FIRST QUARTER REPORT 2018 Polarcus Limited

FIRST QUARTER REPORT 2018 Polarcus Limited Page 1

FIRST QUARTER 2018 Improved capital structure and increased market activity The first quarter 2018 is the first financial reporting period that the Company has adopted IFRS 15 Revenues from Contracts with Customers, a new and mandatory accounting principle on revenue recognition. IFRS 15 has a significant impact on the timing of the recognition of revenue and associated amortization arising from the Company s multi-client projects during the prefunding stage. The Company has applied the modified retrospective approach for transition to IFRS 15, meaning the comparative period numbers are not restated. To enable better comparison with prior period results, the Company will, in places, refer to adjusted numbers that exclude the impact of IFRS 15. Such numbers are based on the same accounting principles that were in effect in 2017, before the implementation of IFRS 15. HEADLINES Q1 2018: Adjusted¹ revenues of USD 40.1 million, up 8% from Q4 2017 (IFRS revenues of USD 30.6 million) Adjusted¹ EBITDA before non-recurring costs of USD 12.1 million, up from USD 2.2 million in Q4 2017 Gross cost of sales of USD 37.7 million, up 2% from Q4 2017 Cash from operations of USD 5.6 million, down from USD 18.5 million in Q4 2017 Completion of NOK 300 million Private Placement and financial restructuring providing debt service runway to 2022 Available liquidity of USD 86.0 million (including undrawn WCF of USD 40 million), up from USD 50.8 million at end Q4 2017 Backlog of USD 150 million Post-quarter end, completion of NOK 40 million Repair Offer ¹ = adjusted for IFRS 15 effects Polarcus recorded increased adjusted¹ revenues of 8% sequentially in a seasonally weak market, mainly as a result of improved vessel utilization. Total utilization for the quarter was 83%, up from 68% in Q4 2017. However, revenues were negatively impacted by production delays on turnkey projects. Total adjusted¹ revenues were USD 40.1 million, up USD 2.9 million sequentially, driven by increased proprietary contract revenue and prefunding revenue, partially offset by lower late sales and other income. Proprietary contract revenue increased by 10% to USD 19.7 million compared to the previous quarter, while adjusted¹ multi-client revenue increased by 60% to USD 9.6 million. The increase in adjusted¹ multi-client revenue was driven by higher prefunding level and multi-client allocation. Gross cost of sales was USD 37.7 million compared to USD 37.0 million in Q4 2017 despite significantly higher utilization. General and administrative expenses, adjusted for one-off professional fees associated with the Company s restructuring, increased to USD 3.1 million in Q1 2018 compared to USD 2.9 million the previous quarter. Cash from operations of USD 5.6 million was USD 12.9 million lower than the previous quarter due to a USD 18.5 million reduction in working capital movements, partially offset by higher earnings. The Company s available liquidity at the quarter end was USD 86.0 million, including the USD 40 million undrawn working capital facility, up from USD 50.8 million at the end of Q4 2017. During 2018 Polarcus completed a financial restructuring, including equity issues with gross proceeds of NOK 340 million, amended debt terms providing the Company a debt service runway to 2022 and an increased working capital facility. This gives Polarcus a robust financial foundation to continue its focus on operational excellence, cost efficiency and backlog for the fleet, in addition to a platform to participate in market consolidation. A net accounting gain of USD 20.3 million was recognized as a result of the Company s financial restructuring completed in the quarter. The number of square kilometers tendered in Q1 2018 almost doubled compared to Q4 2017. The increase is driven by a higher number of larger tenders across Africa and Asia Pacific. For the 12-month period ending Q1 2018, tender activity increased by approximately 50% compared to the same period last year. Oil price is significantly higher to date in 2018 than in recent years and utilization of the active 3D global seismic fleet has increased substantially since Q4 2017. The positive developments in tender activity, oil price and global fleet utilization are all indications of an improving market. The Company s backlog at 31 March 2018, including awards made after the quarter end, is estimated to be USD 150 million. Page 2

ADJUSTED KEY FINANCIALS To enable better comparison with prior period financial performance, the table below summarizes a selection of key financials, alternative performance measures (APM) and segment information adjusted for the impact of IFRS 15. (In millions of USD) Adjusted 31-Mar-18 IFRS 15 adjustment As reported in accordance with IFRS 31-Dec-17¹ Multi-client prefunding revenue 9.5 (9.5) - 3.5 Revenues 40.1 (9.5) 30.6 37.2 EBITDA (before non-recurring items) 12.1 (9.5) 2.6 2.2 EBITDA 25.0 (9.5) 15.5 26.7 Multi-client amortization and impairment 13.9 (9.2) 4.7 22.5 EBIT (before non-recurring items) (4.4) (0.3) (4.7) (19.3) EBIT 5.5 (0.3) 5.2 (84.5) Net profit / (loss) for the period 3.1 (0.3) 2.8 (91.7) Prefunding level 82% 82% - 50% Multi-client projects cash investment 11.7-11.7 6.9 Total equity² 101.8 5.7 107.5 44.7 ¹ = Comparative figures are as reported in 2017 and not impacted by IFRS 15 ² = Includes opening balance sheet adjustment at 1 January 2018 on implementation of IFRS 15 Non-recurring items include impairments, the cost of onerous contract provisions and restructuring costs. KEY FINANCIALS (in accordance with IFRS) (In millions of USD) 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Revenues 30.6 37.2 47.2 179.0 EBITDA (before non-recurring items) 2.6 2.2 10.4 18.2 EBITDA 15.5 26.7 8.9 41.3 EBIT (before non-recurring items) (4.7) (19.3) (18.0) (68.9) EBIT 5.2 (84.5) (20.3) (137.0) Net profit / (loss) for the period 2.8 (91.7) (38.0) (172.5) Basic earnings/(loss) per share (USD) 0.01 (0.60) (0.05) (1.41) Net cash flows from operating activities 5.6 18.5 14.4 34.1 Total assets 529.0 402.9 571.8 402.9 Total liabilities 421.5 358.2 393.2 358.2 Total equity 107.5 44.7 178.6 44.7 Equity ratio 20% 11% 31% 11% Property, plant & equipment cash investment 76.1 1.7 1.7 7.3 Multi-client projects cash investment 11.7 6.9 11.1 20.6 Total cash 46.2 33.7 46.9 33.7 Net interest bearing debt 294.6 260.7 247.3 260.7 Page 3

