Petroleum Geo-Services ASA: Intends to carry out a private placement of new ordinary shares for gross proceeds of approximately USD 225 million

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INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN,
OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR OTHER MEASURES. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED
HEREIN.

Petroleum Geo-Services ASA launches a private placement of new ordinary shares
for ~NOK 1.9 billion (~USD 225 million), an inter-conditional exchange offer of
its 7.375% Senior Notes due December 2018 for new senior notes due 2020 and
extension of the maturity of the revolving credit facility by two years to 2020

Petroleum Geo-Services ASA ("PGS" or the "Company") intends to carry out a
private placement of new ordinary shares for gross proceeds of ~NOK 1.9 billion
(~USD 225 million) (the "Private Placement"). Subject to completion of the
Private Placement and market conditions, the Company expects to carry out a
subsequent offering to existing eligible shareholders of the Company of ~NOK
300 million (USD 35 million).

The subscription price and number of shares to be issued in the Private
Placement will be determined through an accelerated book-building process. The
book-building period for the Private Placement will commence today, 22 November
2016, at 16:30 hours (CET) and close on 23 November 2016 at 08:00 hours (CET).
The Company may, however, at any time and for any reason decide to close or
extend the book-building period at its own discretion.

The minimum order amount and allocation in the Private Placement has been set to
the NOK equivalent of EUR 100,000,  provided that the Company's President & CEO
and his direct reports will be entitled to subscribe shares at lower amounts.

~NOK 425 million (~USD 50 million), representing 22.2% of the Private Placement,
has been pre-subscribed by Ferd AS, PGS' largest shareholder. Ferd AS will be
allocated a minimum number of new shares in the Private Placement, representing
its pro rata ownership of 10.09%. The Company's President & CEO and his direct
reports have pre-subscribed for 248,005 shares representing their pro rata
ownership of shares in the Company.

The Private Placement will be directed towards Norwegian and international
institutional and other professional investors (subject to applicable securities
laws).  In the United States, the Private Placement is directed only at
"qualified institutional buyers" as defined in Rule 144A under the U.S.
Securities Act of 1933, as amended.

The proceeds from the Private Placement will be used primarily to finance an
inter-conditional exchange offer (the "Exchange Offer") for the Company's
existing 7.375% Senior Notes due December 2018 (the "2018 Notes"). The Exchange
Offer is launched together with this Private Placement.

To maintain a robust financial position through the ongoing uncertainty, the
Company has established a financial plan which seeks to strengthen its liquidity
position even further by proactively addressing the December 2018 maturity of
the 2018 Notes, deleveraging the balance sheet and reducing interest costs.
Through the Exchange Offer, the Company is seeking to address the maturity of
the 2018 Notes, the cash consideration for which will be financed from a portion
of the proceeds raised in the Private Placement. The Exchange Offer is
conditional upon the closing of the Private Placement. In November 2016, the
Company has further agreed with the banks in the revolving credit facility
syndicate to extend a portion of its revolving credit facility currently due 18
September 2018 (the "RCF") until 18 September 2020. Subject to and upon
completion of the Private Placement and the Exchange Offer, the RCF will be
reduced from USD 500 million to USD 400 million. On 18 September 2018 the RCF
will be further reduced to USD 350 million. Finally the RCF refinancing includes
covenant reset to retain flexibility of liquidity reserve out to 2020 and no
change in security position for the RCF banks.

Pursuant to the Exchange Offer, holders of the 2018 Notes are offered to tender
their 2018 Notes for a combination of cash and new 7.375% Senior Notes due 2020
to be issued by the Company (the "New Notes"). Holders that elect to accept the
Exchange Offer during the early tender period will receive cash consideration at
95% of par for 50% of their holdings with the remaining 50% exchanged into New
Notes on a par basis. The New Notes will mature in December 2020, with a right
for the Company to call from 15 December 2017 at 103.688% of par, from 15
December 2018 at 101.844% of par and from 15 December 2019 at 100% of par, and
will contain restrictive covenants similar to the existing 2018 Notes in all
material respects. A total of 55.9% of the bonds have pre committed to tender
their 2018 Notes at time of this release. The tender process for the Exchange
Offer commences on the date hereof, and has an early tender date on or about 6
December 2016 and a final expiration date at 20 December 2016.

