Update from EMGS

Electromagnetic Geoservices ASA ("EMGS" or the "Company") is pleased to announce that the Company has received a letter of award from an undisclosed customer for a proprietary data acquisition survey in south-east Asia. The total contract value of the survey is estimated to be in excess of USD 20 million. 

Based on the letter of award, the Company has started mobilisation of the BOA Thalassa.

Subject to final contract award, EMGS expects to commence the survey in the first quarter of 2019.

As described in the Company's Q4 2018 report, EMGS is experiencing a challenging market and liquidity situation and there is consequently some uncertainty related to the Company's ability to meet its obligations under the USD 2.5 million free cash covenant under the Company's convertible bond loan and bank facilities. The Company's ability to meet this obligation is dependent on securing sufficient additional backlog and / or late sales from the Company's multi-client library. Should the Company not be able to do this, or be able to raise additional capital through other measures, the going concern assumption may no longer be valid.

The letter of award announced by the Company today marks an important step in securing such additional backlog. This alone is not sufficient to ensure the short-term revenue and cash flow needed by EMGS to be able to meet its obligations under the free cash covenant and continue operations. Therefore, the Company has implemented a number of cost cutting and other measures to address the liquidity situation, in addition to intensifying efforts to secure backlog and multi-client late sales, and obtain further financing.

Additional details will be announced in due course.  

Contact
Hege Veiseth, CFO, +47 99 21 67 43

About EMGS
EMGS, the marine EM market leader, uses its proprietary electromagnetic (EM) technology to support oil and gas companies in their search for offshore hydrocarbons. EMGS supports each stage in the workflow, from survey design and data acquisition to processing and interpretation. The Company's services enable the integration of EM data with seismic and other geophysical and geological information to give explorationists a clearer and more complete understanding of the subsurface. This improves exploration efficiency and reduces risks and the finding costs per barrel.

EMGS operates on a worldwide basis with offices in Trondheim, Oslo, Houston, Mexico City, Rio de Janeiro and Kuala Lumpur.