FINANCIAL RESULTS (in accordance with IFRS) Operating Revenue (In millions of USD) 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Contract revenue - Proprietary contract (excl. reimbursable) 18.0 16.6 23.7 104.6 - Reimbursable 1.7 1.3 0.9 3.9 - Management fees 3.6 3.7 3.7 14.9 - Bare boat charter 6.7 6.8 3.6 23.5 Multi-client revenue 30.0 28.4 31.9 146.9 - Prefunding - 3.5 14.9 21.7 - Late sales 0.1 2.5-6.0 0.1 6.0 14.9 27.7 Other income 0.6 2.8 0.3 4.4 Total 30.6 37.2 47.2 179.0 Revenues decreased 18% to USD 30.6 million (Q4 2017: USD 37.2 million) due to lower multi-client revenue and other income, partly offset by higher contract revenue. Multi-client revenues were lower as a result of the IFRS 15 impact on the timing of prefunding revenue recognition. The Company has applied the modified retrospective approach for transition to IFRS 15, meaning the comparative period numbers are not restated. Had multi-client prefunding been accounted for using the same accounting principles applicable in 2017, total revenues in Q1 2018 would have been USD 40.1 million, an 8% increase compared to the previous quarter. Proprietary contract revenue increased by 8% to USD 18.0 million (Q4 2017: USD 16.6 million), driven by increased utilization partly offset by lower day rates which were negatively impacted by production delays on turnkey projects. Multi-client revenue decreased to USD 0.1 million (Q4 2017: USD 6.0 million), due to a decrease in prefunding and late sales revenue. Prefunding revenue declined as a result of the IFRS 15 impact on the timing of revenue recognition. Vessel allocation to multi-client projects increased to 18% (Q4 2017: 10%). Multi-client cash investment was USD 11.7 million (Q4 2017: USD 6.9 million) as a result of the increased activity. Had multi-client prefunding been accounted for in Q1 2018 using the same accounting principles applicable in 2017, the Company would have recognized USD 9.5 million in multi-client prefunding revenue, up 175% from the previous quarter (Q4 2017: USD 3.5 million), with an increase in the prefunding level to 82% (Q4 2017: 50%). Operating expenses (In millions of USD) 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Gross cost of sales 37.7 37.0 46.2 165.0 Capitalized to multi-client (11.2) (5.8) (10.0) (16.4) Net deferred transit adjustment - - 0.4 0.4 26.5 31.2 36.6 149.1 Reimbursable cost 1.6 1.3 0.9 3.2 Restructuring costs - 1.6-1.6 Bad debt expense - (0.2) (0.3) (1.2) Onerous contract provision unwinding (3.3) - (3.9) (3.9) Gain on termination of vessel operating lease (13.9) - - - Total cost of sales 11.0 33.9 33.3 148.8 Cost of sales decreased 68% to USD 11.0 million (Q4 2017: USD 33.9 million), driven by a USD 13.9 million non-cash accounting gain on termination of the operating leases for Polarcus Naila and Polarcus Nadia on purchase of the vessels as part of the Company s restructuring. Also contributing were increased costs capitalized to multi-client projects of USD 11.2 million (Q4 2017: USD 5.8 million) as a result of increased multi-client activity. Gross cost of sales increased 2% to USD 37.7 million (Q4 2017: USD 37.0 million) driven by a 41% increase in the number of Fleet vessel operating days. Page 4

A gain of USD 3.3 million (Q4 2017: nil) was recognized in the quarter from the partial unwinding of USD 5.5 million onerous contract provision recognized in Q4 2017. The remaining provision of USD 2.2 million is expected to be unwound in Q2 2018. A gain of USD 13.9 million (Q4 2017: nil) was recognized within cost of sales on termination of the operating leases for Polarcus Naila and Polarcus Nadia on purchase of the vessels in the quarter as part of the Company s financial restructuring. General and administrative costs increased by 17% to USD 4.2 million (Q4 2017: USD 3.6 million), mainly due to an increase in legal and other professional fees associated with the Company s financial restructuring. Adjusted for the one-off costs, general and administrative cost increased by 7% to USD 3.1 million (Q4 2017: USD 2.9 million). EBITDA decreased to USD 15.5 million (Q4 2017: USD 26.7 million), mainly driven by a reduction in the non-cash gains related to accounting for the vessel operating leases for Polarcus Naila and Polarcus Nadia, which reduced to USD 13.9 million (Q4 2017: USD 32.5 million). EBITDA margin was 51% in the quarter (Q4 2017: 72%). EBITDA adjusted for non-recurring items increased to USD 2.6 million (Q4 2017: USD 2.2 million). Depreciation and amortization (In millions of USD) 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Depreciation of seismic vessels & equipment 6.2 11.8 12.2 47.7 Depreciation capitalized to multi-client library (0.7) (0.9) (1.8) (2.7) Total 5.5 10.9 10.4 45.0 Depreciation and amortization decreased by 50% to USD 5.5 million (Q4 2017: USD 10.9 million), mainly driven by a reduction in depreciation of seismic vessels and equipment. Gross depreciation decreased by 48% to USD 6.2 million (Q4 2017: USD 11.8 million) as a result of a reduced depreciable asset base following the vessel impairment charge booked at the end of Q4 2017, partially offset by the addition to Company s depreciable assets following the purchase of Polarcus Nadia and Polarcus Naila during Q1 2018. Amortization of the multi-client library decreased by 83% to USD 1.7 million (Q4 2017: USD 10.5 million), mainly due to the IFRS 15 effects on multi-client amortization, delaying recognition of amortization on multi-client projects in the prefunding stage. The opening balance sheet adjustment required as a result of implementation of IFRS 15 caused the carrying value of one multi-client project to exceed the total revenue expected to be generated from that particular project. As a consequence, the Company recognized a non-cash impairment of USD 3.0 million on 1 January 2018. EBIT recorded in the quarter increased to USD 5.2 million (Q4 2017: loss of USD 84.5 million), mainly driven by a decrease in impairment charges to USD 3.0 million (Q4 2017: USD 89.8 million). EBIT adjusted for non-recurring items improved to negative USD 4.7 million (Q4 2017: negative USD 19.3 million). Changes in fair value of financial instruments The Company recorded a positive change in fair value of financial instruments of USD 0.5 million during the quarter (Q4 2017: positive change USD 4.1 million). The financial instruments measured at fair value through profit and loss were terminated or amended as part of the Company s financial restructuring during the quarter and, subsequently, the Company no longer has any financial instruments accounted for at fair value through profit and loss. Gain on financial restructuring The Company recorded a non-cash accounting gain of USD 20.3 million arising as a result of the Company s financial restructuring completed in the quarter, of which USD 13.9 million impacted cost of sales on termination of the previous operating leases for Polarcus Nalia and Polarcus Nadia and USD 6.4 million in the quarter as a result of the amendments to the Company s unsecured bonds. The future cash flows of the restructured bonds are significantly different from the old cashflows, hence the pre-restructured bonds that had a total carrying value of USD 26.2 million were derecognized from the balance sheet and immediately replaced with the restructured bonds. On the date of recognition, the restructured bonds had an estimated fair value of USD 3.4 million, while an amount of USD 16.4 million was recognized as new share capital following the bond-to-equity conversion that applied to approximately 50% of the pre-restructured bonds. The difference of USD 6.4 million between the carrying value of the pre-restructured bonds and the total of the fair value of the restructured bonds and equity issued is recognized as a gain on restructuring. Net profit and earnings per share Net profit increased to USD 2.8 million (Q4 2017: loss USD 91.7 million), mainly as a result of reduced impairment charges and an increase in the financial accounting gain on restructuring. The Company recorded an improvement in basic and diluted EPS in the quarter to USD 0.01 per share (Q4 2017: loss USD 0.60 per share). Page 5

