TGS ASA Stock

Good morning, and welcome to the presentation of TGS Q2 2026 results. My name is Bård Stenberg, Vice President, Investor Relations and Business Intelligence in TGS. Today's presentation will be given by CEO, Kristian Johansen, and CFO, Sven Børre Larsen. Before we start, I would like to draw your attention to the cautionary statement showing on the screen and available in today's presentation and earnings release. After management's concluding remarks, we will open up for questions from the audience. And you can start by typing in questions on the webcast platform during the presentation. So with that, I give the word to you, Kristian.

Thank you, Bård. So I'll start with the highlights for Q2. We had revenues as announced on the 6th business day of $400 million. They're up 30% year-on-year, and it's driven by a very strong multi-client quarter.

Our EBITDA came in at $244 million. That corresponds to a 61% EBITDA margin, well in line with the historical averages of TGS. Then we had a Q2 EBIT of $120 million, and that corresponds to a 30% EBIT margin. I'm particularly pleased about the streamer utilization, came in at 94%, and it's the highest streamer utilization we've had since Q3 of 2013. And this is clear evidence of the fact that the model works, the integrated model where we can shift capacity between multi-client and contract really seems to be working, and this is up considerably from the same quarter of last year, as you remember. We also had a very strong order inflow. We had $377 million of new orders signed during the quarter, and that means that our total order backlog at the end of Q2 is about $756 million, which is in line with what you saw at the end of Q1.

So a very strong backlog, which tees up TGS for the future and future growth. We're also maintaining our quarterly dividend of USD 0.155 per share, so in line with what we've done for quite a few quarters now. And last but not least, after the quarter end, we managed to sell our North American well data business, which again further strengthens our balance sheet and also positions TGS well to get into that guided comfort zone of $250 million to $350 million of net debt.

Which at the time we get there, we will obviously have a discussion with the Board on additional shareholder distribution. So overall, a strong quarter and a relatively positive outlook for TGS, which we will go through in the next couple of slides. So in terms of the business update and the data acquisition activity, as I said, we had a record strong utilization this quarter, and you can really see this by this slide, where you see significant OBN activity in the U.S. Gulf of America, both multi-client and contract. You see the same picture in Norway, where we have a streamer vessel and an OBN crew, and you see 4 multi-client surveys in the South Atlantic margin on both sides, both Brazil and also West Africa.

In addition to that, you see one vessel in Malaysia or Indonesia, which is on a long-term contract with a supermajor. In terms of our multi-client update, as I said, we had a strong multi-client quarter, and you see external revenues of $284 million in Q2 this year. That's more than twice what we had in Q2 of 2025. And as you remember, that was a rather weak quarter for multi-client. I'm particularly pleased to see that multi-client came back and managed significant growth in Q2 of '26. We had high investments in the quarter, $168 million versus $114 million in Q2 of 2025.

And as you will see, we have guided $550 million of multi-client investments for the full year, and it means that you will see that investments will be lower in the second half of the year than they were in the first half of the year, very much in line with our strategy where we're going to shift some of the capacity back from multi-client to contract based on the current vessel and OBN schedule. We had a sales-to-investment last 4 quarters, the last 12 months of about 1.7, and you can notice that, that number is slightly down from what we had 4 quarters leading up to Q2 of 2025. This is obviously due to higher investments and the short-term impact of investing more.

I think when you see investments taper off towards the second half of the year, you will see that number hopefully will come up as well. In terms of the activity summary, we had 2 multi-client projects offshore Brazil. They're both in the Pelotas basin, both Sul and Norte, and these are heavily prefunded projects in a very exciting basin. Number two, we had a multi-client campaign in West Africa with 2 vessels. So we had the Nigeria Laide multi-client 3D survey, and then we also had a 2D survey offshore Angola, which is also a very important strategic basin for TGS to operate. We also completed the APEX 1 ocean Bottom nodes Project in the Gulf of America.

This is a dense node grid where we don't have reliance on underlying streamer data, thanks to a newly developed technology between acquisition and data processing. Interesting thing with that is that it opens up new markets for TGS and also markets where you don't have a lot of underlying data and you can still go out and acquire OBN for exploration purposes. We commenced the Åsta Graben project in Norway. It's a multi-client 3D streamer in the North Sea also in Q2. In terms of new announcements for multi-client, we were awarded exclusive right for acquisition of multi-client data offshore Brunei. And in addition to that, we also announced an agreement with Equatorial Guinea to create an offshore MegaSurvey, which for those of you who have followed TGS for a while, you know that we've done some of these mega surveys in West Africa, and they've turned out to be very successful.

First phase of this project includes about 27,000 kilometers of 2D in addition to 35,000 square kilometers of 3D data. So a very good quarter for multi-client, very excited about the outlook for multi-client as well. As I said, we're probably going to -- or we are going to invest less in the second half, which is hopefully going to have a positive impact on sales-to-investment and free cash flow, but very much in line with the plans that we laid out before the year.

On the Marine Data Acquisition, we had external revenues of $98 million, and they're down from $145 million in the same quarter of last year. But then you see the internal production, so basically the multi-client programs that we are acquiring with our own fleet and capacity, they're up from $70 million to $142 million. So overall, that means that our total revenues grew from $215 million to $240 million for the Marine Data Acquisition business. The EBITDA margin is slightly down, but you should be aware that internal production, we don't apply any margins for internal work. So it means that the entire EBITDA margin of 21% is on the external revenues of $98 million. So if you adjust for that, you will see that we have healthy profitability also in our Marine Data Acquisition business.

In terms of activities, on the streamer side, we continued working on a large contract for a supermajor in Indonesia, as you saw on the previous slide. In addition to that, we commenced contracts both offshore Norway and Angola. On the OBN side, we commenced a large OBN contract in the Gulf of America in addition to having a node-on-a-rope crew fully utilized on multiple projects in the North Sea this quarter. Contract awards, we were awarded a large 4D streamer contract offshore Angola. That is 8 months duration contract.

In addition to awarded an extension to a multi-year OBN contract in the Gulf of America with a super major that we have worked for a number of years in the Gulf of America, and now we have exclusivity to continue to acquire OBN data in that same basin for the same customer. So a great testimony to our technology, to our service quality, et cetera, on the OBN side, where we tend to have a very dominant position in the U.S. Gulf of America. Our Imaging and Technology, starting with the financials in the lower left-hand corner. So we had external revenues of $14 million. That's down from $19 million, but very similar to the marine data acquisition business, we have higher internal production. So we're shifting capacity from external revenues to internal production. You see revenues growing from $12 million to $18 million, which means that total revenues pretty much stayed flat from last year.

And as you remember, last year was a substantial growth from 2024. So we're pretty much running at full capacity on our imaging centers right now. Our EBITDA margin, same explanation as to the previous slide. They're dropping from 40% to 24%. But keep in mind that the majority of revenues or more than 50% of revenues came from internal production with 0 margin.

So then the entire EBITDA is being generated by external revenues. Strong capacity utilization at all centers, as I said, we have an overweight of resources allocated to internal production this quarter. That may change in the future. And again, this goes back to the strategy of being able to shift capacity between multi-client and contract as we see demand and as we see the timing of projects, which is a great advantage that TGS has and very much in line with the strategy that we laid out with the acquisition of PGS a while ago. We expect continued activity growth for imaging in 2026 and also going into 2027. And in terms of technology developments, we have announced a strategic collaboration with a company called Allton to simplify deployment and recovery of ocean bottom nodes. Yes. And in addition to that, we also announced an acquisition of a company called Apparition, which is a step change improvement in operational efficiency on the seismic source side and also on subsurface image clarity.

Which leads me to the next slide. This is Apparition, and this is the acquisition in highlights. So the acquisition of Apparition secured TGS access to proprietary simultaneous source acquisition and separation technology. What it basically means is that you can tow more sources and get away with fewer streamers.

So it increases the productivity and operational efficiency by up to 30%. This is a technology that TGS has tested together with the Gemini source for the last 2 years and very pleased to close in on that acquisition, which means that we fulfill our ambition by having technology leading tools and gadgets from A to Z, both on the acquisition side, but also on the data processing side. So it sort of fills the last hole in our technology suite for the acquisition side. Last but not least, we also announced the sale of the North American -- well data business. This is a business that is probably less known to most of you, but it's an acquisition that TGS made back in the early 2000s. It's been a tremendous success. We've had a good cash flow business for a number of years.

But what we've seen is that it's been a lack of growth, and we've actually seen some declining growth over the past few years. Margins of the business are pretty good. We're very pleased about being able to sell this business for a good price at good multiples. Enverus paid about $100 million upfront for the -- well data business. And in addition to that, there's $15 million in earn-outs that are conditioned on certain milestones. This really goes back to the strategy, sharpening our focus on integrated offshore technology offering, probably going heavier offshore than onshore given the current market dynamics.

We think offshore offers greater growth opportunities versus onshore today. And it's really about executing on the portfolio optimization, capital discipline and again, providing you as shareholders with an accelerated path to higher shareholder distribution for the future. So with that, I'm pleased about the quarter. It's been a very hectic quarter in terms of making 2 M&A transactions in Q2, growing revenues by more than 30% compared to last year and again, showing a strong backlog and order inflow during Q2. So very pleased about that. Sven is now going to go through the financials and give you more details about that, and then I will come back and talk about the outlook for TGS for the remainder of the year and also for the future. Thank you very much.

Thank you for that, Kristian, and good morning to you all. I will start with going through the net revenues by nature for the second quarter of 2026. So if we turn to Page #12, you'll see that we had multi-client revenues of $250 million in total in the quarter. This was largely, of course, generated by our multi-client business unit with $247 million, while other businesses generated $3 million of multi-client revenues in this particular quarter. If you look at the contract revenues on the right-hand side of the page, you'll see that we had $151 million in total contract revenues in the quarter. This was generated by multi-client business unit with $37 million. You may think that it's strange that our multi-client business generates a lot of contract revenue, but that has to do with joint venture projects that the multi-client business units enters into with respect to projects.

So if we get a partner in on a multi-client project, which pays for -- who's paying for 50% or 33% of the cost, that will be booked as contract revenue in the multi-client business unit. The Marine Data Acquisition business unit, MDA had contract revenues of $98 million. Our Imaging business had external contract revenue of $14 million and other businesses had $2 million. So turning to the next page, looking at our produced segment numbers. The multi-client business unit generated $247 million of multi-client licensing revenues.

And as I said, $37 million of JV revenues or contract revenues, which led to a total revenue of $284 million for the multi-client business unit. The EBITDA margin, strong as always in multi-client, $253 million. This compares to Q2 of last year when we had $132 million of multi-client licensing revenue and only $5 million of joint venture contract revenues, which gave a total of $137 million in revenues and an EBITDA of $126 million. Looking at multi-client investments for this quarter, we continue to invest a lot in our multi-client library, $168 million this quarter, almost the same as we had in Q1 and significantly higher than what we saw in the same period of last year with $114 million. Then looking at the MDA business, it had $98 million of external revenues and $142 million of internal production.

So this is obviously a reflection that we are doing a lot of multi-client for the time being. So as you can see from the bar charts in a historical perspective, we keep a very high activity level in our Data Acquisition business. EBITDA came in at $50 million compared to $53 million in the same quarter of last year. Bear in mind that, as Kristian already alluded to, the internal production or the internal revenue is basically charged with a 0% margin, which means that when we are doing a lot of internal multi-client work instead of working for external customers, that will impair the margin for the MDA business unit.

Then looking at the Imaging business unit on the bottom left -- right-hand corner, sorry, -- we had $14 million of external revenue, sorry, for the Imaging business and $18 million of internal production. Again, we are doing a lot of multi-client projects currently, which is also reflected in the Imaging business unit. EBITDA was $8 million in this quarter. Then looking at the group financials. The revenues that I've gone through now gave a total of $400 million -- so that was made up by $250 million of multi-client revenue and $151 million of contract revenue. This compared to $308 million in the same quarter of last year, which consisted of $136 million of multi-client revenue and $172 million of contract revenue.

Then looking at our operating expenses, net operating expenses in Q2 ended up at $156 million after capitalizing $111 million on internal work. This means that gross operating expenses was -- were $267 million in the quarter. In the first half of 2026, we have experienced that operating -- gross operating expenses has been a bit higher than what we originally expected, and that has mainly to do with 3 factors.

Number one, we have had a higher activity level in our marine data acquisition business than anticipated. We've had a record high utilization on our streamer fleet and also somewhat higher activity level on the OBN side than we originally anticipated. Also, we have had a different geographical mix than we had when we originally gave the cost guidance, which means that we have been working more in high-cost countries, and we have had more costs flowing through our accounts. And then we have also experienced some higher fuel prices, which has been related, of course, to the high oil price we've seen during the first half of the year. These higher costs have largely been mitigated by higher revenue.

So it hasn't hurt EBIT to the same extent as the cost increase should suggest. For the second half of the year, we expect cost to go back to the annualized run rate of $950 million as we originally guided for this year, possibly with a bit higher in Q3 and a bit lower in Q4. But it means that in total for the year, the gross operating expenses will be somewhat higher than the original full year guidance of $950 million. Then looking at depreciation and amortization, we had depreciation of $36 million in this quarter compared to $65 million in the same quarter of last year.

Again, the low net depreciation number is a reflection of the high multi-client activity because we capitalize a larger portion of the depreciation of our assets when we're using them for multi-client projects. Straight-line amortization remains fairly stable, $54 million in this quarter. And then we had $34 million of accelerated amortization, which is largely related to ongoing multi-client projects. This gave a total EBIT of $120 million in the quarter, a margin of 30%. This compares to a loss of $22 million in the same quarter of last year. The margin of 30%, as you can see, is also quite strong in compared to both Q1 and Q4 of last year and Q3 of last year.

So we're quite happy with the EBIT development for the group. Then looking at the profit and loss account. We had total revenues of $400 million that I've gone through. Cost of sales, $72 million; personnel costs, $57 million and other operating expenses of $28 million, which gave an EBITDA of $244 million compared to $153 million in the same quarter of last year, subtracting straight-line amortization of $54 million, accelerated amortization of $33 million. We had some -- a smaller impairment of $2 million and depreciation -- net depreciation of $36 million.

And this gave, as I said, an EBIT of $120 million compared to the $22 million of loss of last year. Financial income of $2 million, financial expenses of $13 million and exchange losses of $2.4 million gave a profit before taxes of $107 million for the quarter compared to a loss of $48 million in the same quarter of last year. Then looking at cash flow, and this is the produced cash flow, so it's linked to the produced EBITDA that we present. The EBITDA was $244 million in the quarter. We paid a bit of taxes, $12 million. And then you can see we have negative $78 million in change of balance sheet items, which is essentially net working capital on a produced basis. So we had a big negative contribution from working capital in this particular quarter.

As you may recall, we had a quite positive impact in Q1. It's quite normal that we see a negative impact in working capital in Q2 from a seasonal perspective. It's typically a result of, number one, that we have -- typically have fairly low or reasonably lower multi-client sales in Q1 that is being collected in Q2. And number two, that we typically start-up -- we are in the start-up phase of a lot of projects for the summer season, the Data Acquisition summer season in the Northern Hemisphere. So it's quite normal that there is a significant negative contribution from working capital in Q2, although in this particular Q2, it was probably more negative than normal.

Then we had paid multi-client investments after removing the non-cash elements and also adjusting for multi-client investments that were capitalized in other periods of $148 million. We had CapEx of $24 million, and then we had a small M&A investment in this company Apparition Geoservices, as Kristian talked about, and a bit of interest received, which meant that we had cash flow from investment activities negative by $173 million.

We had a net change in interest-bearing debt and leasing of $2 million negative. We paid interest of $5 million, and we paid dividend of $31 million, which gave a cash -- negative cash flow from financing activities of $37 million, which in total gave a negative net cash flow of $56 million in the quarter. Looking forward to Q3 and Q4, so we expect to see much more positive cash flow in the second half of the year, although we will see some headwind from working capital also in Q3. Again, it has to do with seasonal factors and that we are still started -- we are shifting to different projects now in the very late part of Q2 and Q3. So a lot of that revenue won't be collected until early Q4.

But we expect a quite strong cash flow in the second half as a whole with somewhat weaker in Q3 and quite strong in Q4. And then looking at the balance sheet, I will not go into a whole lot of detail on the balance sheet other than noting that the balance sheet remains very strong. We had -- due to the negative cash flow, we had an increase in net debt to $503 million in -- towards the end of Q2. But if you adjust for the -- well Data Products transaction, we just above $400 million on a pro forma basis at the end of Q2 and with strong cash flow expected for the second half of the year, we would expect to be -- at this stage, we would expect to be within the -- our target range of $250 million to $350 million towards the end of the year.

And this strong balance sheet allows us to continue to pay dividend. So the Board has resolved to maintain the quarterly dividend at USD 0.155 per share. The ex-date is on a week from now on the 30th of July, and the payment date will be on the 13th of August. And as I said, when we expect to come into the guided range of $250 million to $350 million in the not-too-distant future, and that's the time -- point in time when you should expect us to start increasing shareholder distribution. So by that, I'll hand the word back to Kristian, who will take you through the outlook section of the presentation.

