8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report
December 7, 2009
(Date of earliest event reported)

GEOKINETICS INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization) 001-33460
(Commission File Number) 94-1690082
(I.R.S. Employer
Identification Number)

1500 CityWest Blvd., Suite 800
Houston, Texas, 77042
(Address of principal executive offices)

(713) 850-7600
(Registrant's telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01    Other Events.

        As previously announced, Geokinetics Inc., a Delaware corporation ("Geokinetics") entered into a definitive purchase agreement with Petroleum Geo-Services ASA ("PGS") under which Geokinetics will acquire the onshore seismic data acquisition and multi-client data library business of PGS ("PGS Onshore") in a cash and stock transaction valued at approximately $210 million, on a cash free, debt free basis, which includes net working capital of $37.5 million. The final purchase price is subject to certain customary post-closing adjustments. The transaction is expected to close in the first quarter of 2010 and is subject to normal closing conditions and regulatory approvals; there is no financing condition.

        Under the purchase agreement, Geokinetics agreed to purchase seven corporations or other entities owned by PGS or its subsidiaries, and to acquire assets and assume liabilities from four other subsidiaries of PGS. The entities and assets acquired represent substantially all of PGS Onshore.

        For the nine months ended September 30, 2009, total revenues of PGS Onshore declined 32% from $208.1 million to $141.6 million primarily as a result of a challenging market environment. During this period, the PGS Group experienced lower activity levels in North America, including Alaska and Canada, and North Africa and significantly lower multi-client library sales, offset by higher activity in Mexico. Multi-client library sales, which are concentrated in the United States, declined 93% primarily as a result of continuing decreased capital expenditures by U.S. clients due to difficult economic conditions and declining natural gas prices in the United States.

        A multi-year 3D seismic contract in Mexico was awarded to PGS Onshore by PEMEX in the third quarter of 2008. The surveys under the contract are expected to be conducted into 2012 and the area to be surveyed is in excess of 2,000 square kilometers. The revenues from this contract contributed to the higher activity in Mexico for the nine months ended September 30, 2009.

        Total revenues of PGS Onshore increased by 13% to $278.8 million in 2008 as compared to 2007, following a 14% decline in total revenues in 2007 to $245.7 million as compared to total revenues of $263.8 million in 2006.

        Revenues for the fiscal year ended December 31, 2008 increased primarily due to increased activity in Latin America and redeployment of transition zone operations in Alaska, offset by reduced activity in North Africa. Multi-client library sales declined 15% in 2008 to $68.6 million from $81.2 million in 2007 as a result of decreased capital expenditures by U.S. clients.

        Revenues for the fiscal year ended December 31, 2007, declined primarily due to lower activity in Africa and adverse weather conditions in the United States. In 2007, multi-client library sales increased 80% to $81.2 million from $45.2 million in 2006 as a result of significant client funding of new multi-client projects.

        In this Current Report on Form 8-K, Geokinetics incorporates by reference certain historical financial information of PGS Onshore, attached as Exhibits 99.2 and 99.3 hereto, and unaudited pro forma combined financial information of Geokinetics, attached as Exhibit 99.1 hereto.

        The unaudited pro forma combined financial statements of Geokinetics as of September 30, 2009, for the year ended December 31, 2008 and for the nine months ended September 30, 2009 and 2008 includes the purchase of PGS Onshore and the related financing transactions, including the common stock issued to PGS, the concurrent offering of notes, the preferred stock

restructuring, the execution of the new senior secured credit facility and the common stock offering.

Item 9.01    Financial Statements and Exhibits

(d)

Exhibits:

23.1	Consent of Independent Registered Public Accounting Firm KPMG, LLP.
99.1	Geokinetics—Unaudited Condensed Pro Forma Combined Financial Information as of September 30, 2009, for the year ended December 31, 2008 and for the nine months ended September 30, 2009 and 2008.
99.2	PGS Onshore—Audited Combined Financial Statements as of December 31, 2008 and 2007 and for the three years ended December 31, 2008.
99.3	PGS Onshore—Unaudited Condensed Combined Financial Statements as of September 30, 2009 and for the nine months ended September 30, 2009 and 2008.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GEOKINETICS INC.
December 7, 2009	By:	/s/ SCOTT A. MCCURDY Scott A. McCurdy Vice President and Chief Financial Officer

Exhibit Index

Exhibit Number		Title of Document
	23.1	Consent of Independent Registered Public Accounting Firm KPMG, LLP.
	99.1	Geokinetics—Unaudited Condensed Pro Forma Combined Financial Information as of September 30, 2009, for the year ended December 31, 2008 and for the nine months ended September 30, 2009 and 2008.
	99.2	PGS Onshore—Audited Combined Financial Statements as of December 31, 2008 and 2007 and for the three years ended December 31, 2008.
	99.3	PGS Onshore—Unaudited Condensed Combined Financial Statements as of September 30, 2009 and for the nine months ended September 30, 2009 and 2008.

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Item 8.01 Other Events.
Item 9.01 Financial Statements and Exhibits

SIGNATURE
Exhibit Index

EX-23.1

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Petroleum Geo-Services ASA:

        We consent to the incorporation by reference in the registration statement (No. 333-160268) on Form S-3 of Geokinetics Inc. of our report dated November 17, 2009, with respect to the combined balance sheets of Onshore Group, owned by Petroleum Geo-Services ASA, (the Company or the Onshore Group) as of December 31, 2008 and 2007, and the related combined statements of operations, changes in parent net invested capital, and cash flows for each of the years in the three-year period ended December 31, 2008, which report appears in the Form 8-K of Geokinetics Inc. dated December 7, 2009 and to the reference to our firm under the heading "Experts" in the prospectus supplement. Our report dated November 17, 2009 contains an explanatory paragraph that states that the combined financial statements have been prepared from the separate records maintained by the Company and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had been operated as an unaffiliated entity, as discussed in note 2 to the combined financial statements.

Houston, Texas
December 7, 2009

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EX-99.1

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Exhibit 99.1

UNAUDITED CONDENSED PRO FORMA COMBINED FINANCIAL INFORMATION

        On December 3, 2009, Geokinetics Inc. ("Geokinetics" or "we", "us" or "our") entered into a purchase agreement with Petroleum Geo-Services ASA and its subsidiaries in which Geokinetics agreed to purchase the onshore seismic data acquisition and multi-client data library business of Petroleum Geo-Services ("PGS Onshore") for $210.0 million, consisting of $183.9 million of cash and 2,153,616 shares of Geokinetics common stock, subject to adjustment, primarily for changes in working capital.

        In connection with the PGS Onshore acquisition, we are conducting an offering of $275.0 million of senior secured notes. The notes will mature five years after date of issuance, and will bear interest at a fixed rate agreed to by us and the initial purchasers in the note offering. The notes are being offered by a direct, wholly-owned subsidiary of ours. The notes will be unconditionally guaranteed by Geokinetics and all of its domestic subsidiaries, and will be secured by a first priority lien on substantially all of the assets of the guarantors and the issuer.

        We expect that provisions of the notes generally will provide that until the second anniversary following their issuance, we may redeem up to 10% of the original principal amount of the notes during each 12-month period at 103% of the principal amount plus accrued interest. Thereafter, we may redeem all or part of the notes at a prepayment premium which will decline over time. We will be required to make an offer to repurchase the notes at 101% of the principal amount plus accrued interest if we experience a change of control. The indenture for the notes will contain customary covenants for non-investment grade indebtedness, including restrictions on our ability to incur indebtedness, to declare or pay dividends and repurchase our capital stock, to invest the proceeds of asset sales, and to engage in transactions with affiliates.

        We will initially deposit into escrow 101% of the aggregate issue price of the notes, plus an amount necessary to pay the interest on the notes from and including the issue date of the notes to, but excluding, March 15, 2010. This amount will represent approximately $16.5 million more than the net proceeds of the note offering. The holders of the notes will have a first priority lien on the amounts in the escrow account. We plan to use the amounts in the escrow account to pay the cash portion of the purchase price of the PGS Onshore acquisition, repay existing indebtedness and to pay related expenses. Any amount remaining after such payments will be used for working capital. If we do not close the PGS Onshore acquisition on or before the date the escrow expires, the amount in the escrow account will be used to redeem the notes at 101% of the principal amount plus accrued interest.

        We are also conducting an offering of 4,000,000 shares of our common stock to the public.

        In connection with the PGS Onshore acquisition we have also received a commitment from Royal Bank of Canada to provide a wholly owned subsidiary of ours with a $50.0 million new senior secured revolving credit facility. The revolving credit facility will mature three years after the closing of the PGS Onshore acquisition. We may borrow, repay and re-borrow under the revolving credit facility at any time following the day after the closing of the PGS Onshore acquisition until the maturity date of the facility. Borrowings outstanding under the revolving credit facility will bear interest at a floating rate based on LIBOR.

        We have outstanding 284,321 shares of series B-1 preferred stock convertible into 2,843,210 shares of common stock, and 131,270 shares of series B-2 preferred stock convertible into 1,312,700 shares of common stock, as of September 30, 2009. The dividend rate on the

series B preferred stock is 8% and may be paid by issuing additional shares of series B preferred stock until October 31, 2011, after which dividends are payable in cash. After March 31, 2014, the holders of a majority of the shares of preferred stock may require us to redeem the preferred stock at the liquidation preference of the preferred stock, or $250 per share.

        The holders of the series B preferred stock have agreed with us as follows:

•

the conversion price of the series B-1 preferred stock will be reduced from the current $25 to $20 if we consummate this common stock offering or the PGS Onshore acquisition, or both, on or before June 30, 2010;

•

we will be able to pay dividends in kind on the series B-1 preferred stock until one year after the maturity date of the notes offered concurrently herewith or the bridge facility, but no later than March 31, 2016;

•

we will not be required to redeem the series B-1 preferred stock until one year after the maturity of the notes offered concurrently herewith or the bridge facility, but no later than March 31, 2016; and

•

the holders of the series B preferred stock will waive certain other rights they have with respect to the PGS Onshore acquisition and this common stock offering.

        In exchange, we have agreed as follows with the holders of the series B preferred stock:

•

we will increase the dividend rate on the series B-1 preferred stock from 8% to 9.75%;

•

we will exchange the series B-2 preferred stock for a new series of preferred stock plus the issuance of 750,000 shares of our common stock; and

•

we will pay Avista Capital Holdings, L.P. and Levant America S.A. a cash fee of 2% of the liquidation amount, plus accrued and unpaid dividends of the series B preferred stock.

        The series C preferred stock will be issued to Avista, and will have an aggregate liquidation preference equal to the liquidation preference of the series B-2 preferred stock being redeemed. The series C preferred stock will accrue dividends at a rate of 1.5% in excess of the interest rate of the senior notes offered in the note offering or 12% if we do not consummate the note offering. Dividends may be paid in kind or may accrue, at the election of Avista, until one year after the maturity date of the senior notes, but no later than March 15, 2016. We will be required to redeem the preferred stock, if requested by Avista, one year after the maturity date of the senior notes, but no later than March 15, 2016. The series C preferred stock is not convertible or exchangeable for our common stock.

        We have received a commitment from Royal Bank of Canada to make a bridge loan to our direct wholly-owned subsidiary, in the amount of $275.0 million, for the purpose of funding the PGS Onshore acquisition. We plan to use borrowings under the bridge loan to finance the PGS Onshore acquisition and repay our existing indebtedness if we do not complete the note offering described above. Amounts outstanding under the bridge loan will bear interest at a rate based on LIBOR plus a premium, and will increase quarterly up to a maximum amount specified in the commitment. One year following the closing of the bridge loan, the lenders will convert their loans into roll-over securities or roll-over loans, which will each have a four year maturity. The interest on the roll-over notes and loans will be based on LIBOR plus a premium, which will increase quarterly to a maximum provided in the commitment.

        Borrowings outstanding under the bridge loan will be guaranteed by Geokinetics and each of our domestic subsidiaries, and will be secured by a first priority lien on substantially all of the

assets of the guarantors. We will be able to repay borrowings under the bridge loan at any time, without prepayment penalty. In addition, we will be required to repay amounts outstanding under the bridge loan with the proceeds of certain asset sales and debt issuances. If we experience a change of control, we will be required to repay the bridge facility.

        The bridge facility will have customary representations and warranties, and both incurrence and maintenance covenants, including financial ratios we will be required to meet.

        If we close the note offering, the bridge commitment will terminate. For purposes of the pro forma financial information, we have assumed the notes offering will close and the bridge commitment will terminate.

        The pro forma unaudited financial information included herein is based on the book value of the assets and liabilities of PGS Onshore as of September 30, 2009. The purchase price allocation will be adjusted upon completion of the final valuation of the assets acquired and liabilities assumed, and may be materially different from the information presented herein.

        The unaudited condensed pro forma combined financial information gives effect to the purchase of PGS Onshore and the related financing transactions, including the common stock issued to Petroleum Geo-Services, the offering of notes, the preferred stock restructuring, the execution of our new senior secured revolving credit facility and the common stock offering as if the acquisition and related financing transactions had occurred as of the beginning of the periods presented for purposes of the pro forma combined statement of operations and as of September 30, 2009 for the pro forma combined balance sheet.

