2023
ANNUAL
REPORT
PGS Annual Report 2023 2
3 CEO Letter
4 Corporate Governance
14 Sustainability Report
28 Board of Directors’ Report
41 Responsibility Statement
42 Financial Statements
CONTENTS
PGS ASA and its subsidiaries (“PGS” or “the Company”)* is a
fully integrated marine geophysical company that provides a
broad range of seismic and reservoir services, including data
acquisition, imaging, interpretation, and eld evaluation. Our
services are provided to the oil and gas industry, as well as to
the broader and emerging new energy industries, including
carbon storage and offshore wind. The Company operates on
a worldwide basis with headquarters in Oslo, Norway.
* When the terms “PGS” and “the Company” are used in this report, these will
as a main rule include both PGS ASA and its subsidiaries. However, in certain
sections and paragraphs hereof, these references will only include PGS ASA
as context indicates.
We entered 2023 with a strong order
book in a recovering seismic market.
Our integrated service offering
enabled us to leverage the market
recovery. Protability for our contract
work improved through the year and
is approaching sustainable levels.
Commitments to new MultiClient
programs were strong and our pre-
funding revenues ended close to
140% of capitalized MultiClient cash
investment, signicantly above our
target range of 80-120%.
Our New Energy business successfully
entered the offshore wind market,
where we completed our rst offshore
wind site characterization contract, won
a large project extending well into 2024,
and experienced strong client interest
for our ecient ultra high-resolution 3D
streamer solution.
After a long preparation process, we
renanced most of our 2024 debt
maturities by issuing a $450 million
senior secured bond in early 2023.
Due to the operational headwinds, we
added $75 million to our liquidity reserve
around mid-year by issuing a loan and
allayed external liquidity concerns.
On our digitalization journey, we
continue to excel. Most PGS imaging
work is now done in the cloud, providing
scalability, exibility and always access
to state-of-the-art hardware. We began
harnessing satellite technology to
push the boundaries of offshore data
transmission.
In September, we announced our
intention to merge with TGS, creating
a fully integrated service provider
uniquely positioned to unlock
substantial value for shareholders,
customers and employees. 2023 was an
eventful year for PGS, and our last year
as a standalone company.
Research agencies expect continued
investment growth for our industry
in 2024 and in subsequent years.
Combining TGS and PGS makes the
new company well positioned for the
improving market sentiment in the
coming years. Although I will not have
the pleasure of being a part of this, I
am sure management of the combined
company will capitalize on the business
opportunities ahead, continue to
strengthen our nancial position,
and deliver signicant value to our
shareholders.
Dear PGS Shareholder
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PGS ANNUAL
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2023
Rune Olav Pedersen
President & CEO
For the full year 2023 we benetted from an improving data acquisition
market with a high pre-funding level on our MultiClient projects and increasing
protability for contract work. However, revenues declined compared to 2022
owing to unexpected scheduling and operational challenges, and lower than
expected MultiClient late sales.
PGS Annual Report 2023 3
PGS Annual Report 2023 4
In accordance with the Norwegian Accounting Act section 3-3b, PGS ASA (“PGS” or the
“Company”)’s Board of Directors (the “Board”) is required to annually give a statement
of PGS’ corporate governance. This Corporate Governance Report 2023 is referred
to in the Board’s statement and complies with the above referred section 3-3b. In
accordance with the Norwegian Public Limited Liability Companies Act section 5-6 (5),
this report is scheduled to be presented to the shareholders at the 2024 Annual General
Meeting (“AGM”) for discussion as a non-voting item.
CORPORATE GOVERNANCE
Merger with TGS
In September 2023, PGS announced the
intention of merging with TGS ASA (“TGS”).
TGS and PGS’ shareholders will post
completion own respectively approximately
2/3 and 1/3 of the combined company, on
the basis of the share capital of each of
the companies as of 15 September 2023
(the “Merger”). The merger consideration to
PGS shareholders is in the form of 0.06829
ordinary shares of TGS ASA for each PGS
ASA share. As the merger consideration
implied that TGS shareholders paid a
premium for the PGS shares, the PGS
share price appreciated signicantly on
the day of announcement. The Merger was
approved by the Company’s Extraordinary
General Meeting on 1 December 2023.
The Merger is expected to be completed
during the second quarter of 2024. When
completed, the Company will be merged
into a subsidiary of TGS on the basis of the
principle of continuity and thereafter be
dissolved. The rest of this report should be
read in light of the Merger.
Our Governance Model
PGS ASA is registered in Norway as a public
limited liability company, and our corporate
governance model is based on Norwegian
corporate law, the Oslo Stock Exchange’s
Issuer Rules available on www.euronext.
com, and the Norwegian Code of Practice
for Corporate Governance available on www.
nues.com (the “NUES Recommendations”).
Our governance model is suited to our
Company and the industry in which we
operate.
Our corporate governance principles
have been adopted by our Board and are
summarized below. Our website provides
full versions of our basic corporate
governance documents and an overview
of our governance structure. These
items include the Company’s Articles of
Association, the Board’ Rules of Procedure,
and the charters for the Company’s Audit
Committee, Remuneration and Corporate
Governance Committee (“Remco”), and
Nomination Committee. The documents can
be downloaded from www.pgs.com.
Our Commitments – Sustainability
We have adopted a Code of Conduct
that reects our commitment to our
shareholders, customers, employees, and
other stakeholder to carry out our business
with the utmost integrity. The Code of
Conduct outlines both what stakeholders
can expect from PGS, and what PGS expects
from our employees and anyone working
for PGS. PGS and its employees are also
guided by our Core Values and Leadership
Principles that drive desired behavior and
culture. Our Code of Conduct, Core Values
and Leadership Principles are available in
full on www.pgs.com.
During 2023, we have;
y systematically assessed risk in relation
to our Corporate Compliance Programs
and documented the risk assessment
in our Corporate Compliance Program
– Legal Risk Assessment Report.
This report addresses risk related to
Corruption and Economic Crime, Export
Controls, International Trade Sanctions,
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PGS Annual Report 2023 5
Competition Laws, Data Privacy, and
Human and Labor Rights;
y revised our Global Supply Chain Standard
to integrate the requirements of the
Norwegian Transparency Act, and
updated the procurement risk process
in PGS’s digital management system,
enabling accessibility, transparency,
and understandability for all involved
employees; and
y successfully entered the offshore wind
market, where we completed our rst
offshore wind site characterization
contract, won a large project extending
well into 2024, and experienced strong
client interest for our ecient ultra high-
resolution 3D streamer solution. We are
also expanding our operational capacity
to accommodate growing demand for
offshore wind site characterization
surveying.
PGS is committed to the ten principles of
the United Nations Global Compact in the
areas of human rights, labor, environment,
and anti-corruption. The Board and the CEO
actively ensure that the Company properly
responds to sustainability challenges. To
identify and assess actual and potential
sustainability risks and opportunities for
PGS, the Board and the CEO are actively
involved in the Company’s assessment of
material topics and the development of our
strategic objectives and goals to manage
them.
To identify and report on risks and
opportunities associated with climate
change and the energy transition PGS
uses the frameworks developed by the
Corporate Sustainability Reporting Directive
(“CSRD”), the Task Force on Climate Related
Disclosures (“TCFD”), Global Reporting
Initiative (“GRI”) and the Organization for
Economic Co-operation and Development
(“OECD”) due diligence process and
supporting measures.
Since 2011, PGS has published a separate
sustainability report, which communicates
the Company’s progress in alignment with
the recommendations of the GRI. PGS has
also submitted annual disclosures to the
Carbon Disclosure Project (“CDP”) since
2010. For 2023, PGS will integrate the
sustainability report into the 2023 Annual
Report.
PGS has an ambition to promote the UN
Sustainable Development Goals (“SDGs”)
through concrete actions and goals that
are relevant for the Company’s activities
and global presence. From the materiality
assessment PGS has identied six of the
17 SDGs where the Company contributes.
These identied goals are nos. 04 Quality
Education, 07 Affordable and clean energy,
09 Industry, Innovation and Infrastructure,
13 Climate Action, 14 Life Below Water and 16
Peace Justice and Strong Institutions.
PGS recognizes the impacts of climate
change and the need for a managed
transition to sustainable energy sources to
avoid the most severe consequences for the
environment, society, the economy, and our
business. The Company has committed to
reaching net-zero emissions of greenhouse
gases in 2050 with a 75% reduction in
emissions from maritime operations and
use of 100% renewable energy in oces and
data processing.
A more detailed account of how PGS
manages sustainability risks and
opportunities can be found in our Annual
Report and other ESG documents available
at www.pgs.com.
Our Business
PGS is a fully integrated marine geophysical
company that provides a broad range of
seismic and reservoir services, including
data acquisition, imaging, interpretation
and eld evaluation. Our services are
provided to the oil and gas industry, as well
as to the broader and emerging new energy
industries, including offshore wind-, carbon
capture and storage-, and marine mineral
industries. The Company operates on a
worldwide basis with headquarter in Oslo,
Norway.
Our business purpose, as presented in
the Company’s Articles of Association is:
“The business of the Company is to provide
services to and participate and invest in
energy related businesses.”
Equity and Dividends
The shareholders’ equity as of December 31,
2023, was c. $528 million, corresponding to
29% of total assets.
During 2022, the Company completed
private placements and a subsequent
offering raising c. $250 million of equity. In
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PGS Annual Report 2023 6
2023, the Company repaid c. $130 million
on its Export Credit Financing Loans
(“ECF”) and repaid most of the Term Loan
B (“TLB”), reducing the outstanding TLB
amount from c. $738 million at the start of
the year to c. $70 million at year-end. The
repayments were made from cash/cash
ow, and the issuance of a $450 million
senior secured bond loan in March 2023 and
a new $75 million loan in September 2023.
The Company also raised c. $40 million of
new equity through a private placement in
September 2023.
The Company realized a cash ow before
nancing activities of $182 million in 2023
(compared to c. $210 million in 2022). The
Company achieved a reduction of its gross
interest-bearing debt by c. $273 million or
approximately 26%. Net interest-bearing
debt was $542 million as of December 31,
2023.
The Board continually monitors the
adequacy of the Company’s capital structure
in light of its objectives, strategy, risk prole
and outlook.
The alternative performance measure
“net interest-bearing debt” as used above,
excludes lease liabilities recognized in
accordance with IFRS 16 and is further
dened in the Annual Report.
The Board has adopted a dividend policy
whereby it is the intention to distribute
25 to 50 percent of annual net income
as dividends over time. The Board has
no general authorization to distribute
dividends. Each year’s dividend is decided
by the AGM after a proposal from the Board.
The Company has not distributed dividends
in recent years due to a weak market,
operating losses and the strategic priority of
reducing interest-bearing debt.
The Board is authorized to buy back up to
10 percent of the Company’s share capital
(treasury shares). The current authorization
expires no later than June 30, 2024.
It has been an ongoing practice of PGS
shareholders to grant authorizations to
the Board permitting it to increase the
Company’s share capital or issue convertible
loans for up to 10 percent of the Company’s
share capital for certain dened purposes.
The authorization given in 2023 was used
to raise the c. $40 million of new equity
through the private placement in September
2023 as part of the preparations for the
Merger.
The terms of the Merger as approved by PGS
Shareholders December 1, 2023 restrict,
among other things, all dividend payments,
share buy back and share capital increases
until the completion of the Merger.
Equal Treatment of Shareholders
- Transactions with Closely
Related Parties
PGS has a single share class, and all shares
carry the same rights. At our General
Meetings, each share carries one vote. Our
Board is committed to equal treatment of
shareholders in all respects.
When applicable, transactions involving
the Company’s own shares are carried out
through a stock exchange, or at prevailing
stock-exchange prices if carried out in an
alternative manner.
Transactions between the Company on the
one hand, and shareholders, a shareholder’s
parent company, members of the Board,
executive ocers, or closely related parties
of any such party (referred to as “Closely
Related Parties”) on the other hand shall
be conducted at arm’s length distance and
at market terms. Material transactions
between the Company and Closely Related
Parties will be subject to independent
valuation by third parties.
According to PGS’ Code of Conduct, our
employees shall not have any personal or
nancial interest that might conict with
those of PGS nor inuence or appear to
inuence judgments or actions in carrying
out their responsibilities on behalf of the
Company. According to the Board’s Rules
of Procedure, a member of our Board may
not participate in discussions or decision-
making as to issues in which the Director
or any of its Closely Related Parties have a
material personal or nancial interest. The
Code of Conduct and Rules of Procedure are
available on www.pgs.com.
Shares and Negotiability
The Company’s shares are freely
transferable and there are no restrictions
imposed by the Company on ownership of or
voting for shares.
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PGS Annual Report 2023 7
General Meeting
Through participation in General Meetings,
our shareholders exercise ultimate authority
over the Company and, with exception of
the employee elected Directors, elect the
members of its Board and the chairperson of
the Board.
Pursuant to the Company’s Articles of
Association, the notice of an AGM is
distributed at least four weeks in advance of
the meeting to shareholders. A copy of the
calling notice with appendices will be posted
on www.pgs.com.
Notices convening Extraordinary General
Meeting (“EGM”) must be distributed at
least three weeks ahead of the meeting.
The Board is to call shareholders to an EGM
upon a written demand by the Company’s
independent auditor or shareholders
representing at least ve percent of the
share capital, or for other purposes.
Shareholders who wish to attend a General
Meeting must notify the Company’s registrar
or PGS by the deadline stated in the meeting
notice, which must be at least two working
days before the General Meeting. Only
persons who are recorded as shareholders 5
business days before the date of the General
Meeting may attend and vote at the General
Meeting.
According to the Company’s Articles of
Association, documents to be considered
at the General Meeting may be published on
our website. The same applies to documents
that, due to statutory requirements must be
attached to, or included in the notice calling
the General Meeting. If the documents are
published in such a manner, the statutory
requirements for distribution shall not apply.
Nevertheless, shareholders are entitled to
request that documents to be considered
by the General Meeting are sent to them via
regular mail.
To vote at General Meetings, in person or
by proxy, a shareholder must be registered
with Euronext Securities Oslo, the former
Norwegian Central Securities Depository
(“VPS”).
An owner with shares registered through a
custodian has voting rights equivalent to the
number of shares covered by the custodial
arrangement, provided that the owner of the
shares, within two working days ahead of the
General Meeting, provides PGS with his or
her name and address together with written
conrmation from the custodian to the
effect that he or she is the benecial owner
of the shares held in custody.
Written and/or electronic voting in
accordance with the Norwegian Public
Limited Liability Companies Act, cf. sections
5-8 to 5-8b, shall be allowed for meetings
where such method of voting is arranged by
the Board. The Company is for the 2024 AGM
planning to call for a virtual meeting and
arrange for electronic voting.
Generally, the Chairperson of the Board
and the Chairperson of the Nomination
Committee, and the auditor attends the
AGMs. In accordance with the Company’s
Articles of Association, the Chairperson of
the Board chairs General Meetings. This is a
deviation from the NUES Recommendation
No. 6 for making arrangements to ensure
an independent chairperson for the General
Meetings. The reason for this deviation
is that the Company has found this more
practical and that PGS wishes to ensure
that General Meetings are chaired by a
competent person having proper insight into
PGS’ overall operations.
Nomination Committee
In line with our Articles of Association,
the Company has currently a Nomination
Committee comprised of three members
to be elected by our shareholders at
the AGM. The majority of Nomination
Committee members shall qualify as
independent parties, pursuant to the NUES
Recommendations. The term of service shall
be two years unless the General Meeting
determines that the period shall be shorter,
which is generally the case.
The Nomination Committee’s main
responsibilities, which are set out in the
Nomination Committee Mandate and
Charter, are to propose nominees for
election as members and chairperson
of the Board and the Nomination
Committee. Further, the Nomination
Committee proposes remuneration to
be paid to members of the Board and its
committees and Nomination Committee.
The remuneration is approved by the
General Meeting. Annually, the Nomination
Committee produces a written report
containing its nominations and proposals,
which is distributed in advance of each AGM.
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Once a year, the Nomination Committee
meets with each Director individually
and discusses how the Board and its
committees’ function and whether there
is a need for changes to the Board. The
Nomination Committee also keeps contact
with shareholders and the Company’s
President & CEO (“CEO”) as part of its work.
As of December 31, 2023, the Nomination
Committee comprises Terje Valebjørg
(chairperson), Alex Herger and Jon Arnt
Jacobsen. Mr. Valebjørg was a rst time
electee on the 2016 AGM as a member, Ms.
Herger was a rst time electee as member
at the 2019 AGM, whereas Mr. Jacobsen
was a rst time electee on the 2022 AGM.
