First Quarter 2010 Results

30.04.2010  |  Marketwired

LYSAKER (OSLO), NORWAY -- (Marketwire) -- 04/30/10 --

GeoStreamer® Improves Margins

April 30, 2010: OSLO, NORWAY - Petroleum Geo-Services ASA ('PGS' or
the
'Company') reported an EBITDA margin for the Group of 38 percent in Q1 2010
with
GeoStreamer® playing a key role. Net debt has more than halved in
the past 12
months which has paved the way for the Company to be reorganized for
growth.

§ Group performance: Q1 2010 earnings before interest, tax,
depreciation and
amortization ('Adjusted EBITDA') were $99.3 million, compared to $206.3
million
in Q1 2009.

§ Marine: Q1 2010 revenues are lower than in the same period
last year,
primarily driven by lower prices for Marine contract work.
Depreciation and
amortization is higher in Q1 2010 than in Q1 2009, due to entry of
Ramform
Sterling and higher MultiClient revenues.

§ Recovery in Marine contract EBIT margin: Marine contract EBIT
margin improved
from 12 percent in Q4 2009 to 23 percent in Q1 2010, primarily due to
strong
vessel utilization and performance, increasing share of GeoStreamer®
in the mix
and low Marine cost.

§ Further net debt reduction: Cash proceeds from sale of the
Onshore business
and refund guarantees from cancellation of New Build 532 as well as
strong
working capital development resulted in net interest bearing debt of
$537.4
million, compared to $1,141.5 million in Q1 2009.

§ Almost all 2010 GeoStreamer® capacity sold: Customer interest
for GeoStreamer®
is gaining further momentum and the order book is building significantly
faster
for GeoStreamer® capacity than conventional capacity. Ramform
Valiant and
Ramform Explorer are scheduled for GeoStreamer® upgrades in Q2.

§ GeoStreamer® price uplifts: Both 2D and 6-streamer
GeoStreamer® vessels
currently generate margins in line with high-end conventional 3D vessels.

§ Bidding activity and visibility is increasing: However, new
global capacity
additions scheduled for 2010 put pressure on conventional streamer pricing.

§ PGS Apollo delivered: The new 3D 10-streamer vessel was delivered on
March 26
and will commence operations early May.

§ Organizational changes for future growth: Following sale of
the Onshore
business, PGS has simplified its operational model and is now
organized in
product lines to improve focus and position the group for future growth.

§ Guidance maintained: No change to the 2010 guidance, as
launched at the
capital markets day in December 2009, but currently with more EBITDA upside
than
downside, due to GeoStreamer® and MultiClient activity. Second
half 2010 is
expected to be stronger than first half.

Jon Erik Reinhardsen, Chief Executive Officer and President of PGS,
commented:

'The increasing share of our new GeoStreamer® combined with lower
Marine cost
and strong operating performance caused the Marine contract EBIT margin to
be
significantly higher than in the previous quarter. We currently see
increased
interest in pre-funding commitments, and bidding activity continues its
positive
trend.'

+--------------------------------+---------------------+------------------+
| | | |
| | Quarter ended | Year ended |
|Key Financial Figures | March 31, | December 31, |
|(In millions of dollars, except +----------+----------+------------------+
|per share data) | 2010 | 2009 | |
| |Unaudited |Unaudited | 2009 Audited (1) |
+--------------------------------+----------+----------+------------------+
|Revenues from continuing |$ 259.4 | $ 390.8| $ 1,350.2|
|operations | | | |
+--------------------------------+----------+----------+------------------+
|Adjusted EBITDA (as defined) | 99.3| 206.3| 672.1|
+--------------------------------+----------+----------+------------------+
|EBIT excluding special items (2)| 34.8| 155.2| 386.9|
+--------------------------------+----------+----------+------------------+
|EBIT | 34.2| 104.6| 233.3|
+--------------------------------+----------+----------+------------------+
|Income before income tax expense| 14.9| 89.7| 228.1|
|(benefit) | | | |
+--------------------------------+----------+----------+------------------+
|Net income to equity holders | 16.2| 54.2| 165.8|
+--------------------------------+----------+----------+------------------+
|Basic earnings per share ($ per | 0.08| 0.31| 0.88|
|share) | | | |
+--------------------------------+----------+----------+------------------+
|Diluted earnings per share ($ | 0.08| 0.31| 0.88|
|per share) | | | |
+--------------------------------+----------+----------+------------------+
|Net cash provided by operating | 115.5| 145.4| 676.1|
|activities | | | |
+--------------------------------+----------+----------+------------------+
|Cash investment in MultiClient | 52.1| 44.8| 183.1|
|library | | | |
+--------------------------------+----------+----------+------------------+
|Capital expenditures | 47.9| 93.7| 231.2|
+--------------------------------+----------+----------+------------------+
|Total assets (period end) | 2,843.4| 3,089.3| 2,929.4|
+--------------------------------+----------+----------+------------------+
|Cash and cash equivalents | 350.6| 101.7| 126.0|
|(period end) | | | |
+--------------------------------+----------+----------+------------------+
|Net interest bearing debt | $ 537.4|$ 1,141.5| $ 774.0|
|(period end) | | | |
+--------------------------------+----------+----------+------------------+

(1) Financial information for the full year 2009 is derived from the
audited financial statements as presented in the 2009 Annual Report.
(2) Impairment charges of $0.5 million in Q1 2010, $50.6 million in Q1 2009
and $153.6 million for full year 2009.

Complete Q1 2010 earnings release can be downloaded at www.newsweb.no or
www.pgs.com.

FOR DETAILS, CONTACT:

Tore Langballe, SVP Corporate Communications
Phone: +47 67 51 43 75
Mobile: +47 90 77 78 41

Bård Stenberg, Investor Relations Manager
Phone: +47 67 51 43 16
Mobile: +47 99 24 52 35

US Investor Services
Phone: +1 281 509 8712

****

Petroleum Geo-Services is a focused geophysical company providing a broad
range
of seismic and reservoir services, including acquisition,
processing,
interpretation, and field evaluation. The company also possesses the
world's
most extensive MultiClient data library. PGS operates on a worldwide basis
with
headquarters at Lysaker, Norway.

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

****

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 MultiClient 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 2009. 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.

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

[HUG#1410356]

Earnings Release Q1 2010: http://hugin.info/115/R/1410356/362904.pdf