        The following table sets forth the estimated sources and uses of funds for the PGS Onshore acquisition and related financing transactions, in thousands:

Uses:
	Acquisition of PGS Onshore		$	210,000
	Repayment of existing credit facility and capital leases and other obligations			75,393
	Expenses(1)			21,059
	General corporate purposes			44,308
		Total	$	350,760
Sources:
	Common stock offering		$	49,680
	Issuance of common stock to Petroleum Geo-Services			26,080
	Notes offering			275,000
		Total	$	350,760

(1)

Includes expenses related to the negotiation of the agreement to purchase PGS Onshore, this note offering, the concurrent common stock offering, the new senior secured revolving credit facility, the bridge loan and the preferred stock restructuring.

        The unaudited condensed pro forma financial statements do not give effect to cost savings that may be attributable to any synergies that may be achieved as a result of the acquisition, nor do they give effect to any nonrecurring or unusual restructuring charges that may be incurred as a result of the integration of PGS Onshore into our business.

        The unaudited condensed pro forma combined financial statements are provided for informational purposes only and do not purport to present the consolidated results of operations of us and PGS Onshore had the acquisition occurred on the dates specified, nor are they necessarily indicative of the results of operations that may be expected in the future.

        The unaudited condensed pro forma combined financial information should be read in conjunction with our historical financial statements and the historical financial statements of PGS Onshore and the notes thereto, all of which are included or incorporated by reference into this offering memorandum. Certain accounts of PGS Onshore have been reclassified to be consistent with our presentation format. While we have conducted preliminary reviews of the accounting and financial reporting policy differences related to PGS Onshore, this review is ongoing and will continue throughout the integration process. As such, additional reclassifications or pro forma adjustments may be identified.

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Year Ended December 31, 2008

			Historical
			Geokinetics			PGS Onshore			Pro Forma Adjustments			Pro Forma Combined
			(in thousands, except per share data)
Revenues:
	Seismic acquisition		$	462,416		$	210,166		$	—		$	672,582
	Data processing			12,022			—			—			12,022
	Multi-client library			160			68,611			—			68,771
		Total revenue		474,598			278,777			—			753,375
Expenses:
	Cost of sales			370,238			192,966			—	(A)		563,204
	Selling and administrative costs			39,341			13,935			—			53,276
	Multi-client library amortization			474			45,927			—			46,401
	Depreciation and amortization			48,516			14,913			—			63,429
		Total expenses		458,569			267,741			—			726,310
Loss on disposal of property and equipment				(1,255	)		—			—			(1,255	)
Gain on insurance claim				1,125			—			—			1,125
Operating income				15,899			11,036			—			26,935
Other income (expense):
	Interest income			815			122			—			937
	Interest expense			(6,991	)		(13,479	)		(12,245	)(B)		(32,715	)
	Mandatorily redeemable preferred stock costs			—			—			(6,285	)(C)		(6,285	)
	Other financial items, net			531			(3,449	)		(1,500	)(D)		(4,418	)
		Total other income (expense)		(5,645	)		(16,806	)		(20,030	)		(42,481	)
Income (loss) before income taxes				10,254			(5,770	)		(20,030	)		(15,546	)
Provision for income taxes				9,268			13,483			—			22,751
Net income (loss)				986			(19,253	)		(20,030	)		(38,297	)
Dividends and accretion on preferred stock				6,325			—			(1,529	)(E)		4,796
Income (loss) applicable to common stockholders			$	(5,339	)	$	(19,253	)	$	(18,501	)	$	(43,093	)
Income per common share:
	Basic and diluted		$	(0.51	)							$	(2.49	)
Weighted average common shares outstanding:
	Basic and diluted			10,390						6,904	(L)		17,294

See accompanying footnotes.

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Nine Months Ended September 30, 2009

			Historical
			Geokinetics			PGS Onshore			Pro Forma Adjustments			Pro Forma Combined
			(in thousands, except per share data)
Revenues:
	Seismic acquisition		$	376,800		$	137,555		$	—		$	514,355
	Data processing			7,812			—			—			7,812
	Multi-client library			3,996			4,003			—			7,999
		Total revenue		388,608			141,558			—			530,166
Expenses:
	Cost of sales			277,927			125,152			—	(A)		403,079
	Selling and administrative costs			39,113			7,194			—			46,307
	Multi-client library amortization			2,664			3,170			—			5,834
	Depreciation and amortization			39,014			15,456			—			54,470
		Total expenses		358,718			150,972			—			509,690
Loss on disposal of property and equipment				(2,142	)		—			—			(2,142	)
Operating income				27,748			(9,414	)		—			18,334
Other income (expense):
	Interest income			198			335			—			533
	Interest expense			(4,526	)		(8,069	)		(12,870	)(B)		(25,465	)
	Mandatorily redeemable preferred stock costs			—			—			(4,713	)(C)		(4,713	)
	Other financial items, net			1,491			1,382			(1,500	)(D)		1,373
		Total other income (expense)		(2,837	)		(6,352	)		(19,083	)		(28,272	)
Income (loss) before income taxes				24,911			(15,766	)		(19,083	)		(9,938	)
Provision for income taxes				18,280			(2,734	)		—			15,546
Net income (loss)				6,631			(13,032	)		(19,083	)		(25,484	)
Dividends and accretion on preferred stock				6,199			—			(1,147	)(E)		5,052
Income (loss) applicable to common stockholders			$	432		$	(13,032	)	$	(17,936	)	$	(30,536	)
Income per common share:
	Basic and diluted		$	0.04								$	(1.75	)
Weighted average common shares outstanding:
	Basic and diluted			10,542						6,904	(L)		17,446

See accompanying footnotes.

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Nine Months Ended September 30, 2008

			Historical
			Geokinetics			PGS Onshore			Pro Forma Adjustments			Pro Forma Combined
			(in thousands, except per share data)
Revenues:
	Seismic acquisition		$	347,596		$	148,703		$	—		$	496,299
	Data processing			9,202			—			—			9,202
	Multi-client library			42			59,350			—			59,392
		Total revenue		356,840			208,053			—			564,893
Expenses:
	Cost of sales			278,313			138,368			—	(A)		416,681
	Selling and administrative costs			29,286			10,708			—			39,994
	Multi-client library amortization			370			41,259			—			41,629
	Depreciation and amortization			35,345			10,504			—			45,849
		Total expenses		343,314			200,839			—			544,153
Loss on disposal of property and equipment				(461	)		—			—			(461	)
Gain on insurance claim				697			—			—			697
Operating income				13,762			7,214			—			20,976
Other income (expense):
	Interest income			510			133			—			643
	Interest expense			(5,009	)		(8,847	)		(11,609	)(B)		(25,465	)
	Mandatorily redeemable preferred stock costs			—			—			(4,713	)(C)		(4,713	)
	Other financial items, net			179			(1,593	)		(1,500	)(D)		(2,914	)
		Total other income (expense)		(4,320	)		(10,307	)		(17,822	)		(32,449	)
Income (loss) before income taxes				9,442			(3,093	)		(17,822	)		(11,473	)
Provision for income taxes				4,146			10,526			—			14,672
Net income (loss)				5,296			(13,619	)		(17,822	)		(26,145	)
Dividends and accretion on preferred stock				4,343			—			(1,147	)(E)		3,196
Income (loss) applicable to common stockholders			$	953		$	(13,619	)	$	(16,675	)	$	(29,341	)
Income per common share:
	Basic and diluted		$	0.09								$	(1.70	)
Weighted average common shares outstsnding:
	Basic and diluted			10,363						6,904	(L)		17,267

See accompanying footnotes.

Unaudited Condensed Pro Forma Combined Balance Sheet

As of September 30, 2009

			Historical
			Geokinetics			PGS Onshore		Pro Forma Adjustments			Pro Forma Combined
			(in thousands)
ASSETS
Current Assets
	Cash and cash equivalents		$	19,395		$	11,393	$	(11,393	)(G)
									44,308	(F)	$	63,703
	Restricted cash			2,014			335		(335	)(G)		2,014
	Accounts receivable			117,630			49,924		—			167,554
	Deferred costs			19,814			—		—			19,814
	Prepaid expenses and other current assets			14,921			22,617		(4,539	)(G)		32,999
		Total current assets		173,774			84,269		28,041			286,084
Property and equipment, net				194,933			51,688		—			246,621
Multi-client data library, net				7,934			59,464		—			67,398
Goodwill				73,414			—		52,982	(H)		126,396
Other assets				9,474			16,106		(15,384	)(G)
									18,710	(I)		28,906
	Total assets		$	459,529		$	211,527	$	84,349		$	755,405
LIABILITIES, MEZZANINE AND STOCKHOLDERS' EQUITY
Current liabilities
	Current portion of long-term debt and capital leases		$	23,799		$	—	$	(23,799	)(J)	$	—
	Accounts payable			36,176			4,938		—			41,114
	Accrued liabilities			59,644			22,844		(7,086	)(G)		75,402
	Unearned revenue			29,396			—		—			29,396
	Federal income taxs payable			12,565			6,998		(6,998	)(G)		12,565
		Total current liabilities		161,580			34,780		(37,883	)		158,477
Long-term debt and capital lease obligations, net of current				51,594			—		(51,594	)(J)		—
									272,250	(K)		272,250
Deferred income taxes and other non-current liabilities				13,716			2,162		—			15,878
Mandatorily redeemable preferred stock				—			—		32,818	(P)		32,818
	Total liabilities			226,890			36,942		215,591			479,423
Mezzanine equity				101,054			—		(30,691	)  (Q)		70,363
Stockholders' equity
	Common stock			106			—		69	(L)		175
	Additional paid-in capital			184,214			—		80,600	(M)		264,814
	Accumulated deficit			(52,755	)		174,585		(174,585	)(H)
									(5,213	)(N)
									(1,422	)(O)		(59,390	)
	Accumulated other comprehensive income			20			—		—			20
		Total stockholders' equity		131,585			174,585		(100,551	)		205,619
	Total liabilities, mezzanine and stockholders' equity		$	459,529		$	211,527	$	84,349		$	755,405

See accompanying footnotes.

Footnotes to Unaudited Condensed Pro Forma

Combined Financial Information

Unaudited Condensed Pro Forma Combined Statements of Operations Footnotes

All numbers in thousands

(A)

Research and development costs of PGS Onshore, included in cost of sales, were $16, $2,887 and $16 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively. These costs were incurred by PGS Onshore in connection with development of certain marine vibrator technology.

(B)

The adjustments to interest expense include the following items:

(1)

commitment fee for the bridge loan of $2,750 for all periods; plus

(2)

the write-off of deferred financing cost associated with the retirement of our current working capital facility of $963 for all periods; plus

(3)

the amortization of debt issuance costs related to this note offering and the new senior secured revolving credit facility of $1,502, $1,127 and $1,127 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; plus

(4)

interest expense on these notes of $27,500, $20,625 and $20,625 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; less

(5)

the elimination of interest expense related to the retirement of our current working capital facility and capital leases of $6,991, $4,526 and $5,009 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; and less

(6)

the elimination of interest expense relating to indebtedness of PGS Onshore that we will not be assuming of $13,479, $8,069 and $8,847 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively.

			Year Ended			Nine Months Ended
Description			December 31, 2008			September 30, 2009			September 30, 2008
(1)		Commitment fee for the bridge loan	$	2,750		$	2,750		$	2,750
(2)		Write-off of deferred financing costs associated with retired debt		963			963			963
(3)		Amortization of deferred financing costs related with the notes		1,502			1,127			1,127
(4)		Interest expense on the notes		27,500			20,625			20,625
(5)		Elimination of interest expense		(6,991	)		(4,526	)		(5,009	)
(6)		Elimination of PGS Onshore interest expense		(13,479	)		(8,069	)		(8,847	)
	Total		$	12,245		$	12,870		$	11,609

(C)

Dividends payable and amortization of deferred financing costs related to the series C preferred stock of $6,285, $4,713 and $4,713 for the year ended December 31, 2008 and the nine months ended September 30, 2009 and 2008, respectively. The new series of preferred stock will be

Footnotes to Unaudited Condensed Pro Forma

Combined Financial Information

considered a mandatorily redeemable financial instrument that is within the scope of ASC 480, "Distinguishing liabilities from equity" and therefore will be classified as a long-term liability.

(D)

Reflects expenses related to the PGS Onshore acquisition.

(E)

Reflects the decrease in dividends related to the exchange of the series B-2 preferred stock offset by the effect of the increase in the dividend rate on the series B-1 preferred stock of $(1,529), $(1,147) and $(1,147) for the year ended December 31, 2008 and the nine months ended September 30, 2009 and September 30, 2008, respectively.

Unaudited Condensed Pro Forma Combined Balance Sheet Footnotes

(F)

Excess proceeds from this note offering and the common stock offering after the acquisition, the repayment of our outstanding debt and capital lease obligations and fees and expenses.

