Houston, Texas; Oslo, Norway; July 31, 2000: Petroleum Geo-Services ASA (NYSE: PGO; OSE: PGS) has prepared the following update in order to address certain issues raised in recent press articles regarding the Company’s ongoing dispute with DSND Søndenfjeldske ASA (“DSND”). The Company has been invoiced certain costs related to the subsea and riser installation work on the Ramform Banff which have been in dispute since 1998. The Company has disputed the charges and has, in addition, filed a counterclaim against DSND for an amount that is approximately the same as the amount recently awarded DSND in the first phase of the court case. With respect to the ongoing litigation, there will be three phases to the court case. The first phase concluded on July 28, 2000 in favor of DSND, the second phase will be heard in November 2000 and the third phase is scheduled for April 2001.
Reidar Michaelsen, PGS' Chairman and Chief Executive Officer, stated, "While we are clearly disappointed with both the outcome of the first phase and the order in which each phase is being heard by the court, the negative outcome with respect to the first phase was not unexpected and we remain optimistic with respect to the second and third phase of the court case."
Michaelsen went on to say, "Several of the DSND invoices were recorded in the Company’s accounts pending resolution of the dispute and any incremental payments that may be awarded to DSND as they relate to this dispute would likely further increase our investment in the Banff asset, with a minimal impact on our future earnings."
Petroleum Geo-Services is a technologically-focused oilfield service company principally involved in two businesses: geophysical seismic services and production services. PGS acquires, processes, manages and markets 3D, time-lapse and multi-component seismic data and provides associated data management solutions. This data is used by oil and gas companies in the exploration for new reserves, the development of existing reservoirs, and the management of producing oil and gas fields. PGS’ PetroTracTM suite of advanced geophysical technologies allows oil and gas companies to better characterize and monitor their reservoirs in order to enhance production and ultimate recovery of hydrocarbons. In its production services business, PGS owns four floating production, storage and offloading systems and operates numerous offshore production facilities for oil and gas companies. FPSOs permit oil and gas companies to produce from offshore fields more cost effectively. PGS operates on a worldwide basis with headquarters in Oslo, Norway and Houston, Texas.