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Further information regarding criminal charges towards TGS


May 6, 2014 - London

ASKER, NORWAY (6 May 2014): Økokrim, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, has today presented a criminal charge against TGSfor violation of the Norwegian Tax Assessment Act and the Norwegian Securities Trading Act related to a contract entered into with Skeie Energy AS, later known as E&P Holding AS, in 2009. 

The charge claims that TGS contributed to an unwarranted tax refund through the Norwegian Petroleum Tax Act, related to this specific license of seismic data to Skeie Energy. Skeie Energy purchased a license to existing TGS multi-client data mainly in North Sea and Barents Sea. In addition, the company prefunded a large 3D survey in the Hoop area of the Barents Sea. These surveys have since been licensed to multiple customers. 

The payment for the transaction was made through a combination of cash payment and two loans of a total value of gross USD 42.1 million (net USD 29.4 million) which matured at year end 2010. Due to Skeie Energy's failed attempt to raise new capital, the loans were not repaid according to the agreement at the maturity date. TGS has actively tried to collect its receivables from Skeie Energy in the period since default and has recognized an impairment of USD 19.9 million in 2011, such that the remaining net value of the loan is currently USD 9.5 million.

TGS, as a seismic data provider, does not participate in the petroleum tax refund system and received no tax benefits from the sale of seismic data to Skeie.The data sale was included in TGS' net taxable income, subject to an ordinary income tax of 28%. 

With regards to the same transaction, a secondary charge is presented against TGS concerning market manipulation, for disclosing incorrect or inaccurate financial information to the market. 

In TGS' opinion, the contract with Skeie Energy was an ordinary licensing transaction of high quality seismic data in a very prospective region. The sale was therefore treated in the financial statements as such. 

TGS will cooperate with Økokrim to disclose all information in this matter.

Company summary    

TGS-NOPEC Geophysical Company (TGS) provides multi-client geoscience data to oil and gas Exploration and Production companies worldwide.In addition to extensive global geophysical and geological data libraries that include multi-client seismic data, magnetic and gravity data, digital well logs, production data and directional surveys, TGS also offers advanced processing and imaging services, interpretation products, permanent reservoir monitoring and data integration solutions.

For more information visit TGS online at www.tgs.com.

Forward-looking statements and contact information

All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include TGS' reliance on a cyclical industry and principal customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data products at costs commensurate with profitability. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.

TGS-NOPEC Geophysical Company ASA is listed on the Oslo Stock Exchange (OSLO:TGS).

TGS sponsored American Depositary Shares trade on the U.S. over-the-counter market under the symbol "TGSGY".


For additional information about this press release please contact:

Kristian Johansen
Chief Financial Officer
Cell: +47 47 60 33 34
Email: kristian.johansen@tgs.com

Will Ashby
Director Finance Western Hemisphere & Investor Relations
Tel: +1 713 860 2184 
Email: will.ashby@tgs.com

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)




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: TGS via Globenewswire

HUG#1783258

GlobeNewswire

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