(G)

Effect of the net assets that are not included in the acquisition (the "Excluded Assets"):

Cash	$	11,393
Restricted cash		335
Current deferred tax asset		4,539
Non-Current deferred tax asset		15,384
Deferred tax liabilities and other		(7,086	)
Income taxes payable		(6,998	)
Excluded net assets	$	17,567

        We expect that all, or a majority of, the deferred tax amounts will be eliminated prior to closing.

(H)

The following table presents the preliminary allocation of the excess purchase price of the net assets acquired:

Net assets of PGS Onshore	$	174,585
Less: Excluded net assets		(17,567	)
Net assets acquired		157,018
Purchase price		210,000
Excess purchase price	$	52,982

The excess purchase price has been allocated to goodwill as we have not completed our evaluation of the fair value of the acquired assets and assumed liabilities.

(I)

Includes the expected debt issuance cost from the issuance of these notes of $7,475, the new senior secured revolving credit facility of $1,000, the fair value of the restricted shares to be issued of $ 8,415 and the fee to be paid of $ 656 in conjunction with the exchange of the series B-2 preferred stock for the series C preferred stock, the difference between the fair value of the new series of preferred stock exchanged in the preferred stock restructuring of $ 2,127 less the write off of the deferred financing costs of $963 associated with the retired debt.

(J)

Reflects the repayment of our long-term debt, capital lease and other obligations.

Footnotes to Unaudited Condensed Pro Forma

Combined Financial Information

(K)

Includes the issuance of these notes for $275,000 less a discount of 1% for estimated net proceeds of $272,250.

(L)

Includes the par value of the common stock issued to Petroleum Geo-Services (2,153,616 shares), the shares expected to be issued in the equity offering (4,000,000 shares) and the shares to be issued in conjunction with exchange of the series C preferred stock (750,000 shares).

(M)

Represents the excess of par value of shares issued to Petroleum Geo-Services ($26,059), the shares expected to be issued in the equity offering ($46,633) and the shares to be issued in conjunction with the exchange of the series C preferred stock ($8,408) less fees of $500 related to the modification of the preferred stock.

The assumed fair value of the shares issued to Petroleum Geo-Services was $12.11 per share and the assumed fair value of the shares expected to be issued in the equity offering and for the shares was based on the closing price of the common stock on December 4, 2009 of $12.42.

(N)

Consists of the impact of commitment fees associated with the bridge loan ($2,750), the advisory fees associated with the acquisition ($1,500) and the write off of the deferred financing costs associated with the retired debt ($963).

(O)

Represents the fee to be paid to the holders of the series B-1 preferred stock in connection with the modifications.

(P)

Represents the estimated fair value of the series C preferred stock to be issued in connection with the preferred stock restructuring. The new series of preferred stock will be considered a mandatorily redeemable financial instrument that is within the scope of ASC 480, "Distinguishing liabilities from equity" and therefore will be classified a long-term liability.

(Q)

Represents the series B-2 preferred stock that was exchanged for the series C preferred stock in connection with the preferred stock restructuring.

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Exhibit 99.1

Unaudited Condensed Pro Forma Combined Statement of Operations For the Year Ended December 31, 2008
Unaudited Condensed Pro Forma Combined Statement of Operations For the Nine Months Ended September 30, 2009
Unaudited Condensed Pro Forma Combined Statement of Operations For the Nine Months Ended September 30, 2008
Unaudited Condensed Pro Forma Combined Balance Sheet As of September 30, 2009
Footnotes to Unaudited Condensed Pro Forma Combined Financial Information

EX-99.2

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Exhibit 99.2

ONSHORE GROUP

OWNED BY PETROLEUM GEO-SERVICES ASA

Financial Statements

December 31, 2008 and 2007

(With Independent Auditors' Report Thereon)

Independent Auditors' Report

The Board of Directors
Petroleum Geo-Services ASA:

        We have audited the accompanying combined balance sheets of the Onshore Group, owned by Petroleum Geo-Services ASA, (the Company or the Onshore Group) as of December 31, 2008 and 2007 and the related combined statements of operations, changes in parent net invested capital, and cash flows for each of the years in the three year period ended December 31, 2008. These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        As discussed in note 2 to the combined financial statements, the accompanying combined financial statements have been prepared from the separate records maintained by the Company and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had been operated as an unaffiliated entity.

        In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Onshore Group owned by Petroleum Geo-Services ASA as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the three year period ended December 31, 2008 in conformity with U.S. generally accepted accounting principles.

Houston, Texas
November 17, 2009

1

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Combined Balance Sheets

			December 31,
			2008		2007
			(In thousands of U.S. Dollars)
ASSETS
Current assets:
	Cash and cash equivalents		$	11,858	$	6,671
	Restricted cash			335		829
	Accounts receivable			40,124		50,251
	Accrued revenues and other receivables			25,334		7,806
	Deferred tax assets, current			2,166		4,316
	Other current assets			14,300		10,856
		Total current assets		94,117		80,729
Long-term assets:
	Property and equipment, net			57,889		38,955
	MultiClient library, net			59,377		40,438
	Deferred tax assets			11,038		15,840
	Other long-term assets			880		683
	Licenses, net			143		21
		Total long-term assets		129,327		95,937
		Total assets	$	223,444	$	176,666
LIABILITIES AND PARENT NET INVESTED CAPITAL
Current liabilities:
	Current portion of capital lease obligations		$	—	$	6,708
	Accounts payable			10,163		8,469
	Accrued expenses			14,496		29,555
	Income taxes payable			8,689		9,441
		Total current liabilities		33,348		54,173
Long-term liabilities:
	Other long-term liabilities			8,475		7,464
		Total long-term liabilities		8,475		7,464
		Parent net invested capital		181,621		115,029
		Total liabilities and Parent net invested capital	$	223,444	$	176,666

See the accompanying notes to the combined financial statements.

2

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Combined Statements of Operations

		Years ended December 31,
		2008			2007			2006
		(In thousands of U.S. Dollars)
Revenues:
	Contract	$	204,463		$	164,495		$	218,666
	MultiClient pre-funding		55,958			60,329			17,644
	MultiClient late sales		12,653			20,866			27,491
Revenues related party (contract)			5,703			—			—
	Total revenues		278,777			245,690			263,801
Cost of sales			192,950			159,905			194,081
Research and development costs			16			7			—
Selling, general and administrative costs			13,935			14,412			12,652
Impairment of MultiClient library			—			—			1,193
Depreciation and amortization			14,913			10,780			14,173
Amortization of MultiClient library			45,927			54,126			17,369
	Total operating expenses		267,741			239,230			239,468
	Operating profit		11,036			6,460			24,333
Interest income			122			55			154
Interest expense			(13,479	)		(12,444	)		(10,037	)
Other financial items, net			(3,449	)		(13	)		(470	)
	(Loss) income before income tax expense		(5,770	)		(5,942	)		13,980
Income tax expense			13,483			11,629			11,873
	Net (loss) income	$	(19,253	)	$	(17,571	)	$	2,107

See the accompanying notes to the combined financial statements.

3

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Combined Statements of Cash Flows

		Years ended December 31,
		2008			2007			2006
		(In thousands of U.S. Dollars)
Cash flows provided by operating activities:
Net (loss) income		$	(19,253	)	$	(17,571	)	$	2,107
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Depreciation and amortization		60,840			64,906			31,542
	Impairment of MultiClient library		—			—			1,193
	(Gain) loss on sale of assets		(648	)		29			13
	Deferred income taxes		6,496			(318	)		811
	Net decrease (increase) in restricted cash		494			(492	)		(100	)
	Other items		217			30			21
	Decrease (increase) in accounts receivable, net		10,127			3,775			(23,294	)
	(Increase) decrease in unbilled and other receivables		(17,528	)		5,755			1,611
	(Increase) decrease in other current assets		(3,444	)		(5,848	)		6,949
	Increase in other long-term assets		(197	)		(361	)		(23	)
	Increase (decrease) in accounts payable		1,694			(427	)		1,120
	(Decrease) increase in accrued expenses and income taxes payable		(15,811	)		(2,573	)		15,261
	Increase in other long-term liabilities		1,465			3,399			225
Net cash provided by operating activities			24,452			50,304			37,436
Cash flows used in investing activities:
	Investment in MultiClient library		(62,853	)		(70,202	)		(32,420	)
	Capital expenditures		(36,103	)		(25,468	)		(16,676	)
	Investments in other intangible assets		(156	)		—			—
	Proceeds from sale of assets		705			77			80
Net cash used in investing activities			(98,407	)		(95,593	)		(49,016	)
Cash flows provided by financing activities:
	Repayment of long-term debt		—			—			(1,312	)
	Transactions with Parent, net		85,849			53,681			29,915
	Principal payments under capital leases		(6,707	)		(6,430	)		(20,081	)
	Net decrease in bank facility and short-term debt		—			—			(2,674	)
Net cash provided by financing activities			79,142			47,251			5,848
Net increase (decrease) in cash and cash equivalents			5,187			1,962			(5,732	)
Cash and cash equivalents as of January 1			6,671			4,709			10,441
	Cash and cash equivalents as of December 31	$	11,858		$	6,671		$	4,709

See the accompanying notes to the combined financial statements.

4

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Combined Statements of Changes in
Parent Net Invested Capital

			Parent Net Invested Capital
			(In thousands of U.S. Dollars)
Balance at December 31, 2005				$  27,683
	Comprehensive income:
		Net income		2,107
	Transactions with Parent, net			36,544
Balance at December 31, 2006				66,334
	Comprehensive loss:
		Net loss		(17,571	)
	Transactions with Parent, net			66,266
Balance at December 31, 2007				115,029
	Comprehensive loss:
		Net loss		(19,253	)
	Transactions with Parent, net			85,845
Balance at December 31, 2008				$181,621

See the accompanying notes to the combined financial statements.

5

ONSHORE GROUP

Notes to the Combined Financial Statements

Note 1 — Nature of Business and Organization

        The Onshore group ("Onshore" or "the Company") comprises all of the land seismic operations of the Petroleum Geo-Services ASA group ("PGS) principally involved in providing seismic operations on land, in shallow water and transition zones, including onshore MultiClient Library. Onshore's headquarters is in Houston, Texas, U.S.A. The activities include the following legal entities and Onshore divisions of other legal entities, all ultimately owned by Petroleum Geo-Services ASA ("Parent"):

Onshore legal entities:	Onshore divisions of the following legal entities:
PGS Onshore, Inc.	PGS Geophysical AS
SOH, Inc.	Petroleum Geo-Services Asia Pacific Pte. Ltd.
PGS Onshore (Algeria) EURL	PGS (Malta) Ltd.
PGS Onshore do Brazil Ltda.	PGS (Exploration (UK) Ltd.
PGS Onshore Servicos Ltda.	PGS Mexicana S.A. de C.V.
PGS Onshore (Canada), Inc.	Multiklient Invest AS
PGS Exploration Morocco SARL	Petroleum Geo-Services ASA
PGS Onshore Peru S.A.C.
PGS Onshore Services S.A.C.
PGS Servicios C.A.
PGS Venezuela de C.A.
PGS Administración y Servicios S.A. de C.V.

Note 2 — Summary of Significant Accounting Policies

Basis of presentation and principles of combination

        The combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The combined financial statements are presented in U.S. Dollars ("$" or "dollars"). The accompanying combined financial statements of Onshore have been prepared from the historical accounting records of the Parent and are presented on a carve-out basis reflecting those certain assets, liabilities, and operations of Onshore. The historical results of operations, financial position, and cash flows of Onshore may not be indicative of what they would have been had Onshore been a separate stand-alone entity, nor are they indicative of what Onshore's results of operations, financial position and cash flows may be in the future.

        Transactions between Onshore and PGS and its subsidiaries are herein referred to as related party transactions (see Note 20). PGS's net invested capital in these combined financial statements constitutes PGS's investments in Onshore and represents the excess of total assets over total liabilities. Net invested capital includes the funding of Onshore through the in-house banking, cash pooling arrangements and related party transactions to and from related parties with PGS (see Note 20), and Onshore's cumulative net income (loss), including other comprehensive income directly recognized in net invested capital.

6

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

        All intercompany transactions and balances between Onshore group components have been eliminated in combination.

Relationship with Parent

        The Company participates in a number of Parent-administered programs. Included in the historical information are costs of certain services such as data processing and technology services, and allocations for certain centralized administration costs for treasury, accounting, auditing, tax, risk management, human resources and benefits administration.

        The following is a discussion of the relationship with Parent, the services provided and how they have been accounted for in the Company's combined financial statements. See also Note 20 for more information on related party transactions.

(a) Allocated corporate and shared services costs

        The combined financial statements include Onshore's direct expenses as well as allocations of expenses arising from shared services primarily related to office facilities, information technology, human resources, payroll and marketing. Allocated expenses also include costs relating to the PGS group's financial accounting and reporting software. These costs are allocated to Onshore on a proportional basis using a basis of allocation that would be expected to reasonably reflect the proportion of Onshore's incurrence of such costs. Onshore is charged with a service fee for costs related to corporate services provided by the Parent, such as tax, legal, treasury, compliance, business development, investor relations, risk management, executive management, and corporate accounting services. The service fee is based on Parent's incurred costs of such services, net of any special non-operational project costs, allocated to Onshore based on a proportional basis using a basis of allocation that would be expected to reasonably reflect the proportion of Onshore's incurrence of such costs.

