Slide 1: Q2 2024 Results
18 JULY 2024 Q2 2024 Results Oslo, Norway KRISTIAN JOHANSEN, CEO SVEN BØRRE LARSEN, CFO
Slide 2: Forward-Looking Statements
Forward-Looking Statements All statements in this presentation other than statements of markets, demand for licensing of data within the energy industry, historical fact are forward-looking statements, which are subject operational challenges, and reliance on a cyclical industry and to a number of r
Slide 3: TGS Q2 Highlights
SUMMARY TGS Q2 Highlights Total POC revenues of USD 215 million compared to USD 241 million in Q2 2023 • Late sales of USD 66 million in Q2 2024 vs. USD 63 million in Q2 2023 • POC Early sales of USD 49 million (early sales rate of 94%) compared to USD 66 million (77%) in Q2 2023 • Proprietary reven
Slide 4: Recent Highlights
Recent Highlights
Slide 5: Data acquisition activity in Q2 2024
Multi-client project OBN operation NES operation PGS vessel operation Data acquisition activity in Q2 2024
Slide 6: New Project - Multi-Client
New Project - Multi-Client Onshore 3D Seismic Survey in Eastern U.S. • Survey covers 206 km² on the western flank of the Appalachian Basin • Utilizing 75k wells and 145k logs • Includes seismic subsurface imaging, well performance data, formation tops, and Basin Temperature Modeling • Targets multip
Slide 7: New Award - Imaging
New Award - Imaging Four-Year Licensing Agreement for TGS Imaging AnyWare • Multi-year software contract with Shell to enhance data processing and analytics • Shell will migrate from in-house software to Imaging AnyWare • Underscores Imaging AnyWare’s software sophistication, performance and analyti
Slide 8: New Awards - Contract
New Awards - Contract OBN Contract in North America • TGS secures a 6-month+ contract by a major oil company (returning client) • OBN survey is expected to deliver high- quality seismic data to drive decision-making • Reinforces strong position in North America OBN Contract in West Africa • TGS exte
Slide 9: New Awards - New Energy Solutions
New Awards - New Energy Solutions Ultra High-Resolution 3D (UHR3D) in Europe • 45-day contract awarded in Q3 to support offshore wind and data characterization • Ramform Vanguard to begin survey in Q3 2024 • TGS will manage data imaging • UHR3D enhances detailed subsurface data for shallow targets a
Slide 10: Financials
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Slide 11: POC Revenues by Type
POC Revenues by Type Early Sales Revenue Late Sales Revenue 120 160 140 100 120 80 100 MUSD MUSD 60 80 98 137 88 60 40 78 66 97 59 40 72 72 49 65 62 59 66 20 39 33 31 20 46 0 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4
Slide 12: POC Revenues by Business Unit
POC Revenues by Business Unit Multi-Client & Imaging Digital Energy Solutions 180 20 160 18 16 140 14 120 12 MUSD MUSD 100 10 80 164 156 18 138 146 8 16 60 128 124 110 113 107 6 12 12 11 40 9 10 4 7 8 20 2 0 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2022 Q3 2022 Q4
Slide 13: Operating Costs and POC EBITDA
Operating Costs and POC EBITDA Cost of Sales Personnel Costs 80 40 70 35 60 30 50 25 MUSD MUSD 40 20 72 34 30 63 31 34 32 32 32 58 15 30 20 42 10 21 35 18 27 25 10 5 8 0 2 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 202
Slide 14: Amortization, Depreciation and POC EBIT
Amortization, Depreciation and POC EBIT POC Amortization Depreciation 90 45 80 40 9 5 70 2 35 60 35 30 1 33 9 36 32 32 1 MUSD MUSD 50 15 8 22 25 40 13 20 38 30 15 30 33 20 39 39 37 40 40 41 43 41 39 10 19 21 17 19 10 5 5 6 0 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q