Capital expenditure (In millions of USD) 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Seismic vessels (Polarcus Naila and Polarcus Nadia) 71.9 - - - - Seismic and vessel equipment 1.0 0.7 2.0 7.1 Total 73.0 0.7 2.0 7.1 Capital expenditure increased to USD 73.0 million (Q4 2017: USD 0.7 million) due to the purchase of Polarcus Naila and Polarcus Nadia, two vessels that were previously on operating leases to the Company. The purchase price consisted of USD 75 million and warrants representing 2.5% of the Company s issued share capital. The fair value at purchase date of the consideration given equated to USD 71.9 million, consisting of debt financing with fair value USD 70.9 million and warrants issued to the seller with fair value USD 1.0 million. Cash flow and liquidity Net cash flow from operating activities decreased to USD 5.6 million (Q4 2017: USD 18.5 million), mainly due to reduced working capital movement between quarters. The net working capital movement reduced by USD 18.5 million to USD 7.3 million in the quarter (Q4 2017: positive USD 24.1 million). Net cash flow used in investing activities increased to USD 87.7 million (Q4 2017: USD 8.7 million), mainly driven by increased investment in property, plant and equipment following the purchase of Polarcus Naila and Polarcus Nadia for cash consideration of USD 75.0 million. Investments in multi-client assets increased to USD 11.7 million (Q4 2017: USD 6.9 million) due to an increase in vessel allocation to multiclient projects in the quarter. Net cash flow from financing activities was an inflow of USD 102.5 million (Q4 2017: outflow USD 8.9 million), with the increase mainly due to the proceeds of the equity issue and the new vessel loan financing associated with the acquisition of Polarcus Naila and Polarcus Nadia. Net proceeds from a private placement were USD 36.4 million in the quarter (Q4 2017: nil). Net receipts from bank loans was USD 82.7 million in the quarter (Q4 2017: nil), of which USD 75.0 million was due to the new vessel loan and USD 7.7 million related to a loan used to finance the termination of a cross currency swap in the quarter. Repayment of interest bearing debt increased to USD 8.8 million in the quarter (Q4 2017: 2.2 million) due to payment of the Company s Fleet bank facility, which was largely financed by release of USD 7.7 million of restricted cash. The Company paid USD 3.9 million in fees relating directly to the restructuring in the quarter (Q4 2017: nil). The Company s cash and cash equivalents increased to USD 46.0 million at the quarter end, up from USD 25.8 million at the end of the previous quarter. Total cash held at the quarter end was USD 46.2 million (Q4 2017: USD 33.7 million), including restricted cash of USD 0.2 million (Q4 2017: USD 7.8 million). The Company s working capital facility of USD 40.0 million was undrawn at the quarter end. Reclassification of non-current debt As at the end of the previous quarter, the Company was in breach of the equity ratio covenant under the terms of the unsecured bonds. As a consequence, the Company s long-term debt was temporarily classified as a current liability at 31 December 2017. The covenant breaches were remedied in Q1 2018 as part of the Company s restructuring that was completed the same quarter and, subsequently, the Company s long-term debt is reclassified as non-current. Financial restructuring During Q1 2018 the Company completed a financial restructuring of its balance sheet (the "Restructuring"), including an issue of new shares for gross proceeds of NOK 300 million through a private placement (the Private Placement ). A further share issue with gross proceeds of NOK 40 million was completed on 5 April 2018 (the "Repair Issue" and, together with the Private Placement, the "Equity Issues"). The total key improvements in the Company s liquidity as a result of the Restructuring and Equity Issues are summarized below. NOK 340 million Equity Issues Instalment runway and reduced interest to 2022 Termination of USD 90 million operating lease commitments and acquisition of Polarcus Nadia and Polarcus Naila financed by a USD 75 million (nominal value) vessel loan and issue of warrants representing 2.5% of the Company s issued share capital Relaxed covenants to support trading through a flat market Cash sweep mechanism to secured lenders in the event of excess cash generation Reduced par value and conversion of 50% of unsecured bonds into equity Termination of cross-currency swap arrangement with termination fee covered by a new bank loan facility Working capital facility increased by USD 15 million to USD 40 million The Equity Issues, increased working capital facility, Instalment runway and reduced interest significantly improve the Company's liquidity between now to 2022. Page 6