Thank you very much, Sven. So the first slide we're showing here is just repeating the same message as we did in Q1. And I think if anything, this message has been further confirmed by our strong numbers in Q2. So I'm just going to repeat the highlights of this. Number one, peak oil has been extended by more than 20 years. And the reason why this is really critical for exploration activity is that if you go back 2 years and you look at the peak oil estimates of between 2030 and 2032, it was really hard to make a strong case for exploration because if you think that overall demand is going to taper down or taper off after 2030, and you know that from the time you buy seismic until you're in production could be between 5 and 10 years, there's not really a strong case for increased seismic spending and exploration spending.

That has, however, changed dramatically over the past 6 months, I would say. And I think most people would agree now that peak oil is not going to happen anytime soon.

Most experts would say that it's not going to happen until after 2050, and that provides a very good background and a very good tee up for exploration spending for the future. And we think a lot of our clients are now going back to the drawing boards in terms of rethinking their strategies in terms of how can they renew their reserves and make sure that they extend the reserve life as the peak oil has been extended by more than 20 years. Second point, reserve life continues to decline. This is rather obvious. If you look at the super majors today, most of them have an a reserve life of between 6 and 9 years. And obviously, that sounds like a lot, but if peak oil is sometime after 2050, it puts a lot of pressure on these companies to continue to invest in their business, increase their reserve life. And some of them are doing that through M&A.

We believe that some of that will shift back to exploration spending and that we will see a new cycle in exploration, potentially starting in 2027. This is not going to change overnight, and we all know that super majors and IOCs and any other E&P company, they set their budgets back in October or November last year. At the time, the oil price started with a 5. So it was in the 50s, and we expected it to be even lower turning into 2026. That has obviously not turned out to be true.

We've actually seen renewed focus on energy security. We've seen higher geopolitical risk. We see a very unstable situation now in the Middle East. We see the same in Russia, Ukraine, which means that a lot of the oil in today's market is sort of trapped. There may be short-term solutions to that, but there is no long-term solution to geopolitical risk, which means that E&P companies will have to diversify their portfolios. They need to look for oil elsewhere in the world, and that is going to be one of the triggers to a new exploration cycle. Point number 4 here is quite interesting in terms of investor sentiment is changing. It used to be the way that if an oil company announced a new discovery, their share price would either stay flat or it would actually go down because of the CapEx requirements related to some of these discoveries.

That is not the case anymore. We finally see that Wall Street is putting value on exploration. And we actually see or Goldman Sachs just reported or published a report where they're saying that oil companies who reinvest in their own business are in general, priced at higher multiples than companies who pay out all their cash flow in dividend. So another very positive sign and another reason why we think that exploration spending will see a recovery and growth from 2027.

Number five here, and this is quite interesting. If you look at the yellow circles on the map, you see discoveries that have been announced on a global basis in 2026. So there's a couple of takeaways from that. Number one, it's actually been pretty decent in terms of exploration success. And we know that exploration success drives exploration spending. So that's good. The second point on that is that if you look underneath the yellow circles, you see that there is basically TGS data everywhere, which means that TGS data is being used to find new oil and gas, and that means that our portfolio is very well positioned for a new exploration up cycle.

If you go to the next slide, this is showing the offshore acreage awards from 2020 to 2025. And then it's on the lower left-hand corner, it shows the offshore exploration wells. And you see that there is no correlation between the 2. Over time, there should be correlation because if you pick up more acreage, -- it is eventually going to drive more exploration spending. It's going to drive a higher number of wells. It's going to drive higher spending on seismic. We haven't seen that yet, but what we've seen and what you can see from the upper left-hand corner bar chart is that we see a sharp increase in offshore acreage awards, meaning that our customers go out and they capture a lot of acreage, and they don't do that for fun. They capture the acreage because they want to drill eventually and they want to buy the seismic to understand the potential of that acreage.

So we think there is a time lag here, but we think this is a really good leading indicator of stronger and higher exploration spending for the future. If you look at 3D streamer contract tenders, yes, there is a positive trend recently, but there is a reason why we don't show this slide every quarter. It's extremely volatile. It's really hard to get a good grasp on what it actually shows. Yes, it's pointing in the positive direction. There is a few caveats to this. Number one, multi-client is not part of it. And as you know and as you saw in Q2, multi-client is actually the majority of our 3D streamer activity.

So I wouldn't read too much into it, but it's always good to see the line pointing in the right direction in terms of contract tendering activity. The reason why it's up now recently is mainly driven by tendering activity in the Asia Pacific region. Again, that could turn down again next quarter or 2 quarters later. But keep in mind that multi-client is not part of this.

And the majority of what we did in Q2 was multi-client, and these are projects that are very much driven by TGS rather than driven by the client. So there are signs of improving streamer and OBN activity. I'll point to the upper bar chart first, and you look at contract vessel months and bids not won and how the outlook for '26 streamer market looks. And right now, we think, number one, it has declined by almost 50% from 2019 to 2025. Based on what we see in the market right now, where we have or the industry has booked about 75% of the expected capacity, we think it's going to be slightly up in '26 versus '25.

And then obviously, the macro data is pointing in the right direction in terms of supporting also continued growth in 2027 in terms of the streamer vessel market. On the OBN side, Sales cycles are longer on the OBN side than on the streamer side. We actually -- as it looks right now, we expect '26 activity to be slightly down from '25, and you see that from TGS' numbers as well. However, we've seen a pickup in terms of tender activity for programs for 2027. So we're still quite optimistic in terms of seeing growth in the OBN market in '27 versus '26. But what we see right now and the sales cycles are pretty long is that '26 may be slightly lower than '25.

Again, the markets are different in terms of -- on the streamer side, there's basically 2 players. On the OBN side, you have 5 players or 5 plus -- so it's a more fragmented supply side, driven by very poor discipline in the past 12 or 18 months. But we've seen some positive signs in that regard, too, where we see some of the smaller players who probably burned their fingers a little bit on big projects that have been picked up at very low margins. And we think right now, the pricing is probably slightly better than what you've seen in the last 12 to 18 months.

We talked about the strong order inflow in the quarter. You see we had an order inflow that is pretty close to what we had in Q1 of '26 following a very strong Q4 and Q3. So overall, the last 4 quarters have been very strong in terms of signing new orders. And as a result, you see a stable order backlog at around $750 million to $800 million, which obviously tees us up really well in terms of continuing to grow the business going forward.

So very pleased that we can come back quarter after quarter and show strong order inflow and backlog. On the right-hand side, we show the expected timing of the Marine Data Acquisition backlog and revenue recognition of that, so it can help you kind of build your models in terms of estimating the next couple of quarters activity on the data acquisition side.

We're also showing booked positions. These are not necessarily the same as backlog. This is more like what we have booked internally where we have booked our vessels and the OBN crews, and it also helps to -- for you to build your models and to estimate the activity level for the near term. So here, we're showing Q3 and Q4 -- you see the composition of streamer contracts, streamer multi-client. And then obviously, there is some planned steaming and yard stays. And then on the OBN side, you see the normalized crew count that we have booked internally now for the next 2 quarters.

I'm not going to touch on the details on that, but it's for your information, and it obviously provides you some information in terms of building your own models. Vessel utilization has been very strong in Q2. I highlighted this as one of the highlights of the quarter. We're super pleased about the ability to move vessels and OBN crews and shifting from multi-client to contract, and it obviously reduces the downtime, which is very expensive, particularly on the streamer side. So we've -- we've improved our internal routines, our internal processes and procedures and very pleased to see such a strong utilization in Q2.

In Q3, we expect it to continue to be very strong. We're saying 85%, which is pretty much as high as it gets. I think 94%, as we said earlier today, is as high as it's been since 2013. Even 85% is a really good number. So very pleased about that. So in terms of the guidance, I think we've been through this already. On the multi-client side, we narrowed the range. We had a range of $525 million to $575 million. Our new number is approximately $550 million, so pretty much in the middle of the range, still supported by strong customer commitments.

We have good funding for all our multi-client programs that we do. And in that regard, very, very positive development on that. CapEx is going to be pretty much the same level as in 2025, and we see that we're tracking pretty much according to that right now. On the gross operating cost, Sven talked about that. Yes, we had higher costs, partly due to the business mix in Q1 and Q2. For the rest of the year, we're planning to be pretty much in line with the annual run rate that we have guided of about $950 million. And then on utilization, again, we see significant increase in streamer vessel utilization, partly driven by higher multiclient activity. But again, as I mentioned previously, we're probably going to see -- or we are going to see a shift from multi-client to more contract in Q3, and these are contracts that are already booked, of course.

On the OBN side, we expect to average about 2 normalized crew counts for 2026. Again, we've already mentioned that our comfort zone in terms of long-term net debt target is $250 million to $350 million. We think we're going to be there in the not-too-distant future, as Sven said. So pretty soon, you will see that we will get into that range, hopefully, and then we will discuss shareholder distribution with our Board, whether that's going to be dividend or share buybacks and what we do with the balance sheet going forward. So we're probably going to talk more about that at the Q3 presentation later this fall.

So in summary, EBITDA and EBIT margins of 61% and 30%, respectively, very pleased about the profitability. Yes, the cost was slightly higher this quarter, partly due to the business mix, but very pleased about the revenues and overall pleased with margins that stack well up against the historical averages. We talked about the streamer vessel utilization, again, 94%, the strongest it's been since 2013. Keep on having high order inflow, which is a good sign that the market is developing in a positive direction, which means that our backlog is substantially higher than it was about a year ago.

We're strengthening the acquisition technology portfolio through the acquisition of Apparition. We're maintaining a quarterly dividend in line with previous quarters. And last but not least, after quarter end, we divested our North American -- well data business, which again further strengthens our already strong balance sheet. So with that, I want to say thank you for the attention. I want to open up for Q&A and hand it over to Bård, please.

Thank you, Kristian. We have a couple of questions from the people on the webcast already. So we can start with a question from John A. Olaisen in ABG. How is the outlook for the vessel utilization over the normally softer winter season? And also, could you comment on your expectations of second half multi-client late sales, please?

Yes. I think the vessel utilization, we see a positive trend.

I think, obviously, if you compare Q2 this year compared to Q2 last year, it's a different world. We are constantly working on signing up new opportunities. Obviously, the winter season is always a bit more challenging. I think Q2 and Q3, you would normally see very high utilization. So it's a bit early to comment specifically on that. But I think overall, we -- when you look at the macro drivers, I think we're quite optimistic. We think it will gradually improve, and we're working 24/7 now with securing backlog for the winter season. So probably going to talk more about that at the next quarter.

I mean the sales cycles are probably between 3 and 6 months for most of the streamer work and slightly longer for OBN. So we still have some time for the streamer backlog to be signed. Commenting on late sales for Q2?

Late sales second half for the year?

Yes. It was fairly strong. I think we came in slightly higher than we expected and probably than most analysts expected. So it was a good quarter in that regard. I think late sales, again, we're pleased about that. I'm sure there's going to be a question on transactions from -- or transfer fees or revenues generated by M&A activity. And yes, we had some of that, but it wasn't substantial this quarter, but there were some M&A-related fees as well. But we're not talking tens of millions of dollars in that regard.

Okay. John A. Olaisen has another question. That's probably to you, Sven Børre. In Q1, you commented that you had experienced delays in finalizing prefunding commitments for a survey in Brazil. Has this prefunding commitment now been closed?

I can answer that question. And the answer is that it has been closed. We said last quarter that we hope to have it signed sometime in late Q2 or early Q3, and it happened in Q2. So obviously pleased about that. So we've closed that. We've signed the deal with the client. We haven't received the cash yet, but obviously, that's going to happen in early Q3.

Next question comes from Kevin Roger in Kepler Cheuvreux. Can you give a sense on what has been the prefunding rate in Q2 and your expectations for the full year?

Yes. We don't report that, so we don't disclose that in detail. I think overall, it's been pretty good. It was a bit lower in the last quarter, and we talked about that one contract where we had a delayed signature by one of our key clients, and this is a big project in Brazil, of course.

That has now been signed up. And I think overall, our -- we're pleased about the prefunding level. We don't feel like we're taking a lot of risk. A lot of the multi-client activity that we have is in very proven basins. There is probably less frontier. I hope to see more frontier going into 2027 in line with a more positive market development. But I'm overall, very pleased about the prefunding, but we don't disclose that number specifically.

And we have a question from an investor. To what degree have you seen data purchases associated with customers' decision to take the high level of new offshore acreage, both into the awards and also post the awards?

Yes, it's a very good question. So I would say that when you look at the acreage awards in 2025 and also leading into 2026, they've been record high. But we haven't seen a lot of seismic activity beforehand. So typically, back in the days or 10 years ago and in the previous peak, you would see a lot of seismic activity followed by acreage awards and then you would do drilling. What we're seeing now is a slight change into that. We see that clients -- our clients can go in and negotiate deals directly with governments without going into -- or going through licensing rounds.

So they basically negotiate exclusively with governments. And in order to do that, you don't need to buy a lot of seismic. I mean if you don't pay for the acreage or if you don't pay a lot for the acreage, you probably don't want to buy a lot of seismic beforehand. You want to use your existing seismic. But of course, if you're going to take it to the next step and you're going to start drilling, then you would need all the seismic you can get. So there's probably a change in that regard in terms of you will see higher sales after acreage grab than before acreage grab, and that's probably the greatest difference that I see now compared to 10 years ago in this business.

There's a fewer number of licensing rounds and there are more direct awards, and that is probably going to be -- it's probably going to change as governments are getting more confident that the acreage they have is competitive.

And at that point, they will probably kick off licensing rounds again. And we've seen some examples of that recently. But again, there's been a lot of direct awards where you don't necessarily buy the seismic beforehand.

And we have another question from the same investor. Can you please share how pricing for the contract business and prefunding ratios for the multi-client business has developed recently?

Yes. I think pricing on the streamer side has been fairly flat. We're not pleased about where it sits at current. We're trying to make sure that we stay disciplined, and I think we have been. We've seen a couple of recent awards that we didn't win and data shows that we were pretty far off. There are some goods and bads related to that. I mean it's always good to get a confirmation that you're disciplined, but it's never good to see that competitors are underpricing you by 15%, 20%.

I mean that's not a good sign for the industry as a whole. So I think -- I mean, they're satisfactory. We can still make a positive return on capital on that, but it's not great. And that's one of the things that we expect to see coming up in a better market and a better market environment, which we expect to see in 2027.

And a follow-up from the same investor. Can you highlight the main new data projects that will be available for multi-client sales for the second half of '26 and going into '27?

Yes. I don't want to disclose that specifically. I think what you need to do is go in and look at press releases and go in and look at surveys that we have completed over the past 12 to 18 months.

And typically, there's a little bit of lag to that because you need to process the data, and that could take anything from 2 to 6 or even 8 months. and that's when the projects become available. But I mean, you can still license data even if you've not completed your data processing. So it's not necessarily a key trigger.

We have a question from a private investor. Which geographies do you see as holding the most potential for acquisition? And are there any significant projects being tendered?

Yes. I think the most promising areas right now, they all sit in the South Atlantic area with Brazil, with Angola, Nigeria. There's a lot of interesting projects being developed and even tendered in that region, both sides of the margin. India is picking up a lot. There are big programs being planned and even awarded in India as we speak.

So that's going to take a lot of vessel capacity for the next 12 to 24 months. And then you have the usual suspects mainly on the OBN side with obviously U.S. Gulf of America and Norway, which is more of a seasonal basin in that regard. But I think there's a lot of the same. I think the highest growth right now. I mean, Brazil keeps delivering. And I think West Africa, you see great potential in terms of growth, particularly, yes, we already see that in '26, and I think that's going to even strengthen in 2027.

And we have another question from Kevin Roger in Kepler Cheuvreux. Sven addressed this in his presentation, but he wanted to be reminded regarding the reason for much better cash flow generation in second half versus first half.

Yes. I mean, you can just look at the balance sheet, and there's $78 million of working capital that has been sold but not collected.

So obviously, that's going to help. Second thing is that we're going to invest less. If you look at the total investments in multi-client for the first half and then you take the $550 million that we guided for the full year and then you distribute that evenly between the last 2 quarters, you will see a far lower outflow based on multi-client activities. So I think that's quite easy to make that calculation.

Very good. Then we don't have any further questions from the people on the webcast. So then I'll give the word back to you, Kristian, for concluding remarks.

Thank you very much. And as I said, it's been a hectic quarter, 2 M&A transactions, high revenue growth, lots of interesting projects all over the world. And we're pleased about the development of the business.

We're pleased that we deliver on our promises. We're really looking forward to see you again after our Q3 presentation later this fall and wish you all a great summer and hope to see you soon. Thank you very much.

Good morning, and welcome to the presentation of TGS presentation of Q1 2026 results. My name is Bard Stenberg, Vice President, Investor Relations and Business Intelligence in TGS. Today's presentation will be given by CEO, Kristian Johansen; and CFO, Sven Peter Larsen. Before we start, I would like to draw your attention to the forward-looking statements showing on the screen and available in today's presentation and earnings release. After management's concluding remarks, we will open up for questions from the audience on the webcast. So with that, I give the word to you, Kristian.

Thanks, Bard. And before we kick off with the highlights of Q1, please allow me to provide a quick backdrop to recent market developments impacting our business going forward. Just a few months ago, the market expected 2026 to be defined by oversupply and continued capital discipline. Today, the picture has changed dramatically. The conflict in the Middle East has disrupted supply, effectively trapping significant volumes of oil, tightening the market and driving higher prices. More importantly, it has fundamentally shifted how our clients think about exploration.

