PGS Files Annual Report on Form 20-F

PGS Files Annual Report on Form 20-F 


OSLO, Norway, May 10  /PRNewswire-FirstCall/ -- Petroleum Geo-Services ASA
("PGS" or the "Company") (OSE and NYSE: PGS) announced today that it has filed
its Annual Report on Form 20-F for the year ended December 31, 2004 containing
consolidated financial statements prepared in accordance with US GAAP.

A copy of the Company's Form 20-F is on file with the U.S. Securities and
Exchange Commission (SEC) and is available for viewing and/or downloading at
http://www.sec.gov/ or at the Company's web site at http://www.pgs.com/ (select
the link to "Investor Relations", "Financial Reports" then "SEC Filings").

As previously reported, the financial statements prepared in accordance with
U.S. GAAP vary significantly from the financial statements prepared in
accordance with Norwegian GAAP.  The Company adopted fresh-start reporting
effective November 1, 2003 for U.S. GAAP reporting purposes. Under fresh-start
reporting, the Company recorded assets and liabilities at estimated fair values
as of November 1, 2003, creating a large number of differences compared to the
Norwegian GAAP financial statements which are on an historical cost basis. As
previously reported, these differences, in the consolidated statement of
operations for 2004, relates predominantly to the amortization of the
multi-client library and other intangible assets, but also other effects of
fresh-start.  There are no material differences in net cash provided by
operating activities, net cash used in investing activities and net cash used
in financing activities in the consolidated statement of cash flows.

The tables below show the main differences in net income and shareholders'
equity between the financial statements prepared in accordance with U.S. GAAP
and those prepared in accordance with Norwegian GAAP. Due to fresh-start
reporting there is a large number of differences and the tables and related
comments that follow should not be considered a complete description of the
differences.

  Net income

  (In millions of dollars)                                    2004
  Net loss Norwegian GAAP (including minority interest)      (54.3)
  GAAP differences by caption:
     - Revenues (a)                                           (6.0)
     - Cost of sales, R&D and SG&A (b)                         7.0
     - Exploration costs (c)                                 (16.3)
     - Depreciation and amortization (d)                     (41.4)
     - Other operating expenses, net/cost of reorganization    0.2
     - Income (loss) from associated companies                (4.6)
     - Interest expense                                        0.4
     - Other financial items, net                              0.3
     - Income tax expense (e)                                (19.4)
     - Minority expense                                       (0.6)
   Net loss in accordance with U.S. GAAP                    (134.7)


  Comments on main differences:



(a)  Revenues for 2004 reported in accordance with U.S. GAAP were lower
principally because (1) upon adopting fresh-start reporting, some elements of
deferred revenues were recorded at estimated fair value and (2) since under
U.S. GAAP certain outstanding forward sales contracts for oil were recorded at
fair value at December 31, 2004.

(b)  Cost of sales, R&D and SG&A for 2004 reported in accordance with U.S. GAAP
were lower primarily since certain costs reported as cost of sales under
Norwegian GAAP were presented as exploration cost under U.S. GAAP (ref. also
(c)).

(c)  Exploration costs (which includes cost to explore for oil and natural gas)
for 2004 are reported on a separate line in the statement of operations in
accordance with U.S. GAAP, while these costs were included in cost of sales and
depreciation and amortization under Norwegian GAAP (ref. also (b) and (d)).
This difference only affects the classification in the statement of operations
and has no effect on net income.

(d)  Depreciation and amortization for 2004 reported in accordance with U.S.
GAAP was higher, as previously disclosed, mainly due to higher amortization of
the multi-client library and amortization of several intangible assets
recognized under fresh-start reporting. Higher amortization of the multi-client
library was due to several factors, including higher book value of the library
at the beginning of 2004 due to fresh-start reporting and higher minimum
amortization caused by fresh-start minimum amortization profiles. Partially
offsetting these effects, the costs related to a dry exploration well were
included in depreciation and amortization under Norwegian GAAP while they were
presented as part of exploration costs under U.S. GAAP (ref. also (c)).