Only bondholders that accept the Exchange Offer before expiry of the early
tender deadline will be entitled to the full cash consideration of 95% of par
for 50% of their holdings, while bondholders accepting the Exchange Offer after
this deadline will receive a lower consideration as set out in the Exchange
Offer documentation. The early tender deadline is set to the 10(th) business
days after the launch of the Exchange Offer (6 December 2016).

The Exchange Offer is subject to a minimum participation of 90% of principal
amount of 2018 Notes. The Exchange Offer, the extension to the RCF and the
Private Placement are inter-conditional. Other customary conditions apply. The
full terms and conditions of the Exchange Offer are contained in an Exchange
Offer Memorandum dated 22 November 2016, available to eligible bondholders.

Completion of the Private Placement and issuance of the new shares thereunder is
subject to the fulfilment of the conditions for the transaction, including inter
alia approval by an extraordinary general meeting of the Company (the "EGM"),
expected to be held in approximately three weeks, and 90% acceptance of the
Exchange Offer at the time of the EGM. Subject to the pricing of the Private
Placement, the Company has agreed to a lock-up period, commencing on the date
hereof and continuing until 180 days after closing of the Private Placement, for
issuance of, among other things, equity securities, subject to customary
exemptions (including the subsequent offering referred to herein).

Notice of such meetings, required approvals and further details will be issued
in due course.

Further, subject to completion of the Private Placement and market conditions,
the Company's board of directors (the "Board of Directors") expects to propose
that the EGM authorises the Board of Directors to carry out a subsequent
offering of ~NOK 300 million (~USD 35 million) directed towards shareholders as
of close of business on 22 November, as registered in the Company's shareholder
register with the Norwegian Central Securities Depository (the "VPS") as of
close of business on 24 November 2016, who were not allocated shares in the
Private Placement, and are not resident in a jurisdiction where such offering
would be unlawful or, for jurisdictions other than Norway, would require any
prospectus filing, registration or similar action. Such existing shareholders
are expected to be granted non-transferable subscription rights that provide the
right to subscribe for and, upon subscription, be allocated new shares in the
subsequent offering. The subscription price in such subsequent offering will be
the same as in the Private Placement.

The new shares to be issued in the Private Placement will not be tradable before
they have been fully paid and registered with the VPS and a listing prospectus
for such shares has been approved by the Financial Supervisory Authority of
Norway and published. These events are expected to take place shortly after the
EGM. The new shares will when issued rank equal in all respects to the existing
shares of the Company.

In order to be able to complete the Private Placement, the Board of Directors
will propose to the EGM that the existing shareholders' preferential rights to
subscribe the new shares in the Private Placement are deviated from.  The Board
of Directors has considered alternative structures for the raising of new equity
in connection with the establishment of a financial plan for the Company. After
due considerations, the Board of Directors is of the view that the Private
Placement is in the best interests of the Company and its shareholders since the
Company, through the Private Placement, will be able to raise capital more
quickly, at a lower discount to the trading price and with significantly lower
transaction costs and transaction risk compared to a rights issue, and in a
manner that can be combined with the implementation of the Exchange Offer.

PGS has retained Barclays Bank PLC, DNB Markets, a part of DNB Bank ASA and
Nordea Markets, a part of Nordea Bank Norge ASA as Joint Bookrunners, and ABN
AMRO Bank NV as Co-Manager, for the Private Placement. The Private Placement
will be structured as an undocumented accelerated book-building process.

PGS has retained Arctic Securities AS, Barclays Bank PLC and J.P. Morgan
Securities LLC as Lead Deal Managers and ABN AMRO Securities (USA) LLC, DNB
Markets, a part of DNB Bank ASA, Nordea Bank Danmark A/S and The Royal Bank of
Scotland plc as Co-Managers for the Exchange Offer, directed towards holders of
the 2018 Notes (subject to applicable securities laws).