All three were re-elected at the 2023 AGM
for a service period ending with the 2024
AGM. The current Nomination Committee
members are presented in more detail at
www.pgs.com. The Nomination Committee
proposed for approval at the 2024 AGM is
planned for presentation in the 2024 AGM
Calling Notice.
Shareholders who wish to propose new
Board members or new members of the
Nomination Committee may do so by
submitting a candidate’s name to PGS’
investor relations staff via www.pgs.com
by following the link, “Nominate a Board
Member.” The deadline for submissions each
year is January 31. Alternatively, candidates
can be proposed by letter to PGS attn.
General Counsel or via email to ir@pgs.
com. PGS does not employ any Nomination
Committee members, none is a member
of the Board and all proposed members of
the Nomination Committee are considered
to be independent from the Board and the
management of the Company.
In 2023, the Nomination Committee held
4 physical and virtual meetings. The
Nomination Committee’s report on its work
and recommendations will be set out in the
2024 AGM Calling Notice.
The Board – Composition
and Independence
According to the Company’s Articles of
Association, our Board shall have from three
to thirteen Directors. The period of service
for shareholder elected Board members
shall be one year, whereas the period for the
employee elected Board members is two
years. The Board has adopted its own Rules
of Procedure that establish in more detail its
roles and responsibilities, including:
y Directors’ qualications;
y requirements that a majority of the
shareholder elected Directors in the
Board, a majority of the shareholder
elected Directors being members of
the Remco, and all shareholder elected
Directors being members of the Audit
Committee, are considered to be
independent Directors; and
y an annual review and determination of
the independence of each Director.
The composition of the Board is a reection
of the Company’s commitment to protect
the common interests of all shareholders
and the Company’s need for expertise,
capacity and diversity.
As of December 31, 2023, the Board
comprised seven shareholder-elected and
three employee-elected Directors. The
current shareholder-elected Directors
are Walter Qvam (chairperson), Anne
Grethe Dalane, Richard Herbert, Trond
Brandsrud, Ebrahim Attarzadeh, Shona
Grant and Emiliana Dallan Rice-Oxley, whilst
the current employee-elected Directors
are Anette Valbø, Carine Roalkvam and
Eivind Vesterås. The current Directors are
presented in more detail at www.pgs.com.
Any adjustments to the Board proposed for
approval at the 2024 AGM will be presented
in detail in the 2024 AGM Calling Notice.
As of December 31, 2023, all shareholder-
elected Directors are independent of the
Company’s management, its major business
relations, and major shareholders. No
shareholder elected Director may be an
executive of PGS and is not permitted to
perform paid consultancy work for PGS.
As of December 31, 2023, all shareholder-
elected Directors (bar one), directly or
indirectly, own PGS shares.
Shareholders and other interested parties
may communicate directly with our
shareholder-elected Directors by written
correspondence addressed to PGS ASA,
Board (shareholder-elected members),
Secretary of the Board or to the Company’s
General Counsel Lars Ragnar van der Bl
Mysen, PO Box 251, NO-0216 Oslo, Norway.
Further, the Company has on www.pgs.
com posted an invitation to shareholders
for discussing corporate governance
or corporate responsibility matters by
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PGS Annual Report 2023 9
contacting Mr. Mysen by phone or arranging
a meeting with him.
The Board – Its Work and
Responsibilities
In accordance with Norwegian corporate
law, our Board has overall responsibility
for management and supervision of the
Company, while the CEO is responsible for
day-to-day management.
The Board provides oversight of the CEO’s
day-to-day management and company
activities in general. The Board is also
responsible for ensuring that appropriate
management, guidelines, and control
systems are in place and are followed.
In cooperation with the CEO, the Board
also develops clear goals, strategies and
risk prole for the Company such that it
generates value for its shareholders in
a sustainable manner taking economic,
social and environmental, aspects into
consideration.
The CEO, as agreed with the chairperson of
the Board, annually submits a schedule of
the meetings of the Board of Directors in
the upcoming calendar year. The schedule
is subject to Board approval. In 2023, the
Board held 13 physical and virtual meetings.
During 2023, all the shareholder-elected
Directors participated in all prescheduled
board meetings, save that one Director
missed one prescheduled meeting due to
unforeseen circumstances.
Key elements of the Rules of Procedure
cover the Board’s responsibilities to
determine the Company’s nancial
targets, set strategy along with the CEO
and executive committees, and approve
business plans, budgets, and budgetary and
risk frameworks. The Board reviews at least
annually the objectives, strategy and risk
prole for the Company. In its supervision
of the Company’s business activities, the
Board will seek to ensure that satisfactory
procedures are in place for monitoring and
follow-up of Board-approved corporate
principles and guidelines covering areas
such as ethical conduct; adherence to laws,
rules, and regulations; health, safety and
environment; and corporate responsibility.
The Rules of Procedure also require
an annual self-evaluation to determine
whether the Board and its committees are
functioning effectively. The annual self-
evaluation is prepared and facilitated by
the Remco. An anonymous survey is carried
out and the ndings are discussed by the
Board. The survey’s ndings are made
available to the Nomination Committee. The
Chairperson of the Nomination Committee
also shares with the Board relevant
information for improvement of Board
processes that may come up in their annual
interviews with individual Directors.
Each scheduled Board meeting includes
a separate session at which issues may
be discussed without the presence of the
Company’s management.
The tasks and duties of the CEO vis-à-vis
the Company’s Board are also outlined in the
Rules of Procedure, along with the tasks and
duties of the chairperson of the Board. The
CEO participates in all board meetings other
than closed sessions. The Board elects a
vice chairperson to chair board meetings in
the chairperson’s absence. The full text of
the Board’s Rules of Procedure is available at
www.pgs.com. Our governance structure is
organized as described below.
Our Board is responsible for the supervision
of our business activities. The Board has
established an Audit Committee and a
Remco to assist in organizing and carrying
out its responsibilities. The mandate and
charter for the Audit Committee and Remco
are available at www.pgs.com.
The Board’s Responsibilities
The Board’s responsibilities include to:
y Appoint the Company’s CEO; and
y together with the CEO operate PGS in an
effective and ethical manner to create
value for the Company’s shareholders.
Our Code of Conduct requires
management to maintain an awareness
of the risks involved in carrying out our
business strategies. Personal interests
must not override or conict with the
interests of PGS.
The CEO’s Responsibilities
The responsibilities of the CEO include:
y Managing the day-to-day activities of the
Company;
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y organizing PGS’ Executive Committees
and the Disclosure Committee to further
assist the CEO; and
y under the guidance and supervision of
the Board and the Audit Committee,
ensuring that the Company’s nancial
statements in all material respects
fairly present the Company’s nancial
condition and the results of its
operations, where timely disclosure of
issues to the Board is essential to the
assessment of the Company’s nancial
condition, business performance and
risks.
Board Committees
As of December 31, 2023, our Audit
Committee comprises Directors Anne
Grethe Dalane (chairperson), Trond
Brandsrud, Ebrahim Attarzadeh, Emeliana
Dallan Rice-Oxley and Anette Valbø. All
shareholder-elected Director’s being
members of the committee are considered
independent of the Company. The
committee’s functions are to assist the
Board in its supervision of the integrity
of PGS’ nancial statements; to monitor
the independent auditor’s qualications,
independence and performance; to monitor
the performance of the internal audit
function; to review the integrity of the
sustainability reporting; and to promote and
review compliance with laws and regulatory
requirements.
As of December 31, 2023, the Remco
comprises Directors Walter Qvam
(chairperson), Richard Herbert, Shona
Grant, Carine Roalkvam and Eivind
Vesterås. All shareholder-elected Director’s
being members of this committee are
considered independent of the Company’s
senior management. The function of the
committee is to assist in matters relating
to compensation, benets, and perquisites
of the CEO and other senior executives.
Review and modication of the Company’s
corporate governance implemented
in the Company are also committee
responsibilities.
During 2023, all the shareholder-elected
Directors participated in all prescheduled
regular committee meetings, save that
one Director was absent from two of those
meetings.
In 2023, the Board also mandated one ad-
hoc committee comprising Mr. Qvam, Ms.
Dalane, Mr. Brandsrud and Mr. Attarzadeh
to – together with the PGS management and
advisors – oversee the Company’s process
for (a) managing its debt and assess options
for renancing and (b) merging with TGS.
Risk Management and Internal Control
The Board is responsible for ensuring that
appropriate guidelines, monitoring, and
internal control systems are in place. These
are to include embedding risk management,
designating risk ownership, and
implementing risk responses and controls.
The Board has systems in place to assess
that the CEO exercises appropriate and
effective management. The Board’s Audit
Committee assesses the integrity of PGS’
accounts. It also enquires about, on behalf
of the Board, issues related to nancial
review and external audit of PGS’ accounts.
Further, the Board and the Audit Committee
supervise and verify that effective internal
control systems are in place, including
systems for risk management and nancial
reporting, and non-nancial reporting
related to material sustainability topics.
The Board and the Audit Committee take
steps to ensure that the Company’s internal
control functions are working as intended
and that necessary measures are taken
to reduce extraordinary risk exposure.
Furthermore, the Board makes certain
that the Company is creating value for
the shareholders in a sustainable manner
whilst taking ethical conduct; compliance
with laws, rules and regulations; health,
safety and working environment; and other
environmental, social and governance
(“ESG”) issues into account.
The Company’s anti-corruption program
includes a policy, manual and work
instructions as to several ethical issues,
periodic training, high risk area assessment
and monitoring, compulsory contract
wording, etc. The policy and procedures are
available at www.pgs.com. The program is
evaluated on a regular basis by the Audit
Committee.
Management maintains and regularly
reviews a risk matrix setting out the main
risks for the Company. These risk factors
and the Company’s risk mitigating activities
are subject to discussion in the Board at
least once a year with company-wide ESG
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KPIs to progress key sustainability material
issues, as communicated in the ESRS 1 -
Sustainability material issues paragraph
below.
Management conducts day-to-day
follow-up of nancial management and
reporting. Management has established
a structured approach to ensure that the
system for Internal Control over Financial
Reporting (“ICFR”) is effective. ICFR includes
identication and assessment of all material
nancial reporting risks, identifying and
documenting relevant controls to address
these risks, and monitoring that controls are
implemented and performed. For controls
that are not operationally effective at
year-end, their potential nancial exposure
and impact on the consolidated nancial
statements are evaluated.
PGS has an Internal Audit Department
reporting directly to the Audit Committee
on its audit planning and audit reports. The
purpose of the Internal Audit Department
is to perform independent, objective
assurance and consulting activities that add
value and improve the Company’s initiatives
in nancial, operational and compliance
areas.
The scope of work for the Internal Audit
Department includes determining
whether the Company’s risk management,
control, and governance, as designed and
represented by management, are adequate
and well-functioning.
The audit reports are issued to the Audit
Committee. In addition, the Internal Audit
Department regularly monitors and reports
status of management’s actions to respond
to identied risks or weaknesses.
Remuneration of the Board and
Executive Management
Remuneration of shareholder-elected
Directors is not linked to performance but
is based on an annual fee and is subject to
annual approval by the General Meeting.
Shareholder-elected Directors shall not
solicit or accept specic assignments
for PGS beyond their role as Directors.
Shareholder-elected Directors do not hold
any PGS share options, restricted stock
units or performance based restricted stock
units.
For details on compensation to individual
Directors, please see Note 30 to the
consolidated nancial statements of PGS.
Remuneration payable to both employee-
elected and shareholder-elected Directors
will be proposed by the Nomination
Committee according to its Mandate and
Charter and is submitted to the AGM for
approval.
Executive remuneration is one of the
primary tasks of Remco. The committee
annually reviews the total compensation
level, the mix between xed and
performance related compensation and
the mix between short and long-term
compensation. Remco has developed an
annual schedule in order to ensure and
facilitate a structured approach to the
annual review of executive compensation.
Remco has with the help of an external
advisor identied a specic peer group of
comparable companies across relevant
markets. The advisor has collected and
combined information related to total
compensation level and structure amongst
these companies. As of Remco’s latest
review, the peer group consisted of 17
companies from Norway and Europe. These
companies are of comparable size and have
international operations in the energy and
energy services sectors. The peer group
is subject to regular review. The Board
and Remco use this information, among
other tools, to benchmark and decide on an
appropriate total compensation structure
for the CEO and other executives.
Compensation for the CEO adheres to
the same process as that used for other
executives, but is also subject to approval by
the Board.
The current remuneration package for our
CEO and other executives includes xed
elements and variable elements. The xed
elements consist of a base salary and other
benets such as car allowance, phone,
internet and similar. The xed elements
also include a dened contribution pension
scheme and an individual pension scheme.
The variable elements consist of Short Term
Incentive Plans which is our annual bonus
scheme, and Long Term Incentive Plans
which are composed of Performance based
Restricted Stock Units. Features of these
programs include an absolute ceiling on
performance-related remuneration.
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For further details on the compensation
structure and total compensation to the
CEO and executive team members, please
see Note 30 to the consolidated nancial
statement of PGS, and also the Board’s
Senior Executive Remuneration Policy
approved by the 2021 AGM available on www.
pgs.com, and the Board’s Senior Executive
Remuneration Report for 2023 planned to be
set forth in the 2024 AGM Calling Notice.
Information and Communication
The Board is committed to reporting
nancial results and other relevant
information based on openness and
the requirement of equal treatment of
all shareholders and securities market
participants. The Company complies with
relevant disclosure rules and regulations.
Announcements are released through a
platform provided by Notied and posted
on the Oslo Stock Exchange’s NewsWeb
service. In addition, all announcements are
on www.pgs.com. The Company’s policy
of accessibility for shareholders is also
presented on the Company’s website.
The Company has an investor relations
function to ensure that requests for
information from shareholders, analysts
and other interested parties are satised.
The Company has an active investor
communication program which includes
senior management attending roadshows
in connection with reporting of nancial
results, presentations at relevant investor
conferences, and availability for one-on-
one meetings, both virtual and as physical
meetings.
Takeover Bids
The Board has established guiding
principles for how it will act in the event of a
takeover bid. The Board will ensure that all
shareholders are treated equally and seek
to prevent disruptions to, or interference
with, Company operations to the extent
possible. In the event of a takeover bid,
the Board will, in accordance with its
overall responsibilities and good corporate
governance, act in the best interest of
shareholders and ensure that sucient
information regarding the matter is provided
to the shareholders. If a takeover bid is
made, the Board will issue a statement
containing a recommendation as to whether
the shareholders should accept or reject the
offer, including an independent valuation
of the offer. The Company’s Articles of
Association do not contain any restrictions,
limitations, or defense mechanisms against
acquisition of its shares.
Auditor
The Audit Committee shall support the
Board in the administration and exercise of
its responsibility for supervision of the work
of the independent auditor, who shall keep
the Board informed of all aspects of its work
for PGS. This duty includes submission of an
annual plan for the audit of PGS. The auditor
attends all Audit Committee meetings
and, at least twice a year, meets with the
Audit Committee without the presence of
management. In-house policies govern the
use of the auditor’s services. Use of the
auditor for services other than the audit
of PGS requires pre-approval by the Audit
Committee.
The independent auditor meets with the
full Board at least once a year in connection
with the preparation of the annual nancial
statements and, at least once a year,
presents a review of PGS’ nancial reporting
and internal control procedures for
nancial reporting. At least once a year, the
independent auditor meets with the Board
without the presence of any member of the
executive management.
Remuneration paid to the auditor for
mandatory and other audit services will be
reported to the AGM for approval.
Diversity, Equality and Inclusion
The Company has clear commitments
regarding Responsible Business Conduct,
Equality and Diversity & Inclusion for
our work force. These commitments
are embedded in the Company policies
and goals, which include (a) respecting
fundamental human and labor rights, (b)
preventing discrimination and harassment,
(c) recruiting, promoting and developing
individuals based on qualications,
value and potential, and (d) fostering
and supporting diversity including age,
nationality, gender and qualications.
At the Board level, the Nomination
Committee actively works for ensuring
that there is proper diversity on gender,
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PGS Annual Report 2023 13
age, background, experience and
qualications. The Company complies with
the requirements in the Norwegian Public
Limited Liabilities Act section 6-11a on
gender balance.
At the management level and below the
President & CEO, the SVP Global HR and the
Executive Vice Presidents are all actively
pursuing similar goals as regards equality,
diversity & inclusion among the PGS
management and the entire work force.
The Company’s Annual Report available on
www.pgs.com identies the more precise
goals and how they have been met during
the reporting period.