OPERATIONS Vessel utilization 31-Mar-18 31-Dec-17 31-Mar-17 31-Dec-17 Utilization 83% 68% 72% 77% By category: Exclusive Seismic Contract* 65% 58% 58% 71% Multi-client Seismic 18% 10% 14% 6% Transit 11% 12% 18% 13% Yard stay - - 2% 2% Standby 6% 20% 8% 8% Total 100% 100% 100% 100% * Includes the vessels V. Tikhonov and Ivan Gubkin (formerly Polarcus Amani) which are on bareboat charters. Polarcus Nadia is excluded from vessel utilization subsequent to cold-stacking on 01 April 2015. Utilization increased to 83% (Q4 2017: 68%), driven by an increase in the number of days spent on both contract and multi-client projects. Contract utilization increased to 65% (Q4 2017: 58%) and allocation to multi-client increased to 18% (Q4 2017: 10%) due to three multiclient projects allocated vessel time in the quarter compared to two the previous quarter. Excluding vessels on long-term bareboat charters (and Polarcus Nadia), utilization for the remaining fleet increased to 74% (Q4 2017: 52%). Sales and outlook The first quarter 2018 saw the majority of the active 3D seismic fleet back in operation after very low global fleet utilization during the second half of 2017. All four of Polarcus active vessels were back in operation after Polarcus Asima had been idle for much of Q4 2017. Global tender activity significantly increased, with the number of square kilometers in Q1 2018 almost doubled compared to Q4 2017. This improvement has been driven by a higher number of larger tenders across Africa and Asia Pacific on the back of an increasing oil price. For the 12-month period ending Q1 2018, tender activity increased by approximately 50% compared to a year earlier, a positive indication of a more enduring increase in tender activity over a longer period of time. The positive developments observed in global fleet utilization, tender activity and the oil price are all indications of an improving market. The immediate outlook for the marine seismic market, however, remains competitive. The Company s financial restructuring completed during the start of 2018 puts the Company in a strong position to be able to navigate successfully in the event the market remains subdued. The Company will continue to focus on optimizing its operational cost profile and controlling the pace of its investments in a highly disciplined manner. Gross cost of sales (excluding operating lease expense) for the full year 2018 is expected to be USD 150 million (2017 USD 157 million). The Company expects total CAPEX investments for the full year 2018 to be USD 10 million (2017 USD 7.1 million), excluding the purchase of Polarcus Naila and Polarcus Nadia that formed part of the Company s restructuring. The Company expects general and administrative expenses for the full year 2018 to be USD 13 million, excluding restructuring cost (2017 USD 14 million). The Company s backlog at 31 March 2018, including the two bareboat charters and awards made after the quarter end, is estimated to USD 150 million. Page 7

Interim consolidated statement of comprehensive income (In thousands of USD) Notes 31-Mar-18 31-Mar-17 31-Dec-17 Revenues Contract revenue 3 29,958 31,937 146,925 Multi-client revenue 3 92 14,892 27,707 Other income 3 598 328 4,351 Total Revenues 30,647 47,156 178,983 Operating expenses Cost of sales 4 (10,970) (33,320) (148,769) General and administrative costs (4,189) (4,932) (15,947) Onerous contracts - - 27,027 Depreciation and amortization 5 (5,545) (10,407) (45,018) Multi-client amortization 6 (1,748) (18,021) (42,108) Impairments (2,982) (816) (91,178) Total Operating expenses (25,434) (67,495) (315,993) Operating profit/(loss) 5,213 (20,339) (137,011) Finance costs 7 (9,799) (10,703) (44,392) Finance income 303 475 2,449 Changes in fair value of financial instruments 8 479 (6,075) 6,632 Gain on financial restructuring 11 6,398 - - (2,618) (16,303) (35,311) Profit/(loss) before tax 2,594 (36,642) (172,322) Income tax expense 191 (1,399) (131) Net profit/(loss) and total comprehensive income/(loss) 2,785 (38,041) (172,453) Earnings per share attributable to the equity holders during the period (In USD) - Basic 0.007 (0.477) (1.275) - Diluted 0.007 (0.477) (1.275) Page 8

Interim consolidated statement of financial position (In thousands of USD) Notes 31-Mar-18 31-Mar-17 31-Dec-17 Assets Non-current Assets Property, plant and equipment 9 390,870 432,272 324,122 Multi-client project library 6 27,343 40,009 10,406 Total Non-current Assets 418,213 472,281 334,528 Current Assets Multi-client project library 6 32,333 - - Receivable from customers 16,663 32,932 19,766 Other current assets 15,587 19,646 14,930 Restricted cash 160 6,735 7,818 Cash and bank 46,033 40,183 25,846 Total Current Assets 110,776 99,496 68,361 Total Assets 528,989 571,777 402,888 Equity and Liabilities Equity Issued share capital 10 48,302 15,305 15,344 Share premium 10 634,045 614,086 614,192 Other reserves 25,503 30,006 24,411 Retained earnings/(loss) (600,382) (480,805) (609,228) Total Equity 107,468 178,592 44,719 Non-current Liabilities Interest bearing debt 11 332,798 287,686 - Long-term provisions - 36,580 - Other financial liabilities - 10,408 8,624 Total Non-current Liabilities 332,798 334,673 8,624 Current Liabilities Interest bearing debt current portion 11 8,000 6,463 294,293 Provisions 2,213 2,920 5,489 Accounts payable 18,521 15,011 13,351 Other accruals and payables 59,988 34,119 36,412 Total Current Liabilities 88,722 58,512 349,545 Total Equity and Liabilities 528,989 571,777 402,888 Page 9