        Corporate and shared services costs were allocated to Onshore based on Onshore's portion of the following allocation metrics:

•

Office rent — square feet,

•

Marketing — revenues,

•

Other shared services allocated costs — headcount,

•

Financial accounting and reporting software — estimated percentage utilization of software, and

•

Service fee from Parent — revenues.

        These allocated costs are included in the "Selling, general and administrative costs" line of the combined statement of operations. The total amount allocated for centralized administration costs from Parent in the years ended December 31, 2008, 2007 and 2006 was $10.4 million,

7

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

$13.3 million, and $11.0 million, respectively. These costs represent management's reasonable allocation of the costs incurred. However, these amounts may not be representative of the costs necessary for the Company to operate as a separate stand-alone company. The "Transactions with Parent, net" line item in the combined statements of changes in Parent net invested capital includes these costs paid by Parent on behalf of the Company.

(b) Other transactions with Parent

        PGS charges intercompany interest to Onshore calculated based on Onshore's net intercompany debt to Parent, which is included as part of Parent net invested capital. Parent net invested capital is also adjusted for accrued interest on intercompany borrowings. Intercompany interest was calculated and charged on a monthly basis for all financial periods presented based on LIBOR + 3%. Parent net invested capital includes the net intercompany borrowings resulting from Onshore's participation in PGS' centralized cash management program. Parent net invested capital is increased for cash disbursements involving centralized accounts related to Onshore's operations and investing activities and is reduced to the extent cash collections exceed Onshore's immediate needs and can be transferred to the Parent. As such, the amounts of cash and cash equivalents recorded on the combined balance sheets do not represent the amounts required or generated by the Onshore business, but rather represent cash and cash equivalents of PGS for which Onshore has legal ownership and is not commingled in its centralized cash function.

(c) Guarantees

        The Company is a party to agreements under which it may be obligated to indemnify Parent with respect to certain matters. Typically, these obligations arise as a result of contracts entered into between the Company and Parent under which the Company agrees to indemnify Parent against losses arising from a breach of representations and covenants related to matters such as title to assets sold, the collectibility of receivables, specified environmental matters, lease obligations assumed and certain tax matters. The Company's obligations under these agreements may be limited in terms of time and/or amount, and in some cases the Company may have recourse against Parent for certain payments made by the Company. It is not possible to predict the maximum potential amount of future payments under certain of these agreements, due to the conditional nature of the Company's obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material effect on Onshore's business, financial position or results of operations. The Company believes that if it were to incur a loss in any of these matters, such loss would not have a material effect on the Onshore's business, financial position or results of operations.

8

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

        The material guarantees for which the maximum potential amount of future payments can be determined, are as follows:

•

PGS has pledged the shares of PGS Onshore, Inc. as security for certain Parent debt. The Parent net invested capital in PGS Onshore, Inc. as of December 31, 2008 was approximately $142 million.

•

The Company has outstanding performance bid guarantees of $0.3 million classified as restricted cash as of December 31, 2008 and 2007.

Cash and cash equivalents

        The carrying amounts of cash and cash equivalents approximate fair value and include demand deposits and all highly liquid financial instruments purchased with original maturities of three months or less. Cash and cash equivalents that are restricted from the Company's use are presented separately in the combined balance sheets. Such restrictions primarily relate to cash collateral for bid or performance bonds and restricted cash deposits under contracts.

Foreign currency translation and transactions

        Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation of realized and unrealized monetary assets and liabilities denominated in foreign currencies are recognized in the combined statements of operations.

Operational and capital leases

        Operating lease payments are expensed in the combined statements of operations on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are expensed in the period in which they are incurred.

        Capital leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is not reasonable certainty that the Company will obtain ownership by the end of the lease term.

Credit risk

        The Company's financial assets that are exposed to concentration of credit risk consist of trade receivables from clients. Trade receivables are primarily from independent oil and natural gas companies. The Company manages its exposure to credit risk through ongoing credit

9

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

evaluations of customers and has provided for potential credit losses through an allowance for doubtful accounts. The allowance for doubtful accounts reflects management's best estimate of probable losses inherent in accounts receivable from trade customers and is based on a number of factors consisting mainly of aging of accounts, historical experience, customer concentration, customer creditworthiness and current industry and economic trends.

        The Company is exposed to credit risk related to off-balance items such as long-term agreements entered into with customers and suppliers. The Company manages its exposure to such risks through continuously monitoring of counterparties.

        The Company does not believe that exposure to credit risk is likely to have a material adverse impact on its combined financial position or combined results of operations.

Intangible assets

        Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangible assets other than those specified below are expensed as incurred.

MultiClient library

        The MultiClient library consists of seismic data surveys to be licensed to customers on a nonexclusive basis. Costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized to the MultiClient library. Costs also include seismic crew mobilization expenditures and capitalized borrowing costs.

        The Company records MultiClient library costs in a manner consistent with its capital investment and operating decision analysis, which generally results in each component of the MultiClient library being recorded and evaluated separately. Projects that are covered by the same political regime, with similar geological traits and that are marketed collectively are recorded and evaluated as a group by year of completion.

        Amortization of the MultiClient library is based on the ratio between the cost of the survey and the total forecasted sales of data for such survey. On an annual basis the Company categorizes each MultiClient survey into one of four amortization categories with amortization rates of 90%, 75%, 60% or 45% of sales. Classification of each project into a rate category is based on the ratio of its remaining net book value to estimated remaining sales. Each category therefore is comprised of surveys for which the remaining book value as a percentage of estimated remaining sales is less than or equal to the amortization rate applicable to that category.

        An integral component of amortization of the MultiClient library is the minimum amortization policy. Under this policy, the book value of each survey or group of surveys of the MultiClient library is reduced to a specified percentage by year-end, based on the age of the

10

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

survey or group of surveys in relation to its year of completion. This requirement is applied each year-end regardless of future sales estimates for the MultiClient library survey or groups of surveys. The specified percentage generates the maximum permitted book value for each MultiClient library survey or group of surveys as the product of the percentage multiplied by the original book value of the MultiClient library survey or group of surveys at the respective period end. Any additional or "minimum" amortization charges required are then determined through a comparison of the remaining book value to the maximum permitted book value allowed for each survey or group of surveys of the MultiClient library.

        The specified percentages used to determine the maximum book value of its MultiClient library components are summarized as follows:

Calendar year after project completion	5-year profile			3-year profile
Year 0(a)		100	%		100	%
Year 1		80	%		66	%
Year 2		60	%		33	%
Year 3		40	%		0	%
Year 4		20	%
Year 5		0	%

(a)

Represents the year in which the survey is classified as completed.

        All MultiClient projects have a 5-year profile starting in the year after project completion. All derivative processed products have a 3-year profile starting in the year after data delivery. Derivative products are mainly reprocessing that creates data that can be sold as a separate project.

        The Company classifies as amortization expense in its combined statements of operations any impairment of individual MultiClient surveys that are based on changes in project specific expectations and that are not individually material. The Company expects this additional, non-sales related, amortization expense to occur regularly because the Company evaluates each individual project at least annually for impairment or when specific indicators exist. The Company classifies as impairment in its combined statements of operations write-downs related to fundamental changes in estimates affecting a larger part of the Company's MultiClient library where the effects are material, see impairment of property, equipment and intangibles below.

Research and development costs

        Research and development costs are expensed as incurred.

11

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

Licenses

        Licenses are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the estimated period of benefit, ranging from one to five years.

Property and equipment

        Property and equipment are stated at cost, excluding the costs of the day-to-day servicing, less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis over the useful life of the assets based on cost. The estimated useful lives for property and equipment are as follows:

	Years
Seismic equipment		3 - 5
Buildings and related leasehold improvements		1 - 10
Fixture, furniture, fittings and office computers		3 - 5

        Subsequent expenditures are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to the combined statements of operations during the financial period in which they are incurred.

        An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognized.

        Significant spare parts are capitalized with the asset to which they pertain, while other spare parts and consumables are classified as other current assets and stated at cost.

Mobilization and demobilization costs

        Mobilization costs relate to onsite project costs such as positioning, deploying and retrieval of equipment at the beginning and end of a project are considered to be mobilization or demobilization costs. The Company includes such costs in the cost of the MultiClient survey or exclusive contract with which the costs are associated. The mobilization or demobilization costs related to MultiClient survey are capitalized as a part of the MultiClient library (see above). Mobilization costs on exclusive surveys are deferred and charged to expense based upon the percentage of completion of the project.

        Both for MultiClient and exclusive surveys the estimated probable future economic inflows which are documented at inception must cover the costs capitalized or deferred. If the projects are

12

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

not able to cover all of the costs which could be capitalized or deferred then only those costs that are recoverable (undiscounted cash inflow of the project or activity undertaken exceeds the undiscounted cash outflow) are capitalized/deferred.

Impairment of property, equipment and intangibles

        The Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An asset's recoverable amount is its separately identifiable undiscounted cash flow, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If the undiscounted cash flows are equal to or greater than the carrying value of the asset or group of assets, no impairment is recorded. If the undiscounted cash flows are less than the carrying value of the asset or group of assets, the Company records the difference between the carrying value of the asset and fair value based on the discounted future cash flows as an impairment charge presented separately in the combined statements of operations.

Revenue recognition

        The Company recognizes revenue when persuasive evidence of a sale arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable and collection is reasonably assured. The Company defers the unearned component of payments received from customers for which the revenue recognition requirements have not been met. Consideration is generally allocated among the separate units of accounting based on their estimated relative fair values when elements have stand-alone value. If an element of a customer agreement does not have stand-alone value, revenue is deferred and recognized over the period services are provided. Revenue includes reimbursements for third parties for out of pocket costs, such as fuel, travel and accommodation costs. The related costs are includes in cost of sales. The Company's revenue recognition policy is described in more detail below.

(a) Sales of MultiClient library data

Late sales — The Company grants a license to a customer, which entitles the customer to have access to a specifically defined portion of the MultiClient data library. The customer's license payment is fixed and determinable and typically is required at the time that the license is granted. The Company recognizes revenue for late sales when the customer executes a valid license agreement and has received the underlying data or has the right to access the licensed portion of the data and collection is reasonably assured.

Pre-funding arrangements — The Company obtains funding from a limited number of customers before a seismic project is completed. In return for the pre-funding, the customer

13

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

typically gains the ability to direct or influence the project specifications, to access data as it is being acquired and to pay discounted prices.

        The Company recognizes pre-funding revenue as the services are performed on a proportional performance basis usually determined by comparing the completed square miles of a seismic survey to the survey size unless specific facts and circumstances warrant another measure. Progress is measured in a manner generally consistent with the physical progress on the project, and revenue is recognized based on the ratio of the project's progress to date, provided that all other revenue recognition criteria are satisfied.

(b) Proprietary sales/contract sales

        The Company performs seismic services under contract for a specific customer, whereby the seismic data is owned by that customer. The Company recognizes proprietary/contract revenue as the services are performed and become chargeable to the customer on a proportionate performance basis, usually determined by comparing the completed square miles of a seismic survey to the survey size unless specific facts and circumstances warrant another measure, over the term of each contract. Progress is measured in a manner generally consistent with the physical progress of the project, and revenue is recognized based on the ratio of the project's progress to date, provided that all other revenue recognition criteria are satisfied.

        The Company normally is entitled to progress payments as work is completed on pre-funding and proprietary projects. Depending upon progress of projects in progress, this can result in unbilled accounts receivable or billing billings in excess of revenues recognized.

(c) Revenues related party

        The Company performs, from time to time, seismic services for related parties. Such services are mainly contract sales with terms similar to third party clients (described above). See Note 20 for description of related party revenues for the periods presented.

        For multiple-deliverable arrangements significant management judgment may be required in order to allocate the consideration received to separate units of accounting, depending on the available evidence to support fair value which may include experience with similar transactions, evaluations of expected profit margins, external appraisals and other evidence as situations warrant.

Income taxes

        The Company recognizes the amount of taxes payable or refundable for the year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized.

14

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

        In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowances.

        The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes on continuing operations in the combined statements of operations.

        The provision for income taxes has been computed as if the Company was a stand-alone entity and filed separate tax returns. The provision for income taxes was impacted by PGS worldwide's tax structure and strategies, which were designed to optimize an overall tax position and not necessarily that of the Onshore business. To the extent the Company provides any U.S. tax expense or benefit, any related tax payable or receivable to the parent is reclassified as Parent net invested capital.

        Certain Onshore legal entities and divisions do not file separate tax returns but rather are included in the income tax returns filed by PGS and its subsidiaries in various domestic and foreign jurisdictions. For purposes of these combined financial statements, the tax provision for Onshore was determined from Onshore's financial information carved-out of the consolidated financial statements of PGS, including allocations and eliminations deemed necessary by management as though the Onshore legal entities and divisions were filing their own tax returns.