Compliance with Laws, Rules,
Regulations and Recommendations
As part of PGS’ Code of Conduct available on
www.pgs.com, PGS is inter alia committed
to comply with relevant laws, rules, and
regulations, as well as the Oslo Stock
Exchange’s Issuer Rules. In addition, PGS
complies with the current recommendations
set forth in the NUES Recommendations,
subject only to deviations identied and
justied in this report.
The Board further conducts periodic reviews
of PGS’ corporate governance policies and
procedures, including the Board’s Rules
of Procedure. This process is conducted
regularly and managed by Remco. Any
changes to policies or procedures are
presented to the Board for approval.
PGS Annual Report 2023 14
SUSTAINABILITY REPORT
Our Commitments and Progress – Sustainability 15
ESRS 1
Sustainability Material Issues 16
ESRS E1
Climate Change and Energy Transition 20
EU Taxonomy 20
ESRS E2-E5
Biodiversity and Nature 21
ESRS S1-14
Health, Safety and Security 25
ESRS S1
Future Workforce 26
ESRS S1-4
Respecting the Rights of People 26
ESRS G1
Business Ethics and Integrity 27
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Our Commitments and Progress – Sustainability
As we continue to prepare for the Corporate Sustainability Reporting Directive (“CSRD”) and progress towards
the merger with TGS, the 2023 progress of our sustainability efforts are communicated here. For historical
gures and context, reference is made to the 2022 sustainability report available at www.pgs.com.
We have adopted a Code of Conduct that reects our commitment to our shareholders, clients, employees, and
other stakeholders to carry out our business with the utmost integrity. The Code of Conduct outlines both what
stakeholders can expect from us, and what we expect from our employees and anyone working for us. We are
guided by the PGS’s Core Values and Leadership Principles that drive desired behavior and culture. Our Code of
Conduct, Core Values and Leadership Principles are available in full on www.pgs.com. During 2023, we revised
our Global Supply chain standard to integrate the requirements of the enacted Norwegian Transparency Act,
and updated the procurement risk management in our processes, enabling accessibility, transparency, and
understandability for all involved employees.
PGS is committed to the ten principles of the United Nations Global Compact in the areas of human rights,
labor, environment, and anti-corruption. The Board and the CEO actively ensure that the Company properly
responds to sustainability challenges.
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ESRS 1
Sustainability Material Issues
To identify and assess actual and potential
sustainability risks and opportunities for
PGS, the Board and the CEO are actively
involved in the Company’s assessment of
material topics and the development of our
strategic objectives and goals to manage
them. A company-wide double materiality
assessment according to ESRS 1, was
extended to all PGS employees as input
for the CSRD implementation in 2024. The
results shown in the gure to the right
conrm the prioritization of sustainability
material issue mitigation, with the top 3
material issues being Climate Change and
Energy Transition, Future Workforce and
Business. The perception of the three
sustainability issues and their impact on
PGS’ enterprise value showed a slight shift
compared to 2022, but with the same
prioritization. The Future Workforce was
perceived to have a slightly lesser impact,
Respecting the Rights of People having a
higher impact, and Biodiversity and Nature
have a lesser impact.
For 2022 and previous year’s results
reference is made to the 2022 sustainability
report available at www.pgs.com.
Potential impact on enterprise value
Impact on environment and society
Respecting the
Rights of People
Biodiversity
and Nature
Health, Safety
and Security
Business Ethics
and Integrity
Future
Workforce
Climate Change and
Energy Transition
Climate Change and Energy Transition
Climate Change
ESRS E1
Future Workforce
Own workforce
ESRS S1
Health, Safety and Security
Own workforce
ESRS S1
Business Ethics and Integrity
Business conduct
ESRS G1
Respecting the Rights of People
Own workforce
ESRS S1
Workers in the value chain
ESRS S2
Affected communities
ESRS S3
Biodiversity and Nature
Pollution
ESRS E2
Water and marine resources
ESRS E3
Biodiversity and ecosystems
ESRS E4
Resource use circular economy
ESRS E5
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PGS Annual Report 2023 17
Enterprise Level Risks and Opportunities linked to Sustainability Material Issues
• Accelerating energy transition and
decline in demand for seismic
• Strict regulation of maritime carbon
emissions
Climate Change and Energy Transition
• Major spill or pollution incident
• Incident involving harm to marine fauna
Biodiversity and Nature
• Grave violation of human rights
Respecting the Rights of People
• Ability to attract, develop and
retain talent
Future Workforce
• Victim of major cyber security incident
• Global pandemic or similar event
• Victim of criminal or terrorist activity
Health, Safety and Security
• Engagement in corrupt activities
• Violation of international sanctions
Business Ethics and Integrity
Further, to engage with external
stakeholders, we support the EnerGeo
Alliance nancially and by engaging in
workgroups, committees, and projects.
Stakeholders include customers, non-
governmental organizations, and academia.
For a full list of stakeholders refer to the
2022 sustainability report available at
www.pgs.com.
To identify and report on risks and
opportunities associated with climate
change and the energy transition PGS
uses the frameworks developed by the
Corporate Sustainability Reporting Directive
(“CSRD”), the Task Force on Climate Related
Disclosures (“TCFD”), Global Reporting
Initiative (“GRI”) and the Organization for
Economic Co-operation and Development
(“OECD”) due diligence process and
supporting measures.
Since 2011, PGS has published a separate
sustainability report, which communicates
the Company’s progress in alignment with
the recommendations of the GRI. Further
in 2023 we have continued aligning our
reporting with the CSRD. PGS has also
submitted annual disclosures to the Carbon
Disclosure Project (“CDP”) since 2010 and
to the UN Communication on Progress
since 2014. Further, PGS promotes the UN
Sustainable Development Goals (“SDGs”)
through concrete actions and goals that
are relevant for the Company’s activities
and global presence. From the materiality
assessment, PGS has identied six of the
17 SDGs where the Company contributes.
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PGS Annual Report 2023 18
These identied goals are number 04 Quality Education, 07 Affordable and clean energy,
09 Industry, Innovation and Infrastructure, 13 Climate Action, 14 Life Below Water and 16
Peace Justice and Strong Institutions. Our goals and progress are shown below.
PGS GOAL
Promote education in
geology, geophysics,
mathematics and
digitalization.
PGS GOAL
Upgrade our acquisition,
processing and deliverables
through digitalization and
innovation.
PGS GOAL
Identify and develop new
sustainable business
opportunities.
Cooperation with the Norwegian
Academy of Science and Letters
to promote mathematical
education among young people
in Norway & abroad
Financial support for women
doctorates in Ghana
2011
2017
2022
2023
Financial support students in
Ghana, and interim programs in
Canada, Ghana and Brazil
Sustained educational support
to local communities in Norway
and Ghana through ABEL
Sustained educational support
to local communities in Ghana
and Angola. 176 sponsored
Angolan students. Renovating
and building three schools in
Angola
Financial support for 6 PhD
students (5 female; 1 Male) in
Ghana with 1 guest lecture held
by PGS
Financial support for 184
Angolan students (110 female; 74
male). Solar panels installed in
one school
Ramform seismic vessel
technology
1995
GeoStreamer® seismic streamer
technology
2007
2008 Ramform S-class improves
seismic vessel technology
2013 Ramform Titan-class seismic
vessel technology.
2019 Digital transformation
partnership with Google and
Cognite
2020 High-Performance Computing in
the cloud
2023 Enabled 3 digitalization pillars
with cloud-based computing -
PGS Eos, MultiClient OnDemand,
and PGS Digital Factory
Grow New Energy business 2021
2022 Completed 4 surveys for
characterization of reservoirs
for carbon storage
2023
Completed rst ultra-high
resolution 3D survey in Offshore
wind site characterization
2023 Expanded operations within the
offshore wind segment
Continued to grow the value of
seismic data and services to the
CCUS industry
PGS Track Record of Support for UN SDGs
continued on next page
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PGS Annual Report 2023 19
PGS GOAL
50% reduction in relative
CO2 emissions by 2030.
PGS GOAL
Increase scientic
knowledge by sharing
oceanographic data.
PGS GOAL
Sustain zero tolerance for
corruption and bribery in all
its forms.
Started reporting to Carbon
Disclosure Project (CDP)
2010
ISO 14001 certied2011
2020 Set company target to reduce
relative emissions by 50%
2022 Real-time energy performance
monitoring and optimization
implemented
Completed technical screening
of alternative fuels for the
existing eet
Expand real-time emission
monitoring for EU ETS and
FuelEU Maritime
2023 Align CO2 emissions targets
with 2050 net zero goal
Joint Industry Program with
DNV and Shearwater for energy
& emission reporting (MRV) for
the seismic sector
Global Ocean Data Sharing
Initiative Launched
2017
Ghost-Net Initiative: Removal of
marine debris
Shared temperature and
salinity data with South-
African & Norwegian research
institutions.
2019 Shared current data with South-
African & Norwegian research
institutions
2020 Memorandum of understanding
with Seabed 2030
2021 Live feed of bathymetry data
from all vessels to Seabed 2030
2024 Data sharing agreement
with Hub Ocean to explore &
demonstrate the benets of
sharing industry ocean data
2023 Continued exploring how data
acquired by our eet of vessels
can support oceanic research.
Signed the UN Global Compact
and committed to the ten
principles
2013
Human rights policy 2014
2015 UK Modern Slavery Act
Human rights implemented in
the Supply Chain
2020
Equality & Anti-Discrimination
Act
2021
Norwegian Transparency Act
2022 Human & labor rights and
anti-corruption training across
all eet
2023 UN Call-to-Action from Business
to Governments
PGS Track Record of Support for UN SDGs
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PGS Annual Report 2023 20
PGS recognizes the impacts of climate
change and the need for a managed
transition to sustainable energy sources to
avoid the most severe consequences for the
environment, society, the economy, and our
business. The Company has committed to
reaching net-zero emissions of greenhouse
gases in 2050 with a 75% reduction in
emissions from maritime operations and
100% renewable energy use onshore. In
2023, we worked on planning the next steps
to achieve our net-zero target.
To meet our 75% reduction in absolute
emissions from maritime operations, two
main objectives are established. The rst
objective is ongoing and is to progress
continuously to 2050, which is to reduce
the energy consumption by progressing
three key initiatives (a) Reduce drag from
seismic equipment, (b) Increase operational
eciency, and (c) Enhance energy
eciency.
The second focuses on Greenhouse Gas
intensity of fuels and is comprised of two
initiatives; (a) Alternative fuels with a drop-
in biofuel test to be performed in Q1 in 2024
to enable us to offer our customers to use
bio-fuel mix, (b) Any future newbuilds will
have dual fuel option, with the alternative
fuel options still to be decided.
Further, in 2023, PGS joined forces with
Shearwater and DNV with the objective
to establish a standardized reporting
framework for marine seismic activities
and test DNVs’ Monitoring, Reporting and
Verication (“MRV”) tool in preparation to
meet IMO and EU reporting requirements.
To meet our target of using 100% renewable
energy onshore, two main activities are
in focus, the rst is to complete the full
transition to cloud computing running
on renewable energy, and the second is
for oces and equipment storage with
accessible infrastructure, to power with
renewable energy.
EU Taxonomy
In 2022 we concluded that our geophysical
surveys of reservoirs targeted or used for
carbon storage (“CS”), were eligible for
the activity of underground permanent
geological storage of CO2. In 2023, the
assessment of geophysical surveys for
wind installations was carried out and
concluded that our geophysical surveys for
offshore wind installations promote the
advancement of renewable energy projects,
as per the EU Directive 2018/2001.
In 2023, we completed one survey
where the objective was the geophysical
characterization of reservoirs for CS and
additionally, provided MultiClient data from
our library for the same purpose. Further,
we progressed two surveys with the
objective of characterizing the sub-surface
to safely position and install wind turbines.
The total revenues for these activities were
~$35 million, with $10 million from CS and
~$25 million from wind.
ESRS E1
Climate Change and
Energy Transition
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PGS Annual Report 2023 21
In 2023, and with reference to ESRS E2, the
direct emissions (scope 1) from our vessel
operations resulted in 330 CO2 equivalent
in kTonnes, of which 84% derive from our
seismic vessels and 16% from support and
escort vessels.
The breakdown is shown below and
compared to 2022. Figures earlier than
2022 are available in the 2022 sustainability
report.
We continue to focus on reducing our
relative CO2 emissions by 50% within 2030.
We do this by maximizing the eciency of
our vessels, optimizing their utilization, and
reducing drag during operations. These
efforts are reected in the reduction of
emissions per data unit produced. In 2023,
the emitted kilos of CO2 per common
midpoint resulted in 55.5, getting us back
on track compared to 2022.
We understand the challenge to identifying
the most relevant production-based
emission reduction KPIs and embarked
on a Joint Industry Project with DNV
and Shearwater that aims to establish a
standardized reporting framework and test
DNVs’ reporting tool and achieve greater
transparency and consistency on seismic
energy and emission reporting. The CO2
per CMP KPI will be evaluated after the
reporting standardization is agreed.
ESRS E2-E5
Biodiversity and Nature
Reducing Emissions Per Data Unit
kg CO2 per CMP
2030
20232011 2014 2017 20202012 2015 2018 20212013 2016 2019 2022
90.4
85.4
80.2
66.1
76.2
69.6
73.5
62.4
64.2
59.0
57.4
74.5
55.5
45.2
TARGET
BASELINE
- 50%
CO2 eq Emissions Breakdown (kTonnes)
(a) The 12.6% increase in emissions from 2022 to 2023
is due to higher vessel utilization to survey 59% more
squared kilometers than the previous year.
Scope 1 2022 2023
Direct Emissions (a) 293 330
Seismic vessels 250 277
Support and escort
vessels
43 53
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To improve transparency of indirect
emissions (scope 2) reporting, the
emissions from our data processing
centers are now estimated and reported
separately from our oce emissions. Note
that historical numbers have been adjusted
accordingly.
The transition from on-premises to
cloud compute has enabled an estimated
reduction of 74% compared to 2019.
Our total scope 3 for other emissions is not
yet established; however, we have been
tracking emissions from business travel
since 2012, well-to-tank (WTT) fuels since
2021, and in 2023, we started to track our
emissions from logistics.
The breakdown is shown here and
compared to 2022. Figures earlier than
2022 are available in the 2022 sustainability
report.
CO2 eq Emissions Breakdown (kTonnes)
(a) Only emissions from locations with more than 50 employees are included (Oslo, Weybridge and Houston).
(b) Estimated emissions from our data centers (Westway, Weybridge, Oslo, Cairo and Rio de Janeiro) and Google.
Scope 2 2019 2020 2021 2022 2023
Indirect Emissions 17 17 13 9 5
Oces (a) <1 <1 <1 <1 <1
Data processing (b) 16 16 13 9 4
CO2 eq Emissions Breakdown (kTonnes)
(a) The increase of 11% compared to 2022 is due to increased vessel activity.
(b) Does not include occasional use of charter ights.
(c) In 2023, we started to record our emissions from logistics.
Scope 3 2022 2023
Other Emissions 60 67
Well-to-tank (WTT) Marine Fuels (a) 53 59
Business Travel (b) 7 7
Logistics (c) <1
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PGS Annual Report 2023 23
In addition to CO2 emissions, PGS measures
three other air pollutants to understands
its GHG and overall air emissions. The
breakdown is shown here and compared to
2022. Figures earlier than 2022 are available
in the 2022 sustainability report.
The Energy Consumption of fuel for our
vessels, electricity for our oces and
data centers is reported in gigawatt hours
(GWh). Note that historical numbers for
oces and data centers have been adjusted
accordingly.
Energy Consumption Breakdown (GWh)
(a) The total amount is not an estimate and represents the factual electricity consumption for oces and
data processing.
(b) Only emissions from locations with more than 50 employees are included (Oslo, Weybridge and Houston).
(c) Data centers included are Houston, Weybridge, Oslo, Rio de Janeiro, Cairo. The energy consumption from
our Google supplier is not included.
2019 2020 2021 2022 2023
Fuel 1467 1128 946 1050 1185
VLSFO 812 558 463 642 749
MGO 655 570 483 408 436
Electricity (a) 47 49 38 25 13
Oces (b) 4 3 2 3 2
Data processing (c) 43 46 36 22 11
Sum 1514 1177 984 1075 1198
Environmental Performance Indicators
(a) See scope 1, 2 and 3 for comments.
(b) The 16.7% increase in NOx was due to increased vessel activity for
survey acquisition which required more fuel.