Slide 15: Acquisition – Cost of Sales and IFRS 16 Adjustment
Acquisition – Cost of Sales and IFRS 16 Adjustment 90 40% 36% 80 33% 34% 35% 9 34% 70 9 30% 60 8 Gross margin 23% 25% 20 MUSD 50 20% 20% 19 40 70 26 15% 30 63 56 10% 20 40 34 10 24 5% 0 0% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Cost of sales IFRS 16 adjustment Gross Margin 15
Slide 16: PGS Stand-alone – Financial Summary
PGS Stand-alone – Financial Summary POC Revenues POC EBITDA 300 150 250 5 6 4 6 7 200 92 56 100 72 7 7 82 5 MUSD MUSD 7 150 108 26 55 41 41 46 145 43 129 126 127 37 46 56 116 113 113 100 54 59 50 33 101 72 71 50 101 111 116 94 84 74 63 71 36 0 0 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24
Slide 17: Bridge POC Revenues to IFRS Revenues
Bridge POC Revenues to IFRS Revenues POC revenues Revenues Revenues IFRS revenues recognized from recognized performance according to POC obligations met in during Q2 24 Q2 24 17
Slide 18: IFRS – Profit & Loss
IFRS – Profit & Loss (MUSD) Q2 2024 Q2 2023 Change YTD 2024 YTD 2023 Change Early Sales 57.9 31.1 86% 60.7 73.1 -17% Late Sales 66.1 62.5 6% 138.0 108.0 28% Proprietary Sales 100.3 112.7 -11% 177.8 198.4 -10% Total revenues 224.3 206.3 9% 376.4 379.5 -1% Cost of sales 41.9 63.5 -34% 76.9 121.3 -37%
Slide 19: IFRS – Balance Sheet
IFRS – Balance Sheet Change from (MUSD) Q2 2024 Q1 2024 Q1 2024 Q2 2023 Goodwill 384.6 384.6 0% 384.6 Multi-client library 781.5 772.8 1% 687.3 Deferred tax asset 68.6 73.2 -6% 92.7 Right-of-use assets 114.8 135.6 -15% 66.7 Other non-current assets 248.6 241.9 3% 229.5 Total non-current assets 1,598
Slide 20: IFRS – Cash Flow
IFRS – Cash Flow (MUSD) Q2 2024 Q2 2023 Change YTD 2024 YTD 2023 Change Operating activities: Profit before taxes 48.7 20.7 135% 27.8 7.8 257% Depreciation/amortization/impairment 76.1 74.1 3% 153.4 144.4 6% Changes in accounts receivable and accrued revenues -3.3 -82.4 -96% -38.1 -6.3 507% Changes
Slide 21: Dividends
Dividends Dividend Per Share 1 Dividend Yield 2 1.6 6.0% 1.4 NOK 8.0 5.0% 1.2 NOK 8.5 NOK 8.5 4.0% 1.0 NOK 6.0 USD 1.08 USD per share 0.8 NOK 5.0 3.0% USD 0.8 5.2% 5.2% 0.6 USD 0.75 4.9% 4.5% 4.6% NOK 4.0 2.0% 4.3% USD 0.56 USD 0.56 USD 0.56 4.0% 3.9% 4.0% 3.8% USD 0.6 USD 0.6 3.5% 3.6% 3.7% 0.4 0.1
Slide 22: Outlook
Outlook
Slide 23: Oil & Gas Remain the Most Important Energy Source
Oil & Gas Remain the Most Important Energy Source BP World Energy Outlook 2024: Primary energy demand Current trajectory • Recent long-term forecasts for oil and 350 70% gas demand have been increased 300 60% • Energy demand continuing to increase while clean energy switch slows Primary energy deman
Slide 24: Near-term Growth in US Onshore Production Unlikely
Near-term Growth in US Onshore Production Unlikely US onshore production Rig count DUC count 360 4,000 1,000 250 10,000 900 9,000 340 3,500 800 200 8,000 Oil production (mmbbl/mo) 320 Gas production (tcf/mo) 700 7,000 3,000 300 600 150 6,000 Gas rigs Oil rigs 280 2,500 500 5,000 400 100 4,000 260 2,
Slide 25: Permian Decline Rates Are Increasing
Permian Decline Rates Are Increasing Permian monthly oil production Permian decline rate 200 0.25 180 Permian oil production (mmbbl/mo) 160 0.20 Average annual decline rate 140 120 0.15 100 80 0.10 60 40 0.05 20 0 - Jan-23 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23
Slide 26: Strong Growth in Renewables and CCUS
