PGS Updates Status of the Proposed Atlantis Sale

Petroleum Geo-Services and Sinochem continue to work towards a closing on their proposed transaction. Certain approvals and signatures related to several agreements within Atlantis' gas development project in the Persian Gulf have yet to be obtained, and both parties are currently working together in the United Arab Emirates to obtain the relevant approvals as soon as possible. The attainment of such approvals and signatures are conditions precedent to the closing of the Sinochem transaction. While PGS and Sinochem are continuing to work towards a closing, there can be no assurance that the proposed sale to Sinochem will be completed. Under the most recent extension agreement, PGS does not have the right to terminate the current agreement with Sinochem until June 28, 2002; however, Sinochem can terminate the transaction at any point from May 27, 2002 forward. If the transaction is terminated, PGS will immediately make an announcement and continue to develop the properties until such time as another buyer can be identified.