Air Emissions 2022 2023
CO2 eq (kTonnes) (a) 355 398
SOX (kTonnes) <1 <1
NOX (kTonnes) (b) 6 7
PM (kTonnes) <1 <1
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PGS Annual Report 2023 24
Environmental Performance Indicators
(a) To improve the consistency of reporting, waste onboard is now measured in
kilograms rather than cubic meters. This is to better reect the mass of waste. A
conversion of the 2022 gures has not been done, but 2023 will be a comparison
year for 2024 reporting. Historical gures in cubic meters are available in the 2022
Sustainability Report.
(b) Figures represent oces with more than 50 employees (Oslo, Weybridge
and Houston). 2023 numbers are impacted by oce refurbishments in Oslo and
Weybridge. We are aiming for >80% waste segregation for our oces.
(c) A major non-compliance is one that leads to signicant environmental impact
and/or penalties for the company.
(d) A minor non-compliance is one that leads to insignicant environmental impact
without any consequences beyond statutory reporting where required. The 3 minor
non-compliances were:
i. Fuel above 0.1% sulfur in the Sulphur Emission Control Areas (SECAs) was
registered on the PGS Apollo vessel.
ii. Diesel spilled onto the deck, but not to sea, when the Ramform Sovereign was
on dry dock.
iii. One chartered vessel had a minor hydraulic oil leak with less than 5 liters
overboard.
(e) All 4 onboard spills were safely contained.
(f) The 4 spills comprised of 1 diesel and 3 hydraulic oil spills totaling a volume of
<0.3 m3.
(g) In 2023, 89% of the marine debris (abandoned shing gear and marine debris
from the oceans) was recorded by the Sovereign Ramform in the Andaman Sea. The
increased tonnage reported compared to 2022 is due to an initiative to make the
reporting more complete.
2022 2023
Waste
Vessels (Tonnes) (a) N/A 696.1
Delivered to shore N/A 584.4
Incinerated onboard N/A 63.5
Organic waste to sea N/A 43.2
Stored on board N/A 5.0
Oces (Tonnes) (b) 54 71.7
General waste 17 30.6
Recycled waste 37 41.1
Environmental Incidents
Major non-compliance (c) 0 0
Minor non-compliance (d) 3 3
Spills
Number (e) 3 4
Volume total (m3) (f) < 0.1 <0.3
Volume overboard (m3) 0 0
EnerGeo Alliance Sustainable Seas
Marine Debris collected from sea (kTonnes) (g) 5 146.5
There are strict requirements from the International Maritime
Organization (IMO) on waste management offshore. PGS is
compliant with MARPOL Annex V requirements and for 2023, its
total offshore waste is broken down below. Figures earlier than
2022 are available in the 2022 sustainability report.
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PGS Annual Report 2023 25
Our health and safety performance
remained strong in 2023, with the total
number of recordable cases decreasing
by one to a total of 3 cases compared to 4
in 2022. The potential of these incidents
were low, and we had zero high-potential
incidents across the Company for the year.
To mitigate the elevated physical risks and
the unique nature of offshore working, we
formed a partnership with International SOS
and established the BeWell program for
offshore crew. The objective was to provide
the opportunity to undertake voluntary
health checks with individual follow-up to
promote and maintain a healthy lifestyle
onboard and at home. The program was fully
rolled out 1. December onboard all vessels,
and in only 30 days we had 180 participants
complete the voluntary health check.
To mitigate the risk of major cyber security
incidents, we initiated a process for ISO
27001 certication for information security
management systems and expect to obtain
the certication in 2024.
ESRS S1-14
Health, Safety and Security
Indicator
2022 2023
Lost Time Injury (LTI) 2 1
Restricted Work Case (RWC) 1 0
Medical Treatment Case (MTC) 1 2
# Total Recordable Incidents 4 3
High Potential Incidents 0 0
Man-hours (millions) 3.9 4.8
Lost Time Incident Frequency (LTIF) 0.52 0.21
Total Recordable Case Frequency (TRCF) 1.03 0.62
High Potential Incident Frequency (HIPO) 0.00 0.00
Fatalities 0 0
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PGS Annual Report 2023 26
PGS had 1,210 regular employees and
temporarily contracted personnel as of
December 31, 2023, compared to 1,139 as
of December 31, 2022. The increase is due
to higher activity and increased hiring of
onshore and offshore employees. Note that
in preparation for compliance with CSRD for
FY 2024, statistics on employee numbers
for FY 2023 and FY 2022 include temporarily
contracted persons.
As of December 31, 2023, PGS employees
represented 53 nationalities. 29% of the
oce-based employees and 3% of offshore
employees are women). Among employees
in Norway, 34% are women. The Board of
Directors has four male and three female
shareholder elected directors, and one male
and two female employee-elected directors.
In 2023, we continued our focus to build
skills and capabilities among our employees
that we have identied as necessary for
the future. Besides technical and social
skills courses, we launched several global
learning initiatives, such as:
y Utilizing new technologies to reduce
crew travel for training and improve
sustainability.
y Implemented new ways to create
engaging multimedia presentations of
expert’s technical presentations using
synthetic voice and animation.
y Offered external professional coaching.
y Offered psychological safety workshops
to all employees.
The total number of hours recorded
for training was 16,969 of which 25%
represented operational/technical training.
The average training hours per employee
was 14.4.
In support of Sustainability Development
Goal 04 Quality Education, and PGS’ Goal to
promote education in geology, geophysics,
mathematics, and digitalization, we have
furthered our efforts in 2023 by providing:
y Financial support for 6 PhD students
(5 female and 1 male) and delivered one
guest lecture in Ghana.
y Financial support for 184 students (110
female and 74 male) and installing solar
panels in one school in Angola.
y Sharing knowledge in 21 exhibition
and sponsoring at conferences and
meetings, including contributing to with
articles and publications.
ESRS S1
Future Workforce
ESRS S1-4
Respecting the Rights of People
For our ocial report in accordance with
section 54(1) of the Modern Slavery Act 2015,
on our efforts to prevent modern slavery
for the nancial year ending December 31,
2023, and an account of the due diligence
performed by PGS ASA in accordance with
the enacted Norwegian Transparency Act,
the combined statement is available at pgs.
com.
For historical gures, the Company’s
Sustainability Report 2022 is available on
www.pgs.com. For supplementary metrics,
the Additional Sustainability Disclosures
document is available at pgs.com.
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With reference to ESRS G1-4, PGS can
conrm that in 2023, zero corruption cases,
nor any allegations or requirements to
investigate corruption were recorded.
For ESRS G1-6 – Payment practices, the tax
payment to governments and economic
activity are illustrated by country in
percentages.
In 2023, PGS paid $ 61.9 million in corporate
taxes, employer taxes and revenue shares to
governments.
The graph below outlines the countries to
which PGS made these payments. Note that
the total amount does not include taxes
incurred and paid by JV entities where PGS
is not a controlling/majority owner, nor VAT
and other transactional taxes that can be
reclaimed.
ESRS G1
Business Ethics and Integrity
For an overview of supplementary
sustainability metrics related to Governance,
the Additional Sustainability Disclosures are
available at www.pgs.com.
With reference to ESRS G1-2 – management
of relationships with suppliers, the number
of active suppliers in PGS during 2023 was
~2,000, and of those, ~570 are key suppliers
in PGS’s value chain. Suppliers and business
partners engaged in the compliance, anti-
corruption, and bribery control program
increased by 5% in 2022 to 304 participants
in 2023. Of the 304 participants, 88 are
subject to regular enhanced due diligence,
which includes screening in specialized
tools, distributing questionnaires, requesting
documentation, training, and certication
of compliance. Further, 96 suppliers are
subject to automated continuous compliance
monitoring.
For anti-corruption and with reference to
ESRS G1-3, ninety three percent of the about
hundred employees that we have determined
to be in more exposed roles received physical
training in 2023. Eighty six percent of all
employees on vessels and in oces completed
the e-learning. Further, 60 of our business
partners with an inherently higher exposure
to corruption, conrmed anti-corruption
compliance and training as part of the PGS
anti-corruption program.
Country % contribution of corporate taxes,
employer taxes and revenue share
Brazil 23.1%
Norway 13.2%
Nigeria 10.9%
Angola 10.5%
Other 10.2%
United Kingdom 8.3%
Malaysia 5.3%
United States 5.1%
Egypt 4.9%
Japan 3.3%
Cote D’Ivoire 2.7% Canada 2.6%
Other
Tax
contribution
%
Trinidad &
Tobago
0.38%
Singapore 0.71%
Sao Tome &
Principe
0.31%
Namibia 1.85%
Kazakhstan 0.25%
Ivory Coast 0.01%
Indonesia 1.92%
Guyana 1.99%
Ghana 1.17%
France 0.13%
Cyprus 0.72%
Congo 1.71%
PGS Annual Report 2023 28
The marine seismic acquisition market continued to improve in 2023 with
increasing margins for contract work and a higher pre-funding revenue for new
MultiClient surveys. However, PGS’ revenues declined year-over-year due to a
combination of low MultiClient late sales and unexpected vessel scheduling and
operational challenges.
In 2023 PGS successfully renanced the majority of its debt maturing in 2024
and reduced gross interest-bearing debt by approximately 25%. In September
2023, PGS and TGS announced the intention to merge, aiming to establish
the premier energy data company. The merger makes strategic sense and
close to all shareholders in both companies approved the transaction at the
extraordinary general meetings in December.
BOARD OF DIRECTORS’ REPORT
PGS is organized in four primary
business units: Sales & Services, New
Energy, Operations and Technology &
Digitalization.
y Sales & Services promotes and sells all
PGS’ products and services to energy
companies
y New Energy assesses and develops
business opportunities within the
energy transition markets where PGS
can diversify its service portfolio and
revenues
y Operations manages vessel operations
and marine seismic acquisition
projects
y Technology & Digitalization manages
research and development, PGS digital
transformation and Enterprise IT
PGS is a fully integrated marine geophysical
company that provides a broad range of
seismic and reservoir services, including
data acquisition, imaging, interpretation,
and eld evaluation. The Company’s
services are provided to the oil and gas
industry, as well as to the broader and
emerging new energy industries, including
carbon storage and offshore wind. The
Company operates on a worldwide basis
with headquarters in Oslo, Norway.
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PGS Annual Report 2023 29
2023 Business Highlights
y Increased MultiClient pre-funding revenues by 31% and reported
a MultiClient pre-funding level of 138% of capitalized cash
investments.
y Successfully entered the offshore wind site characterization market
and triggered signicant client interest for the ecient geophysical
approach of conducting site characterization.
y Completed renancing by issuing a new 4-year $450 million senior
secured bond in Q1 and a $75 million term loan in Q3.
y Reduced gross interest-bearing debt by approximately 25%, to $778
million.
y Contract prices and margins showed further improvement
compared to 2022.
y Strong progress on digitalization with close to all imaging work
moved to the cloud, providing scale, exibility and always access to
the best hardware technology.
y Commenced initiative to advance the data transmission capabilities
from our vessels, by utilizing satellite technology to reduce
turnaround time and costs.
y PGS Shareholders approved merger with TGS, and the Company
successfully completed a private placement of $40.6 million to
increase liquidity and further contribute to a nancially robust
combined entity following the merger.
Strategy
PGS is a fully integrated marine seismic
acquisition and imaging company, offering
a full range of towed streamer acquisition
and imaging services through both the
proprietary contract (“Contract”) and
MultiClient business models. Being in control
of seismic acquisition vessels, imaging and
technology, positions PGS to deliver the best
and most exible solutions to clients under
any contract type.
Capital expenditures relating to the Ramform
Titan-class new build program, followed by
a prolonged industry downturn from 2014 to
2018 and severe impact from the COVID-19
pandemic, led to a higher than targeted
interest-bearing debt level. Debt reduction
has been a priority for PGS until a more
sustainable capital structure is achieved
considering the Company’s size and market
cyclicality. Over the last years, PGS has made
signicant progress in optimizing its capital
structure.
The PGS business strategy comprises the
following key priorities:
y Leverage integration across the PGS
value chain
PGS aims to fully utilize the Contract,
MultiClient and the New Energy
markets in combination with integrated
commercial models to build vessel
campaigns maximizing eet utilization.
The Company intends to capitalize on
selling joint acquisition and imaging
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services as a complete solution to
optimize margins and vessel utilization.
y Leading provider of high-resolution
seismic for near-eld exploration,
production (4D) seismic and Carbon
Capture and Storage (“CCS”)
The energy transition drives increasing
focus towards near-eld exploration
and production seismic. PGS is well
positioned in these market segments
with the Ramform acquisition platform
and GeoStreamer technology. PGS
intends to improve exposure and
protability further by creating
geologically driven geophysical
workows and solutions tailored
towards infrastructure-led exploration,
appraisal, and development. PGS
intends to bundle imaging with baseline
4D programs to increase strike rate
for future monitoring contracts.
Systematic MultiClient data rejuvenation
in mature basins is done with the
purpose of creating multi-purpose
products for hydrocarbon detection
and carbon storage use. Targeted New
Energy markets require ultra-high
resolution seismic, which PGS offers.
y Develop New Energy into a signicant
business unit
PGS is progressing well on establishing
a well-recognized presence in markets
within the offshore renewables and
energy transition domains. PGS
intends to build a business with
growing revenues as fast as these
opportunities materialize. PGS has
identied carbon storage, offshore wind
and marine minerals as areas where
the Company can match its assets,
competence, and capabilities to address
industry challenges. During 2022 PGS
established a strong position in the
carbon storage geoservices market
and continued to make MultiClient data
sales related to development of CCS
projects. In 2023 PGS successfully
entered the offshore wind site
characterization market by award and
completion of the rst survey using its
ultra-high resolution 3D technology. The
Company’s offering attracts signicant
client interest and further awards have
resulted in a strong order book for
offshore wind site characterization work
extending well into 2024.
y Increase speed and penetration of
digitalization
Scope and speed of digitalization is
accelerating and PGS is working on
three main pillars of digitalization
projects:
PGS Eos - Enabling faster processing
and imaging of seismic data, using cloud
scalability and automated workows.
During 2023 PGS has moved most of its
imaging work to the cloud, capitalizing
on the unprecedented scale and
exibility, while always having access to
state-of-the-art hardware and software
and to a lower cost compared to
previous in-house data center solutions.
MultiClient OnDemand - A cloud-based
MultiClient sales platform that enables
new sales models and allows clients to
collaborate on high-quality data and
achieve faster subsurface insights and
decisions.
PGS Digital Factory - Includes a suite
of initiatives to build more insights
and analyze patterns and trends. It
utilizes machine learning and articial
intelligence to optimize costs, improve
predictability and performance, reduce
turnaround time, and reveal commercial
opportunities.
y Reduce operating costs and increase
eciency
Fleet operations are a dominant part
of the Company’s cost base. PGS has
developed and implemented a new and
more exible crewing model designed
to reduce cost, without negatively
impacting safety. Next step is to utilize
recent developments in satellite
and communication technology to
streamline data ow processes which
should lead to reduced eet cost. More
widely, the Company is increasingly
taking advantage of its digital toolbox
to improve operational eciency and
reduce capital expenditures.
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PGS Annual Report 2023 31
y Reduce environmental footprint from
our operations
PGS is dedicated to reducing the
risk of harm to the environment and
constantly improving our environmental
performance. Delivering on PGS
Sustainability goals is part of the
Company’s license to operate and more
details are disclosed in the Corporate
Governance and Sustainability sections
on pages 4 and 14 of this report.
Market Development and
Main Businesses
PGS is one of the largest players in the
global marine 3D seismic market.
Historically, seismic activity is closely linked
to the overall exploration and production
spending by energy companies. Several
years of under investments in new oil
and gas supplies in combination with an
increasing focus on energy security are
drivers for the recovery of global exploration
and production activity in recent years.
From a very low level during the Covid-19
pandemic, the seismic market recovery
started in 2021 when energy companies
increased activity on near-eld exploration,
exploration on existing licensed acreage
and 4D reservoir optimization. The seismic
contract business model normally serves
these market segments. The contract
market beneted from the higher activity
with a signicant improvement in 2022 and
a further strengthening during 2023. PGS
has a solid market share in the 4D segment
with its GeoStreamer offering, as well as
steerable streamers and sources, enabling
high data quality and precise replication of
earlier 3D surveys and baseline 4D surveys.
In addition to the structurally growing
efforts to optimize producing elds, there
was a strong renewed focus on exploration,
including frontier areas starting to play
out in 2022. More exploration benets
both the contract and MultiClient markets.
Industry investments in new MultiClient
projects increased signicantly in 2023
and client commitments to these programs
were strong with a pre-funding level of
138% of capitalized investments for PGS.
However, momentum of the recovery did
not progress as anticipated in 2023 likely
owing to continued strong capital discipline
among energy companies and higher than
expected cost ination.
