ANNUAL REPORT 2008 - SinOceanic Shipping · GGS Annual Report 2008 | 3 ... Presentation of...

ANNUAL REPORT 2008

2008 was for GGS a year of change, moving from being a niche seismic player to a focused rig owner

of three tender assisted rigs.

GGS Annual Report 2008 | 3

ContentS

Financial key figures 4

Company operations 6

Presentation of Management Group 10

Presentation of Board of Directors 11

CEO update 12

Report from Board of Directors 14

Investor information 18

Corporate governance 19

Articles of association 23

Statement of responsibility 24

Auditor’s report 26

Consolidated financial statements

Consolidated income statement 27

Consolidated balance sheet 28

Consolidated cash flow statement 30

Consolidated statement of changes in equity 31

Notes to consolidated financial statements 32

Financial statements - parent company

Income statement 65

Balance sheet 66

Cash flow statement 68

Notes to financial statements 69

4 | GGS Annual Report 2008

FinanCial key FiGureS

tnok 2008 2007

income statement - continuing operationsRevenue 458 549 8 356EBITDA 120 296 (29 875)EBIT Operating profit / loss 4 864 (47 248)Profit/loss before tax (34 174) (73 584)Net profit/loss (84 994) (73 584)

Balance sheetTotal non-current assets 2 007 270 197 500Total current assets 625 677 689 728Total assets 2 632 947 887 228

total equityTotal non-current interest bearing debt 771 825 3 535Total equity 939 928 795 770Total equity and liabilities 2 632 947 887 228

Cash flow - continuing operationsNet cash from operating activities 127 013 (32 688)Net cash flow from investing activities (1 231 051) 18 122Net change in cash and cash equivalents (295 021) 631 948Cash and cash equivalents at end of period 286 159 507 087

other key figuresEarnings per share (NOK) (0,05) (0,42)Average share outstanding (million) 805,3 367,1Share price at year end (NOK) 0,43 1,6Market capitalisation (MNOK) 346 1 288

Continuity Solutions Singapore

Continuity Solutions

Hong Kong

Global Tender Barges AS

GGS Invest AS

Global Geo Services ASA

Global Tender Barges Pte Ltd

Corporate StruCture


GGS aims to be a leading, cost-effective and professional owner of tender rigs.


Company operationS

Global Geo Services ASA (GGS, the Group) is organized as a Norwegian public limited liability company , and is registered on the Oslo Stock Exchange. The head office address is Sjølyst Plass 2, Skøyen, Oslo. At the end of 2008 the Group had 15 employees.

In February 2008 GGS finalized the acquisition from Pride Foramer S.A.S of three tender assisted drilling rigs, and GGS is now focusing on performing an active and professional ownership of these rigs through its subsidiary Global Tender Barges Pte.Ltd. established in Singapore.

Rig operationsGlobal Tender Barges Pte. Ltd. is now well established in Singapore with personnel in place to conduct the daily follow up of rig operations under the management of KCA Deutag.

Considering that South-East Asia is one of the main markets for tender assisted drilling operations, Singapore is an ideal location. The company has branches in Indonesia and Brunei, and is preparing to establish also in Malaysia.

The acquisition of three tender assisted drilling rigs from Pride Foramer S.A.S was closed in February 2008.- al Baraka 1 entered in February 2009 into a new drilling

contract with Shell in Brunei with a firm duration of 3 years plus 1 year optional extension.

- Barracuda entered in April 2008 into a new drilling contract with Total in Indonesia with a firm duration of 2 years plus 1 year optional extension.

- alligator completed operations on a drilling contract with Chevron in Angola in April 2009. After a short stay in shipyard the rig will enter into a new drilling contract with Petronas in Malaysia with a firm duration of 4 years plus 1 year optional extension.

A tender assisted drilling rig is a vessel specially designed and equipped to drill production wells from offshore production platforms built without the installation of permanent drilling facilities. The tender rig is moored close to the production platform, and prior to commencement of drilling operations, the drilling package built in modules is lifted from the rig onto the platform by heavy lift cranes on the rig.

In addition to the drilling package the tender rig is equipped with a living quarter, helideck, heavy lift cranes, storage for drilling equipment, power plant to support drilling operations, facilities for mixing and circulation of mud and equipment for well completion.

The operational markets for tender assisted drilling rigs are typically in benign offshore waters of West Africa and South-East Asia.

In 2007 Global Tender Barges Pte. Ltd. made an agreement with KCA Deutag to manage the operation of the three tender rigs. KCA Deutag, a subsidiary of Abbot Group plc, is a well recognized drilling contractor with worldwide operations. KCA Deutag has a 10 % share holding in Global Tender Barges Pte. Ltd. and is operating the three tender rigs on behalf of the owner. Being a well experienced drilling contractor they are providing clients with safe and efficient drilling operations. KCA Deutag’s headquarters are in Aberdeen, Scotland, and the company conducts drilling operations through a worldwide network of local base offices. The company has a history of more than 100 years of drilling and engineering activities across the globe, and their projects are located in some of the most harsh and challenging environments in the world.

Multi-client surveysIn June 2008 the seismic activities of GGS were spun off. The Iranian libraries (PC 2000) are the only remaining seismic assets in GGS.

2009 2010 2011 2012 2013 2014 2015

Barracuda Customer Total Indonesia Dayrate 105 TUSD/day

Al Baraka 1Customer Shell BruneiDayrate 120 TUSD/day

AlligatorCustomer PetronasMalaysiaDayrate 129 TUSD/day

Contract periodOption period

Barracuda day rate is 115 TUSD per day if option is exercised.

Alligator and Al Baraka 1 have annual cost escalation coverage clauses.

CONTRACT dURATION INCLUdING OPTION


al Baraka 1

Class Bureau Veritas

Country of registry Singapore

Year built 1994

Water depth 40’ – 650’

Hull (LWD) 320’ x 105’ x 34.5’

Variable deck load 7,220 tons

Power plant 5 x 1,400 kW

Accommodation 116 beds

Max. hook load 1 mlb static

Top drive TDS 4S (NOV)

Drawworks 2000 HP National

Mud pumps 3 x FB 1600

Mud pits 4,700 bbl (incl. brine)

Shakers 4 x Derrick FLC 2000

BOP 20 3/4” 3k+13 5/8” 5k

Last periodic survey (SPS) 2008

BarraCuDa

Class Bureau VeritasCountry of registry SingaporeYear built 1982Water depth 50’ – 450’Hull (LWD) 300’ x 90’ x 20’Variable deck load 4700 tonsPower plant 4 x 1,400 kWAccommodation 110 bedsMax. hook load 1 mlb staticTop drive Canrig 1050Drawworks 2000 HP NationalMud pumps 3 x 12P160Mud pits 2,075 bblShakers 4 x Derrick FLC 2000BOP 20 ¾” 3k + 13 5/8” 5kLast periodic survey (SPS) 2008

alliGator

Class Bureau VeritasCountry of registry SingaporeYear built 1982Water depth 115’ – 450’Hull (LWD) 300’ x 90’ x 20’Variable deck load 5,732 tonsPower plant 4 x 1,400 kWAccommodation 110 bedsMax. hook load 1 mlb staticTop drive Canrig 1050 45 kftlbsDrawworks 2000 HP NationalMud pumps 3 x 12P160Mud pits 3,334 bbl (incl. brine)Shakers 4 x BEM 600BOP 29 ½” Diverter + 13 5/8” 10kPeriodic survey (SPS) 2009

After several years of operation offshore West Africa, the Al Baraka 1 was towed to Singapore during the spring of 2008 for class recertification and upgrade work and entered in February 2009 into a new drilling contract with Brunei Shell Petroleum with a firm duration of 3 years. Upon class and upgrade work in 2008, the Al Baraka 1 is considered well prepared for operations for its client.

After several years of operation offshore West Africa, the Barracuda was towed to Singapore early in 2008 for class recertification and upgrade work and commenced in April 2008 a new drilling contract with Total in Indonesia with a firm duration of 2 years.

Alligator has for several years been operating offshore West Africa on a drilling contract with Chevron which was completed in April 2009. Thereafter Alligator was towedto Indonesia for class recertification and maintenance work, and will around mid 2009 commence on a new drilling contract with Petronas Carigali in Malaysia with a firm duration of 4 years.


KCA Deutag manages more than 100 drilling rigs in over 20 countries across its key strategic areas of Europe, Russia, the Middle East, the Caspian Sea, north and west Africa. Through its engineering division, RDS, the company is able to offer clients conceptual design, drilling facility engineering and drilling engineering.

KCA deutag’s principles business activities are:

• Jack-upDrillingRigs

• SelfErectingTenderRigs

• OffshorePlatformDrilling

• LandDrillingandWorkover

• DrillingFacilityEngineeringDesignandUpgrade

• PerformanceServices: - Drilling and Performance Engineering - DART (Drilling & Advanced Rig Training) - Technical Limit Services - Snubbing and Well Intervention Services.

KCA Deutag’s health and safety practices are underpinned by management systems and guided by both corporate and local HSE plans. The commitment to health and safety is central to all business activities and reflected in the conduct of all employees.

KCA dEUTAG has during 2008 won awards such as:

• Shell’sbestlandrig

• Shell’sHSEContractoroftheyear2008

• StatoilHydro’sBestRigduring2008

• AchievementinInternationalizationawardedaspartofthe Grampian Chamber of Commerce’s Northern Star Business Awards 2008

For further information on KCA Deutag; www.kcadeutag.com

kCa DeutaG

KCA deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance. KCA deutag is one of the largest international land drilling contractors outside the Americas, the largest offshore platform drilling contractor in the North Sea and an international operator of mobile offshore drilling units.



preSentation oF manaGement Group

KNUT ØvERSjØEN (1965), CEOK. Øversjøen has worked for GGS since August 2007. He has previously held key positions in Norwegian industrial companies such as PGS, Hafslund, Elkem, Kverneland ASA and Umoe AS. He is also serving on the Board of the Norwegian company Kverneland ASA. K. Øversjøen graduated from the Norwegian School of Management (BI).

jON ELdE (1968), CFOJ. Elde has worked for GGS since February 2008. He has previously worked as the CFO of Ringnes, part of the Carlsberg Group, and in corporate development in Orkla and corporate finance KPMG. Elde holds a MBA from Manchester Business School and a BSc from the University of Southern California.

LARS ERIK BAUSTAd (1979), GENERAL MANAGER SINGAPORE OFFICEL. Baustad has worked for GGS since January 2008. He is the general manager of Global Tender Barges Pte Ltd. Baustad has previously held various positions in the industrial investment Group Umoe and has also been the managing director of the venture company, CleanHull. Baustad holds a MSc in Shipping, Trade and finance from Case Business School, London.

Kjell Jensen, VP rig operations, has decided to leave GGS.

LARS ERIK BAUSTAd

KNUT ØvERSjØEN

jON ELdE


preSentation oF BoarD oF DireCtorS

GUNNAR REITAN (1954), ChAIRMAN OF ThE BOARdG. Reitan has been the chairman of the Board of GGS since June 2008. He was deputy CEO of the SAS Group up to August 2007, after 15 years as Group CFO and deputy CEO. G. Reitan has broad international experience over the last 20 years both at executive and Board level within aviation and travel industries, shipping, finance & insurance and real estate. He is now the Executive Chairman of Strata Marine & Offshore AS, which is an oil service group within engineering and precision machining production. G. Reitan holds several other Board positions in public listed companies as well as private companies. G. Reitan graduated as BA from Trondheim Business School in 1975.

ØySTEIN STRAy SPETALEN (1963)Ø. Stray Spetalen is the chairman of the board of Ferncliff TIH AS. Ø. Stray Spetalen is an independent investor and has previously worked in the Kistefos Group as Director of Investments. He also has experience as a stockbroker. Ø. Stray Spetalen owns and controls the investment group Ferncliff AS. Ø. Stray Spetalen graduated as an engineer from the Norwegian University of Science and Technology (NTNU).

GUNNAR hvAMMEN (1963)G. Hvammen was a rig broker in PF Bassøe/Loosbrock and Normarine Offshore Consultants, which he helped to found. Founder of Offshore Heavy Transport ASA. Senior partner in Fondsfinans ASA. Thereafter founder of several oil services related companies, including Songa Offshore.

TONE BjØRNOv (1961)T. Bjørnov holds a degree in business administration from the Norwegian School of Management (BI), as well as qualifications in French and IT from the University of Oslo. She had a long career with DnB NOR in which she held several management positions. She is currently a partner and board member in the finance and currency consulting firm ValutaCorp AS.

ELEN ROALdSET (1944)E. Roaldset is a geologist and holds a doctoral degree (dr.philos) from the University of Oslo. She is a director/professor at the Natural History Museum, University of Oslo. She has been an associate professor in sedimentology/geotechnology at the University of Oslo and professor in petroleum geology at the Norwegian University of Science and Technology (NTNU). She has been a senior scientist in Norske Hydro and senior advisor in Saga Petroleum, and member of a series of research and evaluation committees within the field of geosciences. She is currently a member of the Research Council of Norway’s expert committee on mathematics and physical science, and is a member of the Royal Norwegian Society of Sciences and Letters (DKNVS) and the Norwegian Academy of Technological Sciences (NTVA).

ØySTEIN STRAy SPETALEN

GUNNAR REITAN

ELEN ROALdSET

TONE BjØRNOv

G. hvammen was not present when pictures were taken.


Ceo upDate

For GGS 2008 was a year of change, moving from being a niche seismic player to a focused rig owner of three tender assisted drilling rigs. The seismic business was sold to the newly established Spectrum ASA and listed on Oslo Axess 1 july 2008.

ThE ACqUISITION FROM PRIdEThe acquisition of the tender assist rig Alligator was accomplished 20 January 2008 and Al Baraka 1 and Barracuda 20 February. The operation is outsourced to KCA Deutag for Al Baraka 1 and Barracuda while Pride operated Alligator until April 2009 on our behalf.

Our partner KCA Deutag owns 10 % of the rig owning entity Global Tender Barges Pte Ltd (GTB) in Singapore. GTB was financed with USD 90 million in equity and three loan and guarantee facilities in total USD 170 million.

yARd STAyS FOR BARRACUdA ANd AL BARAKA 1The Barracuda yard stay at Keppel Shipyard in Singapore was accomplished by Pride end March 2008 at estimated time and cost, but not in an appropriate state to be able to deliver services at a standard required both by the operator and the client (Total). This caused severe rig up challenges and additional mainterance work was carried out offshore Indonesia on location. Barracuda commenced drilling operation 28 May 2008.

The Al Baraka 1 yard stay was handed over from Pride as a part of executing the acquisition, and KCA Deutag managed the yardstay on behalf of GTB. Al Baraka 1 was in worse condition than expected, which caused the extended yardstay of 190 days and higher investments than expected. Al Baraka 1 left Keppel shipyard 24 October 2008, and was mobilising for Brunei Shell Petroleum for the remainder of the year. The delay in rig up was mainly due to damage to rig equipment during heavy lift operations. This caused reduced rate level and severe downtime with zero day rate during 4th quarter.

OPERATIONSAlligator has been operated by Pride. The rigs has been performing well with limited downtime and no need for major investments. The financial results have been satisfactory.

Barracuda has been operated by KCA Deutag, and has experienced high downtime resulting in reduced rate levels including zero-rate. GGS has executed additional upgrades and maintenance of the equipment offshore, which has caused high operating costs for 2008 and added investments.

Al Baraka 1 has been rigging up at the platform post the yardstay, and commenced drilling 7 February 2009.