Energy security is once again a top priority. Strategic reserves are being drawn down and reserve replacement has moved back to the forefront after years of underinvestment. Activity is beginning to pick up, particularly outside the Middle East as operators look to secure new diversified sources of supply. That said, this will not happen overnight. Industry budgets for 2026 were set in late 2025, and it will take some time for this shift in sentiment to fully translate into increased spending. However, the direction is clear. What was expected to be a gradual recovery is now shaping into a more urgent and potentially stronger cycle for exploration. And we have good reasons to be increasingly optimistic about the outlook for 2027 and beyond.

In this environment, TGS' data and insights are more relevant than ever, helping our clients move faster with greater confidence as they respond to a rapidly changing energy landscape. So if I move on to the highlights for Q1 of 2026, we had revenues of $321 million, driven by high multi-client activity on the investment side. And as a result of that, we had a utilization of 91% in the quarter. Our Q1 EBITDA was about $200 million. That corresponds to a 62% margin, which is up from last year and pretty much in line with Q4 of 2025.

Our Q1 EBIT was $64 million, and that corresponds to a 20% margin. We had a net cash flow of $29 million, and we have successfully continued to reduce the net debt now to a new level of $424 million. Our order inflow was strong in Q1. We had order inflow of $392 million, and that means that our total order backlog is now $779 million, which is the strongest order backlog TGS has had since 2019. And last but not least, we're maintaining a quarterly dividend of USD 0.155 per share.

Moving on to the business update for the quarter. The first slide is showing our data acquisition activity for Q1. And you can clearly see from this map that we have the majority of activity in Multi-client. So the light blue here, showing the multi-client activity for our streamer vessels in the South Atlantic area shows that we had 5 vessels operating in Q1. We had 3 in Brazil, 1 in the Northern Equatorial margin, 2 in the Polaris play. And then you see 2 vessels on the other side of the margin, one in Nigeria and in Angola, and I will come back to that. Then we had only one contract for our vessel operations, and that was in Indonesia, as you see in the lower right-hand corner of the map.

Moving on to starting with Multi-client. So we had external revenues of $240 million for Multi-client. And we had investments of $178 million and a sales to investment for the last 12 months of 1.7. 1.7 billion is down from the $2.2 billion that we had about a year ago, and this is partly driven, as we have announced previously, with a delay in prefunding of one of the active projects in the South Atlantic area. To summarize the activity for the quarter, we had the Apex-1 ocean bottom node project in the Gulf of America. This is a dense node grid.

And thanks to new technology development developed between acquisition and imaging of TGS, we can actually acquire that data without reliance on underlying streamer data, which is a huge advantage and opens up a new opportunity for us in terms of using OBN for exploration elsewhere in the world. We had a multi-client campaign in West Africa consisting of 2 projects. We commenced a big project in Nigeria. It's called Lee. It's a multi-client 3D survey. And then we also had a project in Angola, which is the Ultra Profundo multi-client 2D survey that we did in the quarter.

We have, as mentioned previously, high multi-client activity in Brazil's exploration basins, 3 Ramform Titan class vessels. Again, as I said, in the Equatorial margin and 2 in the Polaris Basin. And we also see a pickup in terms of frontier activity, and you see that the evidence of that with 2 agreements signed with governments in the quarter, and we see a pickup in interest from governments in terms of signing new MOUs and exclusivity agreements with TGS. So we have one signed in Republic of Equatorial Guinea. And then we have an LOI with a subsidiary of the Libya National Oil Corporation that was also signed this quarter. And again, these are 2 of the most prospective Frontier areas, further showing evidence that Frontier is gradually coming back on the agenda for our clients.

On the Marine Data acquisition, we had external revenues of $58 million, internal production of $137 million. And if you compare that to Q1 of last year, you see that the activity level overall is about the same, but you see a complete shift in terms of how we allocate the vessels. So far more vessel activity on internal projects on multi-clients and then you see less contract. And this is very much in line with the strategy that we lined up and we talked about after Q4. So we said 2026, you will see more multi-client activity. you will see in a relatively weak vessel market, we allocate more of our vessels to Multi-client. And this plays out in terms of Q1 exactly as we planned, where utilization is as high as 91%, so sharply up from the average of last year because we have the flexibility and the ability to move our vessels between contracts and Multi-client as where we see the highest revenue potential and profitability potential.

And you see that from the EBITDA margin as well. We have 19% EBITDA margin in the quarter. But keep in mind that the $137 million of internal production has a 0 margin, which means that all the margin is coming from the external revenues of $58 million. So a strong quarter in terms of profitability as well. In terms of the activity summary, we were awarded an extension to a multiyear OBN contract in the Gulf of America. This is an agreement that we've had for the past 3 years. Now we've extended that further with one of our key clients who is very active in the Gulf of America, particularly in terms of OBN usage. This is a frame agreement. And again, it goes over the next 3 years.

In addition to that, we reintroduced and I'm very pleased to see Ramform Vanguard back in business again and out of stacking. So we have a solid backlog now for the Ramform Vanguard in Europe for the summer season, and we will run a long campaign now funded by multiple parties for offshore wind and site surveying using Vanguard. We also saw contract streamer activity in both West Africa and Indonesia in the quarter, and then we recently signed an OBN contract in the Gulf of America.

Moving on to Imaging and Technology, sort of a similar picture there with a little bit of a shift from external to internal. You see the majority of our production is internal, so $17 million in internal production versus $10 million in Q1 of last year and then $15 million in external revenue. So you see we're able to even grow our external revenues in a quarter where we use most of our capacity on internal production as a result of higher acquisition activity on our vessels for Multi-client. Also strong margin there, 19% margin. And again, internal production, we don't charge any margin. So strong margin on external projects.

In terms of activities, we announced a multiyear strategic agreement with AWS, or Amazon Web Services. I'm extremely excited about this because not only does it provide us the compute that we need and flexibility and scalability in terms of compute, but probably more important and more interesting is the fact that we're working now very closely in a partnership with AWS on Gen AI and what you can do with AI on seismic data. We've already developed very promising models for called seismic foundation models, where you're able to increasingly or get increasingly more efficient in terms of interpretation of data, so you can do things in days now that you spend weeks or even months in the past. And I'm super excited that together with AWS, we can continue to break new barriers in terms of AI for seismic and seismic data.

So again, as we say here, the collaboration is designed to create a foundational shift in Geoscience and again, very excited to follow the outlook of that going forward. new imaging center in KL this quarter, and this builds on a very similar model to what we do in Brazil. Strong utilization at all imaging centers. You see the total of internal production and external revenues is significantly up from last year, and we expect to see that continued activity growth throughout 2026.

So I hand it over to go through our financials, and then I will be back talking about the outlook for the rest of the year and the future. Thank you very much.

Thank you for that, Kristian. I'll start by going through the revenues for Q1. You see here the revenues by nature listed on this page. On the left-hand side, we show a waterfall of our Multi-client revenues in the quarter. Of course, the multi-client business unit is behind most of the Multi-client revenues, $207 million in this quarter. And then we also have a component of $5 million coming from the other category, and that is mostly related to offshore wind measurement and metocean measurement campaigns.

In total, Multi-client revenues amounted to $213 million. On the contract revenue side, you see that multi-client business unit contributes by $33 million in the quarter, and that is related to revenues from JV partners on ongoing multi-client projects. The MDA, the Marine Data acquisition business amounted to $58 million in the quarter. We had $15 million of external revenue from our imaging business and the other category accounted for $3 million, resulting in total net contract revenues of $108 million for the quarter.

If you look at the results by business unit, you see the Multi-client business unit on the top left-hand side with split by the multi-client revenue and the JV revenue in total, $240 million. You have multi-client investments of $176 million, as you can see, a sharp uptick in multi-client investments, as Kristian talked about. On the MDA side, data acquisition side, you see that we had $58 million of external revenue, but we also see the internal production on top.

And as Kristian said, we charge a zero EBIT margin on the internal production. So as you can see, the activity level is pretty high in the quarter and sharply up from Q4 when you also include the internal production. Imaging revenue is a bit down on the external revenue part, $15 million, whereas the internal part related to our own multi-client projects also is up here related to the higher multi-client activity. So as you can see, the overall activity level is more or less flat. And we feel quite confident that we will grow the total amount of activity in our Imaging business this year versus last year.

So if you look at the consolidated numbers, $321 million of revenues that have been well covered by now. So I won't go into more detail there. You see our operating expenses, $122 million net operating expenses in the quarter. This excludes one-off or an extraordinary item, non-cash of $8 million. And then we had $262 million of gross operating expenses in the quarter. As you can see, that is a bit higher than what we have seen in some of the preceding quarters. And this, of course, is partially related to the higher activity level and the high investment activity and partially related to geographical uplifts when you work in regions where you have more geographical related costs that are also reflected in the revenue line, you see that the gross cost will go up. And also, you should also see gross cost to some extent in a longer-term perspective because there are also some periodization effects between the different quarters.

Then looking at depreciation and amortization, we had $36 million of net depreciation in the quarter after capitalizing some of it to multi-client projects. We had straight-line amortization of our multi-client library of $56 million, reasonably stable from the preceding quarters. And we had accelerated amortization of $43 million in the quarter. All in all, this gave us an EBIT of $64 million, excluding this $1 million one-off cost. This corresponds to an EBIT margin of $20 million, which is actually significantly up from the EBIT margin that we saw 1 year ago.

Looking at the P&L, total revenues, $321 million. We had an EBITDA, including this $8 million extraordinary cost of $191 million and $56 million of EBIT, including this cost. Adding on financial income and financial expenses and impacts from currency movements, we ended up with a result before tax in our produced P&L of $44 million in this quarter, which is slightly down compared to the $47 million that we had in the corresponding quarter of last year.

Looking at cash flow. Cash flow was quite strong in the quarter, supported by working capital movements, which is quite normal, of course, in a Q1. So there are, as you know, some seasonal impacts or seasonal effects in our cash flow and working capital movement. We had cash flow from operations of $249 million. We had cash flow from investment activities of $168 million in the quarter. And then we paid down approximately or a little bit more than $30 million of debt in the quarter. And we had -- and in addition, of course, we have some costs relating to IFRS leases. Interest paid were $29 million in the quarter. We pay interest on the bond loan biannually, so Q1, Q3, Q1, Q3 and so on. So we paid that in Q1. And we had normal dividend payments of just above $30 million in the quarter. So all in all, this gave us a net cash position at the end of the quarter of $184 million, as I said, after paying down a bit more than $30 million of debt and after paying $30 million of dividends as well.

As I said, we tend to have some seasonal patterns in our working capital development. So Q1 is typically quite strong from a working capital viewpoint and Q2 tend to be weak. So you should expect to see weaker cash flow in Q2 as a result of the seasonal fluctuations. The balance sheet and note that this is on an IFRS basis. I won't go into details on any of these items other than once again noting that the balance sheet remains very strong and net interest-bearing debt is now down to $424 million as per the end of Q1.

And then we -- this gave us the confidence to continue to sanctioned a dividend of USD 0.155 per share. The ex date is set to 8th of May, and the payment date will be on the 27th of May. By that, I'll leave the word back to you, Kristian.

Thank you, Sven. I'll talk about the outlook now. And I think the first slide sort of speaks to itself and it repeats my introduction message. Exploration is back. And if you look on the left-hand side of this slide, you see 5 different recent reports. It's McKinsey, WoodMac, Goldman Sachs, Financial Times and last but not least, IEA, concluding that the exploration activity that you've seen ever since COVID is not sustainable, and it has to come up. And not only does it have to come up, it has to come up sharply compared to where it's been for the past 5 years. And there are 5 bullet points that I want to go through in more detail in this presentation. Number one starts with peak oil being extended by more than 20 years. This is the conclusion of the IEA report that came out in November last year.

So think about it for a second. If your doctor told you that you had another 20 years to live, you would probably change your priorities. And that's exactly what the oil companies are doing right now. They've been told that peak oil is not going to be 2030 or 2032. It's probably going to be sometime after 2050. And the models of IEA only goes to 2050. So they can't conclude that it's going to peak in 2050. But what they're saying is that it's definitely not going to peak until after 2050. And that means that all companies have to go back on the drawing board. They need to relook at their plans, and they need to start investing in projects now that's going to get in production in 2035 or later, which again is very good news for Frontier activity going forward.

Again, this doesn't change overnight. And I think -- for Q1, obviously, it doesn't happen overnight, and it's not like you're going to see increased spending immediately, but we are increasingly optimistic for the future in terms of exploration, and we get that signal from our clients as well. The second point here is that reserve life continues to decline. I would show a slide showing the development of reserve outlook, and it continues to go sharply down every year. And the reason for that is obviously that the RRR, so the reserve replacement ratio is below 1. And if it's below 1 and you keep on producing as much as you do, then you know that it's just a matter of time until your reserves are going to be unsustainable low. Number three is -- as a result of that, the renewed focus on energy security and geopolitical risk. And this actually started late last fall. We started talking about the energy security and geopolitical risk, and then it was further accelerated, of course, by the war in the Middle East. And now it's on everybody's agenda right now in terms of what do we do when 10 million to 20 million barrels are under high risk going forward. And obviously, inventories are drawn very, very quickly as we speak. And as a result of that, investor sentiment is changing.

So it used to be that investors expected all the capital allocation to go back to share buybacks and dividends. And we actually see now that investors actually prefer companies to continue to reinvest in the business because they see that today's production is not sustainable in 5 or 10 years if you keep on underinvesting in your own business. Last but not least, exploration successes, which we have seen in 2026 are supported by TGS data, which is always a great sign that TGS has data in the right places. So going into further details.

So the first one I have covered before, and I've talked about that. But again, this refers to IEA's World Energy outlook from November 2025, where they make a U-turn compared to what they did about a year before. So in terms of oil and expected demand for oil, you can see the dark blue line. It continues to grow. It continues to grow every year between now and 2050, and that's a significant change from what IEA predicted about 12 months ago.

Natural gas is the same thing. That's a lighter blue, and you see it continues to grow. And if you look at the change in demand expected in 2050 from what IEA said 1 year earlier, oil and natural gas is up 25%. And you see that the one that is down is renewables, which is down 25%. So we're getting more pessimistic about the growth of renewables, and we're getting more optimistic about the growth prospects for oil and gas. And it doesn't mean that renewables is not growing. You see it growing faster than anything else, but it's just not growing as fast as we expected about a year ago. So again, a very positive slide in terms of the outlook for especially Frontier Exploration, where you will see all companies are returning back to Frontier.

The second point is on declining reserve life and what we call an unsustainable RRR. You see the RRRs on the right-hand side, and then you see that they've been consistently one below 100%. And as a result, you see a sharp decline in the reserve life of the major IOCs on the left-hand side. So again, this is obviously not sustainable. It would be sustainable if you had peak oil in 2030, but it's not sustainable if you get another 20 years life expectancy of oil and gas, which is what we have seen quite recently.

Moving on to renewed focus on energy security and geopolitical risk. Of course, this has taken a major change over the past few years, kicking off with the war on the 28th of February, and it will -- it seems like it's just going to continue like that. So the global oil supply actually plummeted by 10.1 million barrels to 97 million in March. This is the largest oil supply disruption in history. And obviously, we're going to see the impact of that in the months to come.

In March, oil prices posted the largest ever monthly gain in wake of the most severe oil supply shock that the world has ever seen. And that again means that the investor sentiment is changing. So the graph on the left-hand side is showing companies that reinvest in the business illustrated with a dark blue line versus companies who underinvest in their business with a lighter blue line. And basically, the definition of that is based on the CapEx to cash flow ratio. So whenever your CapEx to cash flow ratio is over a certain point or over the median, you will belong to the dark blue line. And if you're below the median, it would be the lighter blue. And what you see is a significant change here starting in late October of 2025. Maybe it's a coincidence, but it's about the same time as IEA released their report on another 20 years of extension to peak oil.

But what you see now is that companies who are reinvesting in their business are trading at about 20 percentage points higher share prices than the companies who don't reinvest and allocate all their capital to share buybacks and dividends. And this is a big change compared to what you've seen over the past few years where investors were demanding that you pay out all your excess capital to shareholders rather than reinvesting in your business. If you look at the -- what some of the CEOs are quoted here on the lower right-hand corner, you see Mike Wirth from -- who's the CEO of Chevron, who's saying shale oil production in the U.S. has probably plateaued over the past 6 to 12 months. This is a statement from the CERAWeek in Houston quite recently. BP, so Meg O'Neill, who came in as a new CEO of BP, one of the first public statements she made is that they've set their self a target of 100% reserve replacement by 2027. And that's a big change to where BP has been in the past, and it obviously requires more exploration spending and obviously more data in terms of finding those new barrels.

Last but not least from Galp, Maria said that I know that exploration is all that the industry is talking about these days, quite a change from a few years ago. And again, she can't be more right in terms of making that statement. We've seen a significant change in terms of our clients really getting back to the drawing board in terms of setting plans for exploration for the future.

