Processing capabilities
• Strong operational capabilities
• Technology differentiaton
– GeoStreamer GS
– Fiber optic monitoring
– Electromagnetics
• Proactive financial management
Strong underlying demand fundamentals – Unique position to
benefit from demand for advanced seismic
Competitively Positioned – Performance Through the Cycle
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