Employee benefits

Pension obligations

        PGS has an U.S. defined contribution 401(k) plan where essentially all U.S. employees, including those of the Onshore group, are eligible to participate upon completion of certain period-of-service requirements. The plan allows eligible employees to contribute up to 100% of compensation, subject to plan and statutory limitations, on a pre-tax basis, with a 2008 statutory cap of $15,500 ($20,500 for employees over 50 years). Employee pre-tax contributions are matched by the Company as follows: the first 3% are matched at 100% and the next 2% are matched at 50%. All contributions vest when made. The employer matching contribution related to the plan was $0.5 million, $0.4 million and $0.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. Contributions to the plan by employees for these periods were $1.1 million, $1.0 million and $0.8 million, respectively.

15

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies (Continued)

        The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.

Bonus plans

        The Company recognizes expenses for bonus programs where contractually obliged or where there is a past practice that has created a constructive obligation.

Share-based payments

        Employees of Onshore participate in PGS's share-based payment programs. See Note 21 for further information of the programs and Note 20 for share option compensation costs charged for all periods presented.

        Fair value is measured using the Black-Scholes pricing model. The expected life used in the model is based on management's best estimate and takes into account the effects of non-transferability, exercise restrictions and behavioural considerations. The compensation cost is recognized on an accelerated basis over the vesting period whereby the fair value of an option award with multiple vesting periods is allocated to each individual vesting period and recognized as an expense over service period between the grant date and the vesting date.

        Liability-settled share-based payment awards to employees are re-measured at the fair value of the equity instruments at each balance sheet date. All changes in the fair value of liability classified awards are recognized as adjustments to compensation cost proportionally over the vesting period. After the vesting period has been completed, changes in fair value are recognized immediately in the periods in which they occur until an award is exercised, expires unused, or is forfeited.

Financial instruments

        The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accrued revenues and other receivables, other current assets, accounts payable and accrued expenses approximate their respective fair values because of the short maturities of those instruments. There was no long-term debt in the Company as of December 31, 2008 and 2007.

Comprehensive income

        Comprehensive income is defined as the change in shareholders' equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments. Other comprehensive income is presented in the combined statements of changes in Parent net invested capital.

16

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 2 — Summary of Significant Accounting Policies

Classification in the combined balance sheets

        An asset or liability is classified as current when it is part of a normal operating cycle, when it is held primarily for trading purposes, when it falls due within 12 months and when it consists of cash or cash equivalents on the balance sheet date. Other items are long-term.

Combined statements of cash flows

        The Company's combined statements of cash flows is prepared in accordance with the indirect method, where cash flows from operating activities are incorporated as a part of the cash flow statement, and where the cash flows are divided into operating activities, investing activities and financing activities.

Recent accounting pronouncements

        In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements," ("SFAS 157"). SFAS 157 clarifies the definition of fair value, describes methods used to appropriately measure fair value, and expands fair value disclosure requirements, but does not change existing guidance as to whether or not an instrument is carried at fair value. For financial assets and liabilities, SFAS 157 is effective for fiscal years beginning after November 15, 2007 and for nonfinancial assets and liabilities, SFAS 157 is effective for fiscal years beginning after November 15, 2008. The Company adopted SFAS 157 for financial assets and liabilities on January 1, 2008, as required. The adoption of SFAS 157 did not have a material impact on our financial statements.

        In May 2009, the FASB issued SFAS No. 165, "Subsequent Events," ("SFAS 165"). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. SFAS 165 is effective for interim or annual reporting periods ending after June 15, 2009. The Company adopted SFAS 165 for the interim period ended September 30, 2009, as required. The adoption of SFAS 165 did not have a material impact on our financial statements.

Note 3 — Critical Accounting Judgments, Estimates and Assumptions

Critical judgments

        The preparation of financial statements in accordance with US GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities. In many circumstances, the ultimate outcome related to the estimates, assumptions and judgments may not be known for several years after the preparation of the financial statements. Actual amounts may differ materially from these estimates due to changes in general economic conditions, changes in laws and regulations, changes in future operating plans and the inherent imprecision associated with estimates.

17

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 3 — Critical Accounting Judgments, Estimates and Assumptions (Continued)

        In the process of applying the Company's accounting policies, which are described above, judgments made by the management that have the most significant effect on the amounts recognized in the combined financial statements are described below.

Estimation uncertainty and assumptions

        The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.            

Deferred tax assets

        Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits. The estimates of projected future taxable profits are based on a variety of factors and assumptions, many of which are subjective and are outside of the Company's control. Accordingly these estimates could differ significantly from year to year, and the Company might end up realizing more or less of the deferred tax assets than the Company has recognized in the combined balance sheet.

Amortization of MultiClient library

        In determining the annual amortization rates applied to the MultiClient library, management considers expected future sales and market developments and past experience. These expectations include consideration of geographic location, prospects, political risk, exploration license periods and general economic conditions. Management updates, at least annually, the total expected revenue for each survey or group of surveys of the MultiClient library. Because of the inherent difficulty in estimating future sales and market developments, it is possible that the amortization rates could deviate significantly from year to year. To the extent that such revenue estimates, or the assumptions used to make those estimates, prove to be higher than actual revenue, the Company's future operations will reflect lower profitability due to increased amortization rates applied to the MultiClient library in later years, and the MultiClient library may also become subject to minimum amortization and/or impairment. The minimum amortization policy described in significant accounting policies is an additional element of the Company's MultiClient library accounting policy in order to reduce the inherent risk in the general amortization policy that is based on the above described sales forecasting.

Property, equipment and other intangibles

        Depreciation and amortization is based on management estimates of the future economic benefits and expected useful lives. These estimates may change due to changes in market

18

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 3 — Critical Accounting Judgments, Estimates and Assumptions (Continued)

conditions including competition, technological development, use of the assets and strategic considerations.

Impairment of property, equipment and intangibles

        Property, equipment and intangibles are regularly reviewed for impairment, whenever events or changes in circumstances indicate that the balance sheet carrying amount of the asset may not be recoverable. In order to assess if there is any impairment, estimates are made of the future cash flows expected to result from the use of the asset and its eventual disposal.

        Estimating future cash flows requires management to make judgments regarding long-term forecasts of future revenues and costs related to the assets subject to review. These forecasts are subject to uncertainty as they require assumptions about demand for our products and services, future market conditions and technological developments. Significant and unanticipated changes in these assumptions could require a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and specific times, it is not possible to reasonably quantify the impact of changes in these assumptions

Income taxes

        The Company is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for uncertain tax positions based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Provision for contingencies, claims and tax litigation

        The Company records accruals for contingencies, claims and other uncertain liabilities when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or new or additional information becomes available.

        The outcomes of these issues are subject to a significant degree of uncertainty and management must make estimates and use judgment in determining the expected outcome.

Note 4 — Revenues, Geographic Information and Major Customers

        Onshore is an oilfield service company principally involved in providing seismic operations on land, in shallow water and transition zones, including onshore MultiClient library. The Company serves a worldwide market.

19

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 4 — Revenues, Geographic Information and Major Customers (Continued)

        The geographic classification of revenues listed below is based upon location of performance or, in the case of MultiClient seismic data sales, the area where the survey was physically conducted.

Revenues by geographic region:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008		2007		2006
North America			165,094		154,295		133,823
Latin America			74,088		32,582		26,592
Eastern Hemisphere			39,595		58,813		103,386
	Total		278,777		245,690		263,801

Total assets by geographic region:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
North Americas			162,274		133,237
Latin America			47,367		16,525
Eastern Hemisphere			13,803		26,904
	Total		223,444		176,666

        For the years ended December 31, 2008 and 2007, one individual customer represented 13.6% and 13.8%, respectively, of total revenues. For the year ended December 31, 2006, the two most significant customers accounted for 14.2% and 11.5% of the total revenues.

        In certain of the regions where the Company operates, a significant share of its employees is organized in labor unions. Similarly the Company's operations in certain regions are members of employer unions. Therefore, the Company may be affected by labor conflicts involving such labor and employer unions.

Note 5 — Depreciation and Amortization

        Depreciation and amortization consists of the following:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008			2007			2006
Gross depreciation and amortization			(16,926	)		(12,726	)		(15,176	)
Depreciation capitalized in MultiClient library (Note 14)			2,013			1,946			1,003
	Total		(14,913	)		(10,780	)		(14,173	)

20

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 6 — Interest Expense

        Interest expense consists of the following:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008			2007			2006
Interest expense gross, external			(281	)		(856	)		(1,575	)
Interest expense, related party			(15,290	)		(13,446	)		(8,721	)
Interest capitalized in MultiClient library (Note 14)			2,092			1,858			259
	Total		(13,479	)		(12,444	)		(10,037	)

Note 7 — Other Financial Items, Net

        Other financial items, net, consist of the following:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008			2007			2006
Foreign currency (loss) gain, net			(3,239	)		(30	)		(27	)
Other			(210	)		17			(443	)
	Total		(3,449	)		(13	)		(470	)

Note 8 — Income Taxes

        The income tax provision from continuing operations has been computed on a separate return basis. To the extent we provide any U.S. tax expense or benefit, any related tax payable or receivable to the parent is reclassified to equity.

        The net income tax expense from continuing operations consists of the following:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008		2007			2006
Current taxes:
U.S.			1,329		1,685			3,626
Foreign			5,658		10,262			7,436
Total current			6,987		11,947			11,062
Deferred taxes:
U.S.			3,828		94			3,759
Foreign			2,668		(412	)		(2,948	)
Total deferred			6,496		(318	)		811
	Total income tax expense		13,483		11,629			11,873

21

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 8 — Income Taxes (Continued)

        The (loss) income before tax consists of the following from:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008			2007			2006
U.S.			13,656			13,161			29,902
Foreign			(19,426	)		(19,103	)		(15,922	)
	Total		(5,770	)		(5,942	)		13,980

        The income tax expense differs from the amounts computed when applying the U.S. statutory tax rate to (loss) income before income taxes as a result of the following:

			Years ended December 31,
(In thousands of U.S Dollars)			2008			2007			2006
(Loss) income before income tax expense				(5,770	)		(5,942	)		13,980
U.S. statutory rate				35	%		35	%		35	%
Tax (benefit) expense at statutory rate				(2,020	)		(2,080	)		4,893
Increase (reduction) in income taxes from:
	Foreign jurisdictional rate variances			573			1,109			723
	Change in valuation allowance			9,989			1,409			(942	)
	Foreign and state tax			4,218			6,466			6,478
	Change in tax contingencies recognized as tax expense (benefit)			988			2,813			—
	Other permanent items			(265	)		1,912			721
		Income tax expense		13,483			11,629			11,873

22

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 8 — Income Taxes (Continued)

        Tax effects of the Company's temporary differences are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Deferred tax assets:
Current assets and liabilities			(238	)		(1,166	)
Expenses deductible when paid			(1,751	)		(1,595	)
Long term assets and liabilities			(4,489	)		(6,158	)
Tax losses carried forward			(44,892	)		(34,401	)
	Deferred tax assets, gross		(51,370	)		(43,320	)
Deferred tax liabilities:
Current assets and liabilities			2,596			779
Expenses deductible when paid			534			—
Long term assets and liabilities			4,043			1,381
	Deferred tax liabilities, gross		7,173			2,160
Valuation allowances:
Net operating loss carry forwards			30,360			20,830
Other			633			174
Total valuation allowance			30,993			21,004
Net deferred tax assets			(13,204	)		(20,156	)

        Net deferred tax assets, in the combined balance sheets, are presented as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Deferred tax assets, current			(2,166	)		(4,316	)
Deferred tax assets, long-term			(11,038	)		(15,840	)
	Net deferred tax assets		(13,204	)		(20,156	)

        Available evidence, including recent profits and estimates of projected future taxable income, has supported a more likely than not conclusion that the related deferred tax assets would be realized in the future. A valuation allowance has been established on certain operating loss carry forwards on the basis that we believe these assets will not be utilized in the statutory carry over period.

23

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 8 — Income Taxes (Continued)

        Tax losses carried forward both recognized and unrecognized and with expiration periods starting as of December 31, 2008, are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
U.S.			54,231		51,228
Foreign			86,721		56,140
	Losses carried forward		140,952		107,369

        The taxes are computed based on a separate return method, and therefore the Company reflects U.S. net operating loss carry forwards, of which a significant balance does not remain in the parent enterprise's consolidated U.S. tax return.

        The Company adopted FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." FIN 48, as amended May 2007 by FASB Staff Position (FSP) FIN 48-1, "Definition of 'Settlement' in FASB Interpretation No. 48," prescribes a minimum recognition threshold and measurement methodology that a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

        The unrecognized tax benefits are with regards to foreign jurisdictions, related to the disallowance of tax loss carry over's, the use of net profits tax versus deemed profits tax, and the disallowance of deductible expenses.