NEW CONTRACT FOR ALLIGATORGGS was pleased to secure a new long term contract for

Alligator from the Malaysian based oil company Petronas Carigali for its operations offshore Malaysia. The duration of the contract is 4 years with a one year option. The total contract value is around USD 200 million with an average daily rate of 135 000 USD.

Alligator ended drilling operations for Chevron in Angola 23 February 2009, and was then towed from West Africa to Singapore area for SPS and gross maintenance. Alligator is expected to commence drilling operation for Petronas in third quarter 2009.

ORGANIzATIONAfter the sale of the seismic business, the organization has been refocused to a pure rig owning business. The admin istrative head office in Oslo now constitutes 5 persons, including CEO and CFO. The monitoring of rig operations is managed by GTB in Singapore, with 10 persons in total, focusing on purchasing, cost control, accounting, business review, development and technical supervision.

OThER BUSINESSOther none core assets of GGS consist of a NOK 150 million loan to Spectrum, PC2000 multi client seismic survey, 4,4 % ownership in Ziebel and NOK 886.4 million in taxable losses brought forward. If the timing and price is considered right, these assets will be disposed of.

FOCUS AREAS FOR 2009The main focus for GGS in 2009 will be to secure both a cost efficient and timely yard stay for Alligator and achieve satisfactory uptime and competitive operating costs for all three rigs in operation.

Due to the condition of the world’s financial markets it is also an ambition to secure the financial flexibility of the Group and have a strong focus on cashflow and client relationships.

The long term contracts on the rigs are basis for further growth within the industry.

2008 has been a tough year for our shareholders, and I will do my best to make 2009 more prosperous.

Knut ØversjøenCEO GGS ASA


the main focus for GGS in 2009 will be to secure both a cost efficient and timely yard stay for

alligator and achieve satisfactory uptime and competitive operating costs for

all three rigs in operation.


report From BoarD oF DireCtorS 2008

GGS is a rig contractor. The purchase of three tender rigs was agreed in August 2007 and completed in the first quarter of 2008. GGS aims to be a leading, cost-effective and profes-sional owner of tender rigs. The company also owns a seismic multi client library off the coast of Iran called PC2000.

GGS’ head office is at Skøyen, in Oslo. The Group also has offices in Singapore, Indonesia and Brunei.

BUSINESS ACTIvITIES IN 2008The result for 2008 reflects the restructuring GGS has undergone. GGS’ seismic operations were sold and established as Spectrum ASA (a separate listed company on Oslo Axess).

The process of purchasing the three tender rigs was completed and concluded in the first quarter of 2008. GGS has established office in Singapore for the management of the tender rigs. The Group has secured a long-term partnership with the reputable, Aberdeen- based oil services company KCA Deutag for operation of the rigs. KCA Deutag will contribute management and operational expertise in the day-to-day operation of the three tender rigs.

During 2008, the tender rig Alligator was on a contract with Chevron off the coast of Angola. The contract ended in April 2009. Alligator will now undergo scheduled updating and be moved to a new 4-year contract, with an option for a further 1-year, off the coast of East-Malaysia with the company Petronas Carigali.

The tender rig Barracuda underwent a scheduled inspection and customer specified upgrades for Total and is currently drilling off the coast of East-Kalimantan, Indonesia. The contract with Total is for 2 years, with an option for a further 400 days.

The tender rig Al Baraka 1 has also undergone a scheduled upgrade. It is currently drilling in Brunei for Brunei Shell Petroleum, on a 3 year contract with an option for 1 further year.

ThE GROUP’S FINANCIAL POSITION ANd OPERATING RESULTAt year-end 2008 the Group reported revenues from the continuing business of NOK 458.5 million, compared to NOK 8.4 million in 2007. The rise in revenues is due to the acquisition of the tender rigs. Operating expenses amounted to NOK 338.3 million. In 2007 operating expenses amounted to NOK 38.2 million.

Earnings before interest, taxes, write-down, depreciation and amortization (EBITDA) amounted to NOK 120.3 million in 2008, compared to a negative NOK 29.9 million in 2007.

Amortization and depreciation amounted to NOK 115.4 million. Depreciation for the rigs amounted to NOK 102.2

million, while amortization for the PC2000 seismic library amounted to NOK 13.2 million.

Operating profit (EBIT) amounted to NOK 4.9 million in 2008, while in 2007 the operating result was a negative NOK 47.2 million.

Net financial items amounted to a negative NOK 39.0 million compared to a negative NOK 26.3 million in 2007. The loss before tax was NOK 34.2 million in 2008, compared to a loss of NOK 73.6 million in 2007.

The Board proposes the parent company’s profit for the year, which amounts to NOK 104.6 million, is transferred to retained earnings. The Board recommends no dividend be paid. The parent company had NOK 56.7 million in free equity at year end.

The annual financial statements have been prepared on the basis of a going concern assumption and the Board hereby confirms that this assumption is valid.

LIqUIdITy, FINANCING ANd CAPITAL STRUCTUREAs at 31 December 2008 the Group’s total assets amounted to NOK 2 632.9 million. Its total equity amounted to NOK 939.9 million.

The net cash balance as at 31 December 2008 was NOK 286.2 million compared to NOK 507.1 million as at 31 December 2007.

As at 31 December 2008 the Group had NOK 575.9 million in net interest bearing liabilities. GGS is positioned to meet its future commitments with the aid of internal funds, cash flow and debt financing.

GGS has secured long-term financing through a bank syndicate consisting of Lloyds, Bank of Scotland and Landsbanki. Lloyds has taken over Bank of Scotland, while Landsbanki has been put under administration.

GGS is in compliance with the covenants of the loan agreement with the banking syndicate as at 31 December 2008. The tender rig Alligator is scheduled for upgrade medio 2009. GGS is working with a range of financing options including commercial credits, working capital management and a constructive process with the banking syndicate to secure potential cash flow deficits . The banking syndicate is expressing willingness to postpone installments if needed to secure the short term financing during Alligator’s yard stay.


Net change in cash over the year was a negative NOK 295.0 million. The change is primarily caused by the purchase and investment in the tender rigs.

GGS invested net NOK 1 231.1 million, mainly in connection with the purchase of the tender rigs. The investments were financed through loan purchase and equity.

On 28 May 2008, the general meeting authorized the Board to increase share capital by up to 402 638 340 new shares and to purchase up to 10 % of the outstanding shares. The mandates have not been used in 2008 and is valid until the annual general meeting in 2009.

hSE ANd ORGANISATIONGGS aims to carry out safe and secure operations. The Group complies with national and international requirements and guidelines.

The rigs are operated to high quality standards through management agreements implemented by KCA Deutag. GGS benchmarks service providers through management agreements, internal reporting and control procedures.

The Group had 15 employees as at 31 December 2008 and a good working environment with a leave rate of 2.1 %. The Group is actively committed to rehabilitation and adjusting work tasks for employees. 47 % of the Group’s employees are women. The Board and management of the company focus on preventing any form of discrimination due to gender or race in relation to matters such as pay, promotion and recruitment. The Group gives weight to equal employment legislation.

No serious injuries or accidents were reported in 2008.

The Board has drawn up general guidelines concerning the salaries and remuneration of the management group, which was approved by the general meeting in May 2008. The statement is based on the principle that the Group will strive to offer remuneration on market terms. The salary and remuneration of the CEO is determined by the Board. The CEO determines the remuneration of the rest of the management group. Information about the salaries of key

executives and the CEO can be found in note 9 of the consolidated financial statements.

ThE ENvIRONMENTThe Group impacts the external environment through the operation of the tender rigs. The Group continues to work on measures to minimise its impact on the environment and ensure its operations comply with the applicable statutory regulations and legislation. The Group works together with its subcontractors to minimise any form of environmental impact, and strives to ensure that subcontractors comply with applicable legislation and regulations. No discharges into the sea of oil or chemicals were reported in 2008.

CORPORATE GOvERNANCE REPORTGGS’ Board has decided to provide its statement on the Group’s corporate governance practices in accordance with the Norwegian Code of Practice for Corporate Governance dated 7 December 2004 and revisions of 4 December 2008. The Board fully endorses the statement, which is presented in a separate section of this annual report. The report will be revised every year by the Board.

The Board and management have a good working relationship. The Board has set up remuneration and audit committees, complying with good corporate governance practices.

ShAREhOLdERS ANd EqUITyAs at 31 December 2008 GGS’ two largest shareholders were Spencer Energy (20.0 %) and Ferncliff DAI 1 (15.8 %).

As at 31 December 2008 the 20 largest shareholders owned 54.1 % of the outstanding shares. A more detailed presentation of shareholders and equity is provided in note 20 in this annual report.

RISK MANAGEMENTGGS is exposed to a number of different risk factors. The price of oil and USD exchange rate are two important factors that have impact on the development of the rig market. Furthermore, general market risks, geographical risks and political risks are associated with the regions in which GGS operates. In addition to this, there are risks associated with yard stays and internal operational risks.


GGS manages these risk factors by monitoring the external risk factors, itself and in cooperation with external contacts, as well as through internal reporting and control procedures. The Group’s risk factors are discussed in more detail in note 4.

MARKET OUTLOOKThe Board would like to emphasise that there is some uncertainty associated with making future estimations and predictions. The financial markets are still subject to turbulence, with extremely unstable oil prices, share prices and severely restricted access to capital.

The tender rig operation is a new business for GGS and the dominating activity in the company. The tender rig market is developing, and the Group will benefit from the long term contracts, which should have a positive impact on future

cash flows. The tender rig market is a market with possibilities for further consolidation.

The tender rig business is a niche market in which current demand is estimated to be good.

Based on the above review the Board views the company’s future prospects carefully positively.

EvENTS AFTER ThE BALANCE ShEET dATEThe rig Al Baraka 1 started a drilling programme for Shell on 7 February 2009.

Since most of GGS’ business takes place in USD, the Board has decided that from 2009 onwards the Group will change its presentation currency to USD.

Oslo, 14 April 2009

Gunnar Reitan Chairman of the Board

Øystein Stray Spetalen Elen Roaldset

Gunnar Hvammen Tone Bjørnhov Knut Øversjøen CEO


GGS is a rig contractor. the purchase of three tender rigs was agreed in august 2007 and

completed in the first quarter of 2008.


inveStor inFormation

ShARE INFORMATIONGGS ASA was listed on the Oslo Stock Exchange in 2000 and is traded under the symbol GGS. The 20 largest shareholders held 54.1 % of the outstanding shares at year-end 2008. As at 31 December 2008, GGS’ largest shareholder was Spencer Energy with 20.0 %. As at 31 December 2008, the price of the share was NOK 0.43, which corresponds to a fall of 73 % over the course of 2008.

FINANCINGAs at 31 December 2008, GGS had interest bearing liabilities of NOK 1 034.3 million following the purchase of the three tender rigs from Pride Foramer SAS with whom GGS signed an agreement on 9 August 2007. The transaction was conditional on the transfer of the drilling contracts.

The tender rig Alligator was transferred with its contract with Chevron on 30 January 2008. The drilling contracts of Barracuda and Al Baraka 1 were novated to GGS in February 2008. At the same time GGS completed the financial structure associated with the transaction.

USD 170 million is financed through three different facilities from three different international banks, Lloyds, Bank of Scotland and Landsbanki, as well as Eksportfinans. The primary facility of USD 125 million is a 5-year loan with a repayment profile that corresponds to the cash flow profile of the rig contracts. For more on loan details see note 22 to the consolidated financial statement.

The owner of the rigs and borrower is Global Tender Barges Pte Ltd in Singapore, which is a 90 % owned subsidiary of Global Tender Barges AS, which in turn is 100 % owned by GGS. Abbot Investment Ltd, the parent company of KCA

Deutag, owns 10 % of Global Tender Barges Pte Ltd. The owners have capitalised Global Tender Barges Pte Ltd with USD 90 million in equity. In addition, Global Tender Barges AS/GGS pledged USD 15 million as collateral via a credit facility with drawing rights for the yard stays for Al Baraka 1 and Barracuda. This pledge was converted to equity in January 2009.

The situations of the Group’s lenders have changed following the turbulence in the financial markets during the autumn of 2008. Lloyds Bank plc has taken over Bank of Scotland and Landsbanki has been put into administration by the Icelandic authorities. GGS is monitoring the situation closely. Lloyds is expected to fulfil the Bank of Scotland’s obligations on its behalf, and Landsbanki is expected to sustain its outstanding commitments, but not participate in any further loans or guarantees.

ShAREPRICE vS. vOLUME

2.50

2.00

1.50

1.00

0.50

0.00

100 000

NOK Volume

90 000

80 000

70 000

60 000

50 000

40 000

30 000

20 000

10 000

0

Last quotationsTot. volume (1 000)

28.1

2.07

11.0

1.08

25.0

1.08

08.0

2.08

22.0

2.08

07.0

3.08

21.0

3.08

04.0

4.08

18.0

4.08

02.0

5.08

16.0

5.08

30.0

5.08

13.0

6.08

27.0

6.08

11.0

7.08

25.0

7.08

08.0

8.08

22.0

8.08

05.0

9.08

19.0

9.08

03.1

0.08

17.1

0.08

31.1

0.08

14.1

1.08

28.1

1.08

12.1

2.08

26.1

2.08


Corporate GovernanCe

GGS’ corporate governance principles aim to provide long-term value creation for share holders, employees, other stakeholders and society in general. GGS’ structure will be developed accordingly. The Board of directors of GGS manages the business risks via appropriate control and support mechanisms.

GGS believes openness and transparency are prerequisites when it comes to gaining and maintaining the trust of shareholders, stakeholders, the business community and the general public. We regard trust as vital to sustaining a good reputation and profitable value development. As a company listed on the Oslo Stock Exchange GGS is subject to Norwegian securities law and Norwegian stock exchange rules. The Norwegian Code of Practice dated 7 December 2004, and revisions of 4 December 2008, is based on Norwegian legislation for limited companies, auditing, the stock exchange and securities.

The Board of directors of GGS has decided to provide its corporate governance statement in line with the Norwegian Code of Practice for Corporate Governance.

GGS’ vision is to maximise the financial return of our shareholders by being the most accessible and financially oriented rig company.

GGS’ core values are being trustworthy, ambitious and positive.

We recognise the value of good corporate governance and the role it plays in helping us achieve our vision and strategic goals and values. Our values are an important expression of our vision and our goals, and serve as guidelines in our day-to-day activities.

GGS has drawn up a Code of Conduct in order to ensure high ethical standards. This document outlines general and specific standards of conduct with the aim of assisting individual employees at all levels of the organisation - both national and international - in their day-to-day activities. Failure to comply with the Code of Conduct will result in sanctions that reflect the nature and degree of the illicit actions.

COMPLIANCE WITh ThE COdE OF PRACTICEThe extent to which GGS complies with the Norwegian Code of Practice for Corporate Governance issued by the Norwegian Corporate Government Board (NCGB) in December 2007 is described below.

1. IMPLEMENTATION ANd REPORTING ON CORPORATE GOvERNANCEThe Board of Directors must ensure that the company implements sound corporate governance. The Board of Directors must provide a report on the company’s corporate governance in the annual report. The report must cover every section of the Code of Practice. If the company does

not fully comply with this Code of Practice, this must be explained in the report. The Board of Directors should define the company’s basic corporate values and formulate ethical guidelines in accordance with these values.