Vessel supply is at historically low levels
and there are two main vessel owning
companies in the seismic industry, PGS
and Shearwater. PGS rigged the Ramform
Victory earmarked to acquire a large 4D
contract offshore Brazil with scheduled
startup around mid-year. Delay of necessary
client permits caused project delays into
2024. Scheduling challenges of the current
active eet, and lower than expected
growth of activity, caused the industry
to operate below full utilization in 2023,
especially in the last quarter.
Sales from MultiClient data libraries ended
lower for the industry in 2023, compared
to 2022 when the industry benetted
from signicant transfer fees, triggered
by mergers and acquisitions among the
energy companies. Further, increasing cost
ination, drilling focus and internal resource
allocation can be explanations for a lower
discretionary spending level among the
energy companies.
The seismic industry entered the new
energy markets in 2022 when several
seismic acquisition projects were
conducted for development of CCS
projects, in addition to MultiClient data
sales for the same purpose. In 2023 PGS
expanded its exposure to the new energy
universe by successfully entering the
offshore wind segment by introducing a
3D geophysical approach to offshore wind
site characterization, signicantly more
ecient than the traditional geotechnical
and 2D approach.
Technology
PGS is concentrating its research and
development efforts on areas of technology
differentiation ranging from seismic
acquisition to subsurface and reservoir
imaging. The Company is capitalizing on
digitalization to improve its operational
eciency, reduce capital expenditures and
develop new digital service offerings.
GeoStreamer, the rst-ever multi-sensor
streamer and a proprietary PGS technology,
was a game changer in streamer technology
and a premier example of PGS’ ability
to differentiate through technology
innovation. GeoStreamer has affected the
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PGS Annual Report 2023 32
way marine streamer data has been used
across the entire E&P life cycle, helping PGS
clients to reduce exploration risk, improve
the delineation of reservoir details, enable
accurate reservoir characterization and
facilitate better production monitoring
and management. The unique design of
GeoStreamer has helped PGS clients to
solve some of their long-standing problems,
such as creating high resolution images of
the very near surface.
Separated Waveeld Imaging (“SWIM”)
is a technology that uniquely uses the
recordings of the two complementary
GeoStreamer sensors to create images
with unseen resolution that signicantly
improve E&P companies understanding of
shallow geology and drilling hazards whilst
simultaneously enabling improvements
in survey eciency – an undertaking
previously viewed as contradictory.
PGS Ultima is an imaging tool to provide
better images faster and address another
of PGS’ clients long-standing challenges
to have access to subsurface images
for quicker decision making. PGS Ultima
moves away from the traditional sequential
processing to a fast simultaneous inversion
process, combining velocity model building
and high-end imaging in a single step. The
imaging tool has the potential to reduce
the time it takes from acquisition to the
nal image on the clients’ workstation by
approximately 50%.
By establishing New Energy, PGS used
increased resources for understanding
the geophysical challenges in these new
markets and to nd geophysical solutions
and limitations with current equipment and
technology. To accelerate suitable product
offerings beyond core assets, PGS equipped
the Sanco Swift with the Company’s Ultra
High Resolution 3D (“UHR3D”) seismic
streamer. The technology is best suited
for detailed imaging on a smaller scale for
targets such as complex, highly fractured,
thin, or compartmentalized formations.
During 2023 PGS proved the application
of the UHR3D streamer technology by
successfully completing its rst offshore
wind site characterization contract and built
an orderbook of follow on work extending
well into 2024. Strong client interest for
PGS ecient geophysical approach to
offshore wind site characterization surveys,
compared to the traditional geotechnical
method, made the Company order an
additional set of HD3D streamers, to be
deployed on a suitable vessel if demand is
sucient.
PGS is imaging most of its data in the cloud,
resulting in signicantly lower cost than
previous in-house solution. Imaging in the
cloud provides unprecedented exibility,
scalability, while always having access to
state-of-the-art hardware. PGS continues
to develop cost effective solutions for cloud
solutions and strives towards improving
eciency and reducing costs further.
In December “PGS IO” was launched, which
will harness new satellite technology to cost
effectively buffer seismic eld data onboard
seismic vessels and seamlessly transfer
it to the cloud. This will drive operational
eciencies and realize an interlinked data
ecosystem enabling further synergies in
cloud-based imaging.
Financial Results
PGS has one operating segment focused
on delivery of seismic data and services,
which matches the internal reporting to
the Company’s executive management.
See Note 4 to the Consolidated Financial
statements for information about principles
applied. In the following, Segment
information is referred to as “Produced”.
In 2023, As Reported revenues according to
IFRS amounted to $721.5 million, compared
to $825.1 million in 2022, a decrease of
$103.6 million, or 13%. The decrease is
driven by lower MultiClient late sales and
contract revenues, partially offset by
a higher volume of MultiClient surveys
completed and delivered to clients, driving
pre-funding revenues.
Produced Revenues, forming the basis for
Segment reporting, amounted to $770.6
million, compared to $817.2 million in 2022,
a decrease of $46.6 million, or 6%. The
reduction is due to lower contract and
MultiClient late sales revenues, partially
offset by higher MultiClient pre-funding
revenues.
Contract revenues ended at $284.6 million,
compared to $336.3 million in 2022, a
decrease of $51.7 million, or 15%, due to less
3D vessel capacity allocated to contract
work, partially offset by higher prices.
Contract revenues for the full year 2023
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PGS Annual Report 2023 33
include $24 million related to offshore wind
site characterization surveys.
MultiClient late sales in 2023 were $202.9
million, compared to $326.7 million in
2022, a decrease of $123.8 million, or 38%.
In 2022 the Company benetted from
signicant transfer fees and recognition
of revenues related to a 2-year MultiClient
access agreement with Shell. The seismic
market is improving, and PGS believes the
increasing exploration focus will positively
impact sales from the MultiClient library
going forward.
As Reported MultiClient pre-funding
revenues according to IFRS 15 in 2023
amounted to $207.7 million, compared to
$139.3 million in 2022, an increase of $68.4
million, or 49%. The increase is a result
of higher volume of MultiClient projects
nalized and delivered to clients.
Produced MultiClient pre-funding revenues
in 2023 amounted to $256.8 million,
compared to $131.4 million in 2022, an
increase of $125.4 million, or 95%. The
increase is due to more 3D vessel capacity
allocated to MultiClient acquisition projects,
a higher MultiClient investment level,
stronger pre-funding commitments from
clients, as well as signicant sales from
surveys in the processing phase.
Produced MultiClient pre-funding revenues
were 138% of capitalized MultiClient cash
investments (excluding capitalized interest),
compared to 123% in 2022. The increased
pre-funding level is mainly due to higher
client exploration activity, stronger pre-
funding of ongoing surveys and signicant
sales from surveys in the processing phase.
Total Produced MultiClient revenues (pre-
funding and late sales combined) increased
by $1.6 million, compared to 2022 and ended
at $459.7 million.
Imaging revenues were $25.5 million in
2023, compared to $22.7 million in 2022, an
increase of $2.8 million, or 12%.
The eet allocation ratio, active 3D vessel
time for marine contract versus MultiClient
data acquisition, was 41:59 in 2023,
compared to 72:28 in 2022.
The Company closely monitors its gross
cash costs. Gross cash costs are dened as
the sum of reported net operating expenses
(excluding depreciation, amortization,
impairments, deferred steaming, net and
other charges, net), the cash operating
costs capitalized as investments in
the MultiClient library, and capitalized
development costs. In 2023 gross cash
costs ended at $539.5 million, an increase
of $51.7 million, or 11%, compared to 2022.
The increase is primarily due to more
operated vessel capacity with Ramform
Victory in 3D seismic operation and
Sanco Swift used as an offshore wind site
characterization vessel, partially offset by
lower fuel and project related costs.
Net operating expenses, which include
cost of sales, expensed research and
development costs, and selling, general and
administrative costs, totaled $333.7 million
in 2023, compared to $370.5 million in 2022,
a decrease of $36.8 million, or 10%. The
decrease is mainly explained by more costs
capitalized MultiClient as cash investment.
Full year 2023, gross research and
development (“R&D”) costs was similar
compared to 2022. Capitalized development
cost increased by $1.0 million, or 12%,
compared to 2022, resulting in overall net
R&D expense in 2023 being 14% lower than
in 2022. The Company’s R&D costs are
mainly incurred to support and develop
core business activities of marine seismic
acquisition and imaging.
Total IFRS amortization of the MultiClient
library in 2023 was $220.4 million,
compared to $241.6 million in 2022, a
decrease of $21.2 million, or 9%. The
decrease is mainly driven by a lower
portion of accelerated amortization and no
impairment charges. Amortization was 54%
of MultiClient revenues, compared to 52% in
2022. The higher amortization rate reects
a lower proportion of late sales in the mix.
The Company recorded no impairments on
the MultiClient library in 2023, compared
to $11.5 million in 2022. The impairments in
2022 primarily relate to projects in North
America and West Africa. The MultiClient
library is assessed for impairment on a
survey-by-survey basis.
2023 gross depreciation was $110.4
million, a decrease of $11.8 million, or 10%,
compared to 2022. This comes because of a
generally lower investment level in property
plant and equipment over recent years.
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Impairment tests on vessels and equipment
are performed at year-end and whenever
there are events, changes in assumptions
or indication of potential loss of value.
During the year 2023 and per December 31,
2023, the Company has not identied any
impairment triggers for the vessels from the
performed tests. The Company did however
recognize $6.6 million of impairments
earlier in 2023 regarding vessel equipment
which was not expected to be taken into
use. The seismic market is recovering, but
the recoverable values of seismic vessels
and other assets are sensitive to the
assumed margins and cycles of the seismic
industry as well as changes to operational
plans. As a result, impairments may arise in
future periods.
EBIT ex. impairment and other charges was
$103.9 million in 2023, compared to $117.1
million in 2022.
In 2023, the share of results from
associated companies amounted to a gain
of $1.7 million, compared to a loss of $5.0
million in 2022. The loss in 2022 mainly
relate to fair value adjustments.
Gross interest expense amounted to $105.4
million in 2023, compared to $109.4 million
in 2022, a decrease of $4.0 million, or 4%.
The decrease is due to a considerable
reduction of gross interest-bearing debt,
partly offset by an increase of LIBOR/SOFR
interest rates, which increases the cost of
oating rate debt, as well as a high interest
rate on the new $450 million bonds.
Other nancial expense, net, was $5.5
million in 2023, compared to $2.6 million in
2022.
Income tax expense, which consists of
current and deferred tax expense, was $9.0
million in 2023, compared to $26.1 million
in 2022. The deferred tax expense in 2023
was a credit of $14.6 million, while there was
no deferred tax expense in 2022. Current
tax expense relates to foreign withholding
tax and corporate tax on prots in certain
countries where PGS has executed projects
or made signicant MultiClient sales,
primarily in Africa and South America.
PGS is subject to taxation in many
jurisdictions around the world with
increasingly complex tax laws. PGS has
identied issues in several jurisdictions that
could eventually make the Company liable
to pay taxes relating to prior years in excess
of the provision recognized in nancial
statements. Reference is made to Note 12
of this annual report for a description of
signicant tax contingencies.
Loss to equity holders of PGS ASA was $14.5
million in 2023, compared to a loss of $32.8
million in 2022.
Cash Flow, Financial
Position and Financing
Net cash provided by operating activities
totaled $467.2 million in 2023, compared
to $371.3 million in 2022. The increase is
primarily due to a more favorable working
capital development and a higher amount
of cash costs capitalized as MultiClient
investment (and reported as cash ow
from investing activities). Cash ow before
nancing activities was $182.0 million in
2023, compared to $209.5 million in 2022.
The reduction, despite the increase of cash
provided by operating activities, is primarily
due to higher capital expenditures and
investments in the MultiClient library.
In 2022, PGS recognized approximately $33
million of revenues relating to a change of
control event where MultiClient transfer
fees were disputed by the clients. Given
the inability to timely conclude the matter,
PGS initiated two separate arbitration
proceedings under the dispute resolution
provisions of the agreements. In October
2023, the tribunal in the rst arbitration
issued a decision in PGS’ favor, including
late payment interest and reasonable legal
costs. The amount due to PGS following
this decision, net of any revenue share to
third parties, was per year-end estimated
to approximately $43 million. This was
received after year-end, early 2024. The
decision relates to agreements where PGS
already recognized $18 million as revenues
in 2022 and as a result PGS recognized
additional $17 million of late sales revenues
in 2023. The second arbitration proceeding,
for which the Company recognized
approximately $15 million in 2022 was
settled in 2023 at an amount more than
covering the amount earlier recognized.
Financing and liquidity
On March 31, 2023, PGS issued bonds of
$450 million at 98% of par (the “Bonds”).
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The Bonds have a 4-year tenor, maturing
March 31, 2027, with a coupon of 13.5% paid
semiannually. The Bonds are non-callable
for 2 years and can thereafter be called at
106.75 per cent of par between March 31,
2025, and September 29, 2025, 105.06 per
cent of par between September 30, 2025,
and March 30, 2026, 103.38 per cent of par
between March 31, 2026, and September 29,
2026, and thereafter 100.50 per cent of par.
The proceeds from the Bonds, together
with cash on balance sheet, were used to
repay $600 million of the Company’s term
loan B (“TLB”).
A new $75 million loan (the “Loan”) was
drawn September 18, 2023, with the net
proceeds used to repay on the TLB. The
Loan has an interest rate of SOFR + 7.00%
and matures December 15, 2026, with
quarterly amortization at a rate of 6.25%
of the original principal amount beginning
on June 30, 2024. The Loan is subject to
the same nancial covenants as the $450
million Bonds.
The December 31, 2023, remaining $69.8
million balance of the TLB (due March 19,
2024) was fully repaid from cash in February
2024.
The Company’s Super Senior Loan of $50
million had a scheduled maturity on March
18, 2024. To align the terms of the Super
Senior Loan to the other remaining debt
instruments post the full repayment of the
TLB, the Company has after December
31, 2023, renanced the loan through
amending, extending and increasing the
Super Senior Loan to $60 million with TGS
ASA as the sole lender at terms similar to
what was otherwise available to PGS in the
market.
The main credit agreements contain
minimum liquidity and maximum leverage
ratio covenants. The Bonds and Loan terms
have a minimum liquidity covenant of $50
million and a maximum leverage ratio (Net
Interest-Bearing Debt to last twelve months
IFRS EBITDA) of 3.00:1 from Q1 2023 to Q4
2024 and 2.50:1 thereafter. On December
31, 2023, the leverage ratio was 1.66:1. The
Company expects to remain in compliance
with the nancial covenants in its credit
agreements going forward.
Further, the main credit agreements
contain general and nancial undertakings
usual for these kinds of nancing
arrangements, restricting the Company in
various ways.
PGS announced on September 18, 2023,
an intention to merge with TGS ASA or one
of its subsidiaries (“TGS”). PGS and TGS
announced on October 25, 2023, that their
respective Board of Directors had approved
and decided upon a denitive merger
agreement and formal merger plan. On
December 1, 2023, shareholders of PGS and
TGS approved the merger plan with close to
100% support at the extraordinary general
meetings. The parties expect that the
merger will be completed during rst half of
2024. The merger plan contains customary
mutual restrictions for both parties until
the merger is completed, as well as certain
unilateral restrictions for PGS in relation
to investments, equity transactions and
nancing.
The agreements for the Bonds and the Loan
both contain change-of-control provisions
triggering put options/mandatory call
for the bondholders/lenders at 101% and
102% of par, respectively, at the time of
completing the merger. The Bonds are
currently trading at a price above 110% of
par which should make it unlikely that the
bondholders will exercise the put option at
101% of par. The TLB and the Super Senior
Loan had change-of-control provisions
requiring the loans to be repaid at the
time of completing the merger unless
maturing earlier or otherwise agreed with
the lenders. The TLB was fully repaid in
February 2024 and PGS has renanced the
Super Senior Loan by amending, extending
and increasing this to $60 million Super
Senior Loan where TGS ASA is the sole
lender.
In Q3 2023, PGS raised approximately $40.6
million of new equity. The proceeds were
used to increase liquidity and to further
contribute to a nancially robust combined
entity following the merger with TGS.
During 2023, PGS reduced gross interest-
bearing debt by $273.2 million ($279.6
million including lease liabilities) and net
interest-bearing debt ended at $542.0
million, a reduction of $74.7 million ($81.1
million including lease liabilities).
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Cash and cash equivalents totaled $177.7
million as of December 31, 2023, compared
to $363.8 million as of December 31, 2022.
Investments
In 2023, total MultiClient cash investment,
excluding capitalized interest, amounted to
$185.9 million, compared to $106.4 million
in 2022, an increase of $79.5 million, or
75%. The increase is primarily due to more
3D vessel capacity allocated to MultiClient
projects.