Strong Growth in Renewables and CCUS Drives need for data and insights Installed offshore wind capacity Solar electricity generation CCUS 600 China 20,000 8.0 APAC Current trajectory Net Zero 500 18,000 Americas 7.0 Europe 16,000 6.0 400 14,000 Gt of CO2 Thousand Twh 12,000 5.0 GW 300 10,000 4.0 8,0
Slide 27: Acquisition Activity Plan
Acquisition Activity Plan OBN Crew 1 OBN Crews OBN Crew 2 OBN Crew 3 OBN Crew 4 RM Source 1 RM and Source RM Source 2 RM Source 3 Q1 2024 Q2 2024 Q3 2024 Q4 2024 NSA EUR AMEAP 27
Slide 28: POC Contract Backlog & Inflow
POC Contract Backlog & Inflow Contract Inflow 400 Timing of expected recognition 350 of Acquisition backlog 300 250 MUSD 200 360 355 368 150 280 283 275 240 100 174 196 140 50 120 117 88 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Contract Backlog 700 600 500 218
Slide 29: Capital Markets Day 29 August
Capital Markets Day 29 August • From 14:00 to 16:00 CEST • House of Oslo, Ruseløkkveien 34, Oslo, Norway followed by live webcast • CEO, CFO and Executives will address: • TGS’s unique position and updated strategy • Energy data market outlook • Financial reporting structure • Merger synergies • Cap
Slide 30: TGS Summary
Q2 2024 TGS Summary Total POC revenues of USD 215 million compared to USD 241 million in Q2 2023 High POC early sales rate of 94% POC EBIT of USD 28 million compared to USD 39 million in Q2 2023 Strong contract inflow of USD 368 million during Q2 2024 – total backlog of USD 611 million (POC) PGS tra
Slide 31: Thank you
Thank you Questions? Energy Starts With Us
Slide 32: Appendix
Appendix
Slide 33: IFRS Contract Backlog & Inflow
IFRS Contract Backlog & Inflow Contract Inflow 400 Timing of expected recognition of Early 350 Sales contract backlog 300 250 MUSD 200 360 355 368 150 280 283 275 240 100 174 196 120 140 50 117 88 0 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Contract Backlog 1200 1
Slide 34: License Round Activity
NORTH AMERICA License Round Activity Canada: • Newfoundland Q4 2024 (close) • NW Orphan and Jeanne d’Arc US GOM: • Updated 5-year Plan Lease Sales commence in AFRICA 2025 AGC: • Open Door L AT I N A M E R I C A Angola: • 2025 round – 10 blocks • Out of Round direct awards legally decreed Brazil: Egy
Slide 35: PGS Stand-alone – 3D Vessel Allocation and Utilization
PGS Stand-alone – 3D Vessel Allocation and Utilization 100% • 58% active vessel time in Q2 2024 80% • Utilization impacted by • Delayed start of projects in Brazil and 60% Mediterranean due to permits • Ramform Vanguard converted to multi-purpose vessel to enable UHR, conventional towed streamer, an
Slide 36: PGS Stand-alone – Segment Reporting
PGS Stand-alone – Segment Reporting* Operating result (MUSD) Q2 2024 Q2 2023 Change YTD 2024 YTD 2023 Change Contract 74.1 70.5 5% 190.3 164.7 16% Multi-client 100.2 109.0 -8% 202.4 179.9 13% Imaging & other 5.2 6.9 -25% 9.4 13.9 -32% Total revenues 179.5 186.4 -4% 402.1 358.5 12% Cost of sales 89.6
Slide 37: PGS Stand-alone – Segment Reporting
PGS Stand-alone – Segment Reporting* Net operating expenses (MUSD) Q2 2024 Q2 2023 Change YTD 2024 YTD 2023 Change Cost of sales including investments in multi-client library 138.9 111.3 25% 276.3 235.4 17% Research and developments cost before capitalized dev. costs 4.8 3.5 -37% 11.2 7.6 47% Sellin
Slide 38: PGS Stand-alone – Segment Reporting
PGS Stand-alone – Segment Reporting* Depreciation, Amortization and impairment (MUSD) Q2 2024 Q2 2023 Change YTD 2024 YTD 2023 Change Gross depreciation 29.1 27.2 7% 59.1 55.2 7% Deferred Steaming depreciation, net -1.6 -0.9 78% -0.4 -0.6 -33% Depreciation capitalized to the multi-client library -10