The Board of Directors will implement instructions for its operations and is committed to reviewing the company’s compliance with these principles and making recom mendations concerning improvements. The Board of Directors will report on the company’s corporate governance in its annual report. It is the Board’s responsibility to define GGS’ corporate values and formulate associated ethical guidelines.

DeviationsfromtheCodeofPractice:None.

2. BUSINESSThe company’s business should be clearly defined in its articles of association. The company should have clear objectives and strategies for its business within the scope of the definition of its business in its articles of association. The annual report should include the business activities clause from the articles of association and describe the company’s objectives and principal strategies.

GGS’ business is defined in section 3 of its articles of association. The articles of association’s business activities clause will be included in annual reports, as will a description of the company’s goals and principal strategies. GGS’ goals are described in presentations, financial reports and in reports to the Oslo Stock Exchange.


3. EqUITy ANd dIvIdENdSThe company should have an equity capital at a level appropriate to its objectives, strategy and risk profile. The Board of directors should establish a clear and predictable dividend policy as the basis for the proposals on dividend payments that it makes to the general meeting. The dividend policy should be disclosed. Mandates granted to the Board of Directors to increase the company’s share capital should be restricted to defined purposes and should be limited in time to no later than the date of the next annual general meeting. This should also apply to mandates granted to the Board for the company to purchase its own shares.

GGS raised NOK 986.5 million in capital, which has secured equity of a level appropriate for the company’s goals, strategies and risk profile. GGS works actively to maintain appropriate equity level.


The Board has established and published a clear and predictable dividend policy, which was presented to the annual general meeting on 28 May 2008. The annual general meeting on 28 May 2008 authorised the Board to increase share capital by up to 402,638,340 new shares. Mandates granted to the Board to increase the company’s share capital will continue to be restricted to defined purposes and only be valid until the date of the next annual general meeting. This also applies to mandates granted to the Board to buy back the company’s own shares.


4. EqUAL TREATMENT OF ShAREhOLdERS ANd TRANSACTIONS WITh CLOSE ASSOCIATESThe company should only have one class of shares. Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the event of an increase in share capital must be justified. Any transactions the company carries out in its own shares should be carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. In the event of any not immaterial transactions between the company and shareholders, members of the Board of Directors, members of the executive management or close associates of any such parties, the Board should arrange for a valuation to be obtained from an independent third party. The company should operate guidelines to ensure that members of the Board of Directors and the executive management notify the Board if they have any material direct or indirect interest in any transaction entered into by the company.

GGS has and will continue to have only one class of share. Any decision to waive the pre-emption rights of existing shareholders to subscribe to shares in the event of an increase in share capital will be explained. Any transactions the company carries out in its own shares will be carried out via the stock exchange, or at prevailing stock exchange prices if carried out in any other way. In the event of any not immaterial transactions between the company and shareholders, members of the Board, members of the management group or close associates of any such parties, the Board will arrange for a valuation to be obtained from an independent third party. The company will establish guidelines to ensure that members of the Board and the management group notify the Board if they have any material direct or indirect interest in any transaction entered into by the company.


5. FREELy NEGOTIABLE ShARESShares in listed companies must, in principle, be freely negotiable. Therefore, no form of restriction on negotiability should be included in a company’s articles of association.

GGS’ shares are freely negotiable. No restrictions apply to the shares’ negotiability, and this is stipulated in the company’s articles of association, unless the restrictions are prescribed by Norwegian law.


6. GENERAL MEETINGSThe Board of Directors should take steps to ensure that as many shareholders as possible may exercise their rights by participating in general meetings of the company, and that general meetings are an effective forum for the views of shareholders and the Board.

The Board will give shareholders an opportunity to exercise their rights by participating in the company’s general meetings and will take steps to ensure the general meeting becomes an effective forum in which shareholders and the Board can exchange their points of view. The shareholders will receive the necessary papers relating to matters that are going to be discussed no later than two weeks prior to the date of the general meeting. Shareholders unable to attend will be able to vote by proxy. The Board, nomination committee and auditor will attend the general meeting, and routines that ensure the independent chairing of meetings have been established and are complied with.

GGS’ annual general meeting for 2009 is scheduled for 28 May 2009.


7. NOMINATION COMMITTEEThe company should have a nomination committee, and the general meeting should elect the chairperson and members of the nomination committee.

The general meeting has appointed the nomination committee’s chair and members. The chair is Kjetil Erikstad and its members are Ivar Ramberg and Tone Bjørnov. Tone Bjørnov is also a member of the Board. The nomination committee’s mandate and procedures will be stipulated in the company’s articles of association and include proposing shareholder elected candidates for the Board and proposals concerning the remuneration of Board members.


8. CORPORATE ASSEMBLy ANd BOARd OF dIRECTORS: COMPOSITION ANd INdEPENdENCEThe composition of the corporate assembly should be determined with a view to ensuring that it represents a broad cross-section of the company’s shareholders. The composition of the Board of Directors should ensure that the Board can attend to the common interests of all shareholders and meets the company’s need for expertise, capacity and diversity.

Because of GGS’ size it will not have a corporate assembly. The Board’s composition ensures the Board’s ability to safeguard the shareholders’ interests and operate independently of any special interests. At least half of the shareholder-elected Board members are independent of the company’s management group and important business associates. The Board members’ expertise and independence will be described in the annual report. Members of the management group are not Board members. Any deviation from this principle will be justified, and steps will be taken to ensure the independent preparation of matters that are going to be discussed by the Board. The chairman of the


Board is elected by the general meeting and Board members are elected for a term of a maximum of two years.

Board members are encouraged to own shares in the company.


9. ThE WORK OF ThE BOARd OF dIRECTORSThe Board of Directors should produce an annual plan for its work, with particular emphasis on objectives, strategy and implementation. The Board of Directors should issue instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties. A deputy chairman should be elected. The Board of Directors should consider appointing Board committees in order to help ensure thorough and independent preparation of matters relating to financial reporting and compensation paid to the members of the executive management. The Board of Directors should provide details in the annual report of any Board committees appointed. The Board of Directors should evaluate its performance and expertise annually.

The Board will present an annual plan for its work with particular emphasis on goals, strategy and implementation. The Board will stipulate instructions for its own work and for the day-to-day management, with particular emphasis on the internal allocation of responsibilities and duties. The Board will evaluate its performance and expertise annually. The Board will appoint a deputy chair.

The Board has appointed an audit committee chaired by Board member Tone Bjørnov with Board chairman Gunnar Reitan as a member. The audit committee is tasked with ensuring the independent treatment of matters relating to financial reporting.

The Board has appointed a compensation committee chaired by Board chairman Gunnar Reitan with Board member Gunnar Hvammen as a member. The compensation committee is tasked with ensuring the independent treatment of the management group’s remuneration.


10. RISK MANAGEMENT ANd INTERNAL CONTROLThe Board of Directors must ensure that the company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. Internal control and the systems should also encompass the company’s corporate values and ethical guidelines. The Board of Directors should carry out an annual review of the company’s most important areas of exposure to risk and its internal control arrangements. The Board of Directors should provide an account in the annual report of the main features of the company’s internal control and risk management systems as they relate to the company’s financial reporting.

GGS has a new management Group in place and the company is continuously developing its risk management

systems. The Board plays an important role in ensuring that GGS has good internal control routines and appropriate systems for risk management in relation to the scope and nature of the company’s business activities. The internal control and risk management systems also encompass GGS’ corporate values and ethical guidelines.

The Board reviews the company’s most important risk areas and corresponding internal control mechanisms annually. In its annual report the Board will provide a description of the main elements of the company’s internal control and risk management systems associated with the company’s financial reporting.


11. REMUNERATION OF ThE BOARd OF dIRECTORSThe remuneration of the Board of Directors should reflect the Board’s responsibility, expertise, time commitment and the complexity of the company’s activities. The remuneration of the Board of Directors should not be linked to the company’s performance. The company should not grant share options to members of its Board. Members of the Board of Directors and/or companies with which they are associated should not take on specific assignments for the company in addition to their appointment as a member of the Board.

The Board’s remuneration reflects the Board’s responsibility, expertise, time commitment and the complexity of the company’s activities. The remuneration of the Board of directors is not linked to the company’s performance. The company does not grant share options to its Board members.

The Board reports on the remuneration of the individual Board members in the annual report. If remuneration in excess of regular fees is paid, this will be reported.


12. REMUNERATION OF ThE ExECUTIvE MANAGEMENTThe Board of Directors is required by law to establish guidelines for the remuneration of the members of the executive management. These guidelines are communicated to the annual general meeting. The guidelines for the remuneration of the executive management should set out the main principles applied in determining the salary and other remuneration of the executive management.

The Board stipulates guidelines for the remuneration of the management group. These guidelines were presented to the annual general meeting on 28 May 2008. The salary and other remuneration of the CEO are set by the Board. The remuneration of rest of the management group is set by the CEO pursuant to guidelines issued by the Board.

Options schemes and share allocations for employees are presented to the general meeting for its approval before being awarded. The annual report will provide guidelines for the remuneration of the management group.



13. INFORMATION ANd COMMUNICATIONSThe Board of Directors should establish guidelines for the company’s reporting of financial and other information based on openness and taking into account the requirement for equal treatment of all participants in the securities market. The company should publish an overview each year of the dates for major events such as its annual general meeting, publication of interim reports, public presentations, dividend payment date if appropriate, etc. All information distributed to the company’s shareholders should be published on the company’s web site at the same time as it is sent to shareholders. The Board of Directors should establish guidelines for the company’s contact with shareholders other than through general meetings.

The Board’s guidelines for the company’s reporting of financial and other information are based on the principles of openness and the equal treatment of participants in the securities market. GGS will publish an annual overview of the dates of major events such as its annual general meeting, the publication of interim reports, public presentations, the dividend payment date, etc. Information for the company’s shareholders will also be published on the company’s web site at the same time it is sent to shareholders.


14. TAKE-OvERSThe Board of Directors should establish guiding principles for how it will act in the event of a take-over bid. During the course of a take-over process, the Board of Directors and management of both the party making the offer and the target company have an independent responsibility to help ensure that shareholders in the target company are treated equally, and that the target company’s business activities are not disrupted unnecessarily. The Board of the target company has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer. The Board of Directors should not seek to hinder or obstruct take-over bids for the company’s activities or shares unless there are particular reasons for this. In the event of a take-over bid for the company’s shares, the company’s Board of Directors should not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. If an offer is made for a company’s shares, the company’s Board of Directors should issue a statement evaluating the offer and making a recommendation as to whether shareholders should or should not accept the offer. If the Board finds itself unable to give a recommendation to shareholders on whether or not to accept the offer, it should explain the background for not making such a recommendation. The Board’s statement on a bid should make it clear whether the views expressed are unanimous, and if this is not the case it should explain the basis on which specific members of the Board have excluded themselves from the Board’s statement. The Board should consider whether to arrange a valuation from an independent expert. If any member of the Board or executive management, or close associates of such individuals, or anyone who has recently held such a position, is either the bidder or has a particular personal interest in the bid, the Board should arrange an independent valuation in any case.

This shall also apply if the bidder is a major shareholder. Any such valuation should be either appended to the Board’s statement, be reproduced in the statement or be referred to in the statement. Any transaction that is in effect a disposal of the company’s activities should be decided by a general meeting, except in cases where such decisions are required by law to be decided by the corporate assembly.

In the event of a take-over bid the Boards and management groups of both parties have an independent responsibility to help ensure that all shareholders are treated equally, and that the companies’ business activities are not disrupted unnecessarily. The Boards have a particular responsibility to ensure that shareholders receive adequate information and time to form a view of the offer. The Board will not seek to hinder or obstruct take-over bids for the company’s activities or shares unless there are particular reasons for this. In the event of a take-over bid for the company’s shares, the company’s Board of Directors will not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. If an offer is made for the company’s shares, the company’s Board of Directors will issue a statement evaluating the offer and make a recommendation as to whether shareholders should or should not accept the offer. If the Board is not in a position to do this, the reasons for not making such a recommendation will be explained. Any transaction that results in the sale of GGS will be decided by the general meeting.


15. AUdITORThe auditor should submit the main features of the plan for the audit of the company to the Board of Directors annually.

The auditor briefs the Board on the main features of the plan outlining the conduct of the audit every year, and is invited to attend Board meetings when matters relating to the annual accounts are on the agenda. Every year the auditor will be asked to review the company’s internal control procedures, including any weaknesses that have been uncovered, and suggest improvements and present these to the Board. The Board is considering holding at least one meeting a year at which neither the CEO nor other members of the management group are present. The Board will establish guidelines that describe how the management group can use the auditor for services other than auditing. The Board will present a report on the auditor’s remuneration, for both auditing services and any other services, at the general meeting.



artiCleS oF aSSoCiationaS oF 14 novemBer 2007

ARTICLE 1Company nameThe company name is Global Geo Services ASA. The company is a public limited liability company.

ARTICLE 2Business municipalityThe registered office of the company is in Oslo.

ARTICLE 3The business of the companyThe business of the company is to offer services to the shipping and petroleum-related industry, engage in collection, processing and marketing of geophysical, aerial magnetic and gravitational data and other services relating to this business and to participate in companies with similar businesses.

ARTICLE 4Share capital and sharesThe share capital of the company is NOK 80 527 668.70 divided into 805 276 687 shares with a nominal value of NOK 0.10 each.

ARTICLE 5The Board of directorsThe Board of Directors shall have between three and seven members.

ARTICLE 6Nomination committeeThe company shall have a nomination committee consisting of one to three members. The members are chosen for a period of two years at the time.

ARTICLE 7The General MeetingThe annual General Meeting shall consider and decide the following:1. Approval of the annual financial statement and the

annual report, including the declaration of dividends.2. Election of Board members and the auditor (if up for

election).3. Other matters that by law or these articles pertain to the

General Meeting.


Statement oF reSponSiBility

Today, the Board, the CEO and the CFO of GGS reviewed and approved the Board of directors’ report and the consolidated financial statements for the Group and that of the parent company for the year ending december 31 2008.

GGS consolidated financial statements have been prepared in accordance with IFRSs as adopted by the EU and additional disclosure requirements in the Norwegian accounting act, that should be used as of December 31 2008. The separate financial statements for the parent company have been prepared in accordance with the Norwegian accounting act and Norwegian accounting standards as of December 31 2008. The Board of Directors’ report for the Group and the parent company are in accordance with the requirements in the Norwegian accounting act and Norwegian accounting standard no 16, as of December 31 2008.

To the best of our knowledge, the consolidated and separate annual financial statements for 2008 have been

prepared in accordance with applicable accounting standards. The consolidated and separate annual financial statements give a true and fair view of the assets, liabilities, financial position and profit/ (loss) as a whole as of December 31 2008 for the Group and the parent company. The Board of Directors’ report for the Group and the parent company includes a true and fair view of the development and performance of the business and the position of the Group and the parent company, in addition to the principal risks and uncertainties the Group and the parent company faces.

