PGS to Sell Pertra to Talisman

PGS to Sell Pertra to Talisman 


OSLO, Norway, Feb. 1  /PRNewswire-FirstCall/ -- Petroleum Geo-Services ASA
("PGS" or the "Company") (OSE:PGS)(NYSE:PGS) announced today that it has signed
an agreement to sell its wholly-owned oil subsidiary Pertra AS to Talisman
Energy (UK) Limited a wholly owned subsidiary of Talisman Energy Inc. PGS will
concentrate on its oil service business with strategic focus on geophysics and
floating production operations.

Under the agreement Talisman will pay cash of USD 155 million at closing for
100 percent of the Pertra shares. The transaction value will be adjusted for
certain balance sheet items at closing, which is not expected to have a
material impact on the purchase price. Talisman will finance the acquisition of
Pertra by internal resources.  PGS expects to recognize a gain of approximately
USD 140 million from the transaction as discontinued operations in its
Norwegian GAAP consolidated statements of operations in Q1 2005.

In addition, as a part of the transaction, Talisman has undertaken to split the
upside from the Varg field with PGS on a 50/50 basis if revenues exceed USD 240
million per year in 2005 and 2006, respectively. Further, Talisman and PGS have
agreed to an option for Talisman to change the termination clause in the
contract between PL038 and PGS Production related to the FPSO Petrojarl Varg
which is producing the Pertra operated Varg field. The option is valid until
February 1, 2006 and is subject to closing of the transaction.

Closing of the transaction is subject to the required approvals from the
Ministry of Petroleum and Energy, the Ministry of Finance and the relevant
Norwegian competition authorities. The transaction is also subject to other
customary conditions.  Such conditions, however, do not include due diligence
or financing of the transaction.

Pertra's main asset is the Varg field, located in Production License 038 (PL
038) (Block 15/12) in the Norwegian sector of the North Sea. Pertra AS is the
operator of PL 038 with 70% interest while co-venturer Petoro AS holds the
remaining 30%.

Svein Rennemo, PGS' CEO, stated the following regarding the transaction:

"The divestment of Pertra marks PGS' exit from its successful E&P development,
which started in 2001. PGS was formed as an oil service company and with this
exit from E&P, PGS will once again become fully focused on its oil service
business with strategic focus on geophysics and floating production operations.
In both these areas we are industry leaders, with strong credibility, market
share, client relationships and technological expertise. The proceeds from the
Pertra sale will be used to strengthen our balance sheet, which could include
debt reduction.

"The very competent team in and around Pertra has done an extraordinary job.
After supporting the transition to Talisman they may want again to develop a
start up E&P company. PGS will definitely support and facilitate such an effort
in the initial phase."

Option to change FPSO contract

Under the contract between PL 038 and PGS Production, PGS' FPSO Petrojarl Varg
is currently producing the Pertra operated Varg field for a fixed base day rate
of USD 90,000 and a variable rate of USD 6.30 per barrel produced. PGS is
entitled to terminate the agreement if the production of the Varg field falls
below 15,700 barrels a day.

To ensure a longer life for the Varg field, Talisman and PGS have entered into
an option agreement under which the PL038 License can change the existing
termination right for the FPSO. The option, if exercised, will at the
discretion of the PL038 license holders allow production of the Varg field
until 2010. To exercise the option, the License will have to make a payment of
USD 22.5 million upon exercise of the option and guarantee a minimum of USD
190,000 per day as compensation for the use of the FPSO Petrojarl Varg. The
option is subject to Pertra being purchased by Talisman and is valid until
February 1, 2006. Talisman will pay USD 2.5 million at closing for this option.

More about Pertra AS:

Pertra AS, a wholly-owned subsidiary of PGS, was established to pursue
small-field opportunities on the Norwegian Continental Shelf. Pertra is
presently a license holder of seven licenses, and is operator of three of these
licenses. The only license with production at present is Production License 038
where the Varg field has been in production since December 1998. Pertra is
operator and holds 70 percent ownership in this license. Pertra's other
licenses are as follows: PL321 as operator and 80% owner, PL337 as operator and
45% owner, PL316 as partner and 30% owner, PL332 as partner and 20% owner,
PL343 as partner and 35% owner, and PL349 as partner and 35% owner. Currently
Pertra has 20 employees. More info on http://www.pgs.com/pertra

About Talisman Energy Inc:

Talisman Energy Inc. is a large independent oil and gas producer with global
operations headquartered in Calgary; Alberta, Canada and listed on the Toronto
and New York stock exchanges.  Current market capitalization of Talisman is
approximately USD12 billion with 1,758 employees in its North American and
international operations. In the UK Central North Sea, Talisman has established
a number of operated commercial hubs, which provide significant value through
low risk development, adjacent exploration opportunities, secondary recovery
and third-party tariff receipts. Talisman is also building a new core area in
the Norwegian sector of the Central North Sea. The North Sea was Talisman's
highest netback area in 2003.  More info on: http://www.talisman-energy.com/

The press release including "Separate Financial Information for Pertra" can be
downloaded from the following link:

  http://hugin.info/115/R/978296/144505.pdf

   FOR DETAILS, CONTACT:
   Ola Bosterud
   Sam R. Morrow
   Phone:  [phone]
   Suzanne M. McLeod
   Phone:  [phone]


DATASOURCE: Petroleum Geo-Services ASA



CONTACT:  Ola Bosterud or Sam R. Morrow, [phone], or Suzanne M.

McLeod, [phone], all for Petroleum Geo-Services ASA 



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

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