PGS ASA: Change of measurement basis for Segment Reporting

March 8, 2022: Oslo, Norway, the board of directors of PGS ASA ("PGS" or the "Company") has approved a change in the Company’s basis for Segment Reporting.

PGS has since 2018 prepared its internal management reporting based on the principles applied prior to the implementation of IFRS 15, Revenue from Customer Contracts. This method has recognized MultiClient pre-funding revenue on a percentage of completion basis, and the related amortization of MultiClient library based upon the ratio of aggregate capitalized survey costs to forecasted sales. Maintaining the Segment Reporting on this basis has required maintaining two different sets of accounting records.

Going forward, the Company will apply IFRS 15 as measurement basis also for its internal reporting, generally recognizing MultiClient pre-funding revenues at delivery of the final processed data, which is typically later than the acquisition of the seismic data.

Consequently, from and including Q1 2022, the Company will no longer present revenue and amortization for pre-funding contracts on a percentage of completion basis as segment information.

The change is intended to streamline internal processes and simplify external financial reporting aligned with IFRS regulations, and is in line with the Company’s focus on reducing turnaround times for MultiClient surveys. A similar change has recently been announced by another company in the seismic industry.

The Company will provide Alternative Performance Measures (APMs) and additional disclosures to enable evaluation of progress for ongoing MultiClient surveys. More information will be provided ahead of the Company’s reporting for Q1 2022.