Number five, and this is probably my favorite slide of the deck, it's showing exploration success, which is supported by TGS data. So you see some of the commercial discoveries that have been made in 2026. ranging from Norway all the way to Brazil, and you see 3 discoveries in the South Atlantic area. You see a couple of discoveries in Gulf of America, et cetera. The point of this slide is that pretty much every discovery that is made in the world today, we go in and we check, do we have data and pretty much 10 out of 10, we have data underneath the discoveries that have been made, which is always great.

Every morning, I wake up, I read the news and I see there's been a discovery. And the first thing I check is our TGS database and see whether we have data there. And again, this year has been fantastic in terms of strong exploration success, but also supported by TGS data, which is also a great proof and evidence that we have -- not only do we have a lot of data, but we also have data at the right places.

So to summarize that, we're extremely well positioned for an exploration up cycle. We've been a major consolidator during the 5-year industry down cycle. And there have been times when I've been thinking, are we too brave because it's certainly taken longer time for this recovery to happen than we thought at the time. Nobody expected this to be a 5-year industry down cycle or even 6 years. We thought it was going to be a relatively quick rebound, but it's great to see now that industry partners, clients and you name it, they're all talking about exploration these days. And TGS is obviously in a unique position, having almost 60% of all the multi-client data in the world, having about 50% of the global fleet for seismic acquisition, having the largest OBN counts for deepwater, et cetera, et cetera.

We have, through these acquisitions, gained a unique geophysical technology suite. If you look at all the technologies that we have today, whether it's a GeoStreamer, whether it's a Ramform vessels, whether it's a Gemini low-frequency source, imaging technologies, and you name it. These are all technologies that TGS has gotten access to through acquisitions of 4 companies during the last 5 years. And it's great to see some TGS used to be asset-light. We didn't even have access to the GeoStreamer. We didn't have access to the Gemini low-frequency source that was marketed by ION at the time. Now we have all these technologies in-house.

And that is probably the key reason that an increasing number of clients prefer to work with TGS, whether it's in streamer business, whether it's OBN or, of course, Multi-client. Talking about Multi-client, we have multi-client data covering all major basins. I touched on the fact that we have about 60% of all the data that has been acquired since 2018, and it's obviously a great position to be in. As you saw from our Q1 numbers, we continue to invest in the business. We continue to be brave, bold, and we think that this will benefit TGS and our shareholders in the future. Last but not least, we have an efficient cost base and a strong balance sheet, and you shouldn't take that for granted in our industry. So looking forward, order backlog and inflow.

We had an order inflow of close to $400 million in Q1. Q1 is usually a rather weak quarter in terms of order inflow, but you see that Q1 stands out this year as a very strong quarter. And that means that our total backlog is close to $800 million now. And if you look at historical data on that, you have to go all the way back to 2019 to see a backlog that is as strong as TGS is reporting for Q1 2026. Right-hand side touches on the expected timing of the backlog, and you can read that yourself. I'm not going to cover that in much detail.

Next slide is showing booked positions for both streamer work and OBN for the next 2 quarters. As you see for Q2 of 2026 on the streamer side, we're pretty much sold out. We have a strong backlog and pretty much all our vessels are now working 100%, which means that utilization will probably be in line with what we saw in Q1, which is record strong, by the way. Then you see in Q3, there is still some work to be sold, but it's mainly Multi-client. You see that there is a pickup in activity on the contract side, which is a good sign. We think that the -- we believe that the contract market will strengthen during the summer and into the latter half of -- or second half of 2026. And again, there are still multiple multi-client projects that will fill up the capacity such that Q3 will probably be at a satisfactory level in terms of utilization as well.

On the OBN work, it's slightly different. You see a relatively low crew count in Q2 of '26. This market has been a bit challenging over the past 1.5 years. We see some signs of improvement. And if you look at Q3, it doesn't look good. I mean it's pretty much the same contract allocation as we had in Q2. But keep in mind that the long-term agreement that we signed for Gulf of America with one of our key partners covering OBN work for the next 3 years, that is already sold. So now it's more about timing, when do we decide to go on and acquire the first project. So it will most likely increase the size of the dark blue bar quite substantially.

So I'm not too worried about the OBN allocation for Q3 and then Q4, it's still early days. But again, it's always good to have some of these long-term contracts with clients because you only sell them once. And then it's more about timing and it's more about discussions with the clients in terms of when do you start the project rather than being part of a tender where you need to spend weeks and months to plan for a project. If we move on to the guidance, as Sven said, no changes in the guidance for 2026. We still expect our multi-client investments to be somewhere between $500 million and $575 million. You've seen that we've gotten off to a very good start in that regard. And I think first half may be slightly higher than the second half because there is a capacity constraint now in terms of vessels, and we're using all our vessels, except for one on Multi-client in Q1. That's probably not going to be the case for the full year.

There's probably going to be a slight shift from Multi-client back to contract in line with a better market. On the CapEx, we expect the same level as in 2025. We get sometimes a question whether we can cut the CapEx further. Yes, we can, but I don't think it would be smart. I think we keep on investing in new technologies. We're really proud of some of the technologies that we have acquired over the past 5 years, and we want to continue to develop these technologies. So I think the level that you've seen in 2025 is quite sustainable also for at least 2026.

Gross operating costs, Sven touched on that. And then in terms of utilization, we're expecting a significant increase in streamer vessel utilization for 2026, and you've already seen the signs of that in Q1. You've seen what is already booked for Q2. So I feel pretty good about that statement. And then we said that OBN activity is expected to be in line with 2025, and I think that still stands as it looks right now.

Our long-term net debt target range is between $250 million and $350 million. You saw that we're getting close to $400 million in net debt now. And obviously, our plan is that as soon as we get down to the guided range, we want to look at capital allocation, see if we should either increase dividends, buy back shares or at least do a full assessment of what does our shareholder prefer.

So in summary, high multi-client activity in the quarter, measured as multi-client investments, of course. And as a result, very strong vessel utilization. I think I talked about it last quarter that in 2025, we had a lot of waste. We had white spaces between different contracts, which cost us a lot of money. We've started out 2026 in a much better way where we've been really efficient in terms of booking vessels, making sure that the next project is ready such that you can move a vessel from A to B very quickly. And we've already seen the results of that in terms of increased utilization, but also lower cost and lower waste, which is great to see. EBITDA and EBIT margins, 62% and 20%, respectively. Very strong order inflow, which means that we have the highest backlog since 2019.

And again, as I've said multiple times, exploration is back. There is renewed focus on energy security. And most importantly, the investor sentiment has changed. We are not changing our guidance. Our 2026 guidance stands. And then last but not least, we maintain our quarterly dividend of $0.155 per share. Thank you very much. And I will now open up for questions, and I will ask Sven to come and join me on the stage.

Thank you very much. Yes, we have a series of questions from the people on the webcast. So starting off with Jon Wisen in ABG. Have you seen any tangible signs of improvements in oil companies eager to buy seismic data? In example, the number of client meetings, leads, tenders, vessels, requests, et cetera? And in which of your segments do you expect to see improvements first? Should we expect any improvements in your 2026 P&L? Or is it more a 2027 event?

Yes. I think in terms of client meetings and client interest, I mean, everyone is talking about exploration these days. And as I said, it doesn't change overnight. It's not like a war that kicks off in late February is going to impact spending on seismic in March. But I think there are clear signs that companies are now going back to their strategy plans, they're meeting with their boards. They're discussing what do we do as a consequence of this. And I think one of the challenges that you've seen over the past few years is that all companies spend all their cash. They spend it on dividend, buybacks and CapEx, and there is no more cash unless they're willing to compromise on shareholder allocation. That is going to change now because now they have more cash. So obviously, what happens with the higher oil price is that you will have higher revenues and better cash flow. And we think and we have reason to believe that some of that will benefit seismic and exploration going forward.

So I guess the answer is, yes, there is more optimism. I've had recent meetings with heads of explorations of some of our biggest clients, and they're definitely confirming that they are back to the drawing board in terms of making plans for the future. And again, as John knows, budgets were set in when the oil price was $62 and with an expectation that it would drop down to the 50s. And now we're in a different world and all companies and especially the super majors don't move very fast. So we think that for '27 and onwards, you will see a change. Whether it's going to happen in '26 based on the stronger cash flow, it's still early, too early to say.

We have a somewhat related question from an investor. You mentioned expectations for more contract work in the second half of the year. Are you seeing firm tenders supporting this already? And when could we expect to see more contracts being awarded?

Yes. There's been a pickup in tender activity, both in OBN and streamer. And as we said in Q4, we don't want to go and compete for, let's say, streamer contracts where the margins are unsustainably low. So we actually shifted a lot of our activity to multi-client, which you saw the results of in Q1 with more multi-client investments and higher utilization. I think we see some signs of a pickup in terms of tender activity, and we are competing for some of that. We're not going to sacrifice on our margins. We're going to be very disciplined in that regard, but we see that there is certainly a volume of contracts out there that justifies that we can switch some of that activity back to contract if the pricing is good enough.

Kevin Roger in Kepler Cheuvreux. This is one for you, Sven. You also mentioned it in the presentation, but you can probably repeat it in terms of working capital. Can you please comment on the working capital movement over the past quarters and what to expect for the coming quarters?

Yes. It's -- we are typically seeing strong, as I said, strong working capital development in Q1. That's a seasonal pattern, and we always -- almost always see a weaker development in Q2, and we don't expect it to be very much different this year. So -- and there -- as I said, there is a pretty significant seasonal pattern where Q1 is strong, Q2 is weak. Q3 is also normally a little bit weak, but much better than Q2 normally. And then Q4 is typically better than Q3 again, but Q1 is normally the best one. And it varies a little bit from year-to-year, the relative strength in working capital movements between the quarters. But over time, that's a reasonable pattern to assume. Yes.

Can I also a question regarding if we could indicate the amount of the delayed prefunding that we did not secure in Q1.

Yes, we don't want to give a number on that. But of course, I mean, you can do the math yourself. It's a big survey. It's a high-technology capacity vessel, and we've been acquiring data there for quite some time. And again, on that question, we've been quite transparent on that. We have no reason to believe that we're not going to get that funding from our client. That client is funding multiple projects for TGS in that area. They never let us down. And we would never have started that project and definitely not continue to acquire data if we didn't know that this is more related to bureaucracy and slow internal processes rather than a willingness to buy data over their own blocks. So we're not concerned about that. And then the timing, whether it -- we feel very, very strong that it's going to happen during the acquisition of data, which is good.

Lucas Dahl in Arctic Securities. wonders, so if the recovery plays out the way you project, can you give an indication of kind of multi-client investments and activity that would imply?

Yes. I think we've probably been a bit ahead of schedule in terms of we upped our investments quite significantly in 2025 because we had expected that the market would rebound and then it may happen quicker and more significant than we put into our own plans because of the war and the increased focus on energy security and investor sentiment that is changing. So I guess we've already started. Whether we're going to continue to increase Multi-client investments, it all depends on client interest, client funding, et cetera. And keep in mind, we have somewhat limited vessel capacity, too. I mean, in Q1, we pretty much used all our vessels that one to get to the multi-client investments that we reported. So there's not a whole lot of flexibility in continuing to increase unless we're going to use third-party vessels. On the OBN side, it's a bit different. There is still capacity there. There is still -- we can still grow the revenues quite substantially on the OBN side with the current crew count and the current crew availability.

And I have a question from Stefan Eben in DNB Carnegie. How does the higher oil price environment impact fuel costs on your streamer vessels? Would there be upside to your gross OpEx guidance if we stay at current oil price levels? And to what extent can you push these costs over to the clients?

Yes. It's -- obviously, we will have to pay a bit more for fuel than we assumed some months ago, given the situation that impact do impact the gross cost. We've seen a little bit of that in Q1. It's not too bad. On our contract work, we typically are well protected in our contracts where we can -- where there are clauses that are pushing that additional cost over to the customers. So that's valid for almost all -- a few exceptions, but almost all contracts will have that. But it will, of course, affect gross cost and then a corresponding component in revenues.

Very good. I don't see any further questions from the people on the webcast. unless there's any last-minute questions coming up, I think that concludes the presentation. So I'll leave the concluding remarks to you, Kristian.

Yes. Thank you very much. And I think it's obviously after 5 or almost 6 years where exploration and seismic has been completely out of out of favor. It's great to see all the news flow, all the reports, all the discussions now with clients that are taking a very different tone to what it did quite recently. It's great. We're prepared for this. This is really what we've been working on for the past few years in terms of our strategic agenda. It's taken longer than we expected, and it will still not change overnight, but we definitely see the early signs of a very strong cycle going forward and being probably one of the companies in the world with the highest exposure to exploration is a good position to be in. I really want to thank you for your attention today and hope that you come back in Q2, which is going to be reported in the middle of summer in July. So thank you very much for that, and have a great day. Thanks.

Good morning, and welcome to TGS Q4 2025 presentation. My name is Bard Stenberg, Vice President, Investor Relations and Business Intelligence in TGS. Today's presentation will be given by CEO, Kristian Johansen; and CFO, Sven Peter Larsen.

Before we start, I would like to give some practical information. For those of you present in the room with us today, please use the microphones provided when asking questions. For those of you on the webcast, you can type in the questions on the platform and we will address those after management's concluding remarks.

I would also like to draw your attention to the cautionary statement showing on the screen and available in today's presentation and earnings release.

So with that, it's my pleasure to give the word to you, Kristian.

Thank you, Bard, and welcome, everyone. So we'll start with the highlights for Q4 of 2025. So we had revenues of $363 million. Our revenues in Q4 were driven by strong multi-client performance, which is quite common for any given Q4, but I think we were particularly pleased about this year because it was a quite volatile market in terms of an sliding oil price during the quarter, but we still managed a very strong multi-client performance, which I will come back to.

We had a EBITDA of $227 million. That corresponds to a 63% margin. And again, this is thanks to a very strong focus on cost, which again has preserved our margins in the quarter.

Our Q4 EBIT was $72 million. That corresponds to a 20% EBIT margin. I'm particularly pleased about our order inflow for the quarter. So we had $598 million of new orders signed and this is the strongest order inflow since pre-COVID. And that means that we have a total order backlog of about $706 million entering into 2026.

We had a net cash flow of $206 million and that means that we managed to reduce our net debt to about $427 million. And as you all know, we have guided a range of between $250 million and $350 million as a comfort zone in terms of net debt.

And we've also said that when we get to that range or within that range, we're going to increase shareholder allocation. Whether that's going to be in terms of dividend or share buybacks remains to be seen. But for now, we maintain our dividend of about USD 0.155 per share.

So 2025 has clearly been a transitional year for TGS. We got off to a good start. We had a better-than-expected Q1 results, strong asset utilization and multi-client sales.

And then Liberation Day hit us in early April and obviously, with a resulting macro and geopolitical uncertainty, which had an impact on oil prices. So we showed oil price weakness and volatility, which caused pressure on client spending.

We -- as a result of that, we saw a challenging contract streamer and OBN market through the course of 2025.

However, we've been preserving margins by reducing costs and CapEx. I'm impressed about the way we have reduced our gross operating costs and CapEx by about $156 million of reduction in terms of operating costs and $48 million of a reduction in CapEx versus the original plans for the year.

As a result, we've increased our shareholder return and we have reduced debt at the same time. So we had a net cash flow, as I said, of more than $200 million. We have reduced debt to a level -- or net debt to a level of $427 million and we have increased our dividend in 2025 of 11%.

So we're clearly benefiting from a unique business model. In fact, the only company in our space who has a business model where we are strong in all verticals of the seismic industry. We have signed our first strategic partnership with one of the super majors and we're capitalizing on opportunities in all geoscience markets.

We clearly feel that we're strongly positioned for 2026. We have a strong order inflow and backlog. We have a robust balance sheet and we're continuously optimizing cost and CapEx to be ready for the next up cycle of our industry.

I'll give you a quick business update for Q4 as well. And the first slide here shows the global map. And I want to draw your attention, first and foremost, to the blue color on the slide and this shows the massive multi-client data library of TGS.

So you see data in pretty much all the basins in the world. And in fact, since 2018, we or TGS makes up about 60% of all the multi-client data collected in the world. So a significant market share within the multi-client space, which again gives us a unique opportunity to also utilize our high-quality assets.

I'm not going to touch on all the different basins where we have been active, but you see the usual basins such as U.S. Gulf of America. You see we have 3 vessels in Brazil.

We're strong in West Africa with 2 vessels in Gabon during the quarter and those vessels have now moved to Nigeria and Angola. We had a vessel in India and then you see there's also some new energy operations, both in California, the U.S. and Germany and Australia during Q4 of 2025.

Next, a quick update on the different business units. So we'll start with multi-client and we start with the financials. So we have multi-client sales of $270 million in Q4.

That corresponds to $259 million in Q4 of 2024. We had investments of $117 million. And most importantly, we had sales to investment over the past -- last 12 months of 2.0, meaning that whenever we invest $100 million, we expect to see $200 million of sales, which is a very strong metric and where TGS has been unique in terms of the industry in terms of being able to manage such returns over time.

In terms of awards and key projects, we were awarded a project in Pelotas Norte. This is a Phase 1 of a big project that we're doing offshore Brazil. It's a streamer survey mainly targeting open acreage, but where we also have solid prefunding before we started the survey.

Number two is a project called APEX 1. This is an ocean bottom node multi-client project in Gulf of America. This is actually a dense node grid.