Interim consolidated statement of cash flows (In thousands of USD) Notes 31-Mar-18 31-Mar-17 31-Dec-17 Cash flows from operating activities Profit/(loss) for the period 2,785 (38,041) (172,453) Adjustment for: Depreciation and amortization 5 5,545 10,407 45,018 Multi-client amortization 6 1,748 18,021 42,108 Impairments 2,982 816 91,178 Changes in fair value of financial instruments 8 (479) 6,075 (6,632) Employee share option expenses 132 141 534 Interest expense 7 9,005 9,954 39,742 Interest income (47) (38) (223) Gain on financial restructuring 11 (6,398) - - Gain on termination of vessel operating lease 9 (13,907) - - Effect of currency (gain)/loss 202 233 1,200 Net movements in provisions (3,276) (3,920) (35,731) Net working capital movements 7,338 10,737 29,323 Net cash flows from operating activities 5,629 14,385 34,064 Cash flows from investing activities Payments for property, plant and equipment (76,063) (1,731) (7,340) Payments for multi-client project library (11,679) (11,138) (20,631) Net cash flows used in investing activities (87,742) (12,869) (27,972) Cash flows from financing activities Proceeds from the issue of ordinary shares 10 37,879 38,853 39,003 Transaction costs on issue of shares 10 (1,515) (1,168) (1,173) Receipt from bank loans 11 82,672 - - Repayment of interest bearing debt (8,797) (1,837) (6,893) Interest paid (5,064) (5,093) (18,618) Financial restructuring fees paid (3,856) - - Other finance costs paid (263) (427) (859) Decrease/(Increase) in restricted cash 7,657 (6,005) (7,087) Security deposit related to currency swaps 1,370 740 1,750 Paid towards liability under currency swaps 11 (7,672) - - Interest received 47 38 223 Net cash flows used in financing activities 102,458 25,101 6,346 Effect of foreign currency revaluation on cash (159) (164) (324) Net increase in cash and cash equivalents 20,187 26,452 12,115 Cash and cash equivalents at the beginning of the period 25,846 13,731 13,731 Cash and cash equivalents at the end of the period 46,033 40,183 25,846 Page 10

Interim consolidated statement of changes in equity For the quarter ended 31 March 2018 (In thousands of USD except for number of shares) Number of Shares Issued Share capital Share Premium Other Reserves Retained Earnings/ (Loss) Total Equity Balance as at 1 January 2018 153,438,539 15,344 614,192 24,411 (609,228) 44,719 Total comprehensive income for the period - - - 2,785 2,785 Employee stock options - - 132-132 Warrants issued - - 960-960 Other movements* - - - 6,061 6,061 Issue of share capital 01 March 2018 at NOK 1.30 per share 230,769,231 23,077 14,802 - - 37,879 13 March 2018 at NOK 1.30 per share (bond conversions) 98,809,712 9,881 6,566 - - 16,447 Transaction costs on issue of shares - (1,515) - - (1,515) Balance as at 31 March 2018 483,017,482 48,302 634,045 25,503 (600,382) 107,469 *Other movements represent the effect of adopting IFRS-15 on 1 January 2018. Refer to Note 2.1.1 for details. For the quarter ended 31 March 2017 (In thousands of USD except for number of shares) Number of Shares Issued Share capital Share Premium Other Reserves Retained Earnings/ (Loss) Total Equity Balance as at 1 January 2017 530,472,947 5,305 586,401 29,865 (442,764) 178,806 Total comprehensive loss for the period - - - (38,041) (38,041) Employee stock options - - 141-141 Issue of share capital March 2017 at NOK 0.33 per share 1,000,000,000 10,000 28,853 - - 38,853 Transaction costs on issue of shares - (1,168) - - (1,168) Balance as at 31 March 2017 1,530,472,947 15,305 614,086 30,006 (480,805) 178,592 For the year ended 31 December 2017 (In thousands of USD except for number of shares) Number of Shares Issued Share capital Share Premium Other Reserves Retained Earnings/ (Loss) Total Equity Balance as at 1 January 2017 530,472,947 5,305 586,401 29,865 (442,764) 178,807 Total comprehensive loss for the period - - - (172,453) (172,453) Employee stock options - - 534-534 Other movements* (5,988) 5,988 - Issue of share capital 08 March 2017 at NOK 0.33 per share 1,000,000,000 10,000 28,853 - - 38,853 07 April 2017 at NOK 0.33 per share 3,912,439 39 111 150 Transaction costs on issue of shares - (1,173) - - (1,173) Consolidation of shares New shares issued 4 - - - - - 10:1 Consolidation on 16-May-17 (1,380,946,851) - - - - - Balance as at 31 December 2017 153,438,539 15,344 614,192 24,411 (609,228) 44,719 *Other movements represent the fair value of employee stock options unexercised and expired during the period. Page 11