24

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 8 — Income Taxes (Continued)

        The following table presents the reconciliation of the total amounts of unrecognized tax benefits from January 1, 2006 to December 31, 2008:

(In thousands of U.S. Dollars)	Tax benefits		Interest and penalties
Balance at January 1, 2006		3,066		886
Change in prior year tax positions		—		—
Change in current year tax positions		—		—
Cash settlements with taxing authorities		—		—
Lapse of statute of limitations		—		—
Balance at December 31, 2006		3,066		886
Change in prior year tax positions		2,800		—
Change in current year tax positions		—		—
Cash settlements with taxing authorities		—		—
Lapse of statute of limitations		—		—
Balance at December 31, 2007		5,866		886
Change in prior year tax positions		517		467
Change in current year tax positions		—		—
Cash settlements with taxing authorities		—		—
Lapse of statute of limitations		—		—
Balance at December 31, 2008		6,383		1,353

        As of December 31, 2008, $2,800 of the Company's unrecognized tax benefits could be settled within the next 12 months. As of December 31, 2008, the Company estimated that the remaining balance of unrecognized tax benefits, if resolved in our favor, would positively impact the effective tax rate and, therefore, be recognized as additional tax benefits in our statement of operations. The Company files income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions. In most cases, the Company is no longer subject to United States federal, state, and local, or non-United States income tax examination by tax authorities for years before 2003. The tax filing of the Company's unconsolidated affiliates and related entities are routinely examined in the normal course of business by tax authorities. Currently, the Company's United States federal tax filings are under review for tax year 2006.

Note 9 — Restricted Cash

        Restricted cash totaled $0.3 million and $0.8 million as of December 31, 2008 and 2007, respectively, relating to performance bid guarantees.

25

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 10 — Accounts Receivable

        Accounts receivable consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Accounts receivable — trade			40,124		50,296
Allowance for doubtful accounts			—		(45	)
	Total		40,124		50,251

        The change in allowance for doubtful accounts is as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Balance as of January 1			(45	)		(101	)
New and additional allowances			(90	)		(32	)
Write-offs and reversals			135			88
	Balance as of December 31		—			(45	)

Note 11 — Accrued Revenues and Other Receivables

        Accrued revenues and other receivables consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Accrued revenues, not billable			22,423		6,147
VAT receivable			2,199		1,652
Unbilled and other receivables			712		7
	Total		25,334		7,806

26

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 12 — Other Current Assets

        Other current assets consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Deferred mobilization expense			6,080		4,895
Prepaid operating expenses			4,234		3,062
Withholding taxes and taxes receivable			2,777		1,432
Other			1,209		1,467
	Total		14,300		10,856

Note 13 — Property and Equipment, net

        The components of property and equipment, net, including property and equipment under capital leases, are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Seismic operating equipment			173,671			148,608
Fixtures, furniture and fittings			17,853			12,545
Buildings and leasehold improvements			1,118			1,016
Land			171			171
	Gross purchase costs		192,813			162,340
Accumulated depreciation			(134,924	)		(123,385	)
	Property and equipment, net		57,889			38,955

        For details of the estimated useful lives for the Company's property and equipment, see Note 2.

        The component of property and equipment under capital leases (included in the table above), are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Seismic operating equipment			—		35,961
Fixtures, furniture and fittings			—		126
	Gross purchase costs		—		36,087
Accumulated depreciation			—		(36,064	)
	Property and equipment, net		—		23

27

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 14 — MultiClient Library, net

        The components of the MultiClient library, net, are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Balance as of January 1			40,438			22,415
Cash investments(a)			62,853			70,202
Capitalized depreciation (Note 5)			2,013			1,946
Amortization expense			(45,927	)		(54,126	)
Other			—			1
	Balance as of December 31		59,377			40,438

(a)

Includes capitalized interest of $2.1 million and $1.9 million for the years ended December 31, 2008 and 2007, respectively. Capitalized interest for the year ended December 31, 2006 was $0.3 million.

        For the years ended December 31, 2008 and 2007, there were no additional non-sales related amortization or impairments. For the year ended December 31, 2006 the Company recorded an impairment of $1.2 million to reflect the fair value of future sales on certain individual surveys.

        The net carrying value of the MultiClient library, by the year in which the components were completed, is summarized as follows:

			December 31,
(In thousands of U.S. Dollars)			2008		2007
Completed surveys:
	Completed during 2007			3,514		5,860
	Completed during 2008			40,860		—
		Completed surveys		44,374		5,860
	Surveys in progress			15,003		34,578
		MultiClient library		59,377		40,438

        For information purposes, the following shows the hypothetical application of the Company's minimum amortization requirements to the components of the existing MultiClient library. These

28

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 14 — MultiClient Library, net (Continued)

minimum amortization requirements are calculated as if there will be no future sales of these components.

		December 31, 2008
(In thousands of U.S. Dollars)		Minimum future amortization
During 2009			296
During 2010			296
During 2011			11,992
During 2012			22,312
During 2013			24,481
	Future minimum amortization		59,377

        Because the minimum amortization requirements generally apply to the MultiClient library on a survey-by-survey basis rather than in the aggregate, the Company may incur significant minimum amortization charges in a given year even if the aggregate amount of ordinary amortization charges recognized exceeds the aggregate minimum amortization charges above.

Note 15 — Other Long-Term Assets

        Other long-term assets consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Prepaid expenses and deposits			880		683
	Total		880		683

Note 16 — Licenses, net

        The components of licenses, net, are summarized as follows:

		December 31,
(In thousands of U.S. Dollars)		2008			2007
Gross purchase costs			190			34
Accumulated depreciation			(47	)		(13	)
	Licenses, net		143			21

        Licenses have finite useful lives over which the assets are amortized.

29

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 17 — Leases, Commitments and Contractual Obligations

Leases

        The Company has operating lease commitments expiring at various dates through 2018. Future minimum payments related to non-cancellable operating and capital leases were as follows:

		December 31,
		2008		2007
(In thousands of U.S. Dollars)		Operating leases		Operating leases		Capital leases
2008			—		1,220		6,708
2009			930		809		—
2010			885		809		—
2011			707		619		—
2012			609		589		—
2013			609		—		—
Thereafter			2,998		3,384		—
	Total		6,738		7,430		6,708
Imputed interest							—
Net present value of capital lease obligations							6,708
	Current portion of capital lease obligations						(6,708	)
Long-term portion of capital lease obligations							—

        The Company entered into capital lease arrangements of $0.1 million in the year ended December 31, 2006, while there were no such new arrangements for the years ended December 31, 2008 and 2007.

        The future minimum payments under the Company's operating leases relate to the Company's operations as follows:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Seismic operating equipment			—		853
Buildings			6,738		6,577
	Total		6,738		7,430

        Rental expense for operating leases, including leases with terms of less than one year, was $2.7 million, $5.4 million and $17.0 million for the years ended December 31, 2008, 2007 and 2006, respectively.

30

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 18 — Accrued Expenses

        Accrued expenses consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Accrued operating expenses — land crews			5,204		5,017
Accrued employee benefits			4,790		8,206
Customer advances and deferred revenue			3,029		14,485
Accrued sales tax and VAT			1,064		1,238
Other			409		609
	Total		14,496		29,555

Note 19 — Other Long-Term Liabilities

        Other long-term liabilities consist of the following:

		December 31,
(In thousands of U.S. Dollars)		2008		2007
Tax contingencies			6,846		5,867
Retention bonus, long-term			642		587
Other			987		1,010
	Total		8,475		7,464

Note 20 — Related Party Transactions

        As a consequence of the ownership structure Onshore has historically maintained a significant business relationship with PGS. Onshore and PGS subsidiaries have certain common officers, directors, and shareholders.

        Shared services allocations, accounting and reporting software allocations, corporate service fee, technology marketing fee, and reimbursements are paid to PGS in accordance with management agreements between PGS and Onshore (see Note 2). All intercompany services are

31

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 20 — Related Party Transactions (Continued)

charged with an intercompany service fee. The following table summarizes the expense allocations reflected, in operating expenses, in the combined statements of operations:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008			2007		2006
Shared services allocations			6,085			5,310		3,453
Allocated costs for financial accounting and reporting software			805			849		887
Corporate service fee			4,295			4,895		5,542
Share option compensation costs (Note 21)			(1,832	)		1,687		869
Technology marketing fee			285			—		—
Intercompany service fee			728			555		293
	Total		10,366			13,296		11,044

        During each period presented PGS provided data processing and technology services to Onshore. All services are based on market prices. The costs are included in cost of sales in the combined statements of operations, as follows:

		Years ended December 31,
(In thousands of U.S. Dollars)		2008		2007		2006
Data processing services			2,555		1,948		1,887
Technology services			1,722		—		33
	Total		4,277		1,948		1,920

        During the year ended December 31, 2008, Onshore provided seismic services to PGS totaling $5.7 million, included in revenues in the combined statements of operations. There were no such services provided in the years ended December 31, 2007 and 2006.

        For the years ended December 31, 2008, 2007 and 2006, Onshore was charged with intercompany interest expense of $15.3 million, $13.4 million and $8.7 million, respectively, on net intercompany debt to Parent which is presented within Parent net invested capital.

        See Note 2 Relationship with Parent for more detailed description of intercompany transactions with PGS.

Note 21 — Employee Share Option Programs

        In 2006 and 2008, PGS established two employee share option programs where options were granted to certain key employees including Onshore employees. Additional options were also granted from the 2006 plan in the years ended December 31, 2007 and 2008.

32

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 21 — Employee Share Option Programs (Continued)

        PGS's share option programs are considered as liability classified awards for Onshore employees. One third of the options vest each of the three years subsequent to the date of grant. The first possible exercise is one year after grant date. The latest possible exercise date is five years subsequent to the grant date. Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The options may only be exercised four times a year, during a defined period after the publication of PGS's quarterly earnings release.

        The maximum gain on the options in the 2008 employee option program is subject to a cap of 1.5 times the employee's salary for each calendar year. There is no cap on the 2006 employee option program.

        For options granted under the 2006 employee option program, the exercise price corresponds to the weighted average trading price for PGS's ordinary shares on the Oslo Stock Exchange the week before the options were granted. For options granted under the 2008 employee option program the exercise price corresponds to the weighted average trading price for PGS's ordinary shares on the Oslo Stock Exchange at the date of grant.

        Share-based compensation expense under liability classified awards is initially measured at fair value and is re-measured at each balance sheet date until an award is exercised, expires, or is forfeited. Share-based compensation expense including changes in fair value are recognized in the combined statements of operations proportionally over the service period, and immediately for changes in fair value after the service period is completed up until an award is exercised, expires or is forfeited. The options include a service condition as the individuals participating in the plan must be employed by PGS for a certain period of time in order to earn the right to exercise the share options. The options granted under the 2006 employee option program do not include performance or market conditions. The cap of 1.5 times the employee's salary for each calendar year for options granted under the 2008 employee option program is assessed as a market condition, due to the linkage to the intrinsic value of the award at the date of exercise.

        The compensation amounts charged against Onshore's income for these plans was a reduction of previously recognized expense of $1.8 million in the year ended December 31, 2008 and costs of $1.7 million and $0.9 million for the years ended December 31, 2007 and 2006, respectively (see Note 20) with a corresponding (decrease) increase in Parent net invested capital. The actual tax benefit realized for the tax deductions from option exercises totaled $0.2 million for the year ended December 31, 2007, while there were no such benefits for the years ended December 31, 2008 and 2006. The liability for the outstanding share options was $49,139 and $1,897,919 as of December 31, 2008 and 2007, respectively.

        The tables below detail the Company's outstanding options for the years presented.

33

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 21 — Employee Share Option Programs (Continued)

        Year ended December 31, 2008:

Grant date:	Options outstanding December 31, 2007		Options granted in 2008		Options exercised in 2008			Options forfeited in 2008			Options outstanding December 31, 2008		Weighted- average remaining contractual term	Options exercisable December 31, 2008
July 2006		230,007		—		(2,001	)		(21,003	)		207,003	2.5 years		119,994
May 2007		24,000		—		—			—			24,000	3.4 years		8,000
June 2008		—		407,000		—			(36,000	)		371,000	4.4 years		—
Total		254,007		407,000		(2,001	)		(57,003	)		602,003	3.8 years		127,994

        Year ended December 31, 2007:

Grant date:	Options outstanding December 31, 2006		Options granted in 2007		Options exercised in 2007			Options forfeited in 2007		Options outstanding December 31, 2007		Weighted- average remaining contractual term	Options exercisable December 31, 2007
July 2006		318,000		—		(87,993	)		—		230,007	3.5 years		18,000
May 2007		—		24,000		—			—		24,000	4.4 years		—
Total		318,000		24,000		(87,993	)		—		254,007	3.6 years		18,000

        Year ended December 31, 2006:

Grant date:	Options outstanding December 31, 2005		Options granted in 2006		Options exercised in 2006		Options forfeited in 2006		Options outstanding December 31, 2006		Weighted- average remaining contractual term	Options exercisable December 31, 2006
July 2006		—		318,000		—		—		318,000	4.5 years		—

        The following share options, granted under the share option plans, were exercised for all years presented:

	Year ended December 31, 2008								Year ended December 31, 2007
Granted	Options exercised		Exercise date		Share price at exercise date		Total intrinsic value NOK		Options exercised		Exercise date	Share price at exercise date		Total intrinsic value NOK
July 2006		2,001		May 19, 2008		NOK 161.50		100,050		6,999	August 4, 2007		NOK 125.02		94,626
										80,994	November 3, 2007		NOK 155.71		3,580,745
										87,993					3,675,371

34

ONSHORE GROUP

Notes to the Combined Financial Statements (Continued)

Note 21 — Employee Share Option Programs (Continued)

        No share options have expired during the years ended December 31, 2008, 2007 and 2006.