(e)  Income tax expense for 2004 reported in accordance with U.S. GAAP was
higher, mainly because (1) the provision for tax contingencies at January 1,
2004 was lower than under Norwegian GAAP and (2) realization of unrecognized
tax assets generated before November 1, 2003 are recorded as a reduction of the
carrying value of intangible assets under U.S. GAAP compared to a reduction of
tax expense under Norwegian GAAP.

  Shareholders' equity

   (In millions of dollars)                              Dec. 31, 2004
   Shareholders' equity  Norwegian GAAP:                     304.1
    GAAP differences:
     - Property, plant and equipment (f)                     (33.3)
     - Multi-client library                                    4.1
     - Oil and natural gas assets (g)                          7.5
     - Intangible and other long-lived assets   (h)           38.6
     - UK lease related liabilities (i)                      (63.4)
     - Accrual for pension liabilities (j)                   (20.1)
     - Deferred tax, long-term                                (6.7)
     - Other long-term liabilities                            (2.8)
     - Accrued expenses                                       (2.6)
     - Taxes payable and short-term deferred tax              (1.5)
   Shareholders' equity U.S. GAAP and minority interest      223.9


  Comments on main differences:



(f)  Property, plant and equipment at December 31, 2004 in accordance with U.S.
GAAP were lower mainly because, under fresh-start reporting,  the estimated
fair value of some of the contracts related to the FPSO fleet were recorded
separately as intangible assets. Under Norwegian GAAP, when recording
impairments on these assets in 2003, the contracts were included in the
valuation of the FPSOs.

(g)  Oil and natural gas assets at December 31, 2004 in accordance with U.S.
GAAP were higher mainly because, under fresh-start reporting, these were
recorded at the estimated fair value. Offsetting this difference is the
deferred income tax effect which approximated 78% of this difference.

(h)  Intangible and other long-lived assets at December 31, 2004 in accordance
with U.S. GAAP were higher mainly because, under fresh-start reporting, several
intangible assets were recorded at estimated fair value, including the fair
value of some of the contracts related to the FPSO fleet.

(i)  Accrual for UK lease related liabilities at December 31, 2004 in
accordance with U.S. GAAP were higher because, under fresh-start reporting, the
Company calculated and recognized a liability for certain tax indemnities
related to these leases and also recorded the interest rate differential
related to the leases at estimated fair value.

(j)  Accrual for pension liabilities at December 31, 2004 in accordance with
U.S. GAAP was higher because, under fresh-start reporting, the Company recorded
the liabilities at estimated fair value.

Petroleum Geo-Services is a technologically focused oilfield service company
principally involved in geophysical and floating production services. PGS
provides a broad range of seismic and reservoir services, including
acquisition, processing, interpretation, and field evaluation.  PGS owns and
operates four floating production, storage and offloading units (FPSOs).  PGS
operates on a worldwide basis with headquarters at Lysaker, Norway.  For more
information on Petroleum Geo-Services visit http://www.pgs.com/.

The information included herein contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements are based on various
assumptions made by the Company which are beyond its control and are subject to
certain additional risks and uncertainties as disclosed by the Company in its
filings with the Securities and Exchange Commission including the Company's
most recent Annual Report on Form 20- F for the year ended December 31, 2004. 
As a result of these factors, actual events may differ materially from those
indicated in or implied by such forward-looking statements.

  http://hugin.info/115/R/993565/150219.pdf

  FOR DETAILS, CONTACT:

   Ola Bosterud
   Sam R. Morrow
   Christopher Mollerlokken
   Phone: [phone]

   US Investor Services,
   Renee Sixkiller,
   Phone: [phone]


DATASOURCE: Petroleum Geo-Services ASA



CONTACT:  Ola Bosterud, Sam R. Morrow, Christopher Mollerlokken,

[phone], or U.S. Investor Services, Renee Sixkiller, [phone] 



Web site:  http://www.pgs.com/

http://hugin.info/115/R/993565/150219.pdf 

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