Capital expenditures, whether paid or not,
totaled $93.5 million in 2023, compared to
$50.2 million in 2022, an increase of $43.3
million, or 86%. The increase is primarily
a result of higher investments in seismic
in-sea equipment and reintroduction of the
Ramform Victory.
Financial Market Risk
The Company is exposed to market
risks such as interest rate risk, currency
exchange risk, credit risk, liquidity risk and
commodity price risk, as discussed below.
The Company’s risk management policies
are approved by the Board of Directors.
The treasury function reports regularly to
Company management and any breach of
limits set in the policy is reported to the
Board of Directors.
Interest Rate Risk
PGS has a mixture of xed and oating
interest rate debt to manage the impact of
interest rate uctuations.
As of December 31, 2023, PGS had $194.8
million of oating interest rate debt, with
interest rates based on up to three-month
SOFR rates, plus a margin. Fixed interest
rate debt amounted to $583.2 million. The
exposure to changes in the interest rate is
reduced by the restricted and unrestricted
cash earning interest at oating
interest rate. For every (hypothetical)
one percentage point increase in SOFR
the annual net interest expense of the
PGS’ net debt, including nance leases,
would decrease (with some delay) by
approximately $0.2 million. The increase in
oating interest rates during 2023 impacted
the net interest cost (after taking into
account interest income on restricted and
unrestricted cash) by less than $0.5 million.
Currency Exchange Risk
PGS conducts business primarily in US
dollars (“$” or “USD”), but also in several
other currencies, including British pounds
(“GBP”), Norwegian kroner (“NOK”), Brazilian
real (“BRL”), euro (“EUR”), and occasionally
currencies like Egyptian Pounds (“EGP”) and
Nigerian Naira (“NGN”). PGS is subject to
foreign currency exchange rate risk on cash
ows related to sales, expenses, nancing,
and investment transactions in currencies
other than the US dollar.
PGS predominantly sells products and
services in US dollars, and to a limited
extent in other currencies. In addition
to USD, a signicant proportion of PGS’
operating expenses are incurred in NOK and
GBP. Less substantial amounts are incurred
in various other currencies. Thus, regarding
expenses and revenues in currencies other
than US dollars, such expenses will typically
exceed revenues.
A stronger US dollar reduces PGS’ operating
expenses as reported in US dollars. It is
estimated that a 10% change of the US
dollar against the two most signicant non-
USD currencies, NOK and GBP, would have
an annual impact on gross cash cost of $11-
14 million and $3-5 million, respectively.
The Company did not have any open foreign
currency forward contracts as of December
31 in 2023 or 2022.
All interest-bearing debt is denominated in
US dollars.
Credit Risk
PGS’ accounts receivable is primarily from
multinational, integrated energy companies
and independent oil and natural gas
companies, including companies that are
owned in whole or in part by governments.
PGS manages the exposure to credit risk
through ongoing credit evaluations of
clients. Due to the nature of PGS’ client
base, a low level of losses on accounts
receivable has been incurred over the years.
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PGS has a structured approach to
monitoring the credit risk of the Company’s
banking partners, including the institutions
in which cash is held on deposit.
Commodity Risk
Operation of seismic vessels requires
substantial fuel purchases, thus PGS is
exposed to fuel price uctuations. Based on
the Company’s fuel consumption in 2023, a
10% increase in fuel prices would increase
the total annual fuel costs by approximately
$9 million. The Company seeks to pass fuel
price risk to clients, and achieves this on a
majority of contract work.
Climate Risk
PGS is exposed to both transition risk and
physical risks associated with climate
change. The Company has a structured
approach to monitoring the development
of the seismic exploration market and
opportunities created by the transition to
renewable energy sources globally. The
Company’s strategy is based on market
scenario analysis and positioning of the
Company for the energy transition by
establishing and developing the ‘New
Energy’ business unit, which is a core
component of the Company’s strategy.
The physical risks associated with climate
change may directly affect both onshore
and offshore operations through increased
occurrence of extreme weather conditions.
The Company mitigates this risk through
reducing the dependency of on-premise
computing by shifting data and processing
to the cloud, careful fact based planning
of projects, and by leveraging the inherent
weather resilience of the Ramform eet and
GeoStreamer technology.
Operational and Other Risks
Demand for the Company’s products and
services depends on the level of spending
by energy companies on hydrocarbon-
resource exploration, eld development,
and production. Spending levels are heavily
inuenced by oil and gas prices and energy
companies’ focus areas. The ongoing
energy transition may cause structural
changes in demand. During 2020 and 2021
there was an increasing focus on extracting
more resources from producing elds and
infrastructure lead exploration. Alongside
this trend, more traditional exploration
activity in greeneld areas came into play
in 2022 and was further accelerated on in
2023, benetting both the contract and the
MultiClient markets.
The Company is subject to many risk factors
including, but not limited to the demand
for seismic services, the demand for data
from the Company’s MultiClient library,
increased competition, the attractiveness
of technology, changes in governmental
regulations affecting the markets, the
speed and impact of the energy transition
and its effect on client behavior, technical
downtime, licenses and permits, currency
and fuel price uctuations and operational
hazards such as weather conditions.
Contracts for services are occasionally
modied by mutual consent and in certain
instances may be cancelled by clients on
short notice without compensation, which
was experienced in 2023. Consequently, the
order book as of any particular date may not
be indicative of actual operating results for
any succeeding period.
Shares, Share Capital and Dividend
As of December 31, 2023, PGS had
955,310,440 shares issued and outstanding,
all of which are of the same class and
carry equal voting and dividend rights.
Each share has a par value of NOK 3. PGS’
ordinary shares are listed on the Oslo Stock
Exchange (ticker: PGS) and denominated in
Norwegian kroner.
In Q3 2023, PGS completed a private
placement with gross proceeds of
approximately $40.6 million. The net
proceeds to the Company is used to
increase liquidity and enable a nancially
robust combined entity following the
proposed merger with TGS, protect the
Company against market cyclicality prior
to the consummation of the merger, and
maintain symmetry with TGS as they did
a concurrent private placement sized to
maintain the agreed relative ownership in
the merger.
As of December 31, 2023, the Company held
839,856 treasury shares.
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PGS Annual Report 2023 38
Sustainability
PGS’ Code of Conduct reects the
Company’s commitment to its shareholders,
clients, employees, and other stakeholders
to carry out business with the utmost
integrity. The Code of Conduct outlines
both what stakeholders can expect from
PGS, and what PGS expects from employees
and anyone working for PGS. Employees of
PGS are also guided by the Company’s Core
Values and Leadership Principles that drive
desired behaviour and culture. The Code
of Conduct, Core Values and Leadership
Principles are available in full on www.pgs.
com.
In 2022, PGS committed to net-zero
greenhouse gas (“GHG”) emissions by 2050
with an absolute reduction in maritime
emissions of 75% and 100% renewable
energy usage onshore. The Company has
also identied activities under the EU
Taxonomy, and in 2023, the total turnover
for these activities was approximately
$34 million, with $10 million from CCS
and $24 million from offshore wind site
characterization projects. More information
on the identication of these activities
is available in the Corporate Governance
section on page 4 of this report.
PGS is committed to the ten principles of
the United Nations Global Compact in the
areas of human rights, labor, environment,
and anti-corruption. The Board of
Directors and the CEO actively ensure
that the Company properly responds to
sustainability challenges. To identify and
assess actual and potential sustainability
risks and opportunities for PGS, the Board
of Directors, and the CEO are involved in the
Company’s double materiality assessment
of material topics and the development
of our strategic objectives and goals
to manage them. In 2023, the double
materiality assessment was extended
to all PGS employees in our journey to
full Corporate Sustainability Reporting
Directive (“CSRD”) compliance for FY 2024.
To identify and report on risks and
opportunities associated with climate
change and the energy transition PGS
uses the OECD Guidelines for Multinational
Enterprises on Responsible Business
Conduct and the frameworks developed by
the Carbon Disclosure Project (“CDP”) and
the Task Force on Climate Related Financial
Disclosures (“TCFD”).
Since 2011, PGS has published a separate
sustainability and ESG report, which
communicates the Company’s progress in
alignment with the recommendations of
the Global Reporting Initiative (“GRI”), and in
2022, we started to transition our reporting
with the CSRD and European Sustainability
Reporting Standards (“ESRS”). PGS has an
ambition to promote the UN Sustainable
Development Goals (“SDGs”) through
concrete actions and goals that are relevant
for the Company’s activities and global
presence. From the materiality assessment
PGS has identied 6 of the 17 SDGs where
the Company contributes; 4-Quality
Education, 7-Affordable and clean energy,
9-Industry, Innovation and Infrastructure,
13-Climate Action, 14-Life Below Water and
16-Peace Justice and Strong Institutions.
A more detailed account of how PGS
manages sustainability risks and
opportunities can be found in the Corporate
Governance and Sustainability sections of
this annual report.
Organization
PGS had 1210* regular employees and
temporarily contracted as of December 31,
2023, compared to 1139* as of December 31,
2022. The increase in 2023 is due to higher
activity and increased hiring of onshore and
offshore employees.
As of December 31, 2023, PGS employees
represented 53 nationalities. 29% of the
oce-based employees and 3% of offshore
employees are women). Among employees
in Norway, 34% are women. The Board of
Directors has four male and three female
shareholder elected directors, and one male
and two female employee-elected directors.
At the headquarters in Oslo, 28% of
management positions are held by
women, and 1% of women working in the
*In preparation for compliance with CSRD (Corporate Social Responsibility Directive) for FY 2024, statistics on
employee numbers for FY 2023 and FY 2022 include temporarily contracted persons.
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Norwegian part of PGS work part-time.
PGS consciously strives to improve the
gender diversity of staff through reporting
and actively encouraging development
and promotion of women to management
roles. The primary development processes
are Performance Management, Potential
Assessment, and Coaching and Mentoring
programs. PGS has scored increasingly
higher on the “She” index in recent years.
Additionally, a disproportionate number
newly recruited geophysicists in PGS are
women. Being a global company, PGS has
a long-standing practice of embracing
cultural diversity, and cultural sensitivity
training is offered to employees.
The average monthly salary of all active
regular employees as of December 2023
was $8,445 ($7,292 for female employees
and $8,806 for male employees) based on
January 2024 exchange rates.
Board of Directors and
Corporate Governance
As of December 31, 2023, the Board of
Directors has the following members:
Walter Qvam (Chairperson), Anne Grethe
Dalane, Richard Herbert, Emeliana Dallan
Rice Oxley, Trond Brandsrud, Ebrahim
Attarzadeh, Shona Grant, Anette Valbø,
Carine Roalkvam and Eivind Vesterås. The
latter three are employee elected Board
members.
The Board has established two sub-
committees: an Audit Committee that
as of December 31, 2023 is comprised of
Anne Grethe Dalane (Chairperson), Trond
Brandsrud, Emeliana Dallan Rice Oxley,
Ebrahim Attarzadeh, and Anette Valbø,
and the Remuneration and Corporate
Governance Committee, that as of
December 31, 2023 is consisting of Walter
Qvam (Chairperson), Richard Herbert,
Shona Grant, Eivind Vesterås and Carine
Roalkvam. The committees predominantly
act as preparatory bodies for the Board
of Directors and assist the Directors in
exercising their responsibilities.
PGS also has a Nomination Committee
elected by the shareholders. As of
December 31, 2023, this committee
consists of Terje Valebjørg (Chairperson),
Alexandra Herger and Jon Arnt Jacobsen.
PGS’ corporate governance principles are
adopted by the Board of Directors. The
Board periodically reviews these principles.
Statements of the corporate governance
structure are described in more detail in
the corporate governance section of this
annual report. The Company’s articles of
association, in addition to full versions of
the rules of procedures for the Board of
Directors, the Audit Committee charter, the
Remuneration and Corporate Governance
Committee charter, the Nomination
Committee charter, and PGS’ Code of
Conduct are available on the Company’s
website www.pgs.com.
Since 2004, PGS has maintained a
compliance hotline operated by an external
service provider to facilitate reporting
of any concerns regarding inappropriate
business conduct. The Company
encourages use of the hotline by anyone
who has concerns relating to compliance
with laws and regulations, breaches of the
code of conduct, fair treatment, or any
other matter. Concerns can also be raised
directly with the General Counsel or any
Board member.
The Board of Directors and the Executive
Management team of PGS Group are
covered by PGS ASA’s Directors and
Ocers Liability Insurance (“D&O”) placed
in the international insurance market on
market standard terms and conditions.
The insurance comprises the directors’ and
ocers’ personal legal liabilities, including
defense- and legal costs. The cover also
includes employees in managerial positions
or employees who become named in a claim
or investigation, or is named co-defendant,
and is extended to include members of
the Company’s management or board
committees.
Outlook
Many future energy outlook scenarios
predict global energy consumption to
continue to increase longer term with oil
and gas remaining an important part of the
energy mix. Offshore reserves will be vital
for future energy supply and support the
longer-term demand for marine seismic
services. The seismic market is improving
on the back of increased focus on energy
security, several years of low investments in
new oil and gas supplies, and attractive oil
and gas prices.
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Offshore energy investments are expected
to continue to increase in 2024. The Board
expects the marine seismic acquisition
market to benet from the higher spending
level and a limited supply of seismic vessels.
Further, the Board expects PGS New Energy
to benet from an increasing demand for
geophysical services for offshore wind site
characterization projects.
The Board emphasizes that valuations
in the nancial statements and forward-
looking statements contained in this report
are based on various assumptions made
by management and the Board, depend on
factors beyond our control, and are subject
to risks and uncertainties. Accordingly,
actual results may differ materially.
Pursuant to section 3-3a of the Norwegian
Accounting Act, the Board conrms that
the 2023 nancial statements have been
prepared on the going concern basis which
the Directors believe to be appropriate.
Allocation of Parent
Company’s result for 2023
The nancial statements of the parent
company, PGS ASA, are prepared and
presented in accordance with generally
accepted accounting principles in Norway
(“NGAAP”). PGS ASA reported a prot of NOK
1,027.3 million for 2023, compared to a loss
of NOK 34.2 million in 2022. PGS ASA is a
holding company with no material operating
activities.
The Board proposes that the prot for 2023
of NOK 1,027.3 million is transferred to
other equity. Total shareholders’ equity in
PGS ASA as of December 31, 2023 was NOK
6,420.8 million corresponding to 98% of
total assets.
Walter Qvam
Chairperson
Richard Herbert
Director
Trond Brandsrud
Director
Shona Grant
Director
Eivind Vesterås
Director
Rune Olav Pedersen
President &
Chief Executive Ocer
Anne Grethe Dalane
Director
Emeliana Dallan Rice Oxley
Director
Ebrahim Attarzadeh
Director
Anette Valbø
Director
Carine Roalkvam
Director
Oslo, April 23, 2024
Board of Directors
PGS ASA
PGS Annual Report 2023 41
Today, the Board of Directors and the Chief
Executive Ocer reviewed and approved
the Board of Directors’ report and the
consolidated and separate annual nancial
statements for PGS ASA, for the year ending
and as of December 31, 2023.
PGS ASA’s consolidated nancial
statements have been prepared and
presented in accordance with IFRSs and
IFRICs as adopted by the EU and additional
disclosure requirements in the Norwegian
Accounting Act, and that should be used
as of December 31, 2023. The separate
nancial statements for PGS ASA have been
prepared in accordance with the Norwegian
Accounting Act and Norwegian accounting
standards as of December 31, 2023. The
Board of Directors report for the group
and the parent company is in accordance
with the requirements of the Norwegian
Accounting Act and Norwegian accounting
standard 16, as of December 31, 2023.
To the best of our knowledge:
y The consolidated and separate annual
nancial statements for 2023 have been
prepared in accordance with applicable
accounting standards.
y The consolidated and separate annual
nancial statements give a true and fair
view of the assets, liabilities, nancial
position, and result of operations as a
whole as of December 31, 2023, for the
group and the parent company.
y The Board of Directors’ report for the
group and the parent company include a
true and fair review of:
- The development and performance of
the business and the position of the
group and the parent company.
- The principal risks and uncertainties
the group and the parent company
face.