Notes to the interim consolidated financial statements 1 General information The interim consolidated financial statements of Polarcus Limited and its subsidiaries (together the Company or Polarcus ) for the quarter ended 31 March 2018 were authorized for issue in accordance with a resolution of the Board of Directors on 10 May 2018. Polarcus is an innovative marine geophysical company with a pioneering environmental agenda, delivering high-end towed streamer data acquisition and imaging services from Pole to Pole. Polarcus Limited is incorporated in the Cayman Islands with its registered office at Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands. The Company has its main administration office in Dubai, United Arab Emirates which is the domicile of the Company. The Company currently operates a fleet of six high end 3D vessels, Polarcus Naila, Polarcus Asima, Polarcus Alima, Polarcus Adira, Vyacheslav Tikhonov and Ivan Gubkin. Polarcus Nadia, another vessel in the Company s fleet has been cold-stacked since Q1 2015. Going concern These interim consolidated financial statements for the quarter ended 31 March 2018 are prepared using the going concern assumption. Comprehensive financial restructuing completed and additional equity raised during the quarter During Q1 2018 the Company completed a financial restructuring of its balance sheet (the "Restructuring"), including an issue of new shares for gross proceeds of NOK 300 million through a private placement (the "Private Placement"). A further NOK 40 million of equity was raised in April 2018 (the "Repair Issue" and, together with the Private Placement, the "Equity Issues"). The total key improvements in the Company s liquidity as a result of the Restructuring and Equity Issues are summarized below. NOK 340 million Equity Issues Instalment runway and reduced interest to 2022 Termination of USD 90 million operating lease commitments and acquisition of Polarcus Nadia and Polarcus Naila for USD 75 million (nominal value), fully financed by a new bank loan and issue of warrants Relaxed covenants to support trading through a flat market Cash sweep mechanism to secured lenders in the event of excess cash generation Reduced par value and part conversion of unsecured bonds Termination of cross-currency swap arrangement with termination fee covered by a new bank facility Working capital facility increased by USD 15 million to USD 40 million The Equity Issues and the increased working capital facility have significantly improved the Company's short-term liquidity. The total improvement in the Company s liquidity to 2022, including the impact of lower interest payments and lease savings, as well as reduced debt amortization, is approximately USD 220 million. Further details of the changes to the Company s financing arrangements and improvements in the Company s liquidity position as a result of the Restructuring are explained in later parts of the notes to these interim consolidated financial statements (mainly, Note 9.1 Termination of operating leases and buyback of N-Class vessels, Note 10 Share capital and Note 11 Interest bearing debt). Financial covenants As part of the Restructuring, a number of financial covenants that the Company was previously subject to have been removed, including the removal of the minimum Debt Service Ratio and the minimum equity ratio covenants. The main financial covenants that the Company is subject to, post the Restructuring, are: Minimum liquidity reserve of USD 10 million Minimum working capital as positive at all times The Company was in compliance with both of the above covenants as at 31 March 2018. Future outlook The Company s financial projections used in its going concern evaluation are based on certain assumptions about the future, including those related to contract pricing and vessel utilization, expected multi-client late sales from existing multi-client assets, and expected future CAPEX investment. The Company is dependent upon securing sufficient backlog in the future. Based on these assumptions and following the Restructuring, the Company expects to have sufficient liquidity to operate for at least 12 months after the balance sheet date even if the continued challenging market remains flat. Page 12

Management and the Board of Directors closely monitor the going concern assumptions, cash flow forecast and compliance with financing covenants. Management and the Board of Directors confirm that the financial statements have been prepared under the going concern assumption and conclude this is appropriate. As measured at 31 March 2018, including the two bareboat charters and awards made after the quarter end, the Company s total backlog is estimated to be USD 150 million. 2 Basis of presentation These interim consolidated financial statements for the quarter ended 31 March 2018 are prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for full annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Company for the year ended 31 December 2017 as published and available at Company s website www.polarcus.com. The accounting policies applied by the Company in these interim consolidated financial statements are consistent with those applied in the audited consolidated financial statements for the year ended 31 December 2017 unless otherwise stated below. Please refer to Note 2 Summary of significant accounting policies in the Consolidated Financial Statements in the 2017 Annual Report for information on the Company s accounting policies. New accounting standards IFRS 15 Revenue from Contracts with Customers The Group adopted IFRS 15 effective 1 January 2018, using the modified retrospective approach with the date of transition being 1 January 2018. IFRS 15 establishes a new five-step model that applies to the revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The adoption of IFRS 15 has a significant impact on the timing of recognizing prefunding revenue from the Group s multi-client projects. Prior to IFRS 15, the Group recognized prefunding revenues as the seismic data acquisition services were performed, using a percentage of completion method. Post adoption of IFRS 15, the prefunding revenue will be recognized only when a multi-client project is completed and at the point in time when the customer receives the fully processed data (or receives access to such fully processed data). The Group does not expect adoption of IFRS 15 to have any material impact on recognition of any other types of the Group s revenues. The below table shows the effect of implementing IFRS 15 to the Group s opening statement of financial position, using the modified retrospective approach. (In thousands of USD) Increase in the carrying value of the multi-client library (asset) 40,910 Deferred multi-client prefunding revenue (liability) 34,848 Net increase in equity 6,061 The Company had three multi-client projects that were in the prefunding stage as at the transition date of 1 January 2018. Using the modified retrospective approach, the prefunding revenue recognized on these three projects until 31 December 2017 has been reversed back in to the opening balance of equity with an increase of the same amount in the Company s current liabilities. Similarly, the amortization that has been recognized on these three projects until 31 December 2017 has been reversed back in to the opening balance of equity with an equal amount added back to the opening carrying value of the multi-client library. The net difference between prefunding revenue de-recognized and amortization reversed resulted in an increase of USD 6.1 million in the opening value of the Company s consolidated shareholders equity. The opening balance sheet adjustment required as a result of implementation of IFRS 15 caused the carrying value of one multi-client project to exceed the total revenue expected to be generated from that particular project. As a consequence, the Company recognized a non-cash impairment of USD 3.0 million on 1 January 2018. As the Company used the modified retrospective approach for implementing IFRS 15, the comparative numbers are not restated. IFRS 9 Financial instruments The Company adopted IFRS 9 effective 1 January 2018. IFRS 9 replaced IAS 39 Financial instruments: Recognition and measurement with effect from 1 January 2018. Adoption of IFRS 9 did not have any significant effect on the Company s consolidated financial statements. Presentation of interest bearing debt Effective 1 January 2018, the Company classifies and discloses the carrying value of interest bearing financing arrangements as one line in its statement of financial position as Interest bearing debt. Any part of the interest bearing debt that is repayable within 12 months from the reporting date is disclosed under the Current Liabilities. All comparative numbers are restated to reflect this change in classification. Page 13

