PGS Predicts Higher Marine Contract Margins in 2007

Petroleum Geo-Services ASA

Petroleum Geo-Services ASA (PGS) said Tuesday at its annual Capital Markets Day that the Company expects the EBIT marine contract margin to increase substantially to around 50% for 2007. The margin is impacted by industrywide cost inflation and increased R&D expenditures as previously disclosed.

Furthermore, PGS guided for the marine segment that 2007 Multi-client revenues are expected to be somewhat higher than in 2006. Multi-client investments are planned to approximately double. Capital expenditures are planned at approximately US $200 million.

For the Onshore segment, PGS guided that revenues and operating profit are expected to be in line with 2006. Furthermore, the Company plans multi-client investments of approximately US $30 million. Capital expenditures are planned at US $20-25 million.

As an update on the general market outlook for seismic services, PGS' President and CEO, Svein Rennemo stated the following:

"Our markets continue to strengthen significantly, as oil companies on a broad scale are raising seismic spending and spending plans for 2007 and 2008. We are increasingly confident in the strength and viability of PGS' growth strategy, solidly anchored in highly profitable contract work and with increasing emphasis on multi-client, data processing and new technologies.''

Petroleum Geo-Services is a focused geophysical company providing a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation. The company also possesses the world's most extensive multi-client data library. PGS operates on a worldwide basis with headquarters at Lysaker, Norway.