Oslo, 14 April 2009




Jon Elde CFO


in February 2008 GGS finalized the acquisition of three tender rigs.


auDitor’S report


ConSoliDateD inCome Statement

For the year enDeD DeCemBer 31

tnok note 2008 2007

ContinuinG operationS

Rig revenues 7 362 047 -Reimbursables 7 74 843 -Other revenues 7 21 659 8 356

total operating revenues 458 549 8 356

Rig operating expenses 8 (210 341) -Reimbursable expenses (72 113) -Payroll expenses 9 (9 595) (7 997)Other operating expenses 8 (46 204) (30 234)

total operating expenses (338 253) (38 230)

earnings before interest, tax, depreciation, amortization and impairment (eBitDa) 120 296 (29 875)

Depreciation and amortization 13, 14, 19 (115 432) (19 935)Write-down 14 - 2 561

operating profit/ (loss) 4 864 (47 248)

Interest income 21 684 11 977 Interest expense 11 (39 476) (2 372)Foreign exchange gain/ (loss) 11 8 034 (22 443)Other financial income 5 602 - Other financial expense 11 (34 880) (13 498)

net financial items (39 038) (26 335)

profit/ (loss) before tax (34 174) (73 584)

Tax expense 12 (50 821) -

net profit/ (loss) for the year from continuing operations (84 994) (73 584)

DiSContinueD operationS

Net profit/ (loss) for the year from discontinued operations 6 35 208 (79 954)

net profit/ (loss) for the year (49 786) (153 538)

Profit/ (loss) attributable to the equity holders of the parent (43 778) (153 538)

net profit/ (loss) attributable to the minority (6 008) -

earnings per share Basic, profit for the year attributable to ordinary equity holders of the parent 21 (0.05) (0.42)Diluted, profit for the year attributable to ordinary equity holders of the parent 21 (0.05) (0.42)

earnings per share for continuing operations Basic, profit from continuing operations attributable to ordinary equity holders of the parent 21 (0.10) (0.20)Diluted, profit from continuing operations attributable to ordinary equity holders of the parent 21 (0.10) (0.20)

Average shares outstanding 21 805 276 687 367 078 036 Average shares outstanding diluted 21 805 276 687 369 041 491


ConSoliDateD BalanCe Sheet - aSSetS

as at December 31

tnok note 2008 2007

intangible non-current assets Goodwill 14 - 28 347 Patents 14 - 10 825 Multi-client library 14 6 856 127 442

tangible non-current assets Rigs 13 1 621 545 -Other equipment 13 1 087 29 171

other non-current assets Investment in joint ventures 18 - 1 715 Non-current deferred expenses 19 214 470 -Non-current receivables 22 155 000 -Other financial assets 22 8 312 -

total non-current assets 2 007 270 197 500

Current assets Inventory 15 36 607 6 379 Current deferred expenses 19 85 155 -Trade receivables 16, 22 180 542 25 864 Other receivables 16 23 583 32 555 Restricted cash 17, 22 13 631 117 843 Cash and cash equivalents 22 286 159 507 087

total current assets 625 677 689 728

total assets 2 632 947 887 228


Oslo, 14 April 2009




ConSoliDateD BalanCe Sheet - equity anD liaBilitieS

as at December 31

tnok note 2008 2007

equity attributable to equity holders of the parent Issued capital 20 80 528 80 528 Share premium reserve 826 263 826 263 Retained earnings (132 098) (88 320)Other reserves 108 398 (22 701)

883 092 795 770

minority interest 56 838 -

total equity 939 928 795 770

non-current liabilities Non-current deferred revenues 23 181 242 - Non-current interest bearing debt 22 771 825 3 535 Other liabilities 22 16 298 -

total non-current liabilities 969 364 3 535

Current liabilities Trade payables 22 249 866 33 743 Current interest bearing debt 22 262 459 3 379 Current deferred revenue 23 90 454 -Taxes payable 12 33 010 173 Prepayment from customers 22 257 17 207 Provisions 65 610 33 421

total current liabilities 723 655 87 923

total equity and liabilities 2 632 947 887 228


ConSoliDateD CaSh Flow Statement

For the year enDeD DeCemBer 31

tnok note 2008 2007

operatinG aCtitvitieS

Profit/(loss) before tax from continuing operations (34 174) (73 583) Finance income and expense 39 038 (12 692) Depreciation and amortization 115 432 17 374 Working capital changes 24 528 36 214 Taxes paid 12 (17 811) -

net cash flows from continuing operating activities 127 013 (32 688) net cash flows from discontinued operating activities 4 402 (917)

net cash flows operating activities 131 415 (33 605)

inveStinG aCtitvitieS

Investment in fixed assets 13 (216 907) (17)Acquisition of tender rigs 5 (1 167 938) -Investments in subsidiaries - (773)Proceeds from sale of assets 14 420 6 936 Proceeds from sale of seismic operations 6 125 000 -Interest received 14 374 11 977

net cash flows from continuing investing activities (1 231 051) 18 122net cash flows from discontinued investing activities (18 089) (116 146) net cash flows investing activities (1 249 140) (98 024)

FinanCinG aCtitvitieS

Proceeds from borrowings 800 534 -Repayment of borrowings - (163 394)Net proceeds from issued capital - 851 262Proceeds from minority interests 5 48 465 -Equity transaction costs - (40 710)Interest paid (31 818) (644)Payments other financing activities (8 163) -

net cash flows from continuing financing activities 809 017 646 514net cash flows from discontinued financing activities 9 596 121 937

net cash flows financing activities 818 613 768 451

Net change in cash and cash equivalents continuing operations (295 021) 631 948Net change in cash and cash equivalents discontinued operations (4 092) 4 874Effects of exchange rate changes (26 026) (13 926)Restricted cash at January 1 17 117 843 859Restricted cash at December 31 17 13 631 117 843Cash and cash equivalents at January 1 507 087 1 174

Cash and cash equivalents at end of period 286 159 507 087


ConSoliDateD Statement oF ChanGeS in equity

tnok attributable to equity holders of the parent

Paid in equity

Share premium

reserveOther paid-

in equityRetained earnings

Other reserves

total

equity

equity at January 1 2007 8 359 - 15 939 (9 109) (22 048) (6 859)Currency translation differences - - - - (653) (653)net income and expense recognised directly in equity - - - - (653) (653)Profit/ (loss) for the year - (47 327) (26 999) (79 211) - (153 537)total income and expense for the year - (47 327) (26 999) (79 211) (653) (154 190)Equity issue 72 169 914 300 - - - 986 469 Equity transcation costs - (40 710) - - - (40 710)Issued subscription rights - - 11 060 - - 11 060

equity at December 31 2007 80 528 826 263 - (88 320) (22 701) 795 770

tnok attributable to equity holders of the parent

Paid in equity

Share premium

reserveRetained earnings

Other reserves total

Minority interests

total

equity

equity at January 1 2008 80 528 826 263 (88 320) (22 701) 795 770 - 795 770 Currency translation differences - - - 131 099 131 099 14 381 145 480

net income and expense recognised

directly in equity - - - 131 099 131 099 14 381 145 480 Profit/ loss for the year - - (43 778) - (43 778) (6 008) (49 786)total income and expense for the year - - (43 778) 131 099 87 320 8 373 95 694 Capital increase, minority interest* - - - - - 48 465 48 465

equity at December 31 2008 80 528 826 263 (132 098) 108 398 883 092 56 838 939 928

*capital increase in GTB Pte Ltd (USD 9 million) by minority interest The Board proposes that no dividend will be paid for the current financial year 2008.


noteS to ConSoliDateD FinanCial StatementS

Note 1 Corporate information 33

Note 2 Basis of preparation 33

Note 3 Significant accounting policies 34

Note 4 Financial risk management 40

Note 5 Business combinations 42

Note 6 Discontinued operations 43

Note 7 Revenues and segment information 44

Note 8 Other expenses 46

Note 9 Personnel expenses and employee benefits 47

Note 10 Related parties 49

Note 11 Financial items 50

Note 12 Income tax 51

Note 13 Property, plant and equipment 52

Note 14 Intangible assets 53

Note 15 Inventories 55

Note 16 Trade and other receivables 55

Note 17 Restricted cash 55

Note 18 Investment in joint ventures 56

Note 19 Deferred expenses 56

Note 20 Share capital and shareholder information 57

Note 21 Earnings per share 58

Note 22 Financial instruments 58

Note 23 Deferred revenues 61

Note 24 Guarantees and commitments 61

Note 25 Contingencies 62

Note 26 Group entities 62

Note 27 Subsequent events 62


note 1. Corporate inFormation

Global Geo Services ASA (GGS) is a public limited liability company incorporated and domiciled in Norway. The address of the domicile is Sjølyst Plass 2, 0278 Oslo. The principal activity of GGS is the professional ownership of three tender rigs. The consolidated financial statements of GGS for year-end 2008 were approved by the Board of Directors (the Board) and the Chief Executive Officer (the CEO) on 14 April 2009.

note 2. BaSiS oF preparation

The consolidated financial statements for GGS have been prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the EU.

The consolidated financial statements have been prepared on a historical cost basis except for financial instruments at fair value through profit and loss that are measured at fair value.

The consolidated financial statements of GGS are prepared according to consistent principles for similar transactions.

BASIS OF CONSOLIdATIONThe consolidated financial statements comprise the financial statement of GGS and its subsidiaries as at 31 December 2008. The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.

Subsidiaries are all entities where GGS has a controlling interest. A controlling interest is normally attained when GGS holds, directly or indirectly, more than 50 % of the voting rights and is capable of exercising financial and operational control over the company. The subsidiaries are consolidated from the date on which control is transferred to GGS. Correspondingly, they will no longer be consolidated from the date the control ceases.

A joint venture is an activity over which the Group has joint control through a contractual agreement between the parties. The consolidated financial statements include GGS’ share of the profits/losses from joint ventures by using the equity method.

All intra-group balances, income and expenses and unrealized gains and losses resulting from intra-group transactions are eliminated in full.

Minority interests represent the portion of profit or loss and net assets that is not held by GGS and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders’ equity.

PRESENTATION ANd CLASSIFICATION

Income statementThe income statement is presented by nature for revenues and expenses.

Balance sheetCurrent assets and current liabilities include items due in less than one year from balance sheet date and items tied to the operating business.

Cash flow statementThe cash flow statement is prepared using the indirect method.

SIGNIFICANT ACCOUNTING jUdGMENTS, ESTIMATES ANd ASSUMPTIONS The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates and underlying assumptions are based on historical experience and other elements that seem reasonable. These estimates are the basis for judging the carrying amounts of assets and liabilities that do not appear directly from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

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 adjustments to the carrying amounts of the assets and liabilities within the next financial years arediscussedbelow:

Impairment of rigs and equipmentGGS has made significant investments in rigs and related equipment. These assets are tested for impairment when circumstances indicate there may be a potential impairment. Factors considered important which could trigger an impairment evaluation include changes in market conditions and technical condition of the rigs.


When such indication exists, GGS makes an estimate of the asset’s recoverable amount, which is the higher of fair value less cost to sell and its value-in-use. Estimating recoverable amounts of the assets is based on management’s evaluation, including determining appropriate cash-generating units and discount rate, assumptions on future day rates (market conditions) and estimates of future utilization rates and profit margins.

Changes in circumstances and in management’s evaluations and assumptions may give rise to impairment losses in the relevant periods.

depreciation and useful lives of rigs and equipmentDepreciation of rigs and equipment is calculated using the straight line method over estimated useful lives. The cost of rigs and equipment has been categorized separately by its main components and useful lives have been determined for each component. Estimates may change due to changes in technological developments, changes in market conditions and environmental or legal requirements.

Option periods in the drilling contractsAny option periods in the drilling contracts are included in the lease period at the inception of the lease when it is reasonably certain that the lessee will exercise the option. When such option periods exists GGS makes estimates on the reasonability for the customer exercising the option. This affects the recognition of mobilization revenues, direct incremental expenses of mobilization and client specific investments, as these revenues and expenses are recognized over the lease period.

note 3. SiGniFiCant aCCountinG poliCieS

FOREIGN CURRENCy TRANSLATIONThe consolidated financial statements are presented in NOK, which is also the functional currency for the parent company. Each entity in the GGS Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currency are translated using the exchange rate in effect on the date of transaction. Monetary assets and liabilities in foreign currency are translated into the functional currency using the exchange rate in effect on the balance sheet date. Exchange differences arising from translations are recorded in the income statement. Non-monetary assets and liabilities measured at historical cost in foreign currency are translated using the exchange rate in effect on the date of transaction. Non-monetary assets and liabilities denominated in foreign currency, and recognized at fair value, are translated using the prevailing exchange rate on the date of the determination of the fair value.

The assets and liabilities of foreign operations are translated into NOK at the rate of exchange prevailing at the balance sheet date and the income statements are translated into NOK using the average exchange rate. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of foreign operations, the deferred cumulative amount recognized in equity related to that particular foreign operation is recognized in the income statement.

BUSINESS COMBINATIONSBusiness combinations are accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of acquisition.

dISCONTINUEd OPERATIONSA discontinued operation is a component of the Group that has been disposed of and represents a separate major line of business. Profit after tax from discontinued operations are excluded from continuing operations and reported separately as profit/ (loss) from discontinued operations. Prior period’s profit/loss from discontinued operations are reclassified to be comparable.

REvENUE RECOGNITIONRevenues from the tender rig business are presented as rig revenues. Revenues from multi-client projects, contract seismic and processing are presented as other revenues. The majority of the seismic business is sold during 2008 and hence presented as discontinued operations.

Rig revenuesThe Group’s contracts are term contracts. These are contracts where the assignment is to operate the tender rigs for a specified period of time. For each contract the Group determines whether the contract is a multiple element arrangement and, if so, identifies all deliverables (elements). The determination of whether an arrangement is, or contains a lease, is based on the substance of the arrangement at inception date and considers whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. Currently all the Group’s contracts are multiple element arrangements, containing both a lease element and a drilling services element.


The lease element is recognized to the income statement on a straight line basis over the lease period, starting from commencement date. Commencement date is when the customer according to the contract gets the user benefits and takes control of the tender rig, i.e. when the tender rigs are located on site at the oil fields. Any option periods are included in the lease period at the inception of the lease when GGS is reasonably certain that the lessee will exercise the option.

The drilling services element is recognized in the period in which the drilling services are rendered (drilling period) at rates at fair value.

Mobilization revenues are recognized on a straight line basis over the lease period, starting from commencement date.

Reimbursements Reimbursements received for the purchase of supplies, equipment and other services at the request of GGS’ customers and where GGS is responsible to the customer for providing the product in accordance with contract, are recognized as revenue.

Other revenuesMulti-client projects are projects where GGS, at its own risk and expense, has conducted all or parts of the collection of geophysical data. The data can be sold to an unlimited number of customers. Multi-client revenues are recorded when earned and when GGS has a binding agreement with the customer. Revenue from ongoing surveys is recognized according to the percentage of completion method. Determination of the percentage of completion is based on the amount of accrued expenses relative to the estimated total expenses of the survey. The survey is defined as completed on the date when the seismic data is collected and the vast majority of the data is processed. GGS recognizes the sale of seismic data for completed projects on the date of delivery.

Contract seismic projects are projects where GGS collects predefined geophysical services on behalf of a customer. Revenue from contractual seismic data is recognized when earned and according to the percentage of completion method.

Revenue from the processing of seismic data is recognized at date of delivery.

Interest incomeInterest income is recognized as interest accrues using effective interest method.

OPERATING ExPENSESDirect incremental expenses of mobilization and customer specific investments according to the contracts are deferred and recognized on a straight-line basis over the lease period. Other rig operating expenses are expensed when incurred and presented as rig operating expenses.

Other operating expenses, including general and administrative expenses, are expensed when incurred.

RIGS ANd EqUIPMENTRigs and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Such costs include the cost of adding/replacing part of the rig and equipment when that cost is incurred and the recognition criteria are met. The carrying amount of those parts that are replaced is written off.