So compared to previous surveys, which are more sparse and take advantage of underlying data, this is a denser survey without reliance on underlying streamer data. And the reason why we can do that is that we've had technology breakthroughs in terms of how we acquire ocean bottom nodes with new source technologies combined with new ROV technologies that we have applied on this survey.

Then we completed a big survey in Brazil called Megabar Extension Phase 1. This is a joint venture streamer survey in the Equatorial margin area offshore Brazil and this is the area where Petrobras is drilling as we speak.

I touched on the multi-client performance and this one gives you more details about that. So this shows our quarterly multi-client performance all the way back to Q1 of 2023.

And what you see there, if you follow the line is that it's quite consistent around 2x. Yes, it may drop in certain quarters down to a level of 1.7, but then you also see peaks that goes all the way up to 2.2 and 2.3.

But the important thing here is that over time, we managed an average sale to investment of somewhere between 1.9 and 2.0. And in that regard, I'm extremely pleased that we managed to a sales to investment of 2.0 in a challenging market in 2025.

In Q4, we had multi-client sales that increased year-on-year despite a 15% lower oil price quarter-by-quarter.

On the Marine Data acquisition, we had a negative development of sales and activity. We had OBN contract revenues dropping from $132 million in Q4 of 2024, which was extraordinarily strong, but still they dropped to a level of $47 million in Q4 of this year or 2025.

And we saw a drop also in streamer contract revenues, down from $131 million to $110 million, which means that the gross revenues came down from $263 million last year to $157 million and this is obviously reflecting a very challenging market for both streamer and OBN, particularly in the last 3 quarters of 2025.

So that means that net revenues were $68 million for the quarter, but I'm happy to say that our EBIT margins are actually better than last year. And it's a combination of things.

Number one, we had no operational hiccups in Q4, so very strong operational performance. And number two, we planned very well for the drop of activity in the OBN market, which means that we had no short-term leases during the quarter. So we managed to get rid of them when we planned for Q4, which obviously had a huge impact on our margins during the quarter.

In terms of awards in Q4, we had a 3-year capacity agreement with Chevron signed in Q4. This is for streamer and OBN acquisition services.

And as part of that collaboration, we also work together very closely on technology developments and one example would be what we're doing on the OBN side now in terms of being able to have a more flexible model where we are more efficient in terms of acquisition and we don't have the same reliance on underlying data when we acquire these surveys, particularly in the U.S. Gulf.

We have 3 OBN contracts signed in Europe during the quarter. These are for acquisition campaigns for Q2 and Q3, which means that we're filling up the backlog in Europe pretty well.

In addition to that, we had a streamer 4D contract in Norway. This is going to commence in Q2 of '26 and it has a duration of 65 days. And last but not least, we also signed up a streamer 4D contract offshore Brazil. And this has a second half 2026 start-up. And again, this one has a 75 days duration.

On the Imaging and Technology, we had a strong quarter and it's been a really good year for our Imaging team. Gross Imaging revenues growing from $30 million to $32 million, but more importantly, the external Imaging revenues grew from $15 million to $18 million.

But for the full year, we had a year-on-year growth of 65% for Imaging. As you see, on top of that, we had a margin improvement from 20% to 30% on the EBITDA level.

Again, we have signed a multiyear agreement with a super major for licensing of our software, which is called Imaging AnyWare. And this is the second super major who signed up with TGS in a short period of time. And we now have multiple companies using our software when they do imaging, which again creates a stronger link between TGS and some of our biggest customers.

I touched on the year-on-year growth of 65% and we expect further growth in Imaging in 2026. It's not going to be the same magnitude as we saw in 2025 because obviously, we're starting from a much higher base.

But overall, we will continue to see growth. Growth is probably going to be higher in the second half than the first half based on the backlog that we have right now. But again, the positive development in Imaging is expected to continue also for 2026.

And then last but not least, the new Energy Solutions numbers are still fairly small. You see contract revenues dropping from $7 million to $2 million. And the reason for that is that we didn't have any site characterization surveys in Q4 of 2025.

As you know, we stacked Vanguard after the summer season, partly because we didn't have the backlog that was needed during the winter to justify that vessel.

Then we have multi-client revenues growing from $3 million to $4 million, total revenues down from $9 million to $6 million. But again, as we saw with Imaging and acquisition, we've had a positive EBITDA margin development despite lower activity level.

Some key awards. We have the first wind and metocean campaign in Australia. This is a 1-year deployment and this is in the Gippsland region of Victoria. And then secondly, we're in collaboration with a company called EOLOS, we offer wind and metocean campaigns offshore Brazil.

So with that, I want to hand it over to Sven, who's going to go through our financials and then I will come back and talk more about the outlook for '26. Thank you.

Thank you, Kristian. Good morning. Okay. I'll start by going through the revenues. We had -- our segment revenues came in at $363 million in the fourth quarter, which is down from the same quarter of last year when we had $492 million.

We saw strong performance in our multi-client business, $263 million of multi-client revenues, which is actually a little bit above what we had at the same period of last year. And then, of course, we had significantly lower external revenues in our data acquisition business, $100 million compared to $231 million in the same quarter of last year.

On the operating expenses side, we see here on the top right-hand side, you see the dark blue bar shows the net operating expenses and then we show the capitalization and then we show the gross operating expenses. So gross operating expenses was down to $189 million in the quarter. So you can see that we continue to reduce our gross operating expenses quarter-by-quarter.

However, you should also note that there is approximately $15 million of release of accruals in Q4. So this is cost that we have charged to our P&L earlier in the year based on conservative assumptions on project performance.

And now that these projects are coming to an end, we can release some of these accruals, which has a positive impact of roughly $15 million on the gross cost -- operating cost in this quarter. But it doesn't really affect the full year.

In terms of depreciation on the bottom left-hand chart here, you see that we had low net depreciation of $36 million in Q4 and that has to do with high capitalization of gross depreciation. We had approximately $42 million of capitalization of depreciation in the quarter.

And that is roughly $20 million more than it otherwise would have been. And the reason for that is that we have reclassified some capitalization from cost of sales that were done earlier in the year to depreciation. So we have the opposite effect on the capitalization for operating expenses.

And then you see that we have straight-line amortization of $58 million, more or less in line with the run rate we have had over the past few quarters and we had a somewhat higher accelerated amortization of $62 million and that, of course, relates to the higher multi-client sales.

There is a certain correlation between accelerated amortization and multi-client sales. This gave us an EBIT of $72 million in our segment accounts, which corresponds to a margin of roughly 20% in the quarter. This is down from $92 million in the same quarter of last year.

Here, I'm not going to dwell too much with this table. But as you know, we report our revenues 2 ways. We report the revenues by nature and we report the revenues by business unit. So we compile this table here to avoid any confusions on what numbers we are looking at.

And as you see here, on the multi-client business unit, we do actually have some contract revenues related to JV projects that we do. So when our multi-client department engage in a JV project and we use our own vessel capacity or our own OBN capacity for these purposes, this JV partner will pay our multi-client department, say, 50% of the cost and that is booked as contract revenues in the multi-client business.

And then you also see that in the New Energy Solutions business, we have a little bit of multi-client revenues related to subscriptions of software that we provide to customers.

As you saw from the chart earlier, we are very focused on cost and optimizing our cost base. We have constantly been working on this since the merger with PGS that took effect from 1st of July 2024.

So initially, of course, we saw a reduction related to merger synergies. But also beyond that, we have continued to work on quite a few different efficiency measures. We are using technology in a clever manner to reduce costs.

We have implemented AI solutions in a number of our functions and we're constantly challenging ourselves in order to reduce our cost base.

And you see the result here that 2024 compared to 2025. So 2025 is significantly down compared to what we had in '24 and also the years before.

So -- and this effort will continue. It's going a continuous effort, of course, that is never complete. And for 2026, we guide for a gross operating expense of roughly $950 million, which is in line with the guidance we ended up with or the last guidance we gave for 2025.

But it depends, of course, on the activity level. We could come in below this if activity is lower than stipulated and we could come in a little bit above if we see higher activity level. But the expectation as of now is for $950 million of gross operating expenses.

This brings us to the P&L, $363 million of revenues. We had cost of sales of $48 million. We had personnel expenses of $60 million and we had other operating costs of $28 million, which gave us an EBITDA of $227 million.

If you look at the net effect of the release of these accruals and the reclassification of capitalization of cost, the adjusted EBITDA, I don't like using that word, but I'll do it anyway, would have been roughly $5 million higher than the $227 million, right?

We deduct amortization, some impairments and depreciation gave us an operating profit of $72 million. Then we had financial income of $2 million, interest cost of $20 million and some exchange rate-related losses gave us a pretax profit of $52 million.

So this is the produced account or segment accounts based on percentage of completion. You'll find the IFRS accounts in the appendix or in the quarterly statement.

If you look at cash flow, we were -- we're really happy with the cash flow development, both for Q4 and for the year as a whole. We have delivered actually quite well above our own expectation in that area.

That, of course, partially has to do with what I talked about earlier related to looking after the cost base and reducing costs quite significantly in the quarter.

We have been working on our CapEx plans and we have been reducing CapEx quite significantly compared to the original plan. That is partially obviously based on looking at the needs and being more efficient in that area, but also, of course, stretching the CapEx plan a little bit compared to the original plan.

So all in all, after paying total dividend of $122 million for 2025, we ended up with a positive net cash flow of $96 million for the quarter. This, of course, led to a significant drop in our net debt.

Of course, initially, when we did the -- concluded the merger with PGS and also the subsequent refinancing, we were obviously planning to and hoping for an even more rapid reduction on net debt. But the market has gone a bit against us compared to those original assumptions.

So we're actually quite happy that we are still able to deliver a significant reduction in net debt despite these difficult market conditions and despite paying a dividend, as I said, of $122 million. So net debt is down from $500 million from a year ago to $427 million at the end of 2025. So that's something we are really, really happy about given the circumstances.

Our target is for $250 million to $350 million and that remains firm. As I said, we need a bit more time than we originally envisaged, but we are clear that we want to get down to that level. And at that stage, we will look at increasing shareholder distribution either through dividends or buybacks.

Balance sheet, not too much to comment on this. Our balance sheet, of course, with limited or fairly low net debt levels remain very strong.

You see that our multi-client library is a little bit up over the past 3 months compared to what we had at the end of Q3, but it's actually slightly down compared to what we had a year ago.

You should also note that the right-of-use assets are down over the past 3 months from $200 million at the end of Q3 to $184 million at the end of Q4.

And this, of course, relates to these IFRS 16 leases that we have. And it also means that the lease cost that you'll see in our cash flow will be lower in 2026 than in 2025.

So we -- at this stage, again, it depends a little bit on the activity level. If we see that activity in OBN is picking up, we may enter into some longer-term leases again, but that's not the plan right now. So you should expect, call it, quarterly or the annual run rate of lease expenses to be around $80 million to $90 million in 2026.

And then finally to dividend, given the strong balance sheet that we have and the quite good cash flow, we, of course, continue to pay the quarterly dividend of USD 0.155 in this quarter, that corresponded to NOK 1.47 per share. The ex date will be a week from now on Thursday next week, that's the 19th and it will be paid 2 weeks after that on the 5th of March.

And by that, I'll leave the word back to you, Kristian.

Thank you, Sven. I'm happy to present the outlook that we see right now. And I think the first slide is quite interesting.

This is showing IEA's World Energy Outlook from 2025. And it refers to the energy outlook in '25 versus 1 year earlier, which is '24, of course. And what it shows is that the '25 outlook basically says that oil and demand is not going to peak until sometime after 2050.

And if we compare that to statements that were made back in 2021, for example, where the same institute said that we would have peak oil sometime in 2025, so last year and where there was no need for more exploration, then it's remarkable to see what a change these guys have made over the years.

And just in a matter of 12 months, they have changed the view where oil and natural gas will be up 25% compared to the previous estimate in 2050.

The same situation for coal is that it's going to be up 47% compared to what they said 1 year ago. And what you see is that this is going to be compensated by the fact that renewables is going to show a much lower growth than first anticipated.

So these numbers are changing, of course, every year, but it's obviously a quite significant change and it provides a very positive outlook for a company that is heavy on exploration and very focused on exploration.

So as a result of this, obviously, our customers, the big energy companies, they're highlighting the exploration challenge. They're highlighting the fact that their reservoir life is getting shorter.

We have super majors now who have reservoir lives of 6 to 7 years and they have a reserve replacement ratio of about 20% to 25%. So it means that within 10 or 12 years, they will run out of oil if they're not successful in replacing the reserves.

So we've been talking about this for quite a number of years, but the fact now is that we're getting very close to a situation where our customers will have to ramp up their exploration efforts quite significantly compared to what they were discussing about a year or even 2 or 3 years ago.

If we go to the next slide, we're concluding that exploration is definitely moving up on the priority list and we see that from earnings calls. We hear that from CEOs when they talk to the investor community, they're sort of preparing the investor community that we need to explore more and we need to invest more in -- or more -- allocate more CapEx to exploration in the future because they obviously see the same graphs as I showed on the previous slide.

Just showing a couple of quotes here. One is from Shell who's saying, we're less pleased with the fact that we haven't found the bigger place that allow us to potentially create big new hubs and so that's a space we need to continue to work on to improve.

Equinor said quite recently, now is a focus to deliver on that growth, finding more attractive exploration opportunities within those selected areas. And last but not least, from Chevron, who's one of our long-term partners and when we just signed a 3-year contract, we need to ramp up some of the exploration activity beyond just the focus on near infrastructure opportunities.

So we'll move to a more balanced approach of mature areas that are well known and also early entry into high-impact frontier areas. So again, we're talking more about exploration, of course, but we're also talking about the need to do exploration in frontier areas.

And this is a background or part of a background to our 3-year agreement with Chevron. We together are going to start exploring new areas where oil has not been found before rather than exploring more in areas where there is already oil.

So again, all majors are becoming more positive on exploration. This is evidenced by improving interest in frontier areas. And then the big question is, why don't we see a sharper pickup of activity than we've seen so far?

And the answer to that is on the right-hand side of the slide. And what you see there is that the orange line pretty much touches the top of the 3 bars for 2024 and 2025. And that means very simplified that oil companies today, they basically spend their entire cash flow on the combination of dividend, share buybacks and CapEx.

So one has to give or you need to move the orange line, which means that the oil price has to come out. If you assume that the oil price is going to stay where it is today, then 1 of the 3 needs to be cut. And what I've been through on the previous couple of slides is that, that cannot be exploration, which is part of the CapEx.

It will either have to be dividends, which we doubt is going to happen or it may be share buybacks, which we think is going to happen. And we've already seen a couple of companies who've announced lower purchases of shares than they've done in previous years because they need to free up capital to spend on future growth where exploration obviously fits in.

So the impact on the seismic market of this challenge that these oil companies have is that you've seen a gradual decline of contract vessel months for the industry. So if you look back on this, that shows 2019 and it goes all the way to our expectations for 2026.

What it shows is that in 2023, there was slight growth and some optimism in terms of the vessel market. This is coincidentally when we announced the acquisition of PGS, we saw that things are about to get better.

That didn't happen for multiple reasons. So instead, we saw a gradual decline starting in '24, going into '25 and then we expect 2026 to be either flat or slightly up based on our estimates right now.

If you look at the OBN market, it's quite a different picture. Actually we saw strong growth from 2020 to 2024. Obviously, some shift from the vessel market to the OBN market. But then we've actually seen now 2025 showing quite negative growth in that market.

We expected that when we started 2025. So we have planned for that and back to our margin improvement on the -- in the OBN space is partly driven by the fact that we were ahead of the game in terms of managing our capacity and making sure that we didn't have too many leases related to short-term activity.

In 2026, this shows a further decline of the OBN market. We still don't have a great visibility on that. So it could still be flat.

And we are obviously pursuing multiple opportunities in terms of proving the estimates wrong and making sure that we can have pretty much the same activity level for '26 as we had in '25 and that's really what we're planning for as we speak today.

So again, to summarize, streamer market decline of almost 50% since 2019. On the OBN market, we've seen rapid growth from '20 to '24, but then a rather disappointing picture since then. We think that's going to kind of flatten out going forward and potentially start growing again.

So the question is how have we managed that challenging market. And I'm proud to show the cost development. If we start on the left-hand side, you see the gross operating cost, obviously, pro forma numbers for 2024.

And what you see here is that we peaked in the overall cost level in Q4 of last year of 2024, so $1.1 billion. And then we gradually decreased or reduced our cost base every single quarter since then and Q4 stood out as being quite extraordinary, which means that the last 12 months from Q4 of 2025, our cost base was reduced to $894 million from a peak of $1.1 billion in Q4 of 2024.

So very pleased about this and this is obviously a combination of a synergy realization from the acquisition of PGS, but we way exceeded the synergy expectations that we set because in line with a more challenging market, we had to cut more.

And we're constantly working now on making sure that we have the most efficient operations, the most efficient support and staff systems to support this market we're in.

If you look at the cash flow, which is a result, obviously, of lower revenues, but significantly lower costs, we've managed to deliver a cash flow today of $206 million and you see how that stacks up with the previous years and it shows that the capital discipline of TGS have been very impressive for 2025 and I can guarantee you that we're going to continue to focus very strongly on this for the future.

