TGS
Robert Hobbs Kristian K. JohansenChief Executive Officer Chief Financial Officer
Q1 2013 Earnings Release
2
All statements in this presentation other than statements of historical fact, areforward-looking statements, which are subject to a number of risks, uncertainties,and assumptions that are difficult to predict and are based upon assumptions as tofuture events that may not prove accurate. These factors include TGS’ reliance ona cyclical industry and principal customers, TGS’ ability to continue to expandmarkets for licensing of data, and TGS’ ability to acquire and process dataproducts at costs commensurate with profitability. Actual results may differmaterially from those expected or projected in the forward-looking statements.TGS undertakes no responsibility or obligation to update or alter forward-lookingstatements for any reason.
Forward-Looking Statements
3
Q1 2013 Highlights
Record high Q1 revenues of 211 MUSD, up 10% from Q1 2012 Continued strong profitability with operating profit (EBIT) of 89 MUSD,
corresponding to an EBIT margin of 42% High Q1 investment activity with new multi-client investments of 126
MUSD, up 24% from Q1 2012 Cash flow from operations before multi-client investments was
179 MUSD, up 22% from Q1 2012 Commercial agreement signed to broker Fugro’s 2D multi-client library
on a global basis Full year 2013 guidance maintained
4
Net Revenue Breakdown
2D25%
3D68%
GPS7%
Q1 2013
2D16%
3D74%
GPS10%
Q1 2012
Pre-funding
26%
Late sales60%
Proprietary14%
Q1 2013
Pre-funding
39%
Late sales59%
Proprietary2%
Q1 2012
5
NSA38%
Europe11%
AMEAP39%
Other12%
Q1 2012
Net Revenue Breakdown
NSA64%
Europe13%
AMEAP13%
Other10%
Q1 2013
6
FinancialsKristian K. Johansen
Chief Financial Officer
7
Key Financials
27 54 3075 100 99
65 56
9891 146
113109 139 204
12711
155 4
67
13
29
0
50
100
150
200
250
300
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Prefunding Late sales Proprietary
160181
191215
245
281
211
58 61
8289 94 101 118
89
0%5%10%15%20%25%30%35%40%45%50%
0
20
40
60
80
100
120
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
EBIT EBIT Margin
9366
189147 144 129
243
179
0
50
100
150
200
250
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
62111
61101
162138
95126
0
100
200
300
400
500
600
700
800
020406080
100120140160180
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Clo
sing
NB
V
Inve
stm
ent
Investments NBV
Net Revenues EBIT before non-recurring items
Cash Flow from Operations Multi-client NBV and Investments (operational)
136
8
Q1 2013 Income Statement
USD million, except EPS
Net operating revenues
Cost of goods sold - proprietary and other
Amortization of multi-client library
Gross margin
Other operating expenses
Cost of stock options
Depreciation
Operating profit
Net financial items
Profit before taxes
Tax expense
Net income
EPS, Undiluted
EPS, Fully Diluted
-4%
Q1 2013 Q1 2012Change
in %10%211
0.7
191
0.4
74
117
16 3750%
-5%
7%
23%
61%
70
125
38%
42%
25
3
41%
31
(2) (1)
2
1
89
87
89
0.61
63
26
60 29%
88
25
0.59 0.62
74%
93%
-1%
0%
7%
-4%
-5%0.58
9
Q1 2013 Cash Flow Statement
USD million
Received payments
Payments for operational expenses
Paid taxes
Operational cash flow
Investments in tangible and intangible assets
Investments in multi-client library
Proceeds from sale of short-term investments
Interest received
Interest paid
Proceeds from share offerings
Change in cash balance
2 1
74 86
-
Change in %
(36)
(96)
(16)
-
179
(63)
(11) (5)
147
(0.1)
0.6
3.9
1.0
Q1 2013 Q1 2012
(48)
262 186
(23)
-31%
41%
106%
122%
22%
121%
54%
-100%
65%
-14%
10
Balance Sheet
Milestones for earn-out payment for the acquisition of Stingray in April 2011 have not been met
Contingent consideration set to zero
Goodwill adjustment of 25 MUSD charged in 2012 Annual Accounts
No cash or P/L effect
TGS has no interest bearing debt
USD million
AssetsCash equivalents
Financial investments available for saleOther current assets
Total current assetsIntangible assets and deferred tax asset
Other non-current assetsMulti-client library
Fixed assets
Total assetsLiabilitiesCurrent liabilities
Non-current liabilitiesDeferred tax liability
Total liabilitiesEquityTotal liabilities and equity
452 492
-13%
-2%8%
-8%
1,681 1,661
36
0%-24%
-5%-2%
0%9%
13%
1%
412
4 4 458
4
1,681
764 157
707
801 160
32
651
1,661
348
375
17 17
123 113 4
1,168
324
5%1%
Q1 2013 Q4 2012
339
Change in %
22%
1,230
11
Investments per Vintage
132
299
153
270
679
0
100
200
300
400
500
600
700
2009 2010 2011 2012 WIPOriginal investments Maximum allowed NBV (year-end) Net Book Value
20 %
20% 40%
60%
100%
3 %
23%
61%
37%
18%0%4%
12
Net Revenues vs. Net Book Value per Vintage
17%
3%
12%