Components which have significantly different useful lives are identified separately from the rig and depreciated over their respective usefullives.Depreciationiscalculatedonastraightlinebasisovertheusefullivesoftheassetsasfollows:rigs40yearsandothercomponents 2-40 years. That part of the rig’s costs which relates to SPS (special periodic surveys) is depreciated over the estimated time to the next scheduled SPS, normally 3-5 years. Calculated depreciation takes into account the asset’s residual value if significant.

Rigs and equipment are de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference of the net disposal proceeds and carrying amount of the asset) is included in the profit and loss statement in the year the asset is derecognized.

LEASESThedeterminationofwhetheranarrangementis,orcontainsaleaseisbasedonthesubstanceofthearrangementatinceptiondate:whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.

Group as lesseeOperating lease payments are recognized as an expense in the income statement on a straight line basis over the lease term.

Group as lessorLeases where the Group does not transfer substantially all the risks and benefits of ownership of the asset is classified as operating leases. Please refer to accounting policy on Rig Revenues for further details.


INTANGIBLE ASSETS

Multi-client libraryThe multi-client library comprises completed projects that can be licensed to a number of customers. All direct costs related to data collection, processing and completion of seismic projects are capitalized. The multi-client library is capitalized at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated according to accrued revenues for each survey as a share of the estimated total revenue for each project relative to estimated total cost for each project. In addition, GGS has a minimum amortization policy where the carrying amount one year after completion is at maximum 60 percentage of cost. This maximum level is reduced by 20 percentage points for each of the three subsequent years. The PC2000 library is amortized on a straight line basis over 7 years.

GoodwillGoodwill is the excess value arising from the acquisition of subsidiaries, associates and joint ventures. Goodwill is initially measured at cost being the excess of the cost of the business combination on the transaction date and the net fair value of Group’s share of identifiable assets and liabilities acquired. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

IMPAIRMENT OF TANGIBLE ANd INTANGIBLE NON-FINANCIAL ASSETSTangible and intangible non-financial assets are assessed for impairment at each reporting period and always when events occur or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When impairment is considered, the assets are grouped at the lowest level for which there are separate identifiable cash-generating units.

Impairment is calculated as the difference between the asset’s carrying amount and the recoverable amount. The recoverable amount is the higher of the asset’s fair value less cost to sell and the value in use for GGS. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. When it is assumed that the asset’s recoverable amount is lower than its carrying amount, the asset is written down to the recoverable amount. The impairment amount is recognized in the income statement in those expense categories consistent with the type of the impaired asset.

Previously recognized impairment losses are only reversed if there is no indication of impairment in the current year and there have been changes in the estimates used to determine the recoverable amount. The reversed amount cannot exceed the recoverable amount nor the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. Impairment of goodwill is not reversed.

FINANCIAL INSTRUMENTS

Financial instruments within the scope of IAS 39 are classified as;• financialassetsorfinancialliabilitiesatfairvaluethroughprofitorloss• loansandreceivables• held-to-maturityinvestments• availableforsalefinancialassets• otherfinancialliabilities

GGS determines the classification of its financial instruments at initial recognition. GGS has no held-to-maturity investments or available for sale financial assets. Financial assets and financial liabilities are recognized initially at fair values and in the case of loans and borrowings, directly attributable transaction costs.

Thesubsequentmeasurementoffinancialassetsandliabilitiesdependsontheirclassificationasfollows:

Financial assets and liabilities at fair value through profit or lossThis category includes financial assets that are designated upon initial recognition at fair value through profit or loss and derivative financial instruments. Financial assets and liabilities at fair value through profit and loss are carried in the balance sheet at fair value with gains or losses recognized in the income statement.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such financial assets are carried at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired, as well as through the amortization process.

Other financial liabilitiesOther financial liabilities includes interest-bearing loans and borrowings that are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired, as well as through the amortization process.

GGS assesses at each balance sheet date whether there is any objective evidence that a financial asset is impaired. A financial asset is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred


after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in economic conditions that correlate with default.

BORROWING COSTSBorrowing costs are expensed in the period they occur.

INvENTORIESInventories are stated at cost.

TRAdE ANd OThER RECEIvABLESTrade and other receivables are recognized initially at fair value and subsequently measured at cost adjusted for provision for any impairment. GGS reviews, on a regular basis, trade receivables for impairment based on the maturity and information about the customer’s financial position or other relevant information.

CASh ANd CASh EqUIvALENTSCash and cash equivalents comprise cash at bank and short-term deposits that can be immediately converted into a known amount of cash and have a maximum term to maturity of three months. Bank overdrafts are presented as current liabilities.

TRAdE ANd OThER PAyABLESTrade and other payables are recognized initially at fair value and subsequently measured at cost.

ShARE-BASEd PAyMENT TRANSACTIONSTransfer of GGS’ equity instruments by its shareholders to employees is considered share-based payment transactions within the scope of IFRS 2, unless the transfer is clearly for a purpose other than payment for services supplied to GGS.

PENSIONSGGS has defined contribution plans. The defined contribution plan is a pension plan under which GGS pays fixed contributions to pension plans. GGS has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. GGS pays contributions to publicly or privately administered pension plans. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as an asset to the extent that the cash refund or reduction in future payments is available.

INCOME TAxIncome tax expense consists of taxes payable and the net change in deferred taxes arising as a result of temporary differences. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxations authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the balance sheet date.

Deferred taxes are calculated based on temporary differences between financial and taxable values, less taxable losses carried forward. Unrecognized deferred tax assets are reassessed at each balance sheet date and are recognized only to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

GGS operates in several countries with different tax regimes. In cases where withholding tax is a substitute for income tax (tax levied on multiple components of net income), GGS treats withholding tax as an income tax in accordance with IAS 12. This treatment does not include situations where withholding tax is collected by GGS on behalf of a third party (local or national government).

PROvISIONSProvisions are recognized when GGS has a present obligation (legal or constructive) as a result of a past event and it is probable that the obligation has to be settled and that a reliable estimate of the obligation can be made.

CONTINGENT LIABILITIES ANd CONTINGENT ASSETSContingent liabilities are defined as possible obligations resulting from part events whose existence depends on future events, obligations that are no recognized because it is not probable that they will lead to an outflow of resources and obligations that cannot be measured with sufficient reliability.

Contingent liabilities are not recognized on the balance sheet unless arising from assuming assets and liabilities in a business combination. Significant contingent liabilities are disclosed unless the possibility of an outflow of resources embodying economic benefits is a remote one.

Contingent assets are not accounted for unless virtually certain.


SUBSEqUENT EvENTSAny adjusting events after the balance sheet date are accounted for in the financial statements. Information regarding these events is disclosed in the notes.

NEW IFRS STANdARdS ANd INTERPRETATIONS AdOPTEd

Early adoption new and amended IFRS standards and interpretationsGGShasearlyadoptedthefollowingnewandamendedIFRSduring2008:

IFRS 8 - Operating Segments (applicable to accounting periods commencing on 1 january 2009)IFRS 8 replaces IAS 14, and sets out requirements for disclosure of information about an entity’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers.

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision makers and for which discrete financialinformationisavailable.TheGrouphasdefinedtwooperatingsegments:tenderrigsandseismicactivities.Adoptionoftherevised standard did not have an effect on the financial statements, but did give rise to additional disclosures. Prior period’s profit/ (loss) from the two operating segments are calculated to provide comparable information.

IFRS standards and interpretations issued, but not adoptedGGS has not adopted the following IFRSs and IFRIC interpretations issued by the IASB, but not effective, for the financial year ended 31December2008:

IAS 1 (Revised) - Presentation of financial statements (effective from 1 january 2009) The revised standard will prohibit the presentation of items of income and expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity, requiring ‘non-owner changes in equity’ to be presented separately from owner changes in equity. All non-owner changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period. The Group will apply IAS 1 (Revised) from 1 January 2009.

IFRS 3 (Revised) - Business combinations (effective from 1 july 2009)The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquirer either at fair vale or at the non-controlling interest’s proportionate share of the acquirer’s net assets. All acquisition-related costs should be expensed. The Group will apply IFRS 3 (Revised) prospectively to all business combinations from 1 January 2010.

IFRS 5 (Amendment) - Non-current assets held-for-sale and discontinued operations (and consequential amendment to IFRS 1, ‘First-time adoption’) (effective from 1 july 2009) The amendment is part of the IASB’s annual improvements project published in May 2008. The amendment clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. Relevant disclosure should be made for this subsidiary if the definition of a discontinued operation is met. A consequential amendment to IFRS 1 states that these amendments are applied prospectively from the date of transition to IFRSs. The Group will apply the IFRS 5 (Amendment) prospectively to all partial disposals of subsidiaries from 1 January 2010.

IAS 36 (Amendment) - Impairment of assets (effective from 1 january 2009) The amendment is part of the IASB’s annual improvements project published in May 2008. Where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-in-use calculation should be made. The Group will apply the IAS 36 (Amendment) and provide the required disclosure where applicable for impairment tests from 1 January 2009.

IAS 38 (Amendment) - Intangible assets (effective from 1 january 2009)The amendment is part of the IASB’s annual improvements project published in May 2008. A prepayment may only be recognized in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. The Group will apply the IAS 38 (Amendment) from 1 January 2009.

IAS 37 - Provisions, contingent liabilities and contingent assets (effective from 1 january 2009)Requires contingent liabilities to be disclosed, not recognized. IAS 19 has been amended to be consistent. The Group will apply the changes from 1 January 2009.


IAS 39 (Amendment) - Financial instruments: Recognition and measurement (effective from 1 january 2009) The amendment is part of the IASB’s annual improvements project published in May 2008.

– Clarifies that changes in circumstances relating to derivatives – specifically derivatives desginedor de-designated as hedging instruments after initial recognition – are not reclassifications. Thus, a derivative may be either removed from, or included in the “fair value through profit or loss” classification after initial recognition.

– Removes the reference in IAS 39 to a “segment” when determining whether an instrument qualifies as a hedge– Requires use of the revised effective interest rate (rather than the original effective interest rate) when remeasuring a debt

instrument on the cessation of fair value hedge accounting

The Group will apply the IAS 39 (Amendment) from 1 January 2009. It is not expected to have an impact on the Group’s income statement.

IAS 1 (Amendment) - Presentation of financial statements (effective from 1 january 2009)The amendment is part of the IASB’s annual improvements project published in May 2008. The amendment clarifies that some rather thanallfinancialassetsandliabilitiesclassifiedasheldfortradinginaccordancewithIAS39,‘Financialinstruments:Recognitionandmeasurement’ are examples of current assets and liabilities respectively. The Group will apply the IAS 39 (Amendment) from 1 January 2009. It is not expected to have an impact on the Group’s financial statements.

ThereareanumberofminoramendmentstoIFRS7,‘Financialinstruments:Disclosures’,IAS8,‘Accountingpolicies,changesinaccounting estimates and errors’, IAS 10, ‘Events after the reporting period’, and IAS 18, ‘Revenue’, which are part of the IASB’s annual improvements project published in May 2008 (not addressed above). These amendments are unlikely to have an impact on the Group’s accounts and have therefore not been analyzed in detail.

IAS 23 (Amendment) - Borrowing costs (effective from 1 january 2009) The amendment requires an entity to capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The Group will apply IAS 23 (Amendment) retrospectively from 1 January 2009.

IAS 27 (Revised) - Consolidated and separate financial statements (effective from 1 july 2009) The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognized in profit or loss. The Group will apply IAS 27 (Revised) prospectively to transactions with non-controlling interests from 1 January 2010.

IFRIC 11 IFRS 2 - Group and Treasury Share Transactions (applicable to accounting periods commencing on 1 March 2007)The Group has adopted IFRIC interpretation 11 insofar as it applies to consolidated financial statements. This interpretation requires arrangements whereby an employee is granted rights to an entity’s equity instruments to be accounted for as an equity-settled scheme, even if the entity buys the instruments from another party, or the shareholders provide the equity instruments needed. The Group amended its accounting policy accordingly. The Group has not issued instruments caught by this interpretation.

IFRIC 12 - Service Concession Arrangements (applicable to accounting periods commencing on 1 january 2008)This interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. No member of the Group is an operator, and therefore, this interpretation has no impact on the Group.

IFRIC 13 - Customer Loyalty Programs (applicable to accounting periods commencing on 1 july 2008)This interpretation requires customer loyalty credits to be accounted for as a separate component of the sales transaction in which they are granted. The Group does not maintain any loyalty programs. Adoption of the revised interpretation did not have an effect on the financial statements.

IFRIC 14 IAS 19 - The Limit on a defined Benefit Asset, Minimum funding Requirements and their Interaction (applicable to accounting periods commencing on 1 january 2008)IFRIC Interpretation 14 provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognized as an asset under IAS 1 Employee Benefits. The Group amended its accounting policy accordingly. The Group does not have a benefit scheme; therefore the adoption of this interpretation had no impact on the financial position or performance of the Group.


note 4. FinanCial riSk manaGement

GENERALThe Group operates in several markets when offering drilling services to the international oil industry. The main risk factors are market risk, currency risk, interest rate risk, liquidity risk and credit risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and procedures for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board of Directors has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board regulates its work through Board meetings, Audit Committee and general interaction with the management.

The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their role and obligations.

The Audit Committee oversees how the management monitors compliance with the Group’s risk management work and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

MARKET RISKThe demand for tender rigs is mainly driven by price of oil, the availability of fields and rigs. The price of oil has fallen sharply from its peak summer 2008, which has led to lower activity and thus lower demand for rigs in general. The tender rig market is a niche market. There are few new rigs being built. However, if the general drilling activity remains low one can expect jack up rigs, which rarely are in directly competition with tender rigs, to enter the segment in greater scale. That could put further pressure on day rates.GGS rigs are all on long contracts with major international or national oil companies.

CURRENCy RISKSAll the three rigs gross revenue is denominated in US dollars. The majority of the costs, assets and liabilities are denominated in USD. A small share of the costs is denominated in local currency in the countries the rigs are operating in. The Group’s available liquid assets are held in NOK and USD.As most of the transactions are undertaken in USD, the Group considers the currency risk to be limited. Consequently, no currency hedging transactions have been made.

As of 31 December 2008 foreign currency debts and receivables was split accordingly;

tnok 2008 2007

Debts receivables Debts receivables

USD 1 334 802 181 994 43 488 21 125 SGD 23 035 266 1 698 271 IDR 9 127 - - -BND 18 484 462 - -EUR 1 771 - - 1 863 GBP 2 387 - 13 491 4 389

total in foreign currency 1 389 605 182 722 58 677 27 647

total Group 1 412 305 359 125 91 458 58 419 USD – US Dollar, SGD – Singapore Dollar, IDR – Indonesian Rupi, Bnd – Brunei Dollar, EUR – Euro, GBP – Great Britain Pound

The following table demonstrates the sensitivity to a reasonable possible change in the US dollar exchange rate, with all other variables held constant, of the Group’s profit before tax;

increase/decrease in uSD rate effect on profit before tax (tnok)

2008 +/- 10 % +/- 4 001

2007 +/- 10 % +/- 4 354


INTEREST RATE RISKThe Group’s exposure to interest rate risk relates mainly to its debt obligations and surplus funds placed with financial institutions.

The Group has interest-bearing debt as at 31 December 2008 of NOK 1 034.3 million. See note 22 for details regarding the loan portfolio.

increase/decrease in basis points effect on profit before tax (tnok)

2008* +/- 100 - /+ 7 577*The analysis does not include effect of interest rate swaps

The Group had immaterial interest bearing debt as at 31 December 2007 (see note 22).