RESPONSIBILITY STATEMENT
Walter Qvam
Chairperson
Richard Herbert
Director
Trond Brandsrud
Director
Shona Grant
Director
Eivind Vesterås
Director
Rune Olav Pedersen
President &
Chief Executive Ocer
Anne Grethe Dalane
Director
Emeliana Dallan Rice Oxley
Director
Ebrahim Attarzadeh
Director
Anette Valbø
Director
Carine Roalkvam
Director
Oslo, April 23, 2024
Board of Directors
PGS ASA
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PGS ANNUAL
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2023
2023
FINANCIAL
STATEMENTS
PGS Annual Report 2023 43
ALTERNATIVE PERFORMANCE MEASURES
As required by the European Securities and Markets Authority (“ESMA”) guidelines,
the Company has dened and explained the purpose of its Alternative Performance
Measures (“APMs”) in the paragraphs below.
EBIT, excluding impairments
and other charges
PGS believes that EBIT, excluding
impairments and other charges, is a useful
measure in that the measures provide
an indication of the protability of the
Company’s operating activities for the
period without regard to signicant events
and/or decisions in the period that are
expected to occur less frequently.
Produced revenues
Segment information is referred to as
“Produced”. Produced Revenues, when used
by the Company, means revenues and other
income based on recognition of MultiClient
prefunding revenues on a Percentage-of-
completion (POC) basis. Produced Revenues
is reconciled in Note 4.
Produced EBITDA
Produced EBITDA, when used by the
Company, means Reported EBITDA adjusted
for the difference between Produced
Revenues and Reported Revenues (IFRS).
Produced EBITDA may not be comparable to
other similarly titled measures from other
companies.
The Company has included Produced
EBITDA as a supplemental disclosure
because PGS believes that the measure
provides useful information regarding the
Company’s ability to service debt and to
fund capital expenditures and provides a
helpful measure for comparing its operating
performance with that of other companies.
Produced EBIT, excluding
impairments and other charges
PGS believes that Produced EBIT, excluding
impairments and other charges, is a useful
measure in that it provides an indication of
the protability of the Company’s operating
activities for the period without regard
to signicant events and/or decisions in
the period that are expected to occur less
frequently.
Produced MultiClient pre-funding level
Produced MultiClient pre-funding level
is calculated by dividing the produced
MultiClient pre-funding revenues, as per
segment reporting, by the cash investment
in MultiClient library, as reported in the
Statements of Cash Flows. PGS believes
that the MultiClient pre-funding percentage
is a useful measure in that it provides
some indication of the extent to which the
Company’s nancial risk is reduced on new
MultiClient investments.
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PGS ANNUAL
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PGS Annual Report 2023 44
Net interest-bearing debt
Net interest-bearing debt is dened
as the sum of non-current and current
interest-bearing debt, less cash and cash
equivalents and restricted cash. PGS
believes that net Interest-bearing debt is
a useful measure because it provides an
indication of the hypothetical minimum
necessary debt nancing to which the
Company is subject at balance sheet
date. The Company presents net interest-
bearing debt both including and excluding
lease liabilities.
Liquidity reserve
Liquidity reserve is dened as the sum
of cash and cash equivalents and the un-
drawn part of the Revolving Credit Facility.
Management believes that liquidity reserve
is a useful measure because it provides an
indication of the amount of funds readily
available to the Company in the very short
term at balance sheet date.
Cash ow before nancing activities
Cash ow before nancing activities is
dened as the sum of net cash provided
by operating activities and net cash used
in investing activities, in the consolidated
nancial statements of cash ows.
Order book
Order book is dened as the aggregated
estimated value of future revenues,
measured on a basis consistent with
our Segment reporting principles. This
includes signed customer contracts,
letters of award or where all major
contract terms are agreed. For long term
contracted service agreements the order
book includes estimated revenues for the
nearest 12-month period. PGS believes
that the Order book gure is a useful
measure in that it provides an indication
of the amount of customer backlog and
committed activity in the coming periods.
Capital expenditures,
whether paid or not
Capital expenditures means investments
in property and equipment irrespective of
whether paid in the period but excluding
capitalized interest cost.
Gross cash costs
Gross cash costs are dened as the
sum of reported net operating expenses
(excluding depreciation, amortization,
impairments, deferred steaming, net and
other charges, net) and the cash operating
costs capitalized as investments in the
MultiClient library as well as capitalized
development costs. PGS believes that
the gross cash costs gure is a useful
measure because it provides an indication
of the level of cash costs incurred by the
Company irrespective of the extent to
which the eet is working on MultiClient
projects or the extent to which its R&D
expenditures qualify for capitalization.
Net operating expenses
Net operating expenses are dened
as gross cash costs (as per above) less
capitalized investments in the MultiClient
library and capitalized development
costs. PGS believes this gure is a useful
measure because it provides an indication
of the level of net cash costs incurred by
the Company in running current period
commercial activities that are not devoted
to investment.
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PGS ANNUAL
REPORT
2023
PGS Annual Report 2023 45
APM Reconciliations
EBIT ex. impairment and other charges, net is reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Operating profit (loss) as reported 97.4 106.0
Other charges, net (0.1) (5.7)
Impairment of MultiClient library - 11.5
Impairment and loss on sale of non-current assets (excl. MultiClient library) 6.6 5.3
EBIT ex. impairment and other charges, net 103.9 11 7.1
Segment Reporting, Total Revenues and Other Income, As reported, and Produced revenues are reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Contract seismic 284.6 336.3
MultiClient pre-funding 20 7. 7 139.4
MultiClient late sales 202.9 326.7
Imaging 25.5 22.7
Other Income 0.8 -
Total Revenues and Other Income, As reported 721.5 825.1
Produced MultiClient revenue for projects not yet delivered 84.9 94.0
Produced MultiClient revenue from previous years, projects delivered (35.8) (101.9)
Produced revenues 770.6 817.2
Produced EBITDA, net is reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Operating profit (loss) as reported 97.4 106.0
Produced revenue adjustment to revenue as reported 49.1 (7.9)
Other charges, net (0.1) (5.7)
Amortization and impairment of MultiClient library 220.4 253.1
Depreciation and amortization of non-current assets (excl. MultiClient library) 63.5 95.9
Impairment and loss on sale of non-current assets (excl. MultiClient library) 6.6 5.3
Produced EBITDA 436.9 446.7
Produced EBIT, ex. impairment and other charges, net is reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Operating profit (loss) as reported 97.4 106.0
Produced revenue adjustment to revenue as reported 49.1 (7.9)
Other charges, net (0.1) (5.7)
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PGS ANNUAL
REPORT
2023
PGS Annual Report 2023 46
Net interest-bearing debt is reconciled as follows:
December 31,
(In millions of US dollars) 2023 2022
Cash and cash equivalents 1 77.7 363.8
Restricted cash (current and non-current) 58.4 70.8
Current debt and current portion of non-current debt (131.1) (3 67.1 )
Non-current debt (647.0) (684.2)
Net interest-bearing debt, excluding lease liabilities (542.0) (616.7)
Lease liabilities current (35.8) (32.9)
Lease liabilities non-current (45.0) (54.3)
Net interest-bearing debt, including lease liabilities (622.8) (703.9)
Total capital expenditures, whether paid or not is reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Seismic equipment 50.6 33.3
Vessel upgrades/yard 37.4 11.0
Compute infrastructure/ technology 2.7 5.5
Other 2.8 0.4
Total capital expenditures, whether paid or not 93.5 50.2
Change in working capital and capital leases (4.3) (1.6)
Investment in property and equipment 89.2 48.6
Cash cost, gross and Net operating expenses are reconciled as follows:
Year ended December 31,
(In millions of US dollars) 2023 2022
Cost of sales before investment in MultiClient library (482.5) (433.9)
Research and development costs before capitalized development costs (15.0) (15.0)
Sellling, general and administrative costs (42.0) (38.9)
Cash costs, gross (539.5) (487.8)
Steaming deferral, net 10.8 2.8
Cash investment in MultiClient library 185.9 106.4
Capitalized development costs 9.1 8.1
Net operating expenses (333.7) (370.5)
Segment adjustment to Amortization As Reported (95.9) (0.4)
Impairment of MultiClient library - 11.5
Impairment and loss on sale of non-current assets (excl. MultiClient library) 6.6 5.3
Produced EBIT ex. impairment and other charges, net 57.1 108.8
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PGS ANNUAL
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2023
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PGS ANNUAL
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2023
PGS Annual Report 2023 47
FINANCIAL STATEMENTS
Consolidated Statements of Prot and Loss 50
Consolidated Statements of Comprehensive Income 51
Consolidated Statements of Changes in Shareholders’ Equity 51
Consolidated Statements of Financial Position 52
Consolidated Statements of Cash Flows 53
Note 1 General Information about the Company
and Basis of Presentation 54
Note 2 Summary of Signicant Accounting Policies 54
Note 3 Critical Accounting Judgments, Estimates
and Assumptions 58
Note 4 Segment Reporting 61
Note 5 Revenue from Contracts with Customers 62
Note 6 Other Income 64
Note 7 Cost of Sales 64
Note 8 Depreciation, Amortization and Impairments
of Non-current Assets 64
Note 9 Other Charges, Net 65
Note 10 Interest Expense 65
Note 11 Other Financial Expense, Net 66
Note 12 Income Taxes 66
Note 13 Earnings Per Share Information 68
Note 14 Restricted Cash 68
Note 15 Accrued Revenues and Other Receivables 68
PGS Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Note 16 Other Current Assets 69
Note 17 Property and Equipment 69
Note 18 MultiClient Library 71
Note 19 Other Non-Current Assets 71
Note 20 Other Intangible Assets 72
Note 21 Debt and Guarantees 73
Note 22 Financial Instruments 75
Note 23 Leases, Contingent Liabilities and Provisions 79
Note 24 Accrued Expenses and Other Current Liabilities 80
Note 25 Other Non-Current Liabilities 80
Note 26 Pension Obligations 80
Note 27 Shareholder Information 82
Note 28 Related Party Transactions 84
Note 29 Share Based Payment Programs 84
Note 30 Salaries and Other Personnel Costs, Number of Employees,
and Remuneration to the Board of Directors,
Executive Ocers and Auditors 86
Note 31 Subsidiaries 88
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PGS ANNUAL
REPORT
2023
PGS Annual Report 2023 48
FINANCIAL STATEMENTS
Note 1 Summary of Signicant Accounting Policies 94
Note 2 Intercompany Transactions 94
Note 3 Interest Expense, Net 94
Note 4 Other Financial Items, Net 95
Note 5 Income Taxes 95
Note 6 Shares in Subsidiaries 96
Note 7 Restricted Cash 96
Note 8 Shareholders’ Equity 96
Note 9 Accrued Expenses and Other Short-term Liabilities 97
Note 10 Salaries and Other Personnel Costs, Number
of Employees, and Remuneration to the Board
of Directors, Executive Ocers and Auditors 97
Notes to the Parent Company Financial Statements
Statements of Prot and Loss 91
Statements of Financial Position 92
Statements of Cash Flows 93
PGS ASA Parent Company
CONSOLIDATED
FINANCIAL
STATEMENTS
PGS Annual Report 2023 50
PGS ASA
Consolidated Statements of Prot and Loss
Year ended December 31,
(In millions of US dollars) Note 2023 2022
Revenues 5 720.7 825.1
Other income 6 0.8 -
Total revenues and other income 5 721.5 825.1
Cost of sales 7 (285.8 ) (324.7 )
Research and development costs (5.9 ) (6.9 )
Selling, general and administrative costs (42.0 ) (38.9 )
Amortization and impairment of MultiClient library 8 (220.4 ) (253.1 )
Depreciation and amortization of non-current assets (excl. MultiClient Library) 8 (63.5 ) (95.9 )
Impairment and loss on sale of non-current assets (excl. MultiClient library) 17 (6.6 ) (5.3 )
Other charges, net 9 0.1 5.7
Total operating expenses (624.1 ) (719.1 )
Operating profit (loss)/EBIT (97.4 ) 106.0
Share of results from associated companies 19 1.7 (5.0 )
Interest expense 10 (110.1 ) (110.3 )
Other financial expense, net 11 5.5 2.6
Income (loss) before income tax expense (5.5 ) (6.7 )
Income tax 12 (9.0 ) (26.1 )
Profit (loss) for the year (14.5 ) (32.8 )
Earnings (loss) per share, to ordinary equity holders of PGS ASA: 13
- Basic ($0.02 ) ($0.06 )
- Diluted ($0.02 ) ($0.06 )
PGS Annual Report 2023 51
PGS ASA
Consolidated Statements of Comprehensive Income
Year ended December 31,
(In millions of US dollars) Note 2023 2022
Profit (loss) for the year (14.5 ) (32.8 )
Other Comprehensive income
Actuarial gains (losses) on defined benefit pension plans 26 (7.2 ) 38.4
Items that will not be reclassified to statements of profit and loss (7.2 ) 38.4
Cash flow hedges (1.3 ) 2.6
Other Comprehensive income (loss) from associated companies - -
Items that may be subsequently reclassified to statements of profit and loss (1.3 ) 2.6
Other Comprehensive income (loss), net of tax (8.5 ) 41.0
Total Comprehensive income (loss) to equity holders of PGS ASA (23.0 ) 8.2
PGS ASA
Consolidated Statements of Changes in Shareholders’ Equity
Attributable to equity holders of PGS ASA
(In millions of US dollars)
Share capital
par value
Treasury shares
par value
Additional
paid-in capital
Accumulated
earnings
Other capital
reserves
Shareholders'
equity
Balance as of January 1, 2022 158.9 - 933.1 (840.2 ) (6.7 ) 245.1
Profit (loss) for the period - - - (32.8 ) - (32.8 )
Other Comprehensive income (loss) - - - 38.4 2.6 41.0
Share issue
Share based payments - - 1.2 - - 1.2
Shares capital increase
Acquired treasury shares - (0.2 ) (0.2 ) - - (0.4 )
Share based payments, equity settled - 0.1 (0.1 ) - - -
Balance as of December 31, 2022 313.2 (0.1 ) 1,035.8 (834.6 ) (4.1 ) 510.3
Profit (loss) for the period - - - (14.5 ) - (14.5 )
Other Comprehensive income (loss) - - - (7.2 ) (1.3 ) (8.5 )
Shares capital increase (a) 12.7 - 27.1 - - 39.8
Share based payments - - 2.0 - - 2.0
Acquired treasury shares (b) - (0.5 ) (0.8 ) - - (1.3 )
Share based payments, equity settled (b) - 0.2 (0.2 ) - - -
Balance as of December 31, 2023 325.9 (0.4 ) 1,063.9 (856.3 ) (5.4 ) 527.7
(a) In 2023, the Company issued 45,760,726 new shares following private placements raising gross proceeds of NOK 439,302,970 (approximately USD 40.6 million) as equity. Transaction costs
amounting to ($0.8 ) million are recognized against “Additional paid-in capital”.
(b) In 2023, the Company initiated and completed a share buy-back program to cover settlement of Performance based Restricted Stock Units (“PRSU’s”) granted under the Company’s 2020
Long Term Incentive Plan for employees. 1,575,000 shares were bought back under the program and 530,388 shares were used in settlement to employees.