And that means that TGS is extremely well positioned to benefit from a market recovery with a cost base that is now trimmed for any given market. So if it takes longer, we're still good.

We're managing a cash flow or free cash flow of $200 million plus in 2025. If we see improvement in markets, a lot of that is going to go straight to the free cash flow line.

The fact is that we are the exclusive supplier to the world's largest buyer of seismic activity. And sometimes we have to remind our people about that.

When you look at the big super majors and you look at their seismic budgets, they tend to range from $150 million to slightly above $300 million per year. We're announcing today that we're going to spend between $500 million and $575 million in 2026. So it means that we're by far the largest user and by far the largest buyer of seismic activity.

And what you see on the bar chart to the left-hand side here is that historically, we've been able to use far more than the 6 vessels of the 6 available vessels we have now. We've been using far more historically than those 6 vessels.

And then 2024 and 2025 stands out in terms of we have not been able to move to the orange line, which is basically the vessel capacity we have. And the difference between there is called nonutilized capacity or white space.

In 2026, I feel very confident that we're going to move towards and past the orange line, which means that we're going to optimize the utilization far better than we did in 2024 and 2025.

So again, a very good illustration in terms of highlighting the challenge we've had in '24 and '25, also a good illustration in terms of guiding how you're going to see 2026, where our goal is that the dark blue is going to get higher because we're going to invest more in multi-client.

The light blue, even if it stays at the low level that we've seen, we should be able to move to the orange line, which means that we should be as close as possible to a fully utilized vessel fleet.

We have the luxury of deciding internally whether we're going to pursue opportunities in the contract market or whether we're going to do multi-client. Obviously, these have different characteristics.

Multi-client, they tend to have a slightly longer payback, slightly higher risk, but again, a very strong return over time. And I think we've proven that in 2025. We've proven that through some of the slides that we showed you today that our returns in multi-client don't need to be questioned.

On the contract work, of course, you have lower returns, but you have quicker payback and obviously lower risk. But being in a position as the largest buyer of seismic activity out there to always evaluate whether we should do a multi-client project or whether we should prioritize a contract opportunity is a great position to be in and it's a position that no other company obviously has.

So that takes me to the guidance. So on multi-client investments, we expect to be in the range of $500 million to $575 million for the year.

The upper end of that range is where we have actually good visibility today in terms of our backlog and our planned surveys. The lower end of that range would depend on whether we do partnerships on some of this.

So it all depends on whether we want to go 100% solo or whether we're going to do 50-50 joint ventures to spread the risk. And that's why there is a relatively large range.

And of course, if we're in the lower end of the range, it means that we're going to have higher contract revenues because someone else is going to pay for 50% of our vessel or OBN crew. If we're in the higher end of the range, it's going to be higher multi-client investments, of course, and lower contract revenues.

Again, I feel very confident about the backlog as we stand here today. We announced a backlog at the end of 2025 that is pretty much on par with what we had in 2024.

But what happened in '24 or into '25 is that we started to consume from that backlog very rapidly. What we've seen this year is that we've actually announced quite a few new programs in January, which means that the backlog continues to increase. I will come back to that.

But on the CapEx, it's going to be at approximately the same level as it was in 2025. And again, it came down sharply during the year and I think we're at a point now where we feel quite comfortable going forward.

Gross operating costs, similar to the latest estimate that we had or guidance for 2025, so around $950 million and we're constantly working to reduce that number. And then on utilization, we feel confident that we're going to see a significant increase in streamer vessel utilization. This is going to be driven by higher multi-client activity. And then the OBN activity is expected to be pretty much in line with 2025.

Just want to reiterate some important points that Sven also touched on, the long-term net debt target range of $250 million to $350 million, which means that we are at $427 million today. As soon as we get to $350 million, we're going to call a meeting with the Board and we're going to say, okay, now we need to decide are we going to increase the dividend or are we going to start buying back shares.

If we move on then to the order backlog and inflow, we have touched on this a few times already today. Very impressive order inflow during Q4 and some of that momentum has continued into Q1 of 2026.

As a result, you see a backlog above $700 million at the end of the year. You see that it compares quite well to where we were in Q4 of 2024. But what you saw that time is that we started to consume very rapidly from that and we dropped down to $425 million in Q2 of '25.

So our goal this time around is obviously we're going to continue to run a quite significant backlog during the course of the year and not see the same type of drop.

The right-hand side, you see the expected timing of the Marine Data acquisition backlog and the revenue recognition of that.

In terms of our booked position, I'm not going to touch on the details here, but you see Q1 and Q2 being relatively stable and they're both at a high level in terms of booked streamer work. On the OBN work, you see a normalized crew count that is quite -- pretty much around where we were in Q4, both for Q1 and Q2, so quite flat for the year is what we expect.

Vessel utilization is expected to be around 85% in Q1. You know you can never get to 100% because there will always be some steaming between different jobs, but 85% is historically a very good number and that's really our goal to manage that very, very carefully in '26 and make sure that, that number is significantly higher than it was back in '25. Normalized OBN crew in Q1 of '26 is expected to be around 1.8.

So I'm pleased to present the summary of Q4. So we had strong multi-client performance, evidenced by a sales to investment for the full year of 2.0. We managed to reduce our net debt to $427 million.

We had record high order inflow, in fact, the highest order inflow since pre-COVID and that provides good visibility into 2026.

The short-term market development is sensitive to oil price. And I think there's been a belief out there that the oil price would have significant downside in the first half of the year.

We haven't seen that yet, but we're still planning for a relatively challenging market in the first half. And then hopefully, we'll see a pickup towards the second half of the year.

But the long-term market outlook remains very positive. And I think especially the slide I showed you from IEA shows that there's been a complete shift in terms of how we look at the need for oil and gas and how we predict demand for oil and gas, not only for the next 5 or 10 years, but for the next 25 years.

We're also maintaining our dividend of $0.155 per share. And again, very pleased about 2025, given the challenging market conditions and the volatile oil price development, partly driven by the Liberation Day in early April.

And with that, very pleased to take your questions.

Yes, we can start with the questions from the audience in Oslo. So Kim?

Kim Uggedal, SEB. A few questions. Starting off with multi-client investments. How much of this $500 million, $575 million is external investments? Looking at your charts, you're probably at 4 vessels plus allocated to multi-client this year. Is that...

You mean using external capacity or...

Yes.

It's -- the plan now is to use internal capacity for all of it. That's where we think we're going to be. And if we need to source external capacity, we will do so. But we haven't started any negotiations in that regard.

There will, of course, be some dollars not related to acquisition capacity, but on certain contracts that we do JV on, there will be another company doing the imaging, for instance. And then, of course, you have some permitting costs and stuff like that, that's characterized as external cost. So there will be a little bit of external cost, yes.

Yes, there's an OBN survey where we have already entered into a JV where we're going to use a different, that's true. But on the 100% owned TGS projects, we are using our own fleet on that.

Okay. Because last year, I think it was like 30% or so that came from external.

Yes. That's right. That was sort of something that came from before the merger where we already had contracted an external party to do it.

In dollar terms, you can assume that, that will be somewhat below 20% this year.

Yes.

And then on the actual numbers, you're increasing 20%, 25% on multi-client investments. How big of a risk are you taking now given you're still not down at the $350 million in net debt? I assume you have pretty good, let's call it, pre-commitments in Brazil and Gulf of Mexico, et cetera.

But should we still -- you have a charter showing that sales investment is dropping in '23 when you increase your investments. Right?

Yes.

That's natural, I guess. Should we still aim for 2x sales investment on the elevated investments in '26? Or how do you feel about that?

Yes. We don't think about it on a year-on-year basis. As you saw from the slide, we've been touching down to 1.7. We've been touching up to 2.3 and it obviously because sometimes when you ramp investments up, it may have a year-on-year negative impact.

Over time, we target 2. I think that's a question we've been getting since I joined TGS in 2010. How are you able to keep 2x return or 15 years later, we're still doing that. So I'm not questioning whether we should be able to do that, but I'm not going to guide you on calendar years because you're right. I mean, if you ramp them up, it has a tendency to potentially drop, but it hasn't dropped lower than 1.7-ish historically.

I think touching on those investments, I would say a significant part is obviously Brazil. In Brazil, we have good funding on the projects. There's obviously one big client who is very keen to join us on these surveys.

And then we have a couple of others who are now joining this big company. And we see increased interest overall and I feel very good about the risk profile of those projects.

I would say a second significant basin is obviously U.S. Gulf of America, where we see a lot of OBN activity. While there is more streamer in Brazil, there is obviously more OBN in the Gulf of America. That's also relatively highly funded projects, very good historical track records. We feel very good about the risk level on that.

And then the third part is where we now are moving further towards frontier and we take slightly more risk than we've done historically because we see that this is picking up. Some of this is in close collaboration with one of our long-term partners who as I showed one of the quotes from the CEO saying that we need to go frontier and we have identified certain areas where we want to be stronger.

We're following that company in some of the frontier activity and that may have a slightly negative impact on the prefunding levels, but we're very pleased to do that because we see that this is a company that is probably -- there's going to be quite a few companies following that number one.

And then just more overall picture. You have a comment in the press release saying you don't see any near-term improvements in the market.

At the same time, I think I shared your comments on reducing buybacks and super majors, in particular, super majors, grabbing acreage in more frontier areas. Obviously, oil price dictates a little bit of this, but how -- what's the time line you see for oil companies stepping into more frontier areas, West of Africa, South America, et cetera, until you actually start to see seismic demand coming through? Have you entered into certain negotiations already? Or how is this playing out now?

Yes. I mean it's moving in a positive direction. But I think the slide that we showed were basically concludes that oil companies spend their entire cash flow on the 3 buckets today and that's probably not going to change materially over the next months or year.

There is a positive trend for sure. Our clients take a more positive view on frontier exploration. They're still not certain where to go and then they have this kind of limiting factor of budgets and where do we take that money from given the current oil price.

So I think our kind of cautious statement on particularly the first half of the year is more related to uncertainty around the oil price and the fact that there may be some pressure on these budgets short term.

Long term, I mean, I can't see that this is not going to get much better because, I mean, everyone we talk to have similar statements to what Chevron, Equinor and Shell had. So BP is another one, of course, complete U-turn in terms of the strategy. We've already seen the results of that.

Let me add that when you look at the overall spending trends of oil companies, that's easier to predict. But when you start to dig into the different spending categories, it becomes more complicated because they can reallocate between them.

And we have examples of IOCs that in their 2027 guidance, they say cash flow flat or even a little bit down, but we are going to increase exploration, right? So it's not easy to get it completely right, but -- so that's kind of a cautionary statement we should add to that.

Okay. We have a couple of questions from the people on the webcast. Jorgen Lande in Danske Bank.

Good morning. Can you perhaps provide some input to what level of prefunding rate we should expect on the guided investment level for 2026?

Yes. We're not guiding on the prefunding rate, but we've been making comments today about a high prefunding rate. It varies between the different regions, of course.

I said Brazil is usually quite good. So is Gulf of America, although we're prepared to take slightly more risk on that because of our historical track record and the new regime, which is obviously very supportive to continued oil and gas activity.

The question mark that we have is on the third bucket, which is a lot of West Africa, frontier areas in Asia, et cetera, where we're really going to -- it really depends on how we see the markets develop during the year. But I think overall, I think we feel pretty good at or slightly below the levels that we've seen last year, so...

Very good. We have a couple of questions from Mick Pickup in Barclays. This one is for you, Sven Peter.

Gross cost for 2025 ended at $894 million versus your guidance of approximately $950 million. What changed on plans? And would you have cut guidance if you expected the cost to come in below $900 million?

Yes, we probably would. I can say that when we released guidance in the $950 million guidance in July and we reiterated that in October, we were looking at cost that was closer to that guided level. But we've constantly been able to overdeliver or underdeliver depending on how you see it.

The point is that the cost has been lower than expected constantly through the year. And also, we -- on the contract side, we've seen slightly less activity than we assumed earlier in the year. So it's a little bit related to that as well.

Yes. Very good. Following up on Mick's questions.

When you talk about a flat contract market, do you expect your contract months to stay flat? Is it probably more related to vessel allocation for '26?

Yes, do you want to touch on that or...

Yes. I mean, overall, the mix between contract and multi-client we'll see. I mean, we certainly expect the total utilization to be higher in 2026, I'm talking now about the 3D vessels than in 2025.

And then potentially, that will be more driven by multi-client than contract. So I would say contract is probably not up, maybe a bit down in terms of allocated vessel months.

And again, this points to the fact that we have that optionality that no one else has. We have a record strong backlog. We always have the option whether we're going to do a multi-client project or whether we're going to do a contract.

And if the margins are too low on the contract or the payment terms may not be great, then we see a multi-client project that competes and we are very likely to do that. So we cannot give you a precise answer to that. But what I can say is, like Sven said, it's probably going to be above 50, but whether it's going to be 65 or 57, we don't know.

Last one from Mick Pickup in Barclays.

Hearing a lot of impact on AI, especially on seismic from your clients. Can you explain the impact of AI to TGS? And is this then analyzing your process data better or rather than less work for you? And does it also mean more or less demand for data for TGS?

Yes, it's a good question. And when we look at AI and our AI strategy, I mean, it basically stands on 2 legs. One is how can we get more efficient in terms of what we already do. And that ranges from staff and support to this all the way to obviously vessel utilization, vessel efficiency, OBN efficiency. I touched on some of the improvements we made on the OBN side as partly driven by AI or data science.

On the -- probably what Mick is pointing at is more on the revenue side. Can you create new revenue streams? Can you license a product that you're not able to do today? Can you create or improve the efficiency on interpretation, for example. It's obvious that being the by far largest data company in the world, we're in a really, really good position.

I think what we've done so far is that we've created something called seismic foundation models, where we train the model based on obviously huge amounts of data and then you can use that model, number one, to become much more efficient in terms of interpretation of data.

And number two, you can increase the predictability and the quality of your estimates. So I think that's probably where the industry is going. Whether that's going to drive more data demand or less, it's a question we've had. We want to be very careful that we don't cannibalize the existing business model.

What we've seen so far is that some of the biggest clients of TGS have laid off a massive number of geoscientists. And some of their excuses when they say that they don't buy more data is that we don't have the people to do it.

So obviously, having a very strong and efficient foundation model is going to help in that. And hopefully, that means that they're going to buy more data because they're more efficient in the interpretation and the usage of the data.

Next question is actually from a private investor. What's the plan for the Ramform Vanguard in 2026, which is our site characterization vessel?

Yes, that plan is still under development. We're bidding for work and particularly work in the new energy space. And if we get contracts and if we get a good schedule for the summer and fall season, we may take her out of stacking.

And if we don't have that, we're going to keep her stacked. We don't see a need to take her out unless we have a really good pipeline of opportunities. So that's what the team is working very hard on doing that right now. So we'll probably have more clarity on that by the end of March I guess.

Very good. Next question is from Lukas Daul in Arctic Securities and that's for you, Sven Peter.

Can you give an indication on the projected depreciation and amortization run rate for 2026?

Yes. I guess on depreciation, it shouldn't be much different from what we've had. We -- of course, the capitalization of depreciation will vary a little bit, but depending on how much of the vessel capacity we use for multi-client.

So there is a clear link there. But on a gross basis, it shouldn't change that much. On the amortization side, I think on straight-line amortization, I would expect it to be more or less flat.

And then obviously, the accelerated amortization should increase in line with the more investments and more revenue related to those ongoing investments, right? So there is obviously a clear correlation between multi-client revenues, particularly and multi-client investments and the accelerated amortization.

And we have a follow-up in terms of the capacity allocation. It's actually Erik Fossa in SpareBank 1 Markets and Steffen Evjen in DNB Carnegie Markets, asking about the split between streamer and OBN on your 2025 multi-client investment guidance.

Yes. We don't want to give any further guidance on that other than the overall investment number, which is $500 million to $575 million.

Yes. Another one from Jorgen Lande in Danske Bank.

You're currently utilizing 2 OBN crews. Should we expect that to hold for 2026 apart from adding the third crew for parts of '26, so around 2 to 2.5 OBN crews on average for 2026?

It's probably a fair estimate. It's going to vary a bit and especially during the summer months where we have a node on a rope crew and we have the PRM activity in Norway.

But overall, I think the estimate for the full year is pretty much decent. Our goal is to keep that number pretty much flat to what we had in 2025. But again, as we showed in Q4, being able to plan for a market with less activity is huge in terms of the margins of that, so.

Last question is from Lukas Daul in Arctic Securities.

Your 2026 gross cost guidance is up versus what you delivered in 2025. What's the driver for the year-over-year increase in costs?

Yes. It's -- the cost is partially, of course, activity-driven. We were -- as we said, we expect higher vessel utilization in 2026. So it's mostly related to activity.

Mostly related to very conservative CFO and finance department, I guess.

Okay. Very good. Thank you all for coming to...

We have another question.

I'm not sure if you will answer this, but give it a try. On the net debt target, when do you expect to reach the $350 million? And adding to that, you had a ramp-up on receivables in the quarter as normal for Q4. Should we expect cash flow release or capital release into Q4?

We -- yes, let me take the first one. Obviously, we won't give a precise, but what I can remind you about is that if we have the same cash flow in '26 as we had in '25, we'll be there towards the end of the year, right?

