Slide 1: Q3 2024 Results
24 OCTOBER 2024 Q3 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 operational challenges, and reliance on a cyclical industry and historical fact are forward-looking statements, which are subject principal customers. Actual results may differ materially from to a number of risk
Slide 3: TGS Q3 Highlights
SUMMARY TGS Q3 Highlights¹ Total revenues² of USD 501 million compared to USD 455 million in Q3 2023 EBITDA² of USD 280 million compared to USD 268 million in Q3 2023 EBIT² of USD 104 million compared to USD 82 million in Q3 2023 Realization of total merger synergies (USD 110-130 million) ahead of p
Slide 4: Business Update
Business Update
Slide 5: Data acquisition activity in Q3 2024
OBN operations NES operations MC projects MC vessel operations Contract vessel operations Data acquisition activity in Q3 2024
Slide 6: Multi-Client Update
Multi-Client Update • Strong quarter driven by material M&A transfer- fees and solid pre-funding • Multi-client investments for 2024 expected to be in the range of USD 425-450 million (pro-forma) PAMA 3D – leveraging value of integrated model • Phase 1 covers 19,343 sq. km. of a total permitted area
Slide 7: Contract Update
Contract Update • Strong growth in contract revenues driven by high OBN activity and improved streamer pricing • Expect further improvement in vessel utilization • No OBN equipment sales in Q3 2024 OBN contract in North America • Four-month extension to an existing contract • Reinforces TGS’ positio
Slide 8: New Energy Solutions Update
New Energy Solutions Update • Continued growth in revenues and improving margins CCS: • Assessments of CO2 storage capabilities to optimize sequestration strategies • US Gulf coast • Illinois Basin • Michigan Basin Offshore wind: • Successfully completed UHR3D survey in New Yggdrasil development Pho
Slide 9: Imaging & Technology Update
Imaging & Technology Update • Flat year-on-year revenues and negative margin • Strong recent growth in order inflow • Significant synergy potential addressing profitability • MoU with Petrobras for partnerships in scientific research • TGS Imaging AnyWare software licensed to Shell in four-year deal
Slide 10: Merger Integration Status
Merger Integration Status Annual run-rate synergies 80 ~70 • Following completion of reorganization process in Q3, TGS has realized synergies¹ 60 ~60 quicker than previously guided ~55 • Q3 increased from ~45 million to ~55 million USD million ~45 • Q4 increased from ~60 million to ~70 million 40 •
Slide 11: Financials
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Slide 12: Group Financials
Group Financials Net revenue Net operating expenses¹ 600 250 500 221 200 501 206 400 455 187 193 414 433 150 171 381 MUSD MUSD 300 100 200 50 100 0 0 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Depreciation & Amortization Group EBIT and margin 200 120 25% 180 155 21% 160 123 116 107
Slide 13: Multi-client
Multi-client Revenue EBITDA 300 300 250 268 277 250 251 259 200 230 231 200 213 218 191 MUSD MUSD 150 150 177 100 100 50 50 0 0 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Multi-client investments Sales / Investment LTM 200 2.5x 180 181 160 2.0x 140 120 129 1.5x MUSD MUSD 100 106 106
Slide 14: Contract Utilization
Contract Revenue EBITDA 350 60% 90 300 80 49% 50% 97 47% 70 77 250 42% 96 40% 60 67 OBN share 38% 200 56 59 59 58 50 MUSD MUSD 53 31% 194 30% 150 172 40 48 164 162 151 20% 100 30 10% 20 50 10 0 0% 0 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 External revenue Internal revenue OBN share Q3 23 Q4 23 Q1 24 Q2 24 Q3
Slide 15: Imaging and NES
Imaging and NES IMG Revenue NES revenue 25 30 24 25 20 15 16 15 20 13 14 19 20 18 15 MUSD MUSD 15 10 12 10 10 10 10 10 9 5 5 0 0 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 External revenue Internal revenue Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 IMG EBITDA and EBITDA and margin NES EBITDA and margin 3.0 30% 9 40% 2.5 25%
Slide 16: Produced - Cash Flow
Produced - Cash Flow¹ (MUSD) Q3 2024 Q3 2023 YTD 2024 YTD 2023 Produced EBITDA 280.0 169.6 544.1 420.7 Paid tax -3.2 -8.1 -16.5 -22.1 Change in balance sheet items -11.9 41.0 -80.2 38.5 Cash flow operations 264.9 202.5 447.4 437.1 Capitalized multi-client investments -129.4 -113.1 -248.2 -331.8 Non-
Slide 17: IFRS – Profit & Loss
