ASKER, NORWAY (8 April 2020) - Based on preliminary reporting from operating units, TGS management expects net segment revenues* for the first quarter of 2020 to be approximately USD 152 million. Multi-client Investments for the quarter are expected to be approximately USD 138 million with a prefunding rate of 61%.

The first months of 2020 have demonstrated how our industry can be impacted by unexpected events that have a dramatic impact on economic growth. The COVID-19 virus has led to an unprecedented decline in global demand for oil and gas. On top of that, the price war
between Russia and Saudi Arabia has further exacerbated the situation. As a result, the oil price has seen a dramatic drop from trading in the high $60s per barrel in early January to below $23 per barrel the last days of March.

E&P companies have reacted quickly to the market turmoil and all of them have already announced significant cuts in capital expenditure. Exploration spending can to a certain degree be considered discretionary, hence there is an expectation that the Company’s subsurface data products will be subject to significant spending cuts. As a result, TGS expects a very challenging market in 2020, where data licensing and pre-commitments to new projects may be deferred until clients have more visibility of an improvement in market conditions.

TGS’ asset light business model allows the Company to reduce investments quickly to adapt to changes in demand. As a result of the significant changes in client spending and to preserve cash, the Company has decided to reduce 2020 multi-client investments to
approximately USD 325 million from an original guidance of approximately USD 450 million. Further, the Company has taken actions to reduce operating cost. Through centralization of offices, a global salary freeze, temporary cessation of employee bonuses and right sizing
of the organization, TGS expects a reduction in cash operating cost of approximately 35% compared to 2019 proforma numbers*. The significant reduction in operating costs and capital expenditures will protect the balance sheet during the unprecedented market conditions and position TGS uniquely to improve its competitive position in the future.

TGS’ ambition of returning the Company’s value creation to shareholders through a combination of quarterly cash dividends and share buybacks remains firm. The dividend policy states an ambition to maintain a stable quarterly dividend through the year, but the actual level paid will be subject to continuous evaluation of market outlook, cash flow expectations, and balance sheet development. Due to the unprecedented decline in client demand, the Board of Directors has decided to reduce the Q1 quarterly dividend payable in May from USD 0.375 per share to USD 0.125 per share. Before concluding on dividend distribution in the coming quarters, the Board will continue to evaluate the situation in accordance with the Company’s dividend policy and further developments of COVID-19.

“Recent geopolitical events and the impact of COVID-19 have put significant pressure on the global economy. While it remains uncertain how these factors could impact the future, history shows that an asset light business model with a flexible cost base is a great advantage.
TGS remains committed to delivering industry leading returns and is well prepared to take further actions to rapidly adjust cost and capital expenditure to changes in the marketplace”, says Kristian Johansen, CEO of TGS.

TGS will host a conference call today at CEST 15.00 where CEO Kristian Johansen will be available for Q&A. Attendees may want to call 5-10 minutes before CEST 3:00 pm to ensure registration and access.

Telephone conference dial-in details:
Norway: +47 23500236
United Kingdom: +44 3333009030
USA: +1 8335268384

For more information, visit ( or contact:
Sven Børre Larsen
EVP Strategy and M&A
+47 90 94 36 73

* 2019 proforma operating cost of USD 150 million (excluding restructuring charges, transaction costs and larger impairments of operating

About TGS
TGS provides multi-client geoscience data to oil and gas Exploration and Production companies worldwide. In addition to extensive global geophysical and geological data libraries that include multi-client seismic data, magnetic and gravity data, digital well logs, production data and directional surveys, TGS also offers advanced processing and imaging services, interpretation products, and data integration solutions.

Forward Looking Statement
All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include TGS' reliance on a cyclical industry and principal customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data product at costs commensurate with profitability. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.
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