3 Segment information Effective 1 January 2018, the chief operating decision maker of the Company reviews all activities of the Company as one segment, adjusted for all non-recurring items and for the impact of adopting IFRS 15. As described under Note 2.1.1, the adoption of IFRS 15 has had an impact on the timing of recognition of multi-client prefunding revenue and associated multi-client amortization. While reviewing the financial performance of the Company, management have, for the purposes of internal reporting, continued to report according to revenue recognition principles applied prior to the adoption of IFRS 15, whereby multi-client prefunding revenue is recognized on a percentage of completion basis. The numbers under the Segment column in the table below include the multi-client prefunding revenue and the amortization of multi-client projects that the Company would have recognized if the Company had followed the accounting policies that were in place prior to the adoption of IFRS 15. Non-recurring items are excluded from the Segment information in order to compare the performance with the prior periods. The segment information for comparative periods are adjusted to eliminate non-recurring items. 31-Mar-18 31-Mar-17 (In thousands of USD) Segment Adjustments¹ As reported Segment Adjustments² As reported Revenues Proprietary contracts 19,697-19,697 24,636-24,636 Multi-client prefunding 9,535 (9,535) - 14,892-14,892 Multi-client late sales 92-92 - - - Bare boat charter 6,669-6,669 3,564-3,564 Management fees 3,592-3,592 3,737-3,737 Other income 598-598 328-328 Total Revenues 40,182 (9,535) 30,647 47,156-47,156 Operating costs (27,935) 12,776 (15,159) (36,763) (1,489) (38,252) EBITDA 12,247 3,240 15,488 10,393 (1,489) 8,905 Depreciation and amortization (5,545) - (5,545) (10,407) - (10,407) Multi-client amortization (13,918) 12,170 (1,748) (18,021) - (18,021) Impairments - (2,982) (2,982) - (816) (816) Operating profit/(loss) (EBIT) (7,216) 12,429 5,213 (18,034) (2,305) (20,339) Net financial expense (9,017) 6,398 (2,618) (16,303) - (16,303) Profit/(loss) before tax (16,233) 18,827 2,594 (34,337) (2,305) (36,642) 31-Dec-17 (In thousands of USD) Segment Adjustments² As reported Revenues Proprietary contracts 108,506-108,506 Multi-client prefunding 21,724-21,724 Multi-client late sales 5,984-5,984 Bare boat charter 23,469-23,469 Management fees 14,950-14,950 Other income 4,351-4,351 Total Revenues 178,983-178,983 Operating costs (160,749) (3,967) (164,716) Provision for onerous contracts - 27,027 27,027 EBITDA 18,234 23,059 41,293 Depreciation and amortization (45,018) - (45,018) Multi-client amortization (42,108) - (42,108) Impairments - (91,178) (91,178) Operating profit/(loss) (EBIT) (68,891) (68,119) (137,011) Net financial expense (35,311) - (35,311) Profit/(loss) before tax (104,202) (68,119) (172,322) ¹ = adjustments consist of IFRS 15 related adjustments and adjustments of non-recurring costs (impairments, cost of onerous contract provisions and restructuring costs) ² = adjustments for non-recurring costs (impairments, cost of onerous contract provisions and restructuring costs) Page 14

4 Cost of sales (In thousands of USD) 31-Mar-18 31-Mar-17 31-Dec-17 Gross cost of sales 37,703 46,186 165,027 Capitalized to multi-client projects (11,190) (9,994) (16,400) Net deferred transit adjustment - 443 443 26,512 36,635 149,069 Reimbursable cost 1,641 887 3,195 Net movement in bad debt provision - (282) (1,167) Onerous contract provision unwinding (3,276) (3,920) (3,920) Gain on termination of vessel operating lease* (13,907) - - Restructuring provision - - 1,591 Net cost of sales 10,970 33,320 148,769 *This amount represents the reversal of accrued operating lease expenses relating to the operating lease arrangements for the vessels Polarcus Nadia and Polarcus Naila upon termination of the leases and buy back of the vessels by the Company on 26 February 2018. Also refer to Note 9.1 Termination of operating leases and buyback of N-Class vessels. 5 Depreciation and amortization (In thousands of USD) 31-Mar-18 31-Mar-17 31-Dec-17 Depreciation of seismic vessels and equipment 6,188 12,218 47,663 Depreciation of office equipment 18 30 83 Depreciation capitalized to multi-client library (661) (1,841) (2,728) Total 5,545 10,407 45,018 6 Multi-client project library (In thousands of USD) 31-Mar-18 31-Mar-17 31-Dec-17 Balance at the beginning of the period 10,406 45,107 45,107 Reversal of accumulated amortization* 40,910 - - Investments during the period 12,429 11,082 16,679 Capitalized depreciation 661 1,841 2,728 Amortization (1,748) (18,021) (42,108) Impairments (2,982) - (12,000) Balance at the period end 59,675 40,009 10,406 Of which: Classified as 'Current assets' 32,333 - - Non-current assets 27,342 40,009 10,406 *This amount represents the reversal of amortization that has been recognized on the three multi-client projects that were in the prefunding stage when the Company adopted IFRS 15 on 1 January 2018. Also refer to Note 2.1 New accounting standards. The opening balance sheet adjustment required as a result of implementation of IFRS 15 caused the carrying value of one multi-client project to exceed the total revenue expected to be generated from that particular project. As a consequence, the Company recognized a non-cash impairment of USD 3.0 million on 1 January 2018. One of the multi-client projects that was in the prefunding stage as at 31 March 2018 is expected to be completed and the data to be delivered to the client during 2018. The project is a converted contract with minimal late sales potential and, as a result, the Company expects to consume in full the benefits of the asset within 12 months from the balance sheet date and has been classified as a current asset. 7 Finance costs (In thousands of USD) 31-Mar-18 31-Mar-17 31-Dec-17 Interest expenses on bond loans 3,377 4,863 21,929 Interest expenses on other interest bearing debt 5,365 4,663 16,954 Net interest expenses 8,742 9,526 38,883 Other finance costs 263 427 859 Currency exchange losses 794 750 4,650 Total 9,799 10,703 44,392 Page 15