FOR DETAILS, CONTACT:

Bård Stenberg, VP IR & Corporate Communications: Phone: +47 67 51 43 16, Mobile:
+47 992 45 235

Gottfred Langseth EVP & CFO: Phone: +47 67 51 44 10, Mobile: +47 930 55 580



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Petroleum Geo-Services ASA ("PGS" or "the Company") is a focused Marine
geophysical company that provides a broad range of seismic and reservoir
services, including acquisition, imaging, interpretation, and field evaluation.
The Company's MultiClient data library is among the largest in the seismic
industry, with modern 3D coverage in all significant offshore hydrocarbon
provinces of the world. The Company operates on a worldwide basis with
headquarters in Oslo, Norway.

For more information on PGS visit www.pgs.com.

****

This announcement does not constitute or form part of an offer for sale or
solicitation of an offer to purchase or subscribe for securities in the United
States or any other jurisdiction. The securities referred to herein have not
been and will not be registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold, directly or
indirectly, in the United States, absent registration under or an exemption
from, or in a transaction not subject to, the registration requirements of, the
Securities Act. No public offering of securities is being made in the United
States or in any other jurisdiction.

The offering of the securities referred to in this announcement will be made
pursuant to an exemption under the Prospectus Directive, as implemented in
Member States of the European Economic Area, from the requirement to produce a
prospectus for offers of securities.  This announcement does not constitute an
advertisement for the purposes of the Prospectus Directive.

This announcement does not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor will there be any sale of securities referred
to in this announcement, in any jurisdiction, including the United States, in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such jurisdiction.

The information included herein contains certain forward-looking statements that
address activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future. These statements are
based on various assumptions made by the Company, which are beyond its control
and are subject to certain additional risks and uncertainties. The Company is
subject to a large number of risk factors including but not limited to the
demand for seismic services, the demand for data from our multi-client data
library, the attractiveness of our technology, unpredictable changes in
governmental regulations affecting our markets and extreme weather conditions.

Barclays Bank PLC, DNB Markets, a part of DNB Bank ASA, Nordea Markets, a part
of Nordea Bank Norge ASA and ABN AMRO Bank N.V. (together, the "Managers") are
each acting exclusively for the Company and for no-one else in connection with
any transaction mentioned in this announcement and will not regard any other
person (whether or not a recipient of this announcement) as a client in relation
to any such transaction and will not be responsible to any other person for
providing the protections afforded to their respective clients, or for advising
any such person on the contents of this announcement or in connection with any
transaction referred to in this announcement. The contents of this announcement
have not been verified by the Managers.

Arctic Securities AS, Barclays Bank PLC,  J.P. Morgan Securities LLC, ABN AMRO
Securities (USA) LLC, DNB Markets, a part of DNB Bank ASA, Nordea Markets, a
part of Nordea Bank Danmark A/S and The Royal Bank of Scotland plc (together,
the "Dealer Managers") are each acting exclusively for the Company and for no-
one else in connection with any transaction mentioned in this announcement and
will not regard any other person (whether or not a recipient of this
announcement) as a client in relation to any such transaction and will not be
responsible to any other person for providing the protections afforded to their
respective clients, or for advising any such person on the contents of this
announcement or in connection with any transaction referred to in this
announcement. The contents of this announcement have not been verified by the
Dealer Managers.

No representation or warranty, express or implied, is given by or on behalf of
the Managers or the Dealer Managers or any of their respective subsidiaries,
affiliates, agents or advisers or any of such persons' affiliates, directors,
officers or employees or any other person as to the fairness, truth, accuracy,
completeness or verification of the information or the opinions contained in
this announcement (or whether any information has been omitted from the
announcement) or any other information relating to the Company, its subsidiaries
or associated companies, whether written, oral or in a visual or electronic
form, and howsoever transmitted or made available, and no liability is accepted
for any such information, omissions or opinions.

For a further description of other relevant risk factors we refer to our Annual
Report for 2015. As a result of these and other risk factors, actual events and
our actual results may differ materially from those indicated in or implied by
such forward-looking statements. The reservation is also made that inaccuracies
or mistakes may occur in the information given above about current status of the
Company or its business. Any reliance on the information above is at the risk of
the reader, and PGS disclaims any and all liability in this respect.

This information is subject to the disclosure requirements pursuant to Section
5-12 of the Norwegian Securities Trading Act.



This information is subject to the disclosure requirements pursuant to section
5 -12 of the Norwegian Securities Trading Act.