        The intrinsic value of all vested options and options expected to vest as of December 31, 2008 was zero.

        Grant date information and fair value assumptions are as follows:

Grant date:	Options outstanding December 31, 2008		Average exercise price		Risk free rate			Dividend yield		Volatility factor			Weighted average life	Estimated fair value at grant date (average NOK/USD per share option)
July 2006(a)		207,003		NOK 111.50		3.92–4.00	%		—		45	%	3.5 years	NOK 44.10/$7.12
May 2007(a)		24,000		NOK 140.41		5.02	%		—		43	%	3.5 years	NOK 55.20/$8.87
June 2008		371,000		NOK 133.05		5.75	%		—		46	%	2.5 years	NOK 35.55/$6.77
Total		602,003

(a)

Exercise price is adjusted for special dividend of NOK 10 per share distributed in July 2007.

        Total net unrecognized compensation cost as of December 31, 2008 was $40,695 (related to non-vested share-based options), which is expected to be recognized over a period of 2.5 years (main portion within 1 year).

Note 22 — Supplemental Cash Flow Information

        Cash paid during the years presented includes payments for:

	Years ended December 31,
(In thousands of U.S. Dollars)	2008		2007		2006
Interest paid (external)		281		858		1,835
Income taxes		6,735		3,251		3,111

        Interest paid excludes the impact of interest capitalized to MultiClient library of $2.1 million, $1.9 million and $0.3 million for the years ended December 31, 2008, 2007 and 2006, respectively.

Note 23 — Contingencies

        Onshore is involved in various claims, legal actions and tax uncertainties arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's financial position, results of operations, or liquidity.

35

QuickLinks

Exhibit 99.2

Independent Auditors' Report
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Combined Balance Sheets
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Combined Statements of Operations
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Combined Statements of Cash Flows
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Combined Statements of Changes in Parent Net Invested Capital
ONSHORE GROUP Notes to the Combined Financial Statements

EX-99.3

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Exhibit 99.3

ONSHORE GROUP

OWNED BY PETROLEUM GEO-SERVICES ASA

Financial Statements

September 30, 2009

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Condensed Combined Balance Sheets

			September 30,
			2009 Unaudited		2008 Unaudited
			(In thousands of U.S. Dollars)
ASSETS
Current assets:
	Cash and cash equivalents		$	11,393	$	17,700
	Restricted cash			335		383
	Accounts receivable			25,944		47,867
	Accrued revenues and other receivables			23,980		25,837
	Deferred tax assets, current			4,539		2,820
	Other current assets			18,078		7,653
		Total current assets		84,269		102,260
Long-term assets:
	Property and equipment, net			51,688		53,585
	MultiClient library, net			59,464		58,219
	Deferred tax assets			15,384		10,845
	Other long-term assets			592		1,023
	Licenses, net			130		114
		Total long-term assets		127,258		123,786
		Total assets	$	211,527	$	226,046
LIABILITIES AND PARENT NET INVESTED CAPITAL
Current liabilities:
	Current potion of capital lease obligations		$	—	$	1,725
	Accounts payable			4,938		4,131
	Accrued expenses			16,454		27,039
	Deferred tax liabilities			6,390		—
	Income taxes payable			6,998		10,173
		Total current liabilities		34,780		43,068
Long-term liabilities:
	Other long-term liabilities			2,162		8,468
		Total long-term liabilities		2,162		8,468
		Parent net invested capital		174,585		174,510
		Total liabilities and Parent net invested capital	$	211,527	$	226,046

See the accompanying notes to the condensed combined financial statements.

1

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Condensed Combined Statements of Operations

		Nine months ended September 30,
		2009 Unaudited			2008 Unaudited
		(In thousands of U.S. Dollars)
Revenues:
	Contract	$	132,466		$	145,000
	MultiClient pre-funding		1,595			50,259
	MultiClient late sales		2,408			9,091
Revenues related party (contract)			5,089			3,703
	Total revenues		141,558			208,053
Cost of sales			122,265			138,352
Research and development costs			2,887			16
Selling, general and administrative costs			7,194			10,708
Depreciation and amortization			15,456			10,504
Amortization of MultiClient library			3,170			41,259
	Total operating expenses		150,972			200,839
	Operating (loss) profit		(9,414	)		7,214
Interest income			335			133
Interest expense			(8,069	)		(8,847	)
Other financial items, net			1,382			(1,593	)
	Loss before income tax (benefit) expense		(15,766	)		(3,093	)
Income tax (benefit) expense			(2,734	)		10,526
	Net loss	$	(13,032	)	$	(13,619	)

See the accompanying notes to the condensed combined financial statements.

2

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Condensed Combined Statements of Cash Flows

		Nine months ended September 30,
		2009 Unaudited			2008 Unaudited
		(In thousands of U.S. Dollars)
Cash flows provided by operating activities:
Net loss		$	(13,032	)	$	(13,619	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization		18,626			51,763
	Gain on sale of assets		(754	)		(310	)
	Deferred income taxes		(329	)		6,499
	Net decrease in restricted cash		—			446
	Other items		23			19
	Decrease in accounts receivable, net		14,180			2,384
	Decrease (increase) in unbilled and other receivables		1,354			(18,031	)
	(Increase) decrease in other current assets		(3,778	)		3,203
	Decrease (increase) in other long-term assets		288			(340	)
	Decrease in accounts payable		(5,225	)		(4,338	)
	Decrease in accrued expenses and income taxes payable		267			(2,822	)
	(Decrease) increase in other long-term liabilities		(6,313	)		996
Net cash provided by operating activities			5,307			25,850
Cash flows used in investing activities:
	Investment in MultiClient library		(3,257	)		(57,374	)
	Capital expenditures		(9,820	)		(26,820	)
	Investments in other intangible assets		(38	)		(111	)
	Proceeds from sale of assets		1,347			326
Net cash used in investing activities			(11,768	)		(83,979	)
Cash flows provided by financing activities:
	Transactions with Parent, net		5,996			74,140
	Principal payments under capital leases		—			(4,982	)
Net cash provided by financing activities			5,996			69,158
Net (decrease) increase in cash and cash equivalents			(465	)		11,029
Cash and cash equivalents as of January 1			11,858			6,671
	Cash and cash equivalents as of September 30	$	11,393		$	17,700

See the accompanying notes to the condensed combined financial statements.

3

ONSHORE GROUP

(A Business of Petroleum Geo-Services ASA)

Combined Statements of Changes in
Parent Net Invested Capital

			Parent Net Invested Capital Unaudited
			(In thousands of U.S. Dollars)
Balance at December 31, 2008				181,621
	Comprehensive loss:
		Net loss nine months ended September 30, 2009		(13,032	)
	Transactions with Parent, net			5,996
Balance at September 30, 2009				$174,585

See the accompanying notes to the condensed combined financial statements.

4

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited)

Note 1 — Nature of Business and Organization

        The Onshore group ("Onshore" or "the Company") comprises all of the land seismic operations of the Petroleum Geo-Services ASA group ("PGS) principally involved in providing seismic operations on land, in shallow water and transition zones, including onshore MultiClient Library. Onshore's headquarters is in Houston, Texas, U.S.A. The activities include legal entities and Onshore divisions of other legal entities, all ultimately owned by Petroleum Geo-Services ASA ("Parent").

Onshore legal entities:	Onshore divisions of the following legal entities:
PGS Onshore, Inc.	PGS Geophysical AS
SOH, Inc.	Petroleum Geo-Services Asia Pacific Pte. Ltd.
PGS Onshore (Algeria) EURL	PGS (Malta) Ltd.
PGS Onshore do Brazil Ltda.	PGS (Exploration (UK) Ltd.
PGS Onshore Servicos Ltda.	PGS Mexicana S.A. de C.V.
PGS Onshore (Canada), Inc.	Multiklient Invest AS
PGS Exploration Morocco SARL	Petroleum Geo-Services ASA
PGS Onshore Peru S.A.C.
PGS Onshore Services S.A.C.
PGS Servicios C.A.
PGS Venezuela de C.A.
PGS Administración y Servicios S.A. de C.V.

Note 2 — Basis of Presentation and Principles of Combination

        The unaudited condensed combined financial statements contained herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC") for interim financial statements. The accompanying financial statements include all adjustments which are, in the opinion of management, necessary to provide a fair presentation of the financial condition and results of operations for the periods presented. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in this statement pursuant to the rules and regulations of the SEC. These financial statements should be read in conjunction with the combined financial statements and notes for the year ended December 31, 2008. The results of operations for the nine months ended September 30, 2009, are not necessarily indicative of the results to be expected for the full year ending December 31, 2009. The Company has evaluated subsequent events through December 7, 2009, which represents the date these financial statements were issued.

        The condensed combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The condensed combined financial statements are presented in U.S. Dollars ("$" or "dollars"). The

5

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 2 — Basis of Presentation and Principles of Combination (Continued)

accompanying condensed combined financial statements of Onshore have been prepared from the historical accounting records of the Parent and are presented on a carve-out basis reflecting those certain assets, liabilities, and operations of Onshore. The historical results of operations, financial position, and cash flows of Onshore may not be indicative of what they would have been had Onshore been a separate stand-alone entity, nor are they indicative of what Onshore's results of operations, financial position and cash flows may be in the future.

        Transactions between Onshore and PGS are herein referred to as related party transactions (see Note 13). The Parent's net invested capital in these condensed combined financial statements constitutes the Parent's investments in Onshore and represents the excess of total assets over total liabilities. Net invested capital includes the funding of Onshore through the in-house banking, cash pooling arrangements and related party transactions to and from related parties with the Parent (see Note 13), and Onshore's cumulative net income (loss), including other comprehensive income is directly recognized in Parent net invested capital.

        The preparation of the Company's condensed combined financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and costs during the periods presented. Actual results could differ materially from those estimates.

        All intercompany transactions and balances between Onshore group components have been eliminated in combination.

Note 3 — Relationship with Parent

        The Company participates in a number of Parent-administered programs. Included in the historical information are costs of certain services such as data processing and technology services, and allocations for certain centralized administration costs for treasury, accounting, auditing, tax, risk management, human resources and benefits administration.

        The following is a discussion of the relationship with Parent, the services provided and how they have been accounted for in the Company's combined financial statements. See also Note 13 for more information on related party transactions.

(a) Allocated corporate and shared services costs

        The combined financial statements include Onshore's direct expenses as well as allocations of expenses arising from shared services primarily related to office facilities, information technology, human resources, payroll and marketing. Allocated expenses also include costs relating to the PGS group's financial accounting and reporting software. These costs are allocated to Onshore on a proportional basis using a basis of allocation that would be expected to reasonably reflect the proportion of Onshore's incurrence of such costs. Onshore is charged with a service fee for costs

6

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 3 — Relationship with Parent (Continued)

related to corporate services provided by the Parent, such as tax, legal, treasury, compliance, business development, investor relations, risk management, executive management, and corporate accounting services. The service fee is based on Parent's incurred costs of such services, net of any special non-operational project costs, allocated to Onshore based on a proportional basis using a basis of allocation that would be expected to reasonably reflect the proportion of Onshore's incurrence of such costs.

        Corporate and shared services costs were allocated to Onshore based on Onshore's portion of the following allocation metrics:

•

Office rent — square feet,

•

Marketing — revenues,

•

Other shared services allocated costs — headcount,

•

Financial accounting and reporting software — estimated percentage utilization of software, and

•

Service fee from Parent — revenues.

        These allocated costs are included in the "Selling, general and administrative costs" line of the combined statement of operations. The total amount allocated for centralized administration costs from Parent in the nine months ended September 30, 2009 and 2008 was $7.6 million and $8.1 million, respectively. These costs represent management's reasonable allocation of the costs incurred. However, these amounts may not be representative of the costs necessary for the Company to operate as a separate stand-alone company. The "Transactions with Parent, net" line item in the combined statements of changes in Parent net invested capital includes these costs paid by Parent on behalf of the Company.

(b) Other transactions with Parent

        PGS charges intercompany interest to Onshore calculated based on Onshore's net intercompany debt to Parent, which is included as part of Parent net invested capital. Parent net invested capital is also adjusted for accrued interest on intercompany borrowings. Intercompany interest was calculated and charged on a monthly basis for all financial periods presented based on LIBOR + 3%. Parent net invested capital includes the net intercompany borrowings resulting from Onshore's participation in PGS' centralized cash management program. Parent net invested capital is increased for cash disbursements involving centralized accounts related to Onshore's operations and investing activities and is reduced to the extent cash collections exceed Onshore's immediate needs and can be transferred to the Parent. As such, the amounts of cash and cash equivalents recorded on the combined balance sheets do not represent the amounts required or generated by the Onshore business, but rather represent cash and cash equivalents of PGS for which Onshore has legal ownership and is not commingled in its centralized cash function.