8 Changes in fair value of financial instruments (In thousands of USD) 31-Mar-18 31-Mar-17 31-Dec-17 Gain/(loss) on cross currency interest rate swap agreement 952 103 1,887 Gain/(loss) on fair value of unsecured bonds (473) (6,179) 4,746 Carrying amount and fair value at the period end 479 (6,075) 6,632 As part of the Restructuring, the cross currency interest rate swap agreement was terminated on 6 March 2018 (also refer to Note 11.4 Swap Facility). The unsecured bonds were measured at fair value until the effective Restructuring date of 1 March 2018 and will be measured at amortised cost post-restructuring (also refer to Note 11.1.2 Unsecured bond loans). 9 Property, plant and equipment (In thousands of USD) Seismic vessels and equipment Office equipment Total Costs Balance as at 1 January 2018 979,734 3,063 982,796 Additional capital expenditures 72,954-72,954 Balance as at 31 March 2018 1,052,688 3,063 1,055,750 Depreciation and impairments Balance as at 1 January 2018 655,701 2,974 658,675 Depreciation for the period 6,188 18 6,205 Balance as at 31 March 2018 661,889 2,991 664,880 Carrying amounts As at 1 January 2018 324,032 89 324,122 As at 31 March 2018 390,799 72 390,870 Pledged assets as at 31 March 2018 389,612-389,612 USD 71.9 million of the additional capital expenditure during the quarter ended 31 March 2018 represents the acquisition of the vessels Polarcus Nadia and Polarcus Naila ( N-Class Vessels ), accounted for at the fair value of the consideration paid, that the Company acquired as part of the Restructuring, as further described below. Termination of operating leases and buyback of N-Class vessels On 26 February 2018, as part of the Restructuring, the Company and GSH2 Seismic Carrier I AS ( GSH ) terminated the operating lease arrangement for the N-Class Vessels in exchange for the Company purchasing the vessels from GSH for a total consideration of USD 75 million in fully financed debt and issue of warrants. The purchase price of USD 75 million was fully financed through a New Fleet Facility, as described in Note 11.3 New Fleet Facility. Fair value of the consideration paid for the N-Class vessels is USD 71.9 million, consisting of USD 70.9 million being fair value of the New Fleet Facility and USD 1.0 million being fair value of the warrants issued to GSH. The number of warrants issued to GSH as part of the consideration is 12,846,144, representing approximately 2.5% of the Company s issued share capital after completion of the Restructuring, Private Placement and the Repair Issue. The exercise price for the warrants is set at NOK 3.90 and the warrants are exercisable at any time until 30 November 2022. On the date of termination of the leases, the Company had an aggregate accrued expense of USD 13.9 million relating to the operating lease arrangements for the N-Class vessels. The full amount of the accrued operating lease expense was credited to Cost of sales in Q1 2018 on termination of the leases. Page 16

10 Share capital Changes in authorized share capital The Company s authorized share capital as at 31 March 2018 is USD 59,108,916, divided into 591,089,157 shares of a nominal value of USD 0.10 each. Movements in the issued share capital Number of Shares Issued Share capital Share Premium (In thousands of USD except for number of shares) Total Balance as at 1 January 2018 153,438,539 15,344 614,192 629,536 Issue of share capital 1 March 2018 at NOK 1.30 per share 230,769,231 23,077 14,802 37,879 13 March 2018 at NOK 1.30 per share (bond conversions) 98,809,712 9,881 6,566 16,447 Transaction costs on issue of shares - (1,515) (1,515) Balance as at 31 March 2018 483,017,482 48,302 634,045 682,347 On 1 March 2018, the Company issued 230,769,231 new shares at a subscription price of NOK 1.30 raising NOK 300 million in gross proceeds through the Private Placement. Following the issue of the Private Placement shares, the Company s issued share capital is USD 38,420,777 divided into 384,207,770 shares of a nominal value of USD 0.10 each. Following a joint bondholders meeting held on 12 February 2018 and associated option for bondholders to apply to convert bonds to equity, on 13 March 2018 the Company issued 98,809,712 new shares to the unsecured bondholders who opted to convert the unsecured bonds to equity as per Alternative-2 described under Note 11.1.2 Unsecured bond loans below ( Bond Conversion ). Following the issue of the Private Placement and Bond Conversion shares, the Company s issued share capital is USD 48,301,748 divided into 483,017,482 shares, each with a par value of USD 0.10. As part of the consideration for the N-Class vessels, on 26 February 2018, the Company issued 12,846,144 warrants to GSH, representing approximately 2.5% of the Company s issued share capital after completion of the Restructuring, Private Placement and the Repair Issue. The exercise price for the warrants is set at NOK 3.90 and the warrants are exercisable at any time until 30 November 2022. The fair value of the warrants on the date of issue was calculated at USD 1.0 million. Also refer to Note 9.1 Termination of operating leases and buyback of N- Class vessels. 11 Interest bearing debt Nominal outstanding value as at (In thousands of USD) 31-Mar-18 31-Mar-18 31-Mar-17 31-Dec-17 Bond loans 125M USD secured, convertible bonds - Tranche A USD 69.6 million 22,533 17,584 22,901 125M USD convertible bonds - Tranche B USD 3.5 million 312 6,063 6,063 95M USD unsecured bonds USD 9.8 million 1,891 13,823 12,314 350M NOK unsecured bonds NOK 53.5 million 1,248 7,223 7,369 Total bond loans 25,984 44,693 48,647 Other interest bearing debt Fleet Bank Facility - Tranche 1 USD 42.5 million 40,583 46,626 46,930 Fleet Bank Facility - Tranche 2 USD 35.8 million 34,489 34,660 34,782 Fleet Bank Facility - Tranche 3 USD 82.9 million 79,353 80,663 81,046 Fleet Bank Facility - Tranche 4 USD 86.1 million 82,233 82,470 82,887 New Fleet Facility for N-Class vessels USD 75 million 70,499 - - Swap Facility USD 7.7 million 7,657 - - Other loans - 5,036 - Total other interest bearing debt 314,814 249,455 245,646 Total Interest bearing debt 340,798 294,148 294,293 Of which: Current liability portion 8,000 5,036 294,293 Non-current liability 332,798 244,419 - Page 17