LIqUIdITy RISKAt 31 December 2008 the Group held NOK 286.2 million in cash, NOK 625.7 million in current assets and NOK 723.7 million in current liabilities.

GGS is in compliance with the covenants of the loan agreement with the banking syndicate as of 31 December 2008. The tender rig Alligator is scheduled for upgrade medio 2009. GGS is working with a range of financing options including commercial credits, working capital management and a constructive process with the banking syndicate to secure potential cash flow deficits . The banking syndicate is expressing willingness to postpone installments if needed to secure the short term financing during the Alligator yard stay.

as at 31 December 2008 Due < 3 months Due 3 to 12 months Due 1 to 5 years

Interest-bearing loans and borrowings (see note 22)* 82 797 225 613 838 151 Other liabilities - 98 620 -Trade payables 205 737 44 106 22

total 288 535 368 339 838 174 *Include interest payments and effect of interest rate swaps

as at 31 December 2007 Due < 3 months Due 3 to 12 months Due1 to 5 years

Finance lease 845 2 534 3 535Other liabilities 173 - -Trade and other payables 66 618 - -

total 67 636 2 534 3 535

CREdIT RISKCredit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers. The customers are major international or national oil companies. The credit risks associated to the customers are therefore perceived as limited.

As a consequence of the financial turbulence in 2008, the Icelandic lender Landsbanki is put under governmental administration which restricts the possibility to expand the credit facilities beyond what is already committed. See note 22 for details.

INSURANCE COvERAGEThe Group had entered into insurance programs for all the three rigs related to physical damage, war risk and terrorism, and various kinds of liability protection. These insurances are on terms aligned with industry practice with first class underwriters in the international energy insurance market. The exposure is therefore considered to be low.

CAPITAL MANAGEMENTThe Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital on the basis of its book equity ratio which is calculated as total equity divided by total assets. It is the Group’s policy that this ratio be 20 % or higher.


as at 31 December 2008 2007

Total equity 939 928 795 770Total assets 2 632 947 887 228

Ratio 35.7 % 89.7 %

note 5. BuSineSS ComBinationS

GGS entered into a Memorandum of Agreement with Pride Foramer SAS on 9 August 2007 to acquire the three tender rigs Alligator, Barracuda and Al Baraka. The transaction was subject to the novation of drilling contracts with international oil companies.

The purchase of the tender rig Alligator was closed on 30 January 2008. The drilling contracts on Barracuda and Al Baraka were finally novated and transferred to GGS 20 February 2008.

The owner of the tender rigs is Global Tender Barges Pte Ltd in Singapore, a 90 % owned subsidiary of Global Tender Barges AS (a subsidiary of GGS). Abbot Investment Limited owns 10 %.

The acquisition of the tender rigs is considered to be a business combination according to IFRS 3. The fair value of the identifiable assetsandliabilitiesofthetenderrigsasatthedateofacquisitionwere:

tnok

property, plant and equipment (note 13) Al Baraka 425 039 Alligator 379 704 Barracuda 339 725 Inventory* 23 470

total net assets acquired 1 167 938

* Total net assets acquired has been re-allocated as at year end to include inventory due to updated information on business combination as compared to the first quarter results report.

No other identifiable assets, liabilities or goodwill have been identified in the purchase price allocation. The transaction was acquisitions of assets and no deferred tax liabilities are allocated to the identifiable assets. Disclosure of previous carrying amount of the tender rigs is impracticable, due to lack of information. The total cost of the acquisition was NOK 1 167.9 million (USD 216.1 million) and comprise of a cash settlement of NOK 1 153 million and costs directly attributable to the transaction.

tnok

Cash settlement 1 153 000Costs associated with the acquisition** 14 938

total 1 167 938

** Costs associated with the acquisition have been revised as at year end due to updated information on business combination as compared to the first quarter results report.

From the date of acquisition, the acquired tender rigs have contributed NOK 41.2 million*** to profit before tax of the continuing operations of the Group. Had the acquisition taken place on 1 January 2008, the revenues for the year from continuing operations for the Group would have been NOK 476.8 million, and profit before tax from the continuing operations for the Group would have been NOK 50.7 million***.

*** These figures are segment profit figures and do not include financial items. For further information see note 7.


note 6. DiSContinueD operationS

On 16 April 2008, the Board of Directors of GGS ASA and Spectrum ASA (former subsidiary) agreed to transfer the majority of GGS’ seismic business to Spectrum ASA pursuant to an arm’s length transaction. The transaction was effective 30 June 2008.

Entities, operations and assets sold from GGS ASA to Spectrum ASA comprise;• SharesinSpectrumGeoLtdintheUK

Spectrum Geo Ltd offers seismic data processing, multi-client surveys and offshore acquisition to the oil and gas sector. Spectrum Geo Ltd had a subsidiary in Houston US (Spectrum US Inc), and held a 40 % stake in a joint venture in Libya (Spectrum Geo Libya) and a 50 % stake in a joint venture in Egypt (Spectrum Geo Egypt).

• SharesinGeobridgeIncinChina The Group held a 50 % stake in the joint venture GeoBridge in China, together with BGP Inc. The company offers seismic data consulting.

• LeaseagreementfortheseismicvesselGGSAtlanticGGShaveanoptiontousetheGGSAtlanticforshootingseismicoffshoreIndia in the first quarter 2009

• MultiClientLibraries/surveysinWestFloridaandEastTimor• AccountsreceivableamountingtoNOK34.2million

Note that the PC2000, the Iranian Pseudo 3D surveys, and all the other Iran related surveys of GGS are not part of the transaction and will remain with GGS.

The sale was settled partly in cash (NOK 125 million) and partly by loan (NOK 150 million) from GGS ASA to Spectrum ASA. See note 22 for further details on the loan.

The sale resulted in a gain of NOK 78.6 million (presented as part of discontinued operations).

According to IFRS 5, the results of the discontinued operations are presented to enable evaluation of the financial effects of the discontinuedoperations:

tnok period ended

Jun 30 2008 Dec 31 2007

Revenue 84 662 140 765

Operating expenses (87 937) (132 245)

eBitDa (3 275) 8 520

Amortization/ depreciation/ write-down (29 281) (81 481)

eBit (32 555) (72 961)Net financial items (10 866) (11 455)Net financial items from spin off 78 573 -

profit/loss before income tax from discountinued operations 35 151 (84 416)

Tax expense 56 4 462

profit/loss after tax from discountinued operations 35 208 (79 954)

net cash flow from operating activities 4 402 (917)

net cash flow from investing activities (18 089) (116 146)

net cash flow from financing activities 9 596 121 937

net change in cash and cash equivalents (4 092) 4 874


note 7. revenueS anD SeGment inFormation

RIG REvENUESThe Group’s contracts are multiple element arrangements, containing both a lease element and a drilling services element.

The split between the lease and drilling service elements is based on management’s estimates on market terms of such arrangements individually.

The elements are not separately disclosed on the consolidated income statement for the year ended 31 December 2008, but disclosed in the table below.

tnok 2008 2007

Lease element 33 772 -Drilling services element 328 275 -

total 362 047 -

SEGMENT INFORMATION

The GGS operating segments have been identified based on data used by chief decision makers as well as its impact on GGS figures. Theoperatingsegmentsarestructuredinthefollowingway:

Tender rigsThis segment provides drilling services, including leasing, to oil companies, through the supply of tender rigs, and comprises the 3 tender rigs.

Seismic activitiesThis segment consist of the seismic operations, which include the collection, processing, sale and marketing of seismic data. The majority of the seismic activities has been sold during 2008 and is hence presented as discontinued operations (see note 6 for further details).

Management monitors the operating results of the operating segments separately for the purpose of decision making and performance assessment. Segment performance is evaluated based on segment EBITDA and segment profit. Group financing (including finance income and finance cost) and income taxes are managed on a Group level.

2008

tnok tender rigs Seismic activities unallocated Consolidated

revenuesTotal 436 890 106 258 64 543 212 Discontinued 1 - (84 662) - (84 662) total revenues (continued) 436 890 21 596 64 458 549

eBitDaTotal 137 266 (19 691) (554) 117 021 Discontinued 1 - 3 275 - 3 275 total eBitDa (continued) 137 266 (16 416) (554) 120 296

Depreciation/ amortization/ impair-

mentTotal (99 319 ) (45 394) - (144 713) Discontinued 1 - 29 281 - 29 281 total depreciation/ amortization/

impairment (continued) (99 319) (16 113) - (115 432)

Segment profit Total 37 947 (65 085) (39 591) (66 729) Discontinued 1 - 32 555 - 32 555 total segment profit (continued) 2 37 947 (32 530) (39 591) (34 174)

Total assets 3 2 412 562 33 490 186 895 2 632 947

Total liabilities 4 1 588 855 22 257 81 908 1 693 019


1) Discontinued operations are shown as one line item in the consolidated profit or loss “Net profit/ (loss) from discontinued operations”

2) Profit for each segment does not include other finance income (NOK 5.6 million), finance costs (NOK 34.9 million) and income taxes (NOK 50.8 million)

3) Segment assets do not include other financial assets (NOK 8.3 million), non-current receivables (NOK 155 million) and other receivables (NOK 23.6 million) as these are assets managed on a Group basis (presented as “Unallocated”)

4) Segment liabilities do not include provisions (NOK 65.6 million) and other financial liabilities (NOK 16.3 MNOK), as these are liabilities managed on a Group basis (presented as “Unallocated”)

5) The Group’s share of the losses from joint ventures, NOK 2.3 million, part of as discontinued operations

2007

tnok tender rigs Seismic activities unallocated Consolidated

revenuesTotal - 148 718 403 149 121 Discontinued 1 - (140 765) - (140 765)

total revenues (continued) - 7 953 403 8 356

eBitDaTotal - (17 957) (3 396) (21 353) Discontinued 1 - (8 520) - (8 520)

total eBitDa (continued) - (26 477) (3 396) (29 875)

Depreciation/ amortization/

impairmentTotal - (109 640) 10 784 (98 856) Discontinued 1 - 81 481 - 81 481

total depreciation/ amortization/

impairment (continued) - (28 159) 10 784 (17 374)

Segment profitTotal - (127 597) (18 948) (146 545) Discontinued 1 - 72 961 - 72 961

total segment profit (continued) 2 - (54 636) (18 948) (73 584)

Total assets 3 - 251 473 635 755 887 228

Total liabilities - 91 458 - 91 458

1) Discontinued operations are shown as one line item in the consolidated profit or loss “Net profit/ (loss) from discontinued operations”

2) Profit for each segment does not include finance income (NOK 0 million), finance costs (NOK 13.5 million) and income taxes (NOK 0 million)

3) Segment assets do not include other patents (NOK 10.8 million), restricted cash (NOK 117.8 million) and cash (NOK 507.1 million), as these are assets managed on a Group basis (presented as “Unallocated”)

4) The Group’s share of the profit from joint ventures, NOK 2.7 million, part of as discontinued operations

GEOGRAPhIC INFORMATION

Revenues

tnok 2008 2007

Asia 227 499 17 735 North America 32 726 42 520 Middle East, African and Europe 282 885 88 866 Discontinued (84 662) (140 765)

458 549 8 356

The revenue information above is based on location of performed rig and seismic activities.

Revenue from the 3 customers in the tender rig segment all exceeded 10 % of total revenues;• Chevron(Angola)contributedNOK217.8million• Total(Indonesia)contributedNOK165.6million• BruneiShellPetroleum(Brunei)contributedNOK53.5million In 2007 no customers exceeded 10 % of total revenue.


NON-CURRENT ASSETS

tnok 2008 2007

Asia 1 120 596 28 175 North America - 116 704 Middle East, African and Europe 457 473 50 907

1 578 070 195 785

Non-current assets for this purpose consist of property, plant and equipment and intangible assets.

note 8. other expenSeS

Other operating expenses

tnok 2008 2007

Office expenses 1 774 2 540External services 16 477 9 869Sale fees etc. - 5 942Seismic expenses 24 351 10 179Losses on account receivables 2 203 (175)Travel expenses 1 138 1 099Other 262 780

total 46 204 30 234

Seismic expenses consist of rent of seismic vessel and cost of processing seismic data. External services relates to audit, consulting and legal assistance.

Rig expenses

tnok 2008 2007

Labour costs 112 312 -Repairs, maintenance and supplies 42 310 -Fees 28 243 -Other operating expenses 27 476 -

total 210 341 -

Labour costs are the cost of hired manpower that works on the rigs (KCAD and Pride).

Remuneration to auditors

tnok 2008 2007

Statutory audit 3 665 2046Other assurance services 1 530 813Tax services 231 109Non-audit services 687 33

6 112 3 001

All amounts are specified excluding VAT.


note 9. perSonnel expenSeS anD employee BeneFitS

MANAGEMENT REMUNERATION POLICyAs an international player in its field GGS is competing in an international market for management. GGS aims to remunerate the management in correspondence with assumed market levels for the relevant positions and responsibility.

The Group’s remuneration to the management shall correspond to the assumed market level where the relevant function is exercised.

Compensation for work should primarily be a fixed salary with a bonus scheme, and not fringe benefits, share options and the like. Customary additional benefits such as company car/compensation for the use of one’s own car and the like are accepted.

The current bonus scheme has been in place since 2007. The bonus scheme for the year 2008 is limited upwards to 50 % of the annual salary.

The bonus is based upon the financial performance of the Group as well as individual key performance indicators. The remuneration for CEO is determined by the Board of Directors and the remuneration for the rest of the top management is determined by the CEO inaccordancewithguidelinesoftheBoardofDirectors.Thefollowingfactorsaregivenparticularweight:• Operatingresults• Competitors’comparativefigures

The management group is members of the company’s pension schemes on par with other employees.

Limited severance payment may be combined with non-competition restrictions and netting provisions in respect of other income.

tnok 2008 2007

Salaries 7 516 7 393Pension costs 429 348Bonuses 1 1 061 -Other remuneration 2 589 256

total payroll expense 9 595 7 997

Average number of employees 13 6

1) Bonus relates to bonus for 2007 to the CEO (see table below) that is paid in 2008, and accrued bonus for 2008 for staff employees2) Housing benefits for local management in Singapore

PENSIONSGGS ASA (the company) operates a pension scheme in accordance with the law on obligatory pension schemes in Norway. Costs related to this scheme totaled NOK 0.3 million in 2008.

Contributions of NOK 0 were made for the Chairman and members of the Board, NOK 49 thousands for the CEO and NOK 45 thousands for the CFO.

The age of retirement is 67 years.

BONUSESA bonus scheme was launched at the general meeting in 2008. The bonus scheme is based on Group specific results, as well as individual goals, and is set as a percentage of salary. No bonus payments are awarded to Group management in 2008.


REMUNERATION TO ThE GROUP’S MANAGEMENT

2008

tnok Salaries

other

remuneration pension Bonus total

CEO 1 1 667 6 49 875 2 596 CFO 2 1 317 6 45 - 1 367 VP Rig operations 3 729 4 33 - 765 Rig General Manager 4 886 109 - - 995 Chairman Board of Directors 5 375 - - - 375 Other members Board of Directors 6 660 30 - - 690

total 5 634 153 126 875 6 788

1) K. Øversjøen. The bonus relating to 2007 was paid out in 2008.

