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2015-09-29

EMGS: EMGS announce additional cost reductions

Electromagnetic Geoservices ASA (EMGS) announces that the Company implements
additional cost reduction measures reflecting the challenging market
conditions in the oil service industry.
The Company has identified and implemented comprehensive cost reductions on
terms and conditions for sub-contractors and in staff levels. The key
elements of the program are a reduction of the vessel capacity by one vessel,
from three to two vessels, and a corresponding reduction in the global
employee expenses.
EMGS initiated cost reduction measures in the beginning of the first quarter
this year and further measures were announced in June. Based on the
development in revenues so far in 2015, as well as the outlook for the rest
of 2015 and 2016, the Company has decided to implement further cost
reductions.
The Company expects that the additional cost reductions will reduce the annual
operational cost level by approximately USD 35 million. Hence, the results
from the total reductions implemented in 2015 are expected to amount to USD
70 million, reducing the annual operational cost level to below USD 100
million. The Company will have restructuring charges of approximately USD 2.8
million, whereas USD 1.5 million will be booked in the third quarter and USD
1.3 million will be booked in the fourth quarter 2015. In addition, a
provision related to loss on charter agreements of USD 4.4 million will be
booked in the third quarter 2015. The initiatives will be implemented
immediately and yield effects gradually.
Although the market conditions currently are challenging, EMGS believes that
the Company's technology and flexible business model leaves the Company well
positioned for an upturn in the market.
Contacts

Svein Knudsen, EMGS chief financial officer, +47 911 41 149

Charlotte Knudsen, EMGS head of investor relations, +47 97 56 19 59
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 main offices in Trondheim and Oslo,
Norway; Houston, USA; and Kuala Lumpur, Malaysia.
For more information, visitwww.emgs.com
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: EMGS via Globenewswire

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