Magseis ASA Q3 2017 2nd November 2017

Highlights

Another strong quarter

Operational Performance2 Crews

Continuous focus on more efficient and cost effective

solution

Further growth, backlog and outlook

2

• Negotiations ongoing for the extension in the Red Sea, high tender activity.

• New cable vessel planned for late Q2 2018 start-up date

• Strong financial performance: Revenue of USD 28.7m and EBITDA of USD 13.9m• Revised EBITDA guidance to USD 24 - 26m for the full year, up from USD 20m

• Mobile ROV more efficient than expected, strong industry interest

• Positive results from the Source IsolationTM test

• Completed the Mobile ROV operation for ConocoPhillips in the North Sea

• Completion of the S-78 Extension in the Red Sea expected Mid-November

Source: Magseis

KEY FIGURES Q3 2017

Source: Magseis

28.7REVENUE

13.9EBITDA

9.7NET PROFIT

45.4CASH BALANCE

$ MILLION

$ MILLION $ MILLION

$ MILLION $ MILLION

28.7

REVENUE

Q3 2017

13.1

REVENUE

Q32016

13.9

EBITDA

Q32017

EBITDA

Q32016

3.0

3

Third quarter and first nine months 2017- Key figures

4Source: Magseis

Revenue 28 650 13 094 69 125 38 881

Cost of sales 11 590 7 660 30 246 27 928

EBITDA 13 923 2 993 30 650 2 973

EBIT 8 845 -6 975 18 317 -13 009

Net profit/loss 9 660 -8 841 16 484 -16 754

Basic earnings per share 0.16 -0.23 0.27 -0.44

Financial position

Cash 45 427 13 471

Working Capital1) 11 429 5 933

Total equity 104 775 48 909

Equity ratio 80.6% 56.1%

Gross interest bearing debt 9 762 19 573

Cash flow

Profit and loss Q3 2017 Q3 2016 YTD 2017 YTD 2016

1): Working Capital defined as Trade Receivables less Trade Payables

Net cash from operating activities 21 777 -10 755

Net cash from investing activities -27 072 -16 165

Net cash from financing activities 31 748 28 956

• USD 28.7 million in Revenues• Revenue resulting from strong operational performance on

both Red Sea and ConocoPhillips projects

• Very strong EBITDA performance at USD 13.9 million

• Total Amortisation of USD 2.6m during the quarter

• Closing cash position of USD 45.4 million • Equity ratio 80.6%

• Working Capital decrease• Advantageous payment terms on both Red Sea and Conoco

project during Q3• Small increase in payables

• Full-year guidance revised• Expected EBITDA for 2017 of USD 24-26 million

OBS provides superior image quality - gaining market share over high-end streamer seismic

Streamer Seismic Ocean Bottom Seismic (OBS)

80%Market share

20%Market share

5Source: Magseis/Statoil

MASS technology - Marine Autonomous Seismic System

Miniaturised node sensors Handling system Applications

ROV deployment

Ultra deep water deployment

Cable deployment

6

• Highest spec sensor on the market

• Smart, light, robust and easy-to-handle node

• Superior logistics and efficiency

• Automated handling system

Source: Magseis

MASS Cable

MASS Modular/ROV

MASS Ultra Deep Water

New, exclusive source technology agreement- Significant potential to reduce costs further

Improved efficiency and data quality by new Source Isolation technology

• Reducing number of source vessel sail lines

• Increasing image quality, higher resolution and larger fold

• Exclusive agreement for OBS

• Field test conducted August 2017

• Commercially available in 2018

7

Source Isolation Conventional shooting25m 50m

Source: Magseis

New, exclusive source technology agreement- Significant potential to reduce costs further

Source: Magseis

Nodes deployed on seabed Conventional shooting 7 sail lines Source Isolation 7 sail lines

Source: Magseis

Red Sea project (S-78)

9

Operational highlights• Good operational performance on S-78 Extension due to good

cooperation with BGP

• Project completion delayed due to standby caused by other activities in the area

• Expected completion Mid November

• Q4 will be marked by redeployment of equipment, yard stay and some potential idle time between projects

• Revenue in Q4 estimated at USD 4-6m, potential upside if next project can commence earlier than indicated by the client

Source: Magseis, NASA

Red Sea Exploration

10

Saudi Aramco was the first to use a deepwater rig in the Red Sea region after a 15-month seismic study in 2009 indicated the presence of natural gas. The company discovered three oil and two gas fields in 2013.