6%
18%
44%
0% 1%
9%6%
17%
68%
0%
10%
20%
30%
40%
50%
60%
70%
80%
pre-2009 2009 2010 2011 2012 WIP
Net revenues Net book value
13
Operational HighlightsRobert Hobbs
Chief Executive OfficerRobert Hobbs
Chief Executive Officer
14
License Round Activity and TGS Positioning
Announced
Expected
Norway22nd Concession Round closed with awards expected Q2 2013Next Concession Round expected 2014
2013 APA announced for Sep 2013
United Kingdom28th round expected 2014
IndonesiaFeb 2013 Petroleum round closed with direct awards announced and regular awards in May 2013
Next Petroleum Round expected September 2013
BrazilRound 11 announced 14-15 May 2013Pre-Salt round expected Nov 2013
Canada – OnshoreAlberta (bi- weekly), British Columbia (monthly), Saskatchewan (bi-monthly)Canada – Newfoundland/LabradorLicense round expected 2014Canada – Nova ScotiaNS13-1 Round announced for Oct 2013Rounds also expected in 2014 & 2015
Northeast GreenlandPre-round for Kanumas Consortium closed with awards expected Q2 2013
Ordinary Round expected in Q4 2013
AustraliaAcreage Release planned May 201331 blocks proposed spanning 6 basins
Gulf of Mexico 5 Year Plan 2012-2017Western GOM: H2 2013Central GOM: H1 2014
Sierra LeoneLicense round expected 2014LiberiaUltra Deep round expected in 2013
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Q1 2013 – Operations
Geco Eagle 3D
Geo Caribbean 3D
Polarcus Asima 3D
Kansas Crew
Ohio Crew
Alberta Crew
British Columbia Crew
Geo Arctic 2D
Geo Barents 3D
Akademik Shatskiy 2D
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Sunfish 6,200 km2 3D survey commenced January 2013 with data available Q3 2013 prior to expected 2013 Liberia Bid Round
TGS library in Liberia already includes 24,750 km 2D data and 18,350 km2 3D data
Continued commitment by TGS to highly prospective West Africa Transform Margin
Liberia
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SL-13 Infill 9,191 km 2D survey commenced March 2013 with data available Q4 2013
TGS library in Sierra Leone already includes 5,750 km 2D data and 6,268 km2 3D data
Further extension of TGS data library in highly prospective West Africa Transform Margin
Sierra Leone
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Original 3D survey 12,500 km2
Conjugate margin pre-salt basins, similar to hydrocarbon rich basins offshore Brazil
Acquisition completed in late November 2012
Extension 4,064 km2 3D completed in April Data processing performed by TGS Preliminary data will be available
Q4 2013
Angola 3D Extension
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March 2013 Central Lease Sale 52 companies submitted 407 bids on
320 tracts Good alignment between areas of
interest and TGS data
Amerigo - 7,500 km2
Acquisition commenced December 2012 with preliminary data available Q3 2013
Leverages adjacent TGS 3D data Broadband Clari-Fi™ processing
Wide Azimuth Over 42,000 km2 in the most active
and prolific area of the deep water Gulf of Mexico
Central Gulf of Mexico
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3,500 km2 3D survey commenced March 2013 with data available Q3 2013
Data processing will be performed by TGS using Clari-FiTM
Operational adjustments to survey associated with fish spawning Following communication with the NPD, TGS
halted its permitted activities in certain areas associated with fish spawning
TGS is continuing with other parts of the survey and will return to the affected areas when the spawning season has ended
Some minor operational inefficiencies but no impact on project scope or pre-funding
Barents Sea - Finnmark Platform
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Commercial Agreement with Fugro to Broker Data
Exclusive right to license and market the majority of Fugro’s multi-client 2D library and receive commission fees on the sales of this data
The agreement covers more than 1,000,000 km of seismic data in areas of great strategic interest for TGS Significant data coverage in existing focus areas
such as Northwest Europe Access to a broad range of new client contacts Exposure to seven new countries/areas where
TGS is not active today Reprocessing opportunities and planning tool for new
3D surveys
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United States Firestone 3D* - expanded to 658 km2 in liquid rich
Utica play
Bucklin 3D - 421 km2 of 3D data in Mississippi Lime Oil Play
Wellington 3D* - 510 km2 of 3D data in the Mississippi Lime Oil Play
*completed in Q1, below cost-budget
Strong Position in Onshore Market
Canada Neptune South - 218 km2 of 3D data in the Bakken Oil play
Unity North - 130 km2 of 3D data in the Birdbear play of Western Saskatchewan