PGS Annual Report 2023 52
PGS ASA
Consolidated Statements of Financial Position
December 31,
(In millions of US dollars) Note 2023 2022
ASSETS
Current assets
Cash and cash equivalents 22 177.7 363.8
Restricted cash 14 5.0 11.6
Accounts receivables 5, 22 173.1 169.4
Accrued revenues and other receivables 5, 15 137.1 144.9
Other current assets 16 79.6 61.7
Total current assets 572.5 751.4
Non-current assets
Property and equipment 17 751.8 740.4
MultiClient library 18 313.6 300.3
Restricted cash 14 53.4 59.2
Deferred tax assets 12 16.3 -
Other non-current assets 19 34.1 28.6
Other intangible assets 20 74.9 73.4
Total non-current assets 1,244.1 1,201.9
Total assets 1,816.6 1,953.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Interest-bearing debt 21, 22 131.1 367.1
Lease liabilities 21, 22 35.8 32.9
Accounts payable 22 69.2 45.6
Accrued expenses and other current liabilities 24 150.8 104.2
Deferred revenues 5 206.0 154.4
Income taxes payable 12 23.8 20.4
Total current liabilities 616.7 724.6
Non-current liabilities
Interest-bearing debt 21, 22 623.4 659.7
Lease liabilities 21, 22 45.0 54.3
Deferred tax liabilities 12 0.1 0.1
Other non-current liabilities 25 3.7 4.3
Total non-current liabilities 672.2 718.4
Shareholders' equity
Share capital; par value NOK 3; issued and outstanding 955,310,440 shares 27 325.9 313.2
Treasury shares; par value 27 (0.4 ) (0.1 )
Additional paid-in capital 27 1,063.9 1,035.8
Total paid-in capital 1,389.4 1,349.0
Accumulated earnings (856.3 ) (834.6 )
Other capital reserves (5.4 ) (4.1 )
Total shareholders' equity 527.7 510.3
Total liabilities and shareholders equity 1,816.6 1,953.3
Oslo, April 23, 2024
Board of Directors
PGS ASA
Emeliana Dallan Rice Oxley
Director
Anette Valbø
Director
Walter Qvam
Chairperson
Trond Brandsrud
Director
Eivind Vesterås
Director
Anne Grethe Dalane
Director
Ebrahim Attarzadeh
Director
Carine Roalkvam
Director
Richard Herbert
Director
Shona Grant
Director
Rune Olav Pedersen
President & Chief Executive Ocer
PGS Annual Report 2023 53
PGS ASA
Consolidated Statements of Cash Flows
Year ended December 31,
(In millions of US dollars) Note 2023 2022
Income (loss) before income tax expense (5.5 ) (6.7 )
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, impairment 8 290.5 354.2
Share of results in associated companies 19 (1.7 ) 4.9
Interest expense 10 110.1 110.3
Interest income 11 (20.1 ) (7.0 )
Loss (gain) on sale and retirement of assets - (1.0 )
Income taxes paid 12 (20.2 ) (22.5 )
Other items 13.9 6.6
(Increase) decrease in accounts receivables, accrued revenues & other receivables 57.1 (124.7 )
Increase (decrease) in deferred revenues 5 67.0 31.0
Increase (decrease) in accounts payable 23.7 1.2
Change in other current items related to operating activities (29.7 ) 36.1
Change in other non-current items related to operating activities (17.9 ) (11.1 )
Net cash provided by operating activities 467.2 371.3
Investment in MultiClient library 18 (185.9 ) (106.4 )
Investment in property and equipment 17 (89.2 ) (48.6 )
Investment in other intangible assets 20 (10.1 ) (9.8 )
Investment in other current -and non-current assets - 1.8
Proceeds from sale and disposal of assets 17 - 1.2
Net cash provided by (used in) investing activities (285.2 ) (161.8 )
Interest paid on interest-bearing debt (78.2 ) (90.5 )
Proceeds, net of deferred loan costs, from issuance of long-term debt 21 501.9 47.1
Repayment of interest-bearing debt 21 (798.3 ) (170.1 )
Proceeds from share issue (a) 39.8 241.4
Share buy-back (1.3 ) (0.4 )
Payment of lease liabilities (recognized under IFRS 16) 21, 23 (32.0 ) (36.1 )
Payments of leases classified as interest 23 (7.2 ) (6.4 )
Decrease (increase) in restricted cash related to debt service 7.2 (0.7 )
Net cash provided by (used in) financing activities (368.1 ) (15.7 )
Net increase (decrease) in cash and cash equivalents (186.1 ) 193.8
Cash and cash equivalents as of January 1 363.8 170.0
Cash and cash equivalents as of December 31 177.7 363.8
(a) In 2023, the Company issued 45,760,726 new shares following private placements raising gross proceeds of NOK 439,302,970 (approximately $40.6 million) as equity. Transaction costs
amounting to ($0.8 ) million are recognized against “Additional paid-in capital”.
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FINANCIAL
STATEMENTS
PARENT COMPANY
PGS Annual Report 2023 91
PGS ASA (Parent Company)
Statements of Prot and Loss
Year ended December 31,
(In millions of NOK) Note 2023 2022
Revenue 2 - -
Selling, general, administrative and other costs 2 (70.7) (72.9)
Total operating expenses (70.7) (72.9)
Operating loss (70.7) (72.9)
Intercompany interest income (expense) 2 179.3 102.8
Other interest income (expense) 3 0.5 (18.4)
Dividends/group contributions received from subsidiaries 2 883.9 -
Other financial items, net 2, 4 46.7 (45.7)
Income (loss) before income taxes 1,039.6 (34.2)
Income tax 5 (12.5) -
Net income (loss) 1,027.1 (34.2)
PGS Annual Report 2023 92
PGS ASA (Parent Company)
Statements of Financial Position
December 31,
(In millions of NOK) Note 2023 2022
ASSETS
Non-current assets:
Shares in subsidiaries 1, 6 2,262.8 2,262.8
Intercompany receivables 1, 2 4,279.0 2,762.0
Total non-current assets 6,541.8 5,024.8
Current assets:
Intercompany receivables 2 - 2.5
Other current assets 2.7 5.9
Restricted cash 7 0.3 0.3
Cash and cash equivalents 7 0.7 43.4
Total current assets 3.7 52.1
Total assets 6,545.5 5,076.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity:
Share capital; par value NOK 3; issued and outstanding 955,310,440 shares 8 2,855.9 2,718.6
Treasury shares, par value 8 (10.6) (2.0)
Additional paid-in capital 8 7,347.2 7,040.2
Total paid in capital 10,192.6 9,756.8
Other equity 8 (3,771.8) (4,799.0)
Total shareholders' equity 6,420.8 4,957.8
Current liabilities:
Intercompany debt 2 - 13.5
Public duties payable 5 11.3 -
Accrued expenses and other short-term liabilities 9 113.4 105.6
Total current liabilities 124.7 119.1
Total liabilities and shareholders' equity 6,545.5 5,076.9
Oslo, April 23, 2024
Board of Directors
PGS ASA
Emeliana Dallan Rice Oxley
Director
Anette Valbø
Director
Walter Qvam
Chairperson
Trond Brandsrud
Director
Eivind Vesterås
Director
Anne Grethe Dalane
Director
Ebrahim Attarzadeh
Director
Carine Roalkvam
Director
Richard Herbert
Director
Shona Grant
Director
Rune Olav Pedersen
President & Chief Executive Ocer
PGS Annual Report 2023 93
PGS ASA (Parent Company)
Statements of Cash Flows
Year ended December 31,
(In millions of NOK) Note 2023 2022
Cash flows provided by (used in) operating activities:
Net income (loss) 1,039.6 (34.2)
Dividends/group contributions 2 (883.9) -
Tax expenses (12.5) -
Foreign exchange (gain) loss, unrealized 4 54.6 (1.0)
Changes in current assets and current liabilities (43.4) 301.9
Other items 32.6 6 7.6
Net cash provided by (used in) operating activities 187.0 334.3
Cash flows provided by (used in) investing activities:
Reduced (increased) intercompany receivable (debt) 2 (644.0) (2,748.8)
Change in restricted cash 7 - 0.2
Net cash provided by (used in) investing activities (644.0) (2,748.6)
Cash flows provided by (used in) financing activities:
Purchase of treasury shares (8.6) (2.0)
Settlement of treasury shares (4.3) -
Proceeds from share issue (a) 7 427.3 2,423.9
Net cash provided by (used in) financing activities 414.4 2,421.9
Net increase (decrease) in cash and cash equivalents (42.7) 7.6
Cash and cash equivalents at beginning of year 43.7 35.8
Cash and cash equivalents at end of year 1.0 43.4
a) Net of approximately 3% transaction cost.
PGS Annual Report 2023 94
Note 1 — Summary of Signicant Accounting Policies
PGS ASA and its subsidiaries (“PGS” or “the Company”) prepares its consolidated financial statements in accordance with IFRS® Accounting Standards as adopted
by the European Union (“EU”), while the parent company PGS ASA prepares its unconsolidated financial statements in accordance with the regulations on simplified
application of the International Financial Reporting Standards (IFRS) (FOR-2014-11-03-1415), ref. the Norwegian Accounting Act § 3.9 5th paragraph, with comparative
figures for prior year. The functional currency is Norwegian kroner (“NOK”). PGS ASA is located in Oslo, Norway. The address is Lilleakerveien 4C, 0283 Oslo.
PGS ASA applies the same accounting policies as described in note 2 in the notes to the consolidated financial statements where relevant, except that unrealized
foreign exchange gain (loss) on non-current intercompany loans is recognized in the statements of profit and loss.
Shares in subsidiaries (see note 6) are presented at cost less impairment. Impairment is recognized based upon the carrying value of the individual shares and net
intercompany receivables in the subsidiaries less the estimated recoverable amount (based on discounted estimated future cash flows). If estimated recoverable
amounts increase, impairment charges are reversed accordingly. There is no fixed plan for repayment of long-term intercompany receivables and payables.
The statement of cash flows is prepared using the indirect method.
Note 2 — Intercompany Transactions
Transactions with subsidiaries are mainly related to guarantees and financing activities.
Guarantee fee income is NOK 2.0 million and NOK 2.8 million in 2023 and 2022, respectively.
Building service expense is NOK 3.9 million and NOK 5.1 million in 2023 and 2022, respectively.
Management fee and corporate support expense is NOK 37.3 million and NOK 31.0 million in 2023 and 2022, respectively.
Group contributions from subsidiaries amounted to NOK 883.9 million in 2023. There were no dividends or group contributions in 2022.
Intercompany transactions in the statements of profit and loss consist of:
Subsidiaries Year ended December 31, 2023
(In millions of NOK)
Net interest
income (expense)
Net Receivables/
(Liabilities)
Petroleum Geo-Services AS 179.3 3,281.2
Multiklient Invest AS - 883.9
PGS Geophysical AS - 112.1
Petroleum Geo-Services, Inc. - 0.5
PGS Exploration (UK) Ltd. - 1.0
Other - 0.3
Sum transactions intercompany 179.3 4,279.0
Accumulated impairment -
Net transactions intercompany 4,279.0
Subsidiaries Year ended December 31, 2022
(In millions of NOK)
Net interest
income (expense)
Net Receivables/
(Liabilities)
Petroleum Geo-Services AS 102.8 2 761.8
PGS Geophysical AS - (13.5)
PGS Titans AS - 0.8
Petroleum Geo-Services, Inc. - 0.6
PGS Exploration (UK) Ltd. - 0.7
PGS Suporte Logistico e Servicos Ltda. - 0.5
Other - 0.1
Sum transactions intercompany 102.8 2 751.0
Accumulated impairment -
Net transactions intercompany 2 751.0
Note 3 – Interest Expense, Net
Interest expense, net, consists of:
Year ended December 31,
(In millions of NOK) 2023 2022
Interest income, external 0.5 0.6
Interest expense, external - (19.0)
Total 0.5 (18.4)
PGS Annual Report 2023 95
Note 4 – Other Financial Items, Net
Other financial items, net, consist of:
Year ended December 31,
(In millions of NOK) 2023 2022
Foreign currency (loss) gain, realized and unrealized 52.5 (40.0)
Guarantee fee 0.8 2.8
Other (6.6) (8.6)
Total 46.7 (45.7)
Note 5 – Income Taxes
The income tax expense differs from the amounts computed when applying the Norwegian statutory tax rate to income before income taxes as a result of the
following:
Year ended December 31,
(In millions of NOK) 2023 2022
Tax on ordinary profit/loss:
Payable tax - -
Foreign tax and WHT expense 12.5 -
Changes in deferred tax assets - -
Tax expenses on ordinary profit/loss 12.5 -
Taxable income:
Results before tax 1,039.6 (34.2)
Permanent differences (12.0) 30.2
Changes in tempary differences - -
Allocation of loss to be brought forward (1,027.6) -
Taxable income - (4.0)
Payable tax in the balance:
Payable foreign tax and WHT expense 11.3 -
Payable tax on this year’s result 194.5 -
Payable tax on received group contribution (194.5) -
Total payable tax in the balance 11.3 -
Calculation of effective tax rate:
Profit before tax 1,039.6 (34.2)
Calculated tax on profit before tax 228.7 ( 7.5)
Tax effect of permanent differences (2.6) 6.7
Income tax (expense) benefit 226.1 (0.9)
December 31,
(In millions of NOK) 2023 2022
Temporary differences relate to:
Property, plant and equipment 0.1 0.1
Total 0.1 0.1
Accumulated loss to be brought forward (3,787.7) (4,815.0)
Not included in the deferred tax calculation 3,787.7 4,815.0
Deferred tax assets 22% - -
PGS Annual Report 2023 96
Note 6 – Shares in Subsidiaries
Shares in subsidiaries are recognized in PGS ASA balance sheet at cost less any impairment.
As of December 31, 2023
(In millions of NOK)
Registered
office
Shareholding
(a)
Book value
(b)
Equity
(b)
Impairments
2023
Net income
2023
PGS Holding I Ltd (UK) Oslo 100% 2,262.8 2,252.1 - -
PT Petroprima Geo-Servis Nusantara Indonesia 93% - (231.6) - ( 3 7.6)
Total 2,262.8 -
(a) Voting rights are equivalent to shareholding for all companies.
(b) The numbers are preliminary and statutory audit has not been completed.
As of December 31, 2022
(In millions of NOK)
Registered
office
Shareholding
(a)
Book value
(b)
Equity
(b)
Impairments
2022
Net income
2022
PGS Holding I Ltd (UK) Oslo 100% 2,262.8 2,252.1 - -
PT Petroprima Geo-Servis Nusantara Indonesia 93% - (195.2) - (83.0)
Total 2,262.8 -
(a) Voting rights are equivalent to shareholding for all companies.
(b) The numbers are preliminary and statutory audit has not been completed.
For additional information on impairment of shares in subsidiaries and intercompany receivables, see Note 1.
Note 7 – Restricted Cash
Restricted cash consists of:
December 31,
(In millions of NOK) 2023 2022
Payroll withholding taxes 0.3 0.3
Total 0.3 0.3
Note 8 – Shareholders’ Equity
Changes in shareholders’ equity for the years ended December 31, 2023 and 2022 are as follows:
Paid-in capital
(In millions of NOK) Share capital
Treasury shares,
par value
Additional
paid-in capital Other equity
Shareholders’
equity
Balance as of December 31, 2021 1 202.0 (0.0) 5 994.4 (4 764.8) 2 431.5
Share based payments - - 10.1 - 10.1
Shares issued at conversion of convertible bond 65.8 - 59.7 - 125.5
Shares issued for cash consideration 1,450.8 - 973.1 - 2,423.9
Acquired treasury shares - (2.0) (1.6) - (3.6)
Interest rate swap (net of tax) - - 4.6 - 4.6
Net income (loss) - - - (34.2) (34.2)
Balance as of December 31, 2022 2,718.6 (2.0) 7,040.2 (4,799.0) 4,957.8
Share based payments - - 21.3 - 21.3
Share capital increase (a) 1 37.3 - 290.0 - 427.3
Acquired treasury shares (b) - (12.9) - - (12.9)
Share based payments, equity/settled (b) - 4.3 (4.3) - -
Net income (loss) - - - 143.3 143.3
Group contribution - - - 883.9 883.9
Balance as of December 31, 2023 2,855.9 (10.6) 7,347.2 (3,771.8) 6,420.8
(a) In 2023, PGS ASA issued 45,760,726 new shares following private placements and a subsequent offering raising approximately NOK 439,302,970 million as equity. Transaction costs
amounting to NOK 12.0 million were recognized against additional paid-in capital.
(b) In 2022, PGS ASA initiated and completed a share buy-back program to cover settlement of Performance based Restricted Stock Units (“PRSU’s”) granted under the Company’s 2020 Long
Term Incentive Plan for employees. 1,575,000 shares were bought back under the programme and 530,388 shares were used in settlement to employees.
PGS Annual Report 2023 97
Note 9 – Accrued Expenses and Other Short-term Liabilities
Accrued expenses and other short-term liabilities consist of the following:
December 31,
(In millions of NOK) 2023 2022
Account payable 111.6 104.3
Accrued employee benefits 1.4 1.2
Other 0.4 0.1
Total 113.4 105.6
Note 10 – Salaries and Other Personnel Costs, Number of Employees,
and Remuneration to the Board of Directors, Executive Ocers and Auditors
Salary and social expenses that are included in cost of sales and selling and general and administrative costs consist of:
Year ended December 31,
(In millions of NOK) 2023 2022
Salaries, bonus and board members compensation 6.9 5.4
Social security 1.1 0.8
Other benefits 0.1 0.1
Total 8.1 6.4
As of December 31, 2023, PGS ASA had 0 employees. Man-years were 0 and 0 for the years 2023 and 2022, respectively.
In 2023 the members of the board were compensated with NOK 6.9 million. For a full listing of Board of Directors, CEO and Other Executive Officers and their
compensation, see note 30 in the consolidated financial statements.
PGS ASA has not provided loans or guarantees to any member of the Board of Directors as of December 31, 2023.
Remuneration of auditor
Fees for audit and other services provided by PGS ASA’s auditor EY who was elected in May 2014, are as follows (exclusive VAT and inclusive out of pocket expenses):
Year ended December 31,
(In millions of NOK) 2023 2022
Audit fees 4.5 4.4
All other fees - 0.1
Total 4.5 4.5
2023
ANNUAL REPORT
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