(Abdelghani Henni, HartsEnergy)

“We continue our program to explore the shallow waters of the Red Sea, completing our largest single survey of the seabed encompassing Saudi Arabian territorial waters,” Saudi Aramco said in its latest annual report (2016). (Abdelghani Henni, HartsEnergy)

State-owned Saudi Aramco is hoping that innovative seismic acquisition technology will help the company to successfully explore the geologically complex sub-salt of the ecologically sensitive Red Sea.

The operator had said its share of Red Sea oil and gas resources had the potential to boost Saudi Arabia’s reserves base by more than 30%.

(Saleh Al Saleh, Upstream online)

Red Sea

The new city called “NEOM” will be

developed within this region

ConocoPhillips Eldfisk project

11

• First full scale Mobile ROV operation

• 3000 MASS nodes and 2 ROVs

• Project completed within schedule and budget

• Using ROV vessel and Source vessels already on charter with ConocoPhillips

• Delivering a high-quality 4D OBS survey to our client at a substantially lower cost

• Operational efficiency can be improved further by deploying more MASS nodes and faster ROVs

Source: Magseis

MASS Modular

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High capacity, mobile ROV operation

• Containerised, modular system

• Can be rigged up/down within 1 week on vessels of opportunity or onshore

• Unlimited number of nodes can be deployed

• Efficiency comparable to high-end cable based deployment platforms

• Commercially available, participating in several tenders -> Target of 2-4 ROV projects during 2018

Source: Magseis

Vessel #2 preparations ongoing

Source: Magseis13

• 6,000 MASS sensors in production, long-lead components for handling system ordered

• Detailed design for chosen vessel ongoing

• Target start of operations during Q2 2018• Bidding on projects for 2018 H2

Ramping up capacity to meet market growth:

Source: Magseis14

• MASS node inventory growing from 5,000 to 14,000 by Q1 2018

• Critical long-lead components for an additional 6,000 has been secured, enabling Magseis to reach 20,000 MASS nodes by YE 2018

• Firmly establishing Magseis as a joint industry leader in terms of OBS node capacity

• Strategic focus on maximising the utilisation of our MASS nodes and Return On Capital Employed

20192016 2017 2018

MASS Node Inventory

30 000

25 000

20 000

15 000

10 000

5000

0

Committed orders for complete MASS nodesSecured, critical long-lead itemsPlanned

Source: Magseis/Arkwright/Rystad Energy/Statoil15

Strong market outlook

20202019201820172005 2016

2 250

2 000

1 575

1 500

1 250

1 000

750

500

250

0

USD>750 m

$ MILLION

Third quarter and first nine months 2017- Comprehensive income • Revenue

• USD 28.7m, strong performance on the Aramco S-78 and ConoccoPhillips projects

• Cost of sales • Full quarter of production• Amortisation of capitalised mobilisation and yard costs

(net effect of USD 2.6m during Q3)• Aramco startet end of July in Q3 last year (capitalised cost til 1.shot)

• Depreciation• Amortisation of capitalised mobilisation and yard cost USD 0.9m

• Amortisation and Impairment• No impairment in the third quarter

• Finance • Primarily interest related to GIEK and

Innovation Norway

• Tax• USD 0.5m for withholding tax in Saudi Arabia

In USD thousands Q3 2017(unaudited)

YTD 2017(unaudited)

Q3 2016(unaudited)

YTD 2016(audited)