Cameron River* - 461 km2 of 3D data in the liquids rich Triassic Montney and Doig unconventional fairways
Ille Lake* – 180 km2 of 3D data in the deep basin of Central Alberta
Legacy 3D Data - 12,689 km2
Ille Lake 3D
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Largest 2D library in Brazil (in partnership with WesternGeco)
Approximately 25,000 km of 2D data in Santos Basin reprocessed (originally acquired in 1999-2000)
Significant additional improvement in data quality achieved though the use of advanced imaging techniques
Reprocessing on data in the Campos Basin has commenced
Pre-salt license round expected in November 2013
Reprocessing of Multi-client Library – Brazil
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Clari-FiTM
Processing methodology that increases bandwidth and improves imaging
May be applied to conventionally acquired pre- or post-stack data
Addresses ghost and filtering effects
Gulf of Mexico Hernando 11,400 km2 of 3D data reprocessed
using Clari-FiTM
Benefits include improved subsalt imaging and imaging above the karstlayer with better fault definition
Re-processing of other parts of the Gulf of Mexico library (eMC project) underway
Reprocessing of Multi-client Library Using Clari-FiTM
25
OutlookRobert Hobbs
Chief Executive OfficerRobert Hobbs
Chief Executive Officer
26
Recent discoveries in mature markets in North Sea triggers increased optimism and demand for modern seismic
Exploration success in the Barents Sea attracts new entrants to a region where TGS is developing a dominant position
Strong industry interest for 22nd Norwegian License round triggers potential uplifts on awards and new investments for further license rounds
BOEM 5 year plan 2012-2017 provides visibility of GOM lease sales 2013 GOM Central Lease Sale had good alignment between areas of
interest and TGS data Technology developments generate new opportunities in mature areas May license round announced in Brazil with subsalt round expected
later in 2013 fuels further industry interest Exciting opportunities in Latin America (e.g. Colombia 2D survey)
Strong industry interest in the West African transform margin with proven potential
Increasing industry interest in Australia and changed regulations facilitate for new multi-client projects
South Atlantic pre-salt plays in Africa could prove potential similar to Brazil
Key Drivers for Continued Seismic Outperformance
Geographic region Share of Q1 2013 revenues Key drivers for future investments and growth
EUR
NSA
AMEAP
NSA
AMEAP
EUR
27
Acquisition Capacity SecuredEURAMEAP
NSAOption
3D Vessel Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Geco Eagle
Geo Caribbean
Polarcus Asima
Geo Barents
Oceanic Challenger
Sanco Swift
AngolaAngola
NW EuropeNW Europe
OptionOption
OptionOption
3D Vessels committed per 31 Mar 2013
2D Vessels committed per 31 Mar 2013
LiberiaLiberia
2D Vessel Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Akademik Shatskiy
Geo Arctic
Sanco Spirit
NW EuropeNW Europe
Land Crews committed per 31 Mar 2013
Crew Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Kansas Crew
Ohio crew
Canada Crew 1
Canada Crew 2
CanadaCanada
OptionOption
BarentsBarents
Gulf of MexicoGulf of Mexico
BarentsBarents
Sierra LeoneSierra Leone
ColombiaColombia
Wellington
FirestoneFirestone
Cameron RiverCameron River
Ille LakeIlle Lake
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-
50.0
100.0
150.0
200.0
250.0
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
125.6 131.8 152.8
107.6 98.1 106.4
116.8 109.9 124.4
134.3
210.9
241.7
188.0
152.6 142.7 146.4
Historical Backlog (MUSD) 2009 – 2013
Backlog
29
Summary
Record high Q1 revenues of 211 MUSD, up 10% from Q1 2012 Continued strong profitability with operating profit (EBIT) of 89 MUSD,
corresponding to an EBIT margin of 42% Cash flow from operations of 179 MUSD, up 22% from Q1 2012 Commercial agreement signed with Fugro to broker 2D multi-client
library on a global basis Full year 2013 guidance remains unchanged
Multi-client investments 530 – 600 MUSD
Average pre-funding 50 – 60%
Average multi-client amortization rate 40 – 46%
Net revenues 970 – 1050 MUSD
Contract revenues approximately 5% of total revenues
30
TGS Performs in all Cycles
Average EBIT margin above 40%
Stable EBIT – performance through the cycles
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EBIT Margins vs. Seismic Peers*
TGS Peer Range Peer Average
*Peer group includes CGG, Fugro, Geokinetics, ION Geophysical, PGS, Western Geco, GGSSource Platou Markets and TGS
2012 peer results are unaudited
Thank you
©2013 TGS-NOPEC Geophysical Company ASA. All rights reserved.