IFRS – Profit & Loss¹ (MUSD) Q3 2024 Q3 2023 Change YTD 2024 YTD 2023 Change Total revenues² 451.1 225.4 100% 827.5 604.9 37% Cost of sales 107.3 71.5 50% 184.2 192.8 -4% Personnel cost 87.5 34.4 154% 152.0 99.4 53% Other operational costs 26.1 17.0 54% 62.6 49.5 26% EBITDA 230.2 102.6 124% 428.8 26
Slide 18: IFRS – Balance Sheet
IFRS – Balance Sheet¹ Change from (MUSD) Q3 2024 Q2 2024 Q2 2024 Q3 2023 Goodwill 560.1 384.6 47% 384.6 Multi-client library 1,226.4 781.5 57% 745.0 Deferred tax asset 245.6 68.6 258% 90.1 Right-of-use assets 130.1 114.8 13% 54.7 Other non-current assets 1,082.1 248.6 335% 226.9 Restricted cash 32.5
Slide 19: Substantial Upgrades of Credit Ratings
Substantial Upgrades of Credit Ratings Leverage ratio1 • S&P upgraded rating three notches to BB- stable Net debt-to-EBITDA 30 June 2024 outlook from B- assigned to PGS prior to merger 3.6x 2.8x • Moody’s upgraded two notches to Ba3 stable outlook 2.2x 2.4x 2.4x from B2 assigned to PGS prior to merg
Slide 20: Dividends
Dividends Dividend Per Share 1 Dividend Yield 2 1.6 7.0% 1.4 6.0% 1.2 5.0% USD per share 1 4.0% 0.8 NOK NOK 6.3% USD 3.0% 8.0 8.5 0.6 NOK 1.08 USD 5.2% NOK 8.5 USD 0.75 4.9% 4.6% 0.14 4.5% 4.3% 6.0 0.8 2.0% 4.0% 3.9% 4.0% 3.8% 0.4 USD USD USD USD USD 3.5% 3.6% 3.7% NOK NOK 0.6 0.6 0.14 2.8% 0.56 0.5
Slide 21: Outlook
Outlook
Slide 22: Volatile Oil Price, but Significantly Above Break-even
Volatile Oil Price, but Significantly Above Break-even Oil price last 10 years 120 100 • Geopolitical tension and macro 80 uncertainty cause oil price volatility USD 60 40 Average oil price last 10 years ~USD 65/boe • Energy companies tend not to make 20 material changes to investment plans 0 based
Slide 23: TGS Revenue Generation Through E&P Project Lifecycle
TGS Revenue Generation Through E&P Project Lifecycle MULTI-CLIENT STREAMER ACQUISITION STREAMER & OBN ACQUISITION 2D and 3D data coverage across 3D proprietary contract data and 4D streamer and OBN proprietary mature emerging and frontier basins integrated multi-client projects contract surveys Reve
Slide 24: 3D Streamer Contract Tenders
3D Streamer Contract Tenders Active streamer tenders¹ 800 • Significant increase in streamer tenders since April 600 • Leads remains at a high level MUSD 400 • Several opportunities expected to be 200 concluded over the coming months 0 ¹Active tenders are the dollar value of outstanding bids as of e
Slide 25: Order Backlog & Inflow
Order Backlog & Inflow Order Inflow Expected timing of contract backlog revenue recognition 450 400 350 300 250 MUSD 423 200 360 355 368 150 283 280 275 240 100 196 174 140 50 120 117 0 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Total Backlog 800 700 600 500 Q4 202
Slide 26: Summary
Q3 2024 Summary TGS off to a good start post merger • Strong Q3 2024 financial results • Synergies ahead of target • Credit rating upgrades Oil price volatility remains high but significantly above break-even levels OBN market remains strong with high exposure to production budgets Improving streame
Slide 27: Thank you
Thank you Questions? Energy Starts With Us
Slide 28: Appendix
Appendix
Slide 29: IFRS Backlog & Inflow
IFRS Backlog & Inflow Order Inflow 450 Timing of expected recognition of IFRS Early 400 Sales contract backlog 350 300 250 MUSD 423 200 360 355 368 150 283 280 275 240 100 196 174 140 50 120 117 0 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Total Backlog 1400 1200 Q
Slide 30: IFRS – Cash Flow
IFRS – Cash Flow (MUSD) Q3 2024 Q3 2023 Change YTD 2024 YTD 2023 Change Operating activities: Profit before taxes 52.3 28.5 83% 80.1 36.3 121% Depreciation/amortization/impairment 170.3 76.4 123% 323.6 220.8 47% Changes in accounts receivable and accrued revenues 6.3 -9.9 -164% -31.7 -16.1 97% Chang
Slide 31: Segment Financials
Segment Financials Q3 2024 New Energy Shared (All amounts in USD 1,000s) Multi-client Contract Solutions Imaging services Elimination Q3 2024 Revenues 277,354 290,805 19,435 26,025 204 (112,924) 500,899 Costs 18,632 214,109 15,191 26,755 42,873 (96,635) 220,925 EBITDA 258,722 76,696 4,244 (730) (42,
Slide 32: License Round Activity
NORTH AMERICA License Round Activity Canada: • Newfoundland Q4 2024 (close) • NW Orphan and Jeanne d’Arc AFRICA US GOM: • Updated 5-year Plan Lease Sales AGC: commence in 2025 • Open Door Angola: • 2025 round – 10 blocks • Out of Round direct awards legally L AT I N A M E R I C A decreed Egypt: Braz