16

Revenue 28 650 69 125 13 094 38 881Cost of sales 11 590 30 246 7 660 27 193Research and development 494 1 507 268 1 529SG&A and other expenses 2 643 6 721 2 173 7 185EBITDA 13 923 30 650 2 993 2 974Depreciation 4 962 11 753 3 087 7 658Amortisation 116 347 133 1 276Impairment 0 233 6 748 7 047EBIT 8 845 18 317 -6 975 -13 008Net interest and fx (gain)/loss -1 309 -287 426 1 020Other finance cost - - - -Net finance costs -1 309 -287 426 1 020EBT 10 154 18 604 -7 401 -14 028Tax 493 2 121 1 440 2 725Net income 9 660 16 484 -8 841 -16 753Currency translation differences 0 0 0 0Total comprehensive income 9 660 16 484 -8 841 -16 753

Source: Magseis

Third quarter and first nine months 2017- Balance sheet

• Trade receivables comprising BGP/Aramco and ConocoPhillips

• 50% of August and 100% of September production (paid in Q4)

• Equity ratio of 80.6%• Debt covenants at 30%

• Non-current liabilities• Senior debt drawn down from Export Credit Norway and

Innovation Norway: USD 6.4m• Shell Deep Water R&D funding: USD 7.0m (contingent liability)

• Current tax liabilities– Withholding tax Saudi Arabia– Corporate tax in Singapore and Sweden

• Other current liabilities– Current portion of long-term debt USD 3.4m

In USD thousands YTD 2017(unaudited)

YTD 2016(unaudited)

17

Equipment and other intangibles 64 234 50 153Multi-client library 0 0Cash and cash equivalents 45 427 13 471Trade receivables 16 394 12 909Stock (fuel and batteries) 908 1 763Other current assets 2 964 8 916TOTAL ASSETS 129 927 87 213

Share capital 438 303Share premium 141 486 102 594Retained earnings and other reserves -37 149 -53 989TOTAL EQUITY 104 775 48 909

Obligation under finance lease 181 1 197Other non-current financial liabilities 13 482 13 293TOTAL NON-CURRENT LIABILITIES 13 662 14 490

Trade payables 4 965 6 976Current tax liability 721 189Other current liabilities 5 804 16 649TOTAL CURRENT LIABILITIES 11 490 23 814

TOTAL LIABILITIES 25 152 38 304

TOTAL EQUITY AND LIABILITIES 129 927 87 213

Source: Magseis

Third quarter and first nine months 2017- Cash flow

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• Cash flow from operations• Decrease in working capital resulting from:

• Advantageous payment terms on both Red Sea and Conoco project during Q3

• Small increase in payables

• Cash flow from investments• Relates mainly to investments in nodes for vessel #2

• Cash flow from financing • Instalments of USD 0.7m

Earnings before tax 10 078 18 604 -7 401 -14 028Depr, Amor,Impair,Finance, etc. 3 903 10 125 10 467 16 789Net working capital adjustments 7 128 -6 952 -9 885 -13 515Net cash flow from operating activities 21 109 21 777 -6 819 -10 754

Net cash flow from investing activities -8 796 -27 072 -5 451 -16 165

Net cash flow from financing activities -619 31 748 8 886 28 956

Net change in cash and cash equivalents 11 694 26 453 -3 384 2 036Cash balance at the beginning of the period 33 657 18 974 16 855 11 435Cash balance at period end 45 351 45 427 13 471 13 471

In USD thousands Q3 2017(unaudited)

YTD 2017(unaudited)

Q3 2016(unaudited)

YTD 2016(audited)

Source: Magseis

Magseis - well positioned for further growth in 2018

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Strong OperationalPerformance

Strong Pipeline

Flexible Operating Platform

MASS TechnologyUnrivalled flexibility and capacity in the 4D marketSource Isolation technology targeting 30-50% acquisition cost reduction

Succesfull introduction of MASS Modular with ROV deployment for ConocoPhillipsImpressive operations in challenging conditions in the Red SeaHigh probability for repeat business

Vessel #2 targeting large surveys with increased efficiencyMASS Modular targeting 4D surveys and shallow water

Several active tenders in key markets (capacity already tied-up on awarded projects)Strong focus on 4D and IOR

20