But that's -- we'll see. In terms of the working capital question, yes, you should see some release of that, but also be mindful that we have a bit of investments in Q1. So right now, I would expect -- yes, you shouldn't expect net cash flow to be far from 0 in either direction after paying the dividend, of course.

But we'll have to see. These things are -- the short-term cash flow is a bit unpredictable because of working capital movements and certain other things. But that's, call it, as precise as I can be at this stage.

That concludes the Q&A session. So then I'll leave the concluding remarks to you, Kristian.

Well, thank you very much for your attention today and we're happy to see you after we report our Q1 number later this spring. So thank you for your attention, and have a great day. Thank you.

Good morning, and welcome to TGS Q3 2025 presentation. My name is Bård Stenberg, Vice President, Investor Relations and Business Intelligence in TGS. Today's presentation will be given by CEO, Kristian Johansen; and CFO, Sven Børre Larsen.

Before we start, I would like to draw your attention to the cautionary statement showing on the screen and available in today's earnings release and presentation. For those of you on the webcast, you can start typing in questions during the presentation, and we will address those after management's concluding remarks.

So with that, I give the word to you, Kristian.

Thank you, BÃ¥rd, and welcome, everyone. So I'll start with the Q3 highlights. And before I go through the numbers, I just want to say I'm very pleased that we have a solid recovery after a very weak Q2, and I want to thank all our employees for pursuing sales opportunities aggressively in a challenging market and at the same time, being extremely focused on our cost base, which you will see from the numbers that we have a solid beat on EBITDA and EBIT due to lower cost in the quarter.

So starting with the numbers on the top line, we had revenues of $388 million. That compares to $308 million in the second quarter of this year. So sequentially, that's a 26% increase. As I said, our EBITDA was strong at $242 million. That's a 62% profit margin and again, driven by a very strong cost focus of the organization. We had a Q3 EBIT of $105 million. So it's the first time in several quarters that we're over $100 million in EBIT, and that represents a 27% profit margin. We had an order inflow of $436 million, and that takes our total order backlog up to $479 million -- sorry, total order backlog of $473 million at the end of Q3.

Our cash flow was strong, and that means that with a free cash flow of $81 million and $30 million dividend payment, we managed to reduce our net debt from $432 million or down to $432 million, and this compares to $479 million in Q2 of 2025.

We're maintaining our dividend of $0.155 per share, and we have also adjusted our CapEx guidance down. So that's been reduced to $110 million versus previously $135 million. So overall, strong numbers and strong -- slightly stronger than we expected for Q3, which is always good after, as I said, a very disappointing Q2.

On the business update, and I'm not going to cover all the projects that we had in the quarter, but what you can see here is that Q3 is usually dominated by a strong North Sea season. So we have almost half of our assets working in the North Sea during the summer season and into Q3. You see we had 2 vessels in Brazil, and we're probably going to keep vessels in Brazil for the time being due to strong interest for data acquisition and even our existing data library. We also have OBN operations, so 2 OBN operations in the U.S. Gulf. And then you see we have 1 vessel in Egypt and 1 vessel in India during Q3 of 2025.

I'll also cover the business units. So starting with multi-client. We had multi-client sales of $226 million in the quarter that compares to $277 million in Q3 of 2024. And the difference there is pretty much explained by higher transfer fees in Q3 that we -- in last year than we had in Q3 this year.

Multi-client investments of $86 million this quarter compared to $129 million in the same quarter of last year. And again, that corresponds to a sales to investment for the last 12 months of 2.1. That's similar to what we had last year. But again, it's above the historical average of about 1.9. So very pleased about continued strong sales investments of our multi-client data.

In terms of new awards and key projects that we were executing in Q3, we had PAMA Phase II offshore Brazil. This is a streamer survey in the Equatorial margin area. And then we had another project in the same area called Megabar Extension Phase I. And it was a pleasure for us and for TGS, Petrobras and Brazil to see that Petrobras finally got environmental approval to start drilling in this area. And this is an area where TGS has been acquiring lots of data over the past 12 to 18 months. So again, extremely excited to see that things are moving on. And for those of you who remember the last lease sale in Brazil, you also saw companies such as Chevron and Exxon picking up blocks in that area. So this is a --probably one of the last frontiers and one of the most exciting frontiers in Brazil for sure. So great interest from clients on both surveys that we've been carrying out for, yes, over the past 18 months.

Then last but not least, we had a project called Amendment West 1 in the Gulf of America in the quarter. So this is an ultra-long offset OBN survey over legacy streamer data, and this is a TGS-only project with no partners.

If we move on to the historical multi-client performance, just to put the quarter in the perspective, and this looks at -- last 12-month sale is a light blue and then dark blue is investments. And then the line there, the gray line is last 12 months sales over investments. And you see it's coming up from about 1.9 in the previous quarter to about 2.1 now. So really where we want to be in terms of profitability of our multi-client business, which historically has been yielding returns of somewhere between 1.9 and 2.0. Our internal goal when we start a new multi-client project is always around 2.

Marine Data acquisition, relatively weak quarter as we expected, and we guided the market after Q2 that Q3 would be relatively low in terms of activity level, and then we came in slightly above what we expected. We had contract revenues for OBN of $87 million versus $127 million last year. Our streamer contract revenues in the quarter were $127 million, and we had total gross revenues of $215 million. And as you see, a strong EBITDA margin of about 36% for our assets in Q3.

In terms of new awards and key projects executed during the quarter, we had -- we were awarded a streamer contract in the Mediterranean, as you all know, commenced acquisition of that in Q3. And then we have secured a large streamer contract offshore Indonesia in the quarter, and this is scheduled to start in Q4, has a duration of 8 months. It's a big contract. And again, it's mostly 3D, but the last month of the 8 months is going to be a 4D over some existing production.

We've also been awarded a streamer acquisition contract in Africa. So this is a Q4 start, and it has a duration of about 50 days with some options to extend. And then we have an OBN contract in the Gulf of America. This is also due to commence in Q4, and it has a duration of 4.5 months, a quite large contract for our OBN crew in the Gulf of America.

In terms of our new Energy Solutions business, we had contract revenues of $18 million. It's up from $16 million in the same quarter of last year. Multi-client revenues of $5 million versus $3 million last year. So total revenues of $23 million, which is up from $19 million in Q3 of 2024. And again, as with the other business units, a stronger EBITDA margin year-on-year as compared to Q3 of 2024.

We've been awarded a UHR-3D contract offshore Norway. This commenced acquisition in early July, and we were acquiring that data going into Q3. We acquired also a CCS contract offshore Norway. And then we continue our collaboration with Equinor through our --subsidiary, Prediktor through something called Prediktor Data Gateway solution, and this is delivered to Equinor's Empire Wind Project.

Also happy to see that Imaging & Technology continues a strong growth with good margins. So on the gross imaging revenues, we're $32 million versus $26 million last year. But if you look at the external imaging revenues, they are about $20 million. So it's a doubling of revenues compared to last year. And you've seen that we've been on that kind of growth track for quite some time. We have a -- yes, $20 million this quarter. We're going to be slightly short of $80 million for the year. And again, next year, our goal is for imaging to be above $100 million in external revenues with strong EBITDA margins. So we continue to take market share in the Imaging & Technology space. And part of that -- part of the reason for that is a strong strategic focus on the external market. TGS used to be more focused on the internal market and processing of multi-client projects. But now we made a strategic choice that we're going to go after the external imaging market, and you see the results of that with significant growth and good margins.

We see a significant reduction of HPC costs from added scale. So TGS is a big customer of the big cloud compute providers such as Google, AWS, et cetera. And we see obviously great benefits and synergies from the combination of TGS and PGS in that regard. So again, as I said, we expect continued growth in external imaging revenues, and you've already seen a substantial margin improvement on the imaging side.

With that, I'm going to hand it over to Sven Børre, and then I will be back talking about the outlook shortly. Thank you very much.

Thank you, Kristian. Good morning, everyone. It's always a pleasure to report strong financial numbers. So although the revenue numbers are not that strong in a historical perspective, highlighting the upside potential in the longer term, they are quite strong in a relative perspective and relative to where we've been in -- particularly in Q2, of course. But more importantly, we have a very strong performance on all other parameters, including cost and cash flow parameters. So we are very, very pleased about that.

So let me take you quickly through the numbers. On the revenue side, we came in at $388 million. That consisted of $217 million of multi-client revenues and $171 million of contract revenues. The multi-client revenues were particularly strong in the quarter, mainly driven by strong sales from the Vintage library. The prefunding of new projects were actually lower this quarter than we have seen in some of the previous quarters. So library sales, very strong in the quarter.

Then going to net operating expenses. I'll come -- go into more detail on that on a later page here. So let me just mention that the net operating expenses were $147 million versus $221 million in the same quarter of last year. So a significant reduction there, of course.

Depreciation and amortization. Depreciation, $61 million continues to be reasonably stable, around plus/minus $60 million, as you can see on a quarterly basis. Amortization was quite low in the quarter. The straight-line amortization is stable, whereas the accelerated amortization is quite low in the quarter. That's partially explained by the lower prefunding rate, as I talked about, but I'll -- and also, of course, explained by the mix of the different types of projects that we have in the portfolio right now. This gave us an EBIT of $105 million in this quarter, corresponding to an EBIT margin of 27%, slightly ahead of the operating result in the same quarter of last year despite having significantly higher revenues last year.

Then as I promised, I'll go -- in more detail through the cost base and how the cost has developed during the quarter and how it is likely to develop going forward. On the chart here on the left-hand side, you see Q3 specifically, this Q3 compared to the Q3 of 2024. So as you can see on the left-hand bar in both those 2 charts, you see the gross operating expenses. And you can see it's at $217 million is significantly down compared to the $289 million we had last year. It's -- the decline is particularly visible, obviously, on cost of sales. And it has to do with several factors.

First of all, of course, we have gone through, as we have talked about in previous presentations as well, we've gone through quite a bit of efficiency -- efficiency projects internally. We have realized a lot of cost synergies, of course. And also, after the integration project has been more or less completed, we have continued to look at different efficiency gains, and we've been quite successful in that. But I also have to admit it's also, of course, partially related to lower activity, particularly on the OBN side, where utilization of the crews that we got is a bit lower in this Q3 relative to the Q3 of last year.

And finally, there is also some, call it, nonrecurring items in the quarter, which reduced the cost of sales by a little bit more than $10 million. It's probably-- it's not genuinely nonrecurring items. They are nonrecurring in this quarter, but it's -- most of it is a reversal of costs that have been expensed previously. So over time, it's not a nonrecurring cost, but in this particular quarter, it is nonrecurring.

And as you can see, if you compare to the same parameters of last year, we are significantly down even when adjusting for the one-off costs we had related to the merger integration process in last year. So you see that last year, we had $162 million of cost of sales. There were no merger integration costs in that number. On personnel cost, we had $95 million, where we had $11 million approximately of merger integration-related costs. So the underlying costs in that quarter were $84 million, still well -- still well above the $69 million we have in this quarter. And on other operating costs, we had approximately $5 million of -- or $6 million of merger integration-related costs. So the underlying cost there was $25 million in the previous quarter. So we're actually a little bit up this quarter compared to last quarter on an underlying basis, and that has to do with compute. We are using more high-performance compute resources now than we did last year. And that obviously has to do with higher imaging activity and more use of AI and machine learning and algorithms that require more high-performance computing, and that's an -- a deliberate development, of course.

If you look at the right-hand chart or the right-hand side of the page, you see a chart showing the cost development on a last 12-month basis over time here. And as you can see, the last 12 months as of end of Q3, we had $982 million of gross cost. Our guidance remains firm at -- around $950 million for the year as a whole. So you see the trend there. We have come significantly down, and we expect to come further down in -- when we report Q3 -- Q4. In fact, we -- if anything, we expect to be below $950 million and not above. So we're quite happy with the development on the cost side, and you can also see the evolution of our guidance through the year on the right-hand side of the chart there with the dark bar where we have -- where we're down basically $100 million relative to the original gross cost guidance. So we have done a lot on the cost side, which is obviously helping us quite a bit in terms of delivering a strong EBITDA in this quarter.

Looking at the profit and loss statement, we had $388 million of total revenues consisting of $217 million of multi-client revenues and $171 million of contract revenues. I've talked about cost of sales, personnel costs and other operating costs, which already. This gave us an EBITDA of $242 million compared to $280 million in the same quarter of last year. Straight-line amortization was $60.5 million, where its roughly where it has been on the --on the previous quarters. As I mentioned, accelerated amortization, quite low this quarter related to the mix of projects we were doing and a lower prefunding rate. We had a small impairment on one of the multiclient projects that we do. That's not uncommon. As you can see, we had something similar in the same quarter of last year. And depreciation of $61 million, which gave us this operating profit of $105 million. We had financial income of $4.3 same level as last year. We had financial expenses of $19.4 million, which is slightly above last year, which may surprise people because we did a refinancing that reduced the interest cost quite significantly in Q4 of last year. However, bear in mind that we took a lot of that interest saving in the PPA. So we wrote up the PGS debt in the PPA, which reduced the interest charge in the PPL -- P&L already ahead of the refinancing. So that's the main explanation for that, call it, not so intuitive development. And this gave us a result before taxes of $85 million compared to $97 million in the same quarter of last year.

Cash flow, as Kristian alluded to, quite strong in the quarter. We had cash flow from operations of $242 million in the quarter, almost the same level as the $265 million we had last year when you subtract the multi-client investment and CapEx and adjust for timing and working capital movements. We had cash flow from investment activities negative by $94 million compared to $59 million in the same quarter of last year. And then -- if you then subtract the cash flow items related to financing of $97 million, we end up with a net change in cash and cash equivalents of $50 million in this quarter compared to $82.6 million -- or $83 million in the same quarter of last year.

So looking at cash flow in a slightly different way, looking at the evolution of our net debt, you can see that we reduced that quite significantly in this quarter. So the cash flow before dividend, which is a key measure that we are looking at internally was $77 million in this quarter. We paid the dividend of $30 million, which helped us reduce net debt from $479 million to $432 million at the end of the quarter.

Let me -- and this is to be compared with our net debt target of $250 million to $350 million. That's the range we are aiming at, and we're getting down there. It takes a little bit longer time than we initially planned for, and that has to do with the market development, but we are still firm in our belief that we will get there in -- in due course.

Let me also mention that in Q4, you should expect a somewhat negative development in net working capital items. So it's a seasonal thing. And so you shouldn't expect the cash flow after net working capital adjustments to be as strong in Q4.

Balance sheet, not many significant developments worth mentioning here. The only thing I'm going to mention is the goodwill. You can see that it's down by $4 million. That has to do with the PPA adjustments that we did. So when you do an acquisition as we did with PGS, you can do PPA adjustments up until 12 months after the acquisition closed. And -- and what we have done here is that -- we have increased our long-term receivables by $4 million and reduced the goodwill by a corresponding number.

And apart from that, the balance sheet, of course, remains very strong and even stronger than it was at the end of Q2, given the net debt development. This allows us to continue to pay a dividend of USD 0.155 per share, corresponding to NOK 1.56 per share in this quarter. The ex-date is 1 week from now on the 30th of October, and we will pay the dividend to the shareholders on the 13th of November.

So by that, I'll hand the word back to you, Kristian.

Thank you, Sven, and we're going to touch on the outlook, and I'll start with a slide that we find very interesting, but it's a bit challenging to understand. So I'll take you through it very slowly.

But if you start on the left-hand side, you see the chart there, you see that the light gray color shows the current decline curve. So that is debated whether it's 8% as we show here, and these are numbers from IEA or whether it's 15%, which is Exxon's number that they publicly state that the real decline curve is.

But anyway, if you use 8%, 8% is then equivalent to losing more than the current production from Brazil and Norway every year for the next 10 years. It's quite steep even at 8%. But then in order to satisfy demand going forward, then the big question is how much do we need to invest and how much does the E&P sector need to invest? So if I take you to the right-hand side and you go all the way to 2025, you see that we as an industry or the E&P industry globally invest around $600 billion in CapEx. That's a total CapEx of the entire industry. And that's been pretty much the average. It's just -- right now, it's about $575 million, and it's been $600 million pretty much on average for the past 3 or 4 years.

If you take that information, the $600 billion and you take it back again to the left-hand side, you see that $600 billion is the second blue color from the top. That's where it's going to take us in terms of continuing to invest at today's level, which basically is flat. It's a flat demand compared to today.

So today's or the current investments are probably going to satisfy a flat demand development going forward. But if you think that demand for oil and gas is going to continue to grow in the future, we need to invest more. And we actually need to invest probably somewhere around $750 million because that takes us up to the expected demand going forward. So it's a very powerful slide in terms of understanding that today's investment level is not sufficient to satisfy any growth in demand. And I think most of you and most other readers would argue that there will be growth. There will be continued growth in demand. We've seen that, and we've been wrong several times. Demand has surprised on the upside, and it will continue to do so.

So again, today's investment level from the industry is not sufficient in terms of satisfying any demand growth going forward. And that is further backed by the second slide we have. So last week, I attended something called Energy Intelligence Forum in London. And I think 8 out of the 10 -- 8 CEOs of the 10 largest oil companies in the world were there. And I just included some quotes from 4 of the CEOs that were there and attended the conference.