7

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 3 — Relationship with Parent (Continued)

(c) Guarantees

        The Company is a party to agreements under which it may be obligated to indemnify Parent with respect to certain matters. Typically, these obligations arise as a result of contracts entered into between the Company and Parent under which the Company agrees to indemnify Parent against losses arising from a breach of representations and covenants related to matters such as title to assets sold, the collectibility of receivables, specified environmental matters, lease obligations assumed and certain tax matters. The Company's obligations under these agreements may be limited in terms of time and/or amount, and in some cases the Company may have recourse against Parent for certain payments made by the Company. It is not possible to predict the maximum potential amount of future payments under certain of these agreements, due to the conditional nature of the Company's obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material effect on Onshore's business, financial position or results of operations. The Company believes that if it were to incur a loss in any of these matters, such loss would not have a material effect on the Onshore's business, financial position or results of operations.

        The material guarantees for which the maximum potential amount of future payments can be determined, are as follows:

•

PGS has pledged the shares of PGS Onshore, Inc. as security for certain Parent debt. The Parent net invested capital in PGS Onshore, Inc. as of September 30, 2009 was approximately $132 million.

•

The Company has outstanding performance bid guarantees of $0.3 million and $0.4 million classified as restricted cash as of September 30, 2009 and 2008, respectively.

Note 4 — Income Taxes

        The Company accounts for income taxes in accordance with FASB Accounting Standards Codification, which requires the recognition of amounts of taxes payable or refundable for the current year and an asset and liability approach in recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Management determines deferred taxes by identifying the types and amounts of existing temporary differences, measuring the total deferred tax asset or liability using the applicable tax rate and reducing the deferred tax asset by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management's methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining the annual effective tax rate and the valuation of deferred tax assets, which can create variances between actual results and estimates and could have a material impact on the Company's provision or benefit for income taxes. The income tax provision from continuing operations has

8

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 4 — Income Taxes (Continued)

been computed on a separate return basis. To the extent the Company provides any U.S. tax expense or benefit, any related tax payable or receivable to the Parent is reclassified to equity.

        Our effective tax rate was 17% and (340%) for the nine months ended September 30, 2009 and 2008, respectively. The income tax benefit for the nine months ended September 30, 2009 consisted primarily of foreign tax benefits recognized as a result of the settlement of an uncertain tax position offset by taxes in foreign jurisdictions. The income tax expense for the nine months ended September 30, 2008 consisted primarily of tax expense in profitable jurisdictions and by losses in foreign jurisdictions for which no benefit was provided.

Note 5 — Geographic Information

        Onshore is an oilfield service company principally involved in providing seismic operations on land, in shallow water and transition zones, including onshore MultiClient library. The Company serves a worldwide market.

        The geographic classification of revenues listed below is based upon location of performance or, in the case of MultiClient seismic data sales, the area where the survey was physically conducted.

Revenues by geographic region:

		Nine months ended September 30,
(In thousands of U.S. Dollars)		2009		2008
North America			48,316		128,844
Latin America			82,069		47,921
Eastern Hemisphere			11,173		31,288
	Total		141,558		208,053

Total assets by geographic region:

		September 30,
(In thousands of U.S. Dollars)		2009		2008
North America			150,333		178,046
Latin America			52,858		26,767
Eastern Hemisphere			8,336		21,233
	Total		211,527		226,046

        In certain of the regions where the Company operates, a significant share of its employees is organized in labor unions. Similarly the Company's operations in certain regions are members of

9

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 5 — Geographic Information (Continued)

employer unions. Therefore, the Company may be affected by labor conflicts involving such labor and employer unions.

Note 6 — Depreciation and Amortization

        Depreciation and amortization consists of the following:

		Nine months ended September 30,
(In thousands of U.S. Dollars)		2009			2008
Gross depreciation and amortization			(15,456	)		(12,169	)
Depreciation capitalized in MultiClient library (Note 10)			—			1,665
	Total		(15,456	)		(10,504	)

Note 7 — Interest Expense

        Interest expense consists of the following:

		Nine months ended September 30,
(In thousands of U.S. Dollars)		2009			2008
Interest expense gross, external			(3	)		(249	)
Interest expense, related party			(8,260	)		(10,463	)
Interest capitalized in MultiClient library (Note 10)			194			1,865
	Total		(8,069	)		(8,847	)

Note 8 — Other Current Assets

        Other current assets consist of the following:

		September 30,
(In thousands of U.S. Dollars)		2009		2008
Deferred mobilization expense			11,994		2,261
Withholding taxes and taxes receivable			3,449		2,431
Prepaid operating expenses			2,396		1,758
Other			239		1,203
	Total		18,078		7,653

10

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 9 — Property and Equipment, net

        The components of property and equipment, net, are summarized as follows:

		September 30,
(In thousands of U.S. Dollars)		2009			2008
Seismic operating equipment			176,639			171,400
Fixtures, furniture and fittings			19,664			13,530
Buildings and leasehold improvements			248			1,022
Land			6			171
	Gross purchase costs		196,557			186,123
Accumulated depreciation			(144,869	)		(132,538	)
	Property and equipment, net		51,688			53,585

Note 10 — MultiClient Library, net

        The components of the MultiClient library, net, are summarized as follows:

		September 30,
(In thousands of U.S. Dollars)		2009			2008
Balance as of January 1			59,377			40,438
Cash investments(a)			3,257			57,374
Capitalized depreciation (Note 6)			—			1,665
Amortization expense			(3,170	)		(41,259	)
Other			—			1
	Balance as of September 30		59,464			58,219

(a)

Includes capitalized interest of $0.2 million and $1.9 million for the nine months ended September 30, 2009 and 2008, respectively.

11

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 10 — MultiClient Library, net (Continued)

        The net carrying value of the MultiClient library, by the year in which the components were completed, is summarized as follows:

			September 30,
(In thousands of U.S. Dollars)			2009		2008
Completed surveys:
	Completed during 2007			3,514		3,514
	Completed during 2008			38,943		40,934
	Completed during 2009			16,766		—
		Completed surveys		59,223		44,448
	Surveys in progress			241		13,771
		MultiClient library		59,464		58,219

        For information purposes, the following shows the hypothetical application of the Company's minimum amortization requirements to the components of the existing MultiClient library. These minimum amortization requirements are calculated as if there will be no future sales of these components.

		September 30, 2009
(In thousands of U.S. Dollars)		Minimum future amortization
During 2009			74
During 2010			701
During 2011			8,875
During 2012			18,198
During 2013			25,132
During 2014			6,484
	Future minimum amortization		59,464

        Because the minimum amortization requirements generally apply to the MultiClient library on a survey-by-survey basis rather than in the aggregate, the Company may incur significant minimum amortization charges in a given year even if the aggregate amount of ordinary amortization charges recognized exceeds the aggregate minimum amortization charges above.

12

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 11 — Accrued Expenses

        Accrued expenses consist of the following:

		September 30,
(In thousands of U.S. Dollars)		2009		2008
Accrued employee benefits			8,615		7,685
Accrued operating expenses — land crews			4,508		11,813
Customer advances and deferred revenue			1,786		6,766
Accrued sales tax and VAT			1,141		235
Other			404		540
	Total		16,454		27,039

Note 12 — Other Long-Term Liabilities

        Other long-term liabilities consist of the following:

		September 30,
(In thousands of U.S. Dollars)		2009		2008
Tax contingencies			1,080		6,766
Retention bonus, long-term			1,082		1,592
Other			—		110
	Total		2,162		8,468

Note 13 — Related Party Transactions

        As a consequence of the ownership structure Onshore has historically maintained a significant business relationship with PGS. Onshore and PGS subsidiaries have certain common officers, directors, and shareholders.

        Shared services allocations, accounting and reporting software allocations, corporate service fee, technology marketing fee, and reimbursements are paid to PGS in accordance with management agreements between PGS and Onshore (see Note 3). All intercompany services are

13

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 13 — Related Party Transactions (Continued)

charged with an intercompany service fee. The following table summarizes the expense allocations reflected, in operating expenses, in the condensed combined statements of operations:

		Nine months ended September 30,
(In thousands of U.S. Dollars)		2009		2008
Corporate and shared services allocations			7,229		9,469
Share option compensation costs (Note 14)			420		(1,334	)
	Total		7,649		8,135

        During each period presented PGS provided data processing and technology services to Onshore. All services are based on market prices. The costs are included in cost of sales in the combined statements of operations, as follows:

		Nine months ended September 30,
(In thousands of U.S. Dollars)		2009		2008
Data processing services			961		1,854
Technology services			75		926
	Total		1,036		2,780

        During the nine months ended September 30, 2009 and 2008, Onshore provided seismic services to PGS totaling $5.1 million and $3.7 million, respectively, which is included in revenues in the combined statements of operations.

        For the nine months ended September 30, 2009 and 2008, Onshore was charged with intercompany interest expense of $8.3 million and $10.5 million, respectively, on net intercompany debt to Parent which is presented within Parent net invested capital.

Note 14 — Employee Share Option Programs

        In June 2009, PGS established an additional employee share option program, where options covering 435,000 Parent shares were granted to certain key Onshore employees at an exercise price of NOK 40.29 (approximately $6.38). The terms under this share option program are similar to those under the 2008 employee share option program described in Onshore's annual financial statements and are accounted for as liability settled awards. The grant date fair value was NOK 13.68, based upon no expected dividend yield, expected stock price volatility of 50-60% and risk free interest rate of 2%.

        The compensation amounts charged against Onshore's income for all employee share option plans was an expense of $0.4 million for the nine months ended September 30, 2009 and a

14

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 14 — Employee Share Option Programs (Continued)

reduction of previously recognized expense of $1.4 million for the nine months ended September 30, 2008 (see Note 13) with a corresponding increase (decrease) in Parent net invested capital. The liability recognized for the outstanding share options was $469,450 and $547,013 as of September 30, 2009 and 2008, respectively.

        During the nine months ended September 30, 2009, no options were exercised and 20,997 forfeited. As of September 30, 2009, options to purchase 1,016,006 Parent shares were outstanding with a weighted average exercise price of NOK 89.38.

Note 15 — Supplemental Cash Flow Information

        Cash paid during the years presented includes payments for:

	Nine months ended September 30,
(In thousands of U.S. Dollars)	2009		2008
Interest paid (external)		3		249
Income taxes		4,641		4,346

        Interest paid excludes the impact of interest capitalized to MultiClient library of $0.2 million and $1.9 million for the nine months ended September 30, 2009 and 2008, respectively.

Note 16 — Contingencies

        Onshore is involved in various claims, legal actions and tax uncertainties arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have any material adverse effect on the Company's financial position, results of operations, or liquidity.

Note 17 — New Accounting Standards

        Effective January 1, 2008, the Company adopted ASC 820-10, "Fair Value Measurements and Disclosures," with respect to recurring financial assets and liabilities. The Company adopted ASC 820-10 on January 1, 2009, as it relates to nonrecurring fair value measurement requirements for nonfinancial assets and liabilities. ASC 820-10 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The adoption of the standard had no impact on the consolidated financial results.

        Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 105-10, "Generally Accepted Accounting Principles." ASC 105-10 establishes the FASB Accounting Standards Codification™ ("Codification") as the source of authoritative accounting principles recognized by the FASB to be

15

ONSHORE GROUP

Notes to the Condensed Combined Financial Statements (Unaudited) (Continued)

Note 17 — New Accounting Standards (Continued)

applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. The FASB will now issue new standards in the form of Accounting Standards Updates ("ASUs"). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the changes in the Codification. References made to FASB guidance have been updated for the Codification throughout this document.

        In September 2009, the FASB ratified Accounting Standards Update ("ASU") 2009-13, Revenue Arrangements with Multiple Deliverables ("EITF 08-1"). ASU 2009-13 superseded EITF 00-21 and addresses criteria for separating the consideration in multiple-element arrangements. ASU 2009-13 will require companies to allocate the overall consideration to each deliverable by using a best estimate of the selling price of individual deliverables in the arrangement in the absence of vendor-specific objective evidence or other third-party evidence of the selling price. ASU 2009-13 will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and early adoption will be permitted. Onshore is currently evaluating the potential impact, if any, of the adoption of ASU 2009-13 on its consolidated results of operations and financial condition.

Note 18 — Subsequent Events

        On December 3, 2009, PGS announced that they had signed a definitive agreement under which Geokinetics Inc. ("Geokinetics") will acquire the onshore business of PGS valued at approximately $210 million consisting of cash and common stock of Geokinetics, subject to certain adjustments. The transaction is expected to be completed during the first quarter of 2010.

16

QuickLinks

Exhibit 99.3

ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Condensed Combined Balance Sheets
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Condensed Combined Statements of Operations
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Condensed Combined Statements of Cash Flows
ONSHORE GROUP (A Business of Petroleum Geo-Services ASA) Combined Statements of Changes in Parent Net Invested Capital
ONSHORE GROUP Notes to the Condensed Combined Financial Statements (Unaudited)