2) J. Weseth (NOK 150 thousands) was the CFO until J. Elde (NOK 1 168 thousands) was appointed 1 February 2008

3) K. Jensen started in May 2008

4) L. Baustad started 1 January 2008

5) The Board now comprises G.Reitan (Chairman) appointed at the general meeting in 2008, G. Hvammen, Ø. Stray Spetalen, E. Roaldset and T. Bjørnov. The chairman of GGS ASA receives an annual remuneration of NOK 250 thousands. Board members receive NOK 160 thousands per year.

6) Other remuneration is to the nomination committee

2007

tnok Salaries

other


CEO 1 2 339 - 52 1 600 3 991 CFO 2 1 631 - 51 - 1 682 VP seismic 3 1 040 198 - - 1 238 Chairman Board of Directors 4 250 - - - 250 Other members Board of Directors 4 75 350 - - 425

total 5 335 548 103 1 600 7 586*Of the above, NOK 2.5 million is presented as operating expenses in note 6.

1) The CEO position was in 2007 held by T. Christoffersen (salary NOK 1 052 thousands), E. Berglund (salary NOK 578 thousands, bonus NOK 1 600 thousands) and K. Øversjøen (salary NOK 709 thousands) who was appointed 6 August 2007

2) The CFO position was in 2007 held by J. Kildahl (NOK 800 thousands) and J. Weseth (NOK 831 thousands)

3) VP seismic is part of discontinued operations (see note 6)

4) Other remuneration to the Board is consulting fees to former members. Salaries to Board are NOK 825 thousands less NOK 500 thousands due to reduction in 2006 fee.

GUIdELINES FOR dETERMINING SALARIES ANd OThER COMPENSATION FOR GROUP MANAGEMENTIn accordance with the regulations in paragraph 6-16a in the Norwegian Public Limited Companies Act, the Board of Directors has established a statement regarding salary and remuneration to the management of the company. The focus of the Group is to hire qualified mangers and to pay according to the market. Salary and remuneration of the CEO is determined by the Board of Directors, and payments to other employees are determined by the CEO according to guidelines from the Board of Directors.

The CEO in GGS is entitled to receive post payment for 3 months after his termination period (3 months) if the contract is terminated by the company. This agreement is not valid if the CEO is fired due to major breaches of agreement.


note 10. relateD partieS

A party is related to an entity if the party directly or indirectly through one or more intermediaries controls, is controlled or is under common control with the entity (this includes parents and subsidiaries), has an interest in the entity that gives it significant influence over the entity or has joint control over the entity. Furthermore, a related party is an associate, a joint venture partner or a close family member.

A related party transaction is a transfer of resources, services or obligations between related parties regardless of whether a price is charged.

In order to ensure that such information is made public, the following related party relationships are described in detail;

tnok

purchase from

related parties 2008

receivable/(payable)

as at 31.12.2008

purchase from


receivable/(payable)

as at 31.12.2007

Tycoon Industries 1 951 (978) 2 006 - Std Engineering 345 (345) - - Jake AS - - 800 - Gram, Hambro & Garman - - 2 682 - Songa Shipping - - 17 304 - K.G. Finstad/ Upfront AS - - 4 483 (3 660) M. Andersen / Navigator AS - - 2 154 (1 061) Venja Kapital AS - - 262 - C Ramsden & A Cunningham - - 8 264 (7 492)

Pacific Exploration - - 12 532 868

2008GGS has through its subsidiary Global Tender Barges in Singapore a management agreement with Abbot Group as the owner of KCA Deutag in operation of the three tender barges. Abbott owns 10 % of Global Tender Barges Pte Ltd.

GGS leases its premises and is hiring P. Sølvberg from Stray Spetalen’s company Tycoon Industrier AS. P. Sølvberg holds 1 000 000 shares in GGS.

GGS is guaranteeing the financial lease for the 2D Seismic Vessel GGS Atlantic. The vessel is operated by Spectrum ASA. GGS Atlantic is owned by Atlantic Seismic where A. Blystad, who also owns Spencer Energy AS, is the majority owner.

The Group is hiring engineering services from Std Engineering which is a part of Noble Denton where Stray Spetalen is the majority shareholder.

CEO K. Øversjøen’s wholly owned company, Kov Oil Services AS, borrowed in 2007 NOK 10 million from each of the two companies Ferncliff TIH AS and Spencer Energy AS. Ferncliff TIH AS is owned by Stray Spetalen, who is a member of the Board of Directors of GGS and also the sole owner of the company Ferncliff DAI I AS. Spencer Energy AS is the largest shareholder of GGS. Kov Oil Services AS bought shares in GGS from Spencer Energy, Ferncliff and related parties. The share prices were set based on a combination of the market prices at the time of the transactions and a calculated cost of the sales restrictions set forth in the agreement based on option pricing. The sales restrictions are gradually released through a two year period.

The investment company of CFO J. Elde has borrowed NOK 5.0 million, the investment company VP Rig Operations K. Jensen has borrowed NOK 1.5 million and the investment company of General Manager L. Baustad has borrowed NOK 1.5 million from the two companies Ferncliff TIH AS and Spencer Energy AS. These investment companies bought GGS shares through Oslo Stock Exchange. See note 11 for share holdings. The conditions set forth in the agreements between the investment companies and the two major shareholders are considered to be at market terms.

The consultancy contract with former chairman of the Board M. Andersen has been terminated. This consultancy contract includes a right to severance pay of TNOK 388 equivalent to 3 months of fees. GGS has taken the position that the consultancy agreement is not validly entered into. This was settled in 2008 between the parties with limited financial consequences for the Group.

2007On 18 April 2007 the company appointed Gram, Hambro and Garman Advokatfirma AS as legal advisors to the Group. M. Garman, former chairman of the Board, is a partner.

J. Kildal, who owns Jake AS, was appointed as the interim CFO of GGS in the last half of 2007. Kildal is working as the CEO of Standard Drilling ASA and as Executive President of Stray Spetalen’s company Ferncliff TIH AS.

As a part of the Novation Agreement between Ferncliff TIH AS and GGS, which nominated GGS as the Buyer under the MoA between Pride Foramer S.A.S and Ferncliff TIH AS, Ferncliff TIH AS was entitled to a 1 % commission fee based on the total Purchase Price. This commission fee is divided equally between Ferncliff TIH AS and Spencer Energy AS.


The vessel GGS Atlantic was until 20 April 2007 hired from Songa Shipping Pte Ltd which is owned by A. Blystad who also own Spencer Energy AS.

The former management of the subsidiary CSPL, which resigned in December 2007, has a substantial investment in Pacific Exploration (registered in Singapore). During 2006 CSPL bought goods and services worth TNOK 36 009 (TSGD 8 831) from Pacific Exploration. CSPL also received earnings of TNOK 2 547 (TSGD 625) from this company. In 2007 CSPL received net invoices totaling TNOK 12 532 (TSGD 3 224).

GGS had a consultancy contract with former chairman of the Board M. Andersen.

In Q1 2002 GGS entered into a tenancy agreement with Fagerstrand Næringsbygg AS, a company owned by a consultant to the company and former board member K.G. Finstad. This agreement has not been renewed and came to an end on 31 March 2007.

E. Berglund was the CEO of GGS between May and August 2007. In October 2006 GGS entered into an agreement with Venja Kapital AS and E. Berglund concerning assistance in connection with shareholder days and projects.

note 11. FinanCial itemS

FOREIGN ExChANGE GAINS ANd LOSSES

tnok 2008 2007

Foreign exchange gains 243 861 10 125 Foreign exchange losses (235 827) (32 568)

total 8 034 (22 443)

The foreign exchange gains and losses are mainly linked to monetary assets and liabilities in foreign currencies (primarily USD) in the Norwegian companies in the Group.

INTEREST ExPENSE

tnok 2008 2007

Interests on bank loans 39 428 696 Other interest expenses 47 1 676

total 39 476 2 372

OThER FINANCIAL ExPENSE

tnok 2008 2007

Loss on financial assets and liabilities at fair value through profit and loss (19 783) -Other financial expenses (15 097) (13 498)

total (34 880) (13 498)

For further details on the loss of financial assets and liabilities at fair value through profit and loss, please refer to note 22.


note 12. inCome tax

Themajorcomponentforincometaxexpensefortheyearsended31December2008and2007are:

tnok 2008 2007

Current income tax Current income tax charge (50 821) -Deferred income tax Relating to origination and reversal of temporary differences - -

income tax expense reported in the income statement (50 821) -

1)Includedintheincometaxexpenseis:- Tax accrual of USD 4.0 million related to GGS’ operations in East Asia, of which USD 2.7 million comprise of VAT. The actual tax

charge may be reduced to USD 1.7 million if certain conditions are met- Withholding tax of NOK 22.8 million, tax levied on multiple components of net income, which is a substitute for income tax and

thus treated as income tax

A reconciliation between tax expense and the product of accounting profit multiplied by Norway’s domestic tax rate for the years ended31December2008and2007isasfollows:

tnok 2008 2007

profit before tax (34 173) (73 584)

Domestic tax rate 28 % 28 %Expected income tax based on domestic tax rate 9 568 20 604 Tax effect of non-deductible expenses (6 340) (3 664)Tax effect of non-taxable income 14 104 25 811 Adjustment to previous years profit / loss (3 330) - Tax effect of foreign income taxes (54 775) 1 Tax assets not recognised current year (10 049) (42 752)

Current tax income / (expense) (50 821) -

Effective tax rate in % 148.7 % 0.0 %

deferred income tax Deferredincometaxat31Decemberrelatestothefollowing:

tnok 2008 2007

Deferred tax liabilityReceivables - 3 330 Profit and loss account 17 -

17 3 330

Deferred tax assetsTangible assets (3 189) (3 044)Inventories - (1 936)Accrued expenses (1 097) - Tax losses carried forward (248 180) (237 411)

(252 466) (242 391)

Deferred income tax expense / (income) - -

Deferred tax liabilities / (assets) (252 449) (239 061)Deferred tax assets not recognised in balance sheet 252 449 239 061

Deferred tax liabilities / (assets) in balance sheet - -

Deferred tax assets are recognised only to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise any deferred income tax assets at year end 2008 and 2007.


The Group has operations that are subject to taxation under various tax regimes in different countries. Tax gains and losses under different tax regimes can not be offset against each other.

There is no limit to carry forward the Group’s tax losses of NOK 248.2 million (gross NOK 886.4 million).

note 13. property, plant anD equipment

tnok

machinery

and equipment tender rigs total

CostAt 1 January 2007 35 077 - 35 077Additions 23 784 - 23 784Disposals (14 491) - (14 491)

Exchange adjustments 746 - 746

at 31 December 2007 45 116 - 45 116Business combination (note 5) - 1 144 469 1 144 469Additions 1 218 215 689 216 907Disposals (6 365) - (6 365)Discontinued operations (note 6) (36 614) - (36 614)

Exchange adjustments - 371 843 371 843

at 31 December 2008 3 355 1 732 001 1 735 356

Depreciation and write-downAt 1 January 2007 (10 960) - (10 960)Depreciation for the year (4 985) - (4 985)At 31 December 2007 (15 945) - (15 945)Depreciation for the year (726) (88 449) (89 175)Discontinued operations (note 6) 15 120 - 15 120

Exchange adjustments (717) (22 008) (22 725)

at 31 December 2008 (2 268) (110 457) (112 724)

useful life 3-10 years 40 years

net book valueAt 31 December 2008 1 087 1 621 545 1 622 632

At 31 December 2007 29 171 - 29 171

The tender rigs are secured against bank loans (see note 22).

IMPAIRMENT OF PROPERTy, PLANT ANd EqUIPMENTThe management, pursuant to IAS 36, investigated in 2008 indications of impairment of tender rigs acquired in the first quarter of 2008. Long shipyard stays and uncertainty about the future oil prices indicated impairment, and an estimate was made for the recoverable amount. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Each rig is considered to be a cash-generating unit (CGU).

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management. The estimated cash flows cover the rigs life time. A scrap value is assumed at the end of each rigs lifetime.

The cash flows for the rigs are based on the existing contracts up to the date of closure. The cash flows beyond the contract periods are estimated based on day rates in the last contract entered by GGS adjusted with a growth rate within each contract period, average costs per day adjusted with a growth rate, investments and change in working capital. It is assumed that each new contract will have an average duration of four years. Further, it is assumed that the rigs will be upgraded and maintained at shipyard between each contract period.


Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-taxandreflectspecificrisksrelatingtotherelevantoperatingsegments.Thefollowingmaininputshavebeenused:

alligator al Baraka 1 Barracuda

Pre-tax discount rate 8.1 % 8.1 % 8.1 %Remaining useful life as at 31 December 2008 14 years 26 years 14 yearsResidual value USD 25 million USD 25 million USD 25 millionDay rate (TUSD)* 129 129 129

Cost per day (TUSD)* 76 76 76* Period after existing contracts

No impairment charge related to the rigs arose in 2008.

SENSITIvITy ANALySISIf the estimated operating revenue used in the value in use calculation for three rigs had been 10 % lower than management’s estimates at 31 December 2008, GGS would have recognized impairment on Al Baraka by approximately USD 20 million. The rigs Alligator and Barracuda would not have been impaired with a reduction in operating revenue of 10 %.

If the estimated pre-tax discount rate applied to the discounted cash flows for the three rigs had been approximately 1 % higher than management’s estimates, GGS would still not have recognized impairment.

note 14. intanGiBle aSSetS

tnok multi-client library patent-rights Goodwill total

CostAt 1 January 2007 942 434 120 360 41 893 1 104 687Additions 93 404 - 8 264 101 668Disposals (7 851) - - (7 851)Exchange adjustments (521) - - (521)

at 31 December 2007 1 027 466 120 360 50 157 1 197 983Additions - - - -Disposals - (120 360) - (120 360)Discontinued operations (note 6) (263 260) - (50 157) (313 417)

at 31 December 2008 764 206 - - 764 206

amortization and write-downAt 1 January 2007 (803 592) (120 360) (13 546) (937 498)Amortization for the year (68 176) - - (68 176)Write-down (28 256) 10 825 (8 264) (25 695)

at 31 December 2007 (900 024) (109 535) (21 810) (1 031 369)Amortization for the year (14 573) - - (14 573)Discontinued operations (note 6) 157 246 - 21 810 179 056Disposals - 109 535 - 109 535

at 31 December 2008 (757 351) - - (757 351)

useful life 4-7 years 10 years -

net book valueAt 31 December 2008 6 856 - - 6 856

At 31 December 2007 127 442 10 825 28 347 166 614

2008

PC2000After the sale of the seismic operations (see note 6), only the Iranian libraries are left in GGS.

The management, pursuant to IAS 36, investigated in 2008 indications of impairment of the multi-client library PC2000. There are no indications of impairment of the multi-client library PC2000 as at 31 December 2008. PC2000 will be fully amortized by Q2-09. The other Iranian libraries are completely amortized as at 31 December 2008.


The regulations that set the framework for PC2000 stipulate an earnings sharing with Iranian companies and authorities after GGS has covered its costs. GGS will, after covering its costs have the right to approximately 40 % of the net sales earnings from PC2000. According to GGS’ prognosis, this will not happen in the period up until 2010.

Patent-rightsGGS finalized the sale of the GGS Invest (then Nescos) operations for NOK 10.8 million to Ziebel AS in February 2008 in exchange for shares and a share of future profits (not recognized share of future profits as at 31 December 2008).

2007

PC2000The management, pursuant to IAS 36, investigated in 2007 indications of impairment of the multi-client library PC2000 and subsequently Pseudo 3D. There are no indications of impairment of the multi-client library PC2000 as of 31 December 2007.

West Florida phase 1The management, pursuant to IAS 36, investigated in 2007 indications of impairment of the multi-client library West Florida phase 1. A fall in earnings indicated impairment, and an estimate was made for the recoverable amount. A value in use assessment was carried out by PWC on behalf of GGS ASA on 31 December 2007. The pre-tax discount rate was set at 14.7 %. The rate was set by calculating the weighted required rate of return, adjusted for asset specific risk. The cash flows used in the estimate were up until 2015 inclusive, and a residual value of 2 times net sales in 2015 was assumed. The value-in-use assessment valued the library at NOK 21.2 million as at 31 December 2007. This prompted a write-down of NOK 18.5 million in 2007.

West Florida phase 3The management, pursuant to IAS 36, investigated in 2007 indications of impairment of the multi-client library West Florida phase 3. Higher investment costs than budgeted and uncertainties regarding revenues were indications of impairment, and an estimate was made for the recoverable amount. A value in use value assessment was carried out by PWC on behalf of GGS ASA on 31 December 2007. The pre-tax discount rate was set at 14.7 %. The rate was set by calculating the weighted required rate of return, adjusted for asset specific risk. The cash flows used in the estimate was up until 2012 inclusive, and a residual value of two time net sales in 2012 was assumed. The value-in-use assessment valued the library at NOK 53.4 million as at 31 December 2007. The valuation showed no need for a write-down in 2007.

Libraries from the acquisition of SpectrumThe management, pursuant to IAS 36, investigated in 2007 indications of impairment of the separate multi-client surveys from the acquisition of Spectrum. A fall in revenues for some of the surveys indicated impairment, and an estimate was made for the recoverable amount. A value in use assessment was carried out by PWC on behalf of GGS ASA on 31 December 2007. The pre-tax discount rate was set for each survey and was in the range from 8.7 % to 19.7 %. The rate was set by calculating the weighted required rate of return, adjusted for asset specific risk. The cash flows used in the estimate was up until 2010 inclusive, and a residual value of one time net sales in 2010 was assumed. The value in use assessment valued the surveys at a total of NOK 39.6 million as at 31 December 2007. This prompted a write-down totaling NOK 9.9 million in 2007.

Patent-rightsGGS finalized the sale of the GGS Invest (then Nescos) operations to Ziebel AS in February 2008 in exchange for shares and a share of future profits. Based on this transaction, earlier write-downs of patents were reversed by NOK 10.8 million.

GoodwillGoodwill of NOK 28.3 million stemmed from the added value made up by the human resources, skills and experience contained within Spectrum. Goodwill of NOK 14.2 million is allocated to each of Spectrum’s largest entities Spectrum Ltd and Spectrum Inc.

A value-in-use assessment of the subsidiaries Spectrum UK and Spectrum Inc was carried out by PWC on behalf of GGS ASA on 31 December 2007. The nominal post-tax WACC was estimated to 13.0 %. The cash flows used in the estimate was up until 2010 inclusive, and a residual value of 5 time net sale in 2010 was assumed. The valuation assessment valued Spectrum UK at NOK 165.2 million and Spectrum US at NOK 54.2 million as at 31 December 2007. Based on the result of these valuations, the opinion of the management is that the carrying amount of goodwill amounting to NOK 28.3 million can be justified.


note 15. inventorieS

tnok 2008 2007

Production supplies and material (at cost) 36 607 750Work in progress (at cost) - 5 629

total inventories at cost 36 607 6 379

Inventories for the current financial year are related to the subsidiary Global Tender Barges Pte Ltd and consist of spare material on the tender rigs. The production supplies and materials are measured at cost. No write-down of inventories were carried out in 2008 (NOK 0 million in 2007).

note 16. traDe anD other reCeivaBleS

TRAdE RECEIvABLES

Asof31December,thepastdueanalysisfortradereceivablesnotimpairedisasfollows:

tnok total not past due

up to 3 months

past due

3-6 months past

due

over 6 months

past due

2008 180 542 122 974 40 857 10 710 6 002

2007 25 864 7 543 9 512 4 827 3 982

Accounts receivables are non-interest bearing and granted credit is generally 30-60 days.

A provision has been made for losses incurred from account receivables of NOK 1.2 million as of 31 December 2008 (NOK 12.8 million in 2007).

Maximum exposure to credit risk as of 31 December 2008 is NOK 180.5 million (NOK 25.9 million in 2007).

OThER RECEIvABLES

tnok 2008 2007

Prepaid expenses 4 081 5 972 Other receivables 4 965 13 867 Earned, not invoiced revenue 7 227 12 716 Interest receivable 7 310 -

total 23 583 32 555

note 17. reStriCteD CaSh

Restrictedcashasat31December:

tnok 2008 2007

Bid bond 12 830 - Employee tax deductions 397 444 Deposit 404 117 400

total 13 631 117 843

The bid bond is related to the Reliance contract in India (see note 24). Bid bond is the amount that is put on a secured account as a guarantee for the future work that is to be performed by GGS. Deposit in 2007 was for purchase of tender rigs by subsidiary Global Tender Barges Pte Ltd in Singapore.


note 18. inveStment in Joint ventureS

After the sale of seismic business in June 2008, GGS no longer holds any interest in any joint ventures.

In2007GGSheldthefollowinginterests:•50%shareinGeoBridgePteLtd•SpectrumGeopex-EgyptLtd,ajointventureinwhichformersubsidiarySpectrumUKowneda50%stake•NAPSCOSpectrumGeopexLibya,ajointventureinwhichformersubsidiarySpectrumowneddirectlyandindirectlya32.5%stake•Celtex,5%jointventureregisteredinJersey

Share of profit/ (loss) from joint ventures is presented as part of the discontinued operations, please refer to note 6.

2007

tnok

Spectrum

Geopex-egypt

ltd

napSCo

Spectrum

Geopex libya

Geo Bridge

pte ltd Celtex adjustments

investments in

joint ventures

Carrying amount 2 478 179 2 129 411 (3 483) 1 715

note 19. DeFerreD expenSeS

tnok 2008 2007

At 1 January - -Deferred during the year 311 309 -Released to the income statement (11 685) -

at 31 December 299 624 -

Current 85 155 -Non current 214 470 -

299 624 -

Direct incremental expenses of mobilization and client specific requirements are deferred and recognized over the estimated duration of the lease contracts, normally 3-5 years.


note 20. Share Capital anD ShareholDer inFormation

The company’s registered share capital is NOK 80 527 668.70 divided into 805 276 687 shares, each at a nominal value of NOK 0.10. The share capital is fully paid. All shares have the same rights.

2008 2007

Issued No of shares No of shares

Ordinary shares of NOK 0.1 per share 805 276 687 805 276 687

20 largest shareholders and ownership interest as at 31 December 2008

SPENCER ENERGY AS 161 100 000 20.01 %FERNCLIFF DAI 1 AS 121 435 711 15.08 %SOLAN CAPITAL AS 21 000 000 2.61 %SEB ENSKILDA ASA 18 690 000 2.32 %KOV OIL SERVICES AS 14 600 000 1.81 %GROSS MANAGEMENT AS 14 160 000 1.76 %SVELA EIENDOM AS 12 007 400 1.49 %SKAGEN VEKST 10 000 000 1.24 %MORGAN STANLEY & CO INTL PLC 7 125 000 0.88 %TVENGE 7 000 000 0.87 %LINUX SOLUTIONS NORGE AS 6 500 000 0.81 %HAVTRÅL AS 6 294 173 0.78 %CAMACA AS 5 010 000 0.62 %HANDELSBANKEN MARKETS 5 000 000 0.62 %VERDIPAPIRFONDET NORDEA SMB 4 615 000 0.57 %BANK OF NEW YORK, BRUSSELS BRANCH 4 543 050 0.56 %THORENDAHL INVEST AS 4 500 000 0.56 %DNB NOR NAVIGATOR 4 033 249 0.50 %JOHANSEN 4 020 000 0.50 %MATSPECIALEN AS 4 000 000 0.50 %

totals 435 633 583 54.10 %

Other shareholders (4 831) 369 643 104 45.90 %

GGS owns zero treasury shares as at 31 December 2008 (zero in 2007).

Shares owned by the GGS’ Board of Directors and management

as of 31 December 2008: note total no of shares

Ferncliff Dai 1 AS 1 121 435 711 15.08 %Gross Management AS 1 14 160 000 1.76 %Kov Oil Services AS 2 14 600 000 1.81 %Solan Capital AS 3 21 000 000 2.61 %JE Oil Services AS 4 3 500 000 0.43 %L E Baustad 5 1 335 000 0.16 %K. Jensen 6 1 100 000 0.14 %Gunnar Reitan Holding AS 7 250 000 0.03 %

E. Roaldset, Board member 59 233 0.01 %

1) Board member Ø. Stray Spetalen controls Ferncliff Dai 1 AS, Gross Management AS, and various related parties. Combined interest of 17.15 %

2) CEO K. Øversjøen controls Kov Oil Services AS

3) Board member G. Hvammen controls Solan Capital AS

4) CFO J. Elde controls JE Oil Services AS

5) General Manager Baustad controls through own companies and private

6) VP Rig Operations K. Jensen with related parties

7) Chairman of the Board G. Reitan controls Gunnar Reitan Holding AS

The general meeting on 28 May 2008 voted to authorize the Group’s board to buy back the Group’s own shares. The authorization is valid until next general meeting. The authorization has not been used on 31 December 2008.


note 21. earninGS per Share

Basic earnings per share is calculated by dividing the consolidated profit or loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

During the current financial year and up to the date of completion of these financial statements, there have been no transactions involving ordinary shares or potential ordinary shares.

tnok 2008 2007

Net loss attributable to ordinary equity holders of the parent from continuing operations (78 986) (73 584) Profit/ (loss) attributable to ordinary equity holders of the parent from a discontinued operation 35 208 (79 954)

net profit/ (loss) attributable to ordinary equity holders of the parent for basic earnings (43 778) (153 538)

Weighted average of number of ordinary shares as at 31 December 805 276 687 367 078 036

To calculate earnings per share for the discontinued operation, the weighted average number of ordinary shares for both basic and dilutedamountsisaspertableabove.Thefollowingtableprovidestheprofit/(loss)figuresused:

tnok 2008 2007

net profit/ (loss) attributable to ordinary equity holders of the parent from a

discontinued operation for basic and dilluted earnings per share calculations 35 208 (79 954)

earnings per share for discontinued operations Basic, profit/ (loss) from discontinued operations attributable to ordinary equity holders of the parent 0,04 (0,22)

Diluted, profit/ (loss) from discontinued operations attributable to ordinary equity holders of the parent 0,04 (0,22)

note 22. FinanCial inStrumentS

This note provides a comparison by category for carrying amounts and fair values of all the Group’s financial instruments that are carried in the financial statements. The estimated fair value of the Group’s financial instruments has been determined using appropriate valuation methodologies.

NON-CURRENT FINANCIAL ASSETS ANd LIABILITIES

tnok 31 Dec 2008 31 Dec 2007

Currency

nominal

interest rate

year of

maturity Fair value

Carrying

amount Fair value

Carrying

amount

non-current

interest bearing debtTerm loan USD LIBOR + 1,9 % 2 012 802 672 771 825 - -Leasing agreements GBP Various 2010 - - 3 340 3 535

802 672 771 825 3 340 3 535 non-current

financial assetsSPU loan NOK NIBOR + 3 % 2011 161 757 150 000 - - Ziebel loan NOK 9 % 2011 5 000 5 000 - -

166 757 155 000 - -

Fair value for the non-current financial assets and liabilities has been calculated by discounting the expected future cash flows at prevailing market interest rates.


Non-current interest bearing debtGGS has in 2008 drawn USD 150 million (NOK 1 034.3 million) of a USD 170 million, 5-year loan and guarantee facility with a maturity profile corresponding to the estimated cash flow profile of the tender rig contracts. The loan takes security in the tender rigs and the shares in Global Tender Barges AS and Global Tender Barges Pte Ltd. (see note 26).

ThedrawnUSD150millionloanisdividedintothreeseparatefacilities:•5-yeartermloan•2-yearrevolvingcredit,whichwillbeconvertedtotermloanafterthe2years(in2010).•Multioptionloan,whichisanannualrollingfacility

The loan syndicate consists of the three international banks Lloyds, Bank of Scotland and Landsbanki. Lloyds has acquired Bank of Scotland and Landsbanki is under administration by the Icelandic government.

Thetwomaincovenantsintheloanagreementare:•12monthsrollingEBITDAcomparedtonetdebt•accumulatedEBITDAtoaccumulatedinterestcharge

Therepaymentschedule(includinginterestpaymentsandeffectofinterestswaps)is:

tuSD Currency 2009 2010 2011 2012 total

total interest bearing debt Term loan USD 37 919 41 000 41 800 15 319 136 039 Revolving credit USD 1006 7 544 7 213 6 878 22 641 Multi option* USD 5 141 - - - 5 141

44 066 48 544 49 013 22 197 163 820*In the table above the multi option loan is assumed paid in 2009. If certain conditions apply, this will be rolled over on an annual basis.

Financial leases

tnok 2008 2007

minimum lease payments dueLess than one year - 3 379 More than one year and less than five years - 3 535 More than five years - -

total minimum lease payments - 6 914 Less:Futurefinancecharges - (600)

present value of finance lease liabilities - 6 314

pv of lease liabilities broken downLess than one year - 2 973 More than one year and less than five years - 3 340 More than five years - - Total minimum lease payments - 6 314

Carrying amount of leased assetsVehicles - 292 Equipment - 7 434

total carrying amount leased assets - 7 725

The financial leases from 2007 stems from the former subsidiary Spectrum ASA’s long-term leasing agreements related to seismic operating equipment.

Non-current financial assets – SPU loanThis relates to part sales consideration due to the sale of the seismic business to Spectrum ASA (see note 6). Spectrum may prepay the loan earlier without incurring penalties. The Loan Agreement contains standard provisions relating to covenants and events of default.

The management, pursuant to IAS 39, investigated in 2008 indications of impairment for the loan forwarded to Spectrum ASA. The contracton in the seismic market was an indication of impairment. The carrying amount of the loan was tested against different scenarios of estimated future cash flows, based on publicly available information. The valuation requires management to make certain assumptions about the input.

The valuation showed no need for a write-down in 2008.


CURRENT FINANCIAL ASSETS ANd LIABILITIESThe carrying amount of cash and cash equivalents and current financial assets and liabilities are a reasonable estimate of their fair value due to the short term maturities of these instruments.

tnok 31 Dec 2008 31 Dec 2007

note Currency

nominal in-

terest rate

year of

maturity

Fair

value

Carrying

amount Fair value

Carrying

amount

Current financial assetsTrade receivables 16 180 542 180 542 25 864 25 864 Other receivables 16 12 275 12 275 13 867 13 867 Restricted cash 17 13 631 13 631 117 843 117 843 Cash and cash equivalents 286 159 286 159 507 086 507 086

total current financial assets 492 607 492 607 664 660 664 660

total current financial liabilitiesTrade payables 249 866 249 866 33 743 33 743 Current interest bearing debt Term loan* USD LIBOR + 1.9% 2012 227 464 227 464 - - Multi option* USD LIBOR + 1.75% 2009 34 995 34 995 - - Leasing agreements GBP Various 2010 - - 2 973 3 379

total current financial liabilities 512 325 512 325 36 716 37 122

*Please refer to details under non-current interest bearing debt

FAIR vALUE ThROUGh PROFIT OR LOSS

tnok Carrying amount effect on profit