And the first one from Darren Woods who said that the oil market oversupply is likely to be short term with demand from emerging economies set to make meeting global energy demand more challenging in the medium to longer term. I mean, Nasser was very clear that we had a decade where people didn't explore. It's going to have an impact. If it doesn't happen, there will be a supply crunch.

And then Patrick Pouyanné from TotalEnergies, this non-OPEC supply, which today is impacting the market from Brazil, Guyana and shale oil will plateau. There is a limit to this growth. And then finally, Vicki Hollub from Occi said that discoveries have gone way down. Investment in exploration has gone way down, but it's not just investment that's a problem. We just aren't finding big resources anymore. So very much backing the statement that we had on the first slide that the industry needs to invest more if you believe in demand growth for oil and gas and I think most of us are now convinced that there will be continued growth in demand for both oil and gas.

Going more to the micro level in terms of streamer contract tenders, it's down, and it's down for 2 reasons, mainly the fact that there's been quite a few awards recently. So TGS has been awarded a couple of streamer contracts quite recently. And also on the OBN side, we have announced 2 contracts recently. But the market is not great. There is nothing that indicates that 2026 is going to be a great year for contract tenders. I have to be honest and state that.

But keep in mind that this does not include multi-client. And we have big projects in Brazil. As I said, we have 2 vessels in Brazil as we speak, probably going to keep those 2 vessels there for the time being. And we have -- we see great -- or a great uptick in activity in Africa in terms of multi-client. So the fact that multi-client is not part of this means that this slide gives a very skewed picture in terms of how the market for TGS actually is. So I feel like with the recent increase you've seen in our order backlog, which is mainly and very much driven by multi-client prefunding, I think we see a future that is far brighter than this slide will indicate.

On the OBN market development, 2025 will be back to 2023 level in terms of activities or total revenues for this sector or segment, and that is down from 2024. So that significant growth trajection that we saw in 3 years that has stopped and has come down slightly. This is partly due to some big projects in Brazil that have been awarded, but they have not been acquired yet. So they haven't started yet. And these are big projects that TGS was unsuccessful in winning and some smaller competitors won big projects in Brazil that again has not yet started. So we’ll wish them good luck on that.

In terms of the guidance for the 2025, obviously we're entering the last quarter of the year. So our multi-client investments, we keep our guidance of $425 million to $475 million. We're probably going to be in that kind of mid-range of that investment guidance. We're going to have approximately 70% of the investment expected to be acquired with our own capacity. In terms of CapEx, as we've said a couple of times today, we're reducing our CapEx guidance from $135 million to $110 million. And on the gross operating cost, we again target $950 million for the year. So that's unchanged from the previous quarter.

In terms of utilization, we expect improved utilization year-on-year of our 3D streamer fleet and again, partly helped by multi-client. And then we expect lower OBN acquisition activity, which you have seen, especially over the past quarter or so. So that will be down compared to 2024. And to give you slightly more flavor on that, so we'll start with the order backlog and inflow. So again, as you see, the order inflow was strong this quarter at $430 million -- or above $430 million and that leads to a backlog of $473 million. Again, very weak numbers in Q2 this year, but a relatively solid comeback in Q3, where you see quite significant growth in the order inflow with the resulting increase in the total order backlog. And then you see on the right-hand side, you see the pie chart, and you're obviously familiar to that, and it gives you some guidance in terms of expected timing of recognizing this backlog as revenues.

We also provide you with a summary of our booked positions. So basically, this is where our fleet and OBN crews are booked for the next 2 quarters. So you see on the streamer side, you see that we have about 16 months booked for Q4 and you see the composition of contract versus multi-client. And again, as I alluded to you see more multi-client there than contract. And again, if I look into the 2026, that's probably going to be the case. It's going to be more than 50% as we can tell today on multi-client because of good prefunding and a healthy backlog in terms of some of our big multi-client projects, particularly in Brazil.

And then on the OBN schedule, you see that we're just short of 2 crews working for Q4, and it's going to be approximately the same for Q1, and it's pretty much 1 crew for multiclient and 1 crew for contract, and it's close to being fully utilized for 1 quarter. In terms of geomarkets, we're going to have contract work for our streamer fleet in Africa, Asia and then multi-client in Brazil. For the OBN, we're going to have contract work in Gulf of America and we're also going to have 1 crew working multiclient in the Gulf of America. We expect total multiclient investments in Q4 of $120 million and utilization, as I said on the left-hand side, you see pretty much how it's going to be for the next quarter. And then obviously, there is still time to book more capacity for Q1 of 2026.

So with that, I'm ready to summarize the presentations. Again, pleased to announce solid performance on financial key figures. We had net debt reduced to $432 million based on a free cash flow of about $80 million and $30 million paid in dividends. We've been very disciplined in terms of cash outflow, meaning that we're reducing our 2025 CapEx by $25 million, and this has been reduced several times during the year. So the latest number now is about $110 million for the full year. Obviously, there is -- the short-term market development is sensitive to oil price, but the long-term market outlook, as you've seen from this presentation, remains very positive. And we're maintaining a dividend of $0.155 per share.

With that, I want to bring Sven up here and the BÃ¥rd is going to take you -- take us through some Q&As, and we'll take it from there. Thank you very much.

Thank you, Kristian. We have a nice audience here in Oslo. So we can start with questions from the audience. Yes, John?

Yes. May I ask a little bit of detail on Sven Børre on the OpEx. You mentioned that the gross OpEx is $217 million was $217 million in Q3. And if I add the $10 million that you mentioned as nonrecurring, it will be $227 million. But what did you say -- were there any merger costs included in that $227 million?

No, no. The merger costs I talked about were just for the comparable ‘24 number.

Right.

And going forward, what's still the running quarterly cost base in TGS? Is it $227 million?

I mean we've guided for $950 million annualized.

That includes higher OpEx in the first quarter. What's the running on the quarterly basis?

Yes, it's a bit lower than that. And it will depend a little bit on the activity level. But if you take a little bit lower than $950 million and divide by 4, you should be at an approximately right level.

It's not too far away from $227 million then?

No, it should be reasonably representative.

And then a question on multi-client sales in the quarter. You want to specify or give an indication of the transfer fee? Did you book a transfer fee for the Chevron Hess deal in Q3?

No, we're not allowed to be specific on which transfer fees we booked, but I think the market has been pretty right in terms of there were a big transfer fee this quarter, and that was related to one transaction. We probably had 2 or 3. We have transfer fees in every given quarter, but there was one that was particularly large. I think the market has speculated that in total, we had transfer fees around $25 million, $30 million. So that's pretty much where it was.

And that means that other late sales were probably not too bad either. So I just wonder the key driver -- I assume one of the key drivers in Q3 was the U.S. Gulf -- the American -- the Gulf of America lease round in December. Is that correct? And also more specifically, did you see all the sales that you expect or most of the sales that you -- late sales that you expect in connection with the December round, did they come in Q3? And was there a significant impact on that? Or will you also see it in Q4?

Yes. There were a couple of drivers. And number one, you're right. I mean, our late sales was pretty strong regardless of whether you adjust for transfer fees or not. And our transfer fees were far lower in Q3 this year than they were last year, where the transfer fee was very high. I think one driver of the strong late sales in Q3 was a weak late sales in Q2. And I think that's a reminder to the market that when you looked at it, particularly late sales, but overall, the multi-client performance of TGS, you probably have to look at it in a slightly longer perspective. So if you look at the average of Q2 and Q3, you're more back to normalized level and Q2 was embarrassingly low and Q3 is back where we should be.

So that was one driver is that Q2 was very low. Transfer fees, we've been discussing that. And the third one, yes, we had impact from the lease sale in the U.S. go that is coming up in Q4. Was that significant? Not really. I mean we're talking 10 to 20 rather than 40 to 60, right? Is there more to be sold? Absolutely. But we don't know when that's going to happen, and we don't know if it's going to happen. I mean it's obviously uncertainty around that.

What we can say to add to that is that in the licensing round in '23, most of the sales related to that round happen after the round. So the dynamic around this is a bit uncertain, of course.

And we have talked about that multiple times that the licensing round, particularly in the U.S. haven't really had the same impact as it used to have. So now we do more of the sales beforehand. So we have much higher prefunding of the surveys that we do in the U.S. GOM today than we used to have historically. And then as Sven Børre said, we have some of our sales after the round is taking place rather than lining up for the licensing round. So it's probably more evenly distributed now than it used to be. In the past, it was always you shot without prefunding and then you had a significant kicker at the -- before the licensing round. And then after that, there was nothing.

And my final question before I give the word to somebody else. You mentioned that it's too early to expect a great year for contracted streamers in '26. What do you think it will take? What kind of oil price levels do we need to see to see a great year for streamers in seismic?

We've been doing some internal analysis in that regard and looking at the dilemma of an oil company today or an energy company today is that they have this dividend obligations, they have buyback obligations and then they have CapEx and seismic is obviously part of that discretionary CapEx. And with the oil price dropping from $70 and down to $60, although it's higher today, then you obviously put a lot of strain on that kind of dilemma. So are they going to cut the dividend? Probably not. Are they going to cut back on the buybacks? Potentially, yes. Total has already announced that. Are they going to start spending more on exploration? Well, if you listen to what they say and if you listen to what they told me last week, they are, but we haven't seen it yet.

And I think with the current oil price, we should be a bit cautious expecting that to kick off in 2026. So we're planning for a market that is going to continue to be quite challenging in that regard. But saying that, when we talk about the contract market, and it is important to say that we should be using at least 50%, perhaps up to 70% of our fleet on multi-client projects. And that's where I'm probably more optimistic today than I was 3 months ago in terms of the backlog that we see building up on the multi-client side. So we're not too concerned about the utilization of our fleet in 2026. But obviously, if you look at the contract market per se, it's not great. There is no reason to question that.

And what oil price is needed to change that?

We've been saying that you probably need somewhere between $70 to $75 to see a significant increase in exploration. But again, back to what I heard from the CEOs last week and the oil price was $60 at the time. They're saying that we have -- we've been -- we've done a terrible job in terms of exploration, and we need to get better and we need to spend more. Yes Lukas.

You said that multi-client performed better than what you expected in Q3. So I guess you had a view on the transfer fees. So what exactly was better than what you expected?

You know how it is when you get really beaten up like we did in Q2, you set expectations slightly lower for Q3 and I think that was partly what happened. And we pretty much knew the range of the transfer fee at the time. And obviously, there are always tough discussions on -- and it goes back and forth in many, many iterations before you end up with a number. But that pretty much came in as we expected. I think the market probably estimated that to be bigger or more significant than it was, but we pretty much came in where we thought we would be.

And what are your expectations related to the licensing round in Brazil?

Yes, there was one yesterday with five-blocks where we had data in most of those areas. And obviously, we see some opportunities related to that. I think the news of the environmental permit to Petrobras is very good for TGS. I mean this has been the area where we have invested more than anywhere else in the world over the past 18 months. Obviously, we've taken some risk on that environmental assessment. And obviously, it's great to see that, that had a positive outcome. So I think -- yes, I think that's as specific as I can be. Okay.

And your EBITDA margin on the contract business was nicely up. Is that better pricing, lower costs?

Yes. We probably don't see better pricing. I think that's fair to say. It's not significantly down either, but it's not kind of the right environment to increase pricing to put it that way. So it's cost control and cost efficiency and obviously also partially these reversals that I talked about in this particular quarter. But that has to be seen over time where it's basically mostly related to costs that have been charged previously.

And you are cutting your other CapEx guidance with $25 million. What is that...

No, we've been working constantly on our cost base and our cash outflow base, so to speak, during this year. And CapEx obviously has been under a lot of scrutiny to try to work that down. At the same time, we need to invest in the business, and we need to be maintaining our fleet well and keep it up to the highest standards, and we need to replace streamers. But we have worked on that streamer replacement program and how we can maintain the current streamers in a better manner and keep them longer and or push or spend more time on that replacement program than we initially planned for. That's essentially what's doing it. And of course, there are a lot of -- we are cautious on all other types of CapEx spending for the time being.

There's not a lot of peers to TGS in the streamer space. But if you look at the peer or peers, you will see that our CapEx is far higher. And it's been a reason for that. But of course, there are things we can do in terms of getting that down, and that's what we've done.

And if you break down the $110 million between streamers, computing power, vessel maintenance and other, what would the split be?

Almost half is related -- purely related to streamers.

Can I ask on the CapEx? What should we expect going to '26? Is it fair to assume the same level?

Yes, we will come back to that when we guide in February. But our ambition is to continue to keep that at a lower -- significantly lower level than what we initially guided for this year, of course.

Yes. And did I see an offshore wind contract that you're going to do in July? What vessel will you use for that? Is Ramform Vanguard still going to be stacked? Or do you think you will take that out to do that work?

Yes. We haven't made that decision. And again, we stacked it and we're going to stack it and keep it stacked until we see improvements in the market, and we have 6 vessels who can do the job if we need to. But that's something we consider at any point of time, and we're not ready to make that decision today.

And one last technicality about how you allocate your streamer vessels. You talked about at least 50% doing multi-client and then also maybe up to like 17%. If you can help us a little bit in '26. What’s…

It's too early. What I mean by saying that is that we have that flexibility, and we're not totally dependent on the contract marketing for our fleet. We should be in a position to use at least 50% to 75% on multi-client. We will guide you on -- on a rolling basis for two quarters going forward, but we're not going to give you any more clarity than that.

Okay. We have a couple of questions from other people on the web. Jørgen Lande in Danske Bank. You mentioned prefunding was a bit lower. Do you expect prefunding levels to trend downwards compared to what you have indicated?

Probably not a trend, but we are -- we have had, call it, quite high prefunding levels over the past quarters, and it's probably almost naturally high for -- some periods. So I would think that we're -- yes, we think it will be at that 80% to 90% level over time, give or take, but it may vary from quarter-to-quarter depending on the mix of the different projects that we're doing.

It also has a lot to do with how much risk do we want to take in terms of if we believe that we're at the bottom of the cycle, and we believe that these CEOs who talk about the need for more exploration. Is this the time to go out and do some frontier work with lower prefunding. I mean that's discussions that we have with the Board at any point of time. And similar discussion to what all companies have in terms of are they going to invest more in exploration for the long-term. Yes. So we have those discussions, and that will obviously have an impact on the prefunding rate. But there is no indication in the market that it's harder to get prefunding than it's been before. Not at all.

And we have a question from Mick Pickup in Barclays. You talk of advanced multi-client levels, yet consensus that you supplied has investments down in '26 versus '25. This doesn't seem consistent. So without giving guidance, can you talk directionally about '26 multi-client investment levels?

Yes. I'm not going to do that. But of course, the consensus is not -- we don't make consensus. We just collect consensus. So if consensus is lower in '26 than it's '25, it doesn't necessarily represent what we plan to do. But it's too early for us to say what we're going to invest for '26. We're in that period right now where we're looking at our investment level. I would be very surprised if it differs significantly from what it does this year. And especially on the downside, I would be very disappointed if we see a much lower number.

Next question comes from Ole Martin Rødland in Pareto Securities. While order intake was good this quarter, backlog is still at low levels. Based on best expectations, do you assume lower external streamer and OBN revenues in 2026? And will that possibly be offset by higher multi-client investments and revenues?

Yes, it's too early to say. What we have been saying today is that we have that flexibility, and we can do it -- if we need to. And the beauty of our business model and the beauty about being fully integrated as we are, and we're the only company in our space that can claim that is that we have the flexibility at any point of time to switch between contracts and multi-client. And there's been speculation as to our price is down in the contract market, how bad is the contract market, et cetera. Well, if it is bad and if pricing is down, then we just do multi-client if we can get funding for multi-client projects. And I think we've delivered today, and we've shown you today, and we even showed you in the past four or five quarters that we generate a return of 2x on our multi-client project. So if pricing is low and if we see that we sacrifice too much on our margins by doing some of those contracts, we don't do that.

And another point to bear in mind in our multi-client investments in 2025, we have – we still have quite a bit of external investments where we're using external vessels and external providers. It takes -- following the merger, it takes a little bit of time to in-source everything. So you should probably expect more or less 100% of the capacity that we source to be internal in '26. So even if you, for the sake of argument, assumed flat multi-client investments, you could see higher utilization of our own assets on multi-client.

Okay. Then we have another question from Steffen Evjen in DNB Carnegie. Do you have any leads to sign more OBN contract work over the winter season on top of the current book positions that you disclosed today?

Yes. I mean the sales cycles in OBN are longer than streamer. We like to say they're typically 5 or 6 months at least. So that gives you an indication in terms of when you will see new contracts. We have a number of leads. Some of these leads are related to single contracts and some of the leads are related to what we call capacity agreements or bigger long-term agreements with some of our customers. So there are negotiations going on. And obviously, we're going to announce that to the market as soon as we have contracts to announce.

We don't have any further questions from the web. Any last questions from the people here in Oslo? If not, that concludes the Q&A session. So I give the word to you, Kristian, for your concluding remarks.

Yes. Thank you very much for your attention today. And again, as I said initially, it was a relief to come back with better numbers than we had in Q2. We were obviously as surprised and disappointed as you were in Q2, and it's good to see not only that we have a revenue growth of 26% compared to the last quarter, but we see a very strong profitability and all key metrics are very positive compared to previous quarters. So I wish you all the best and looking forward to see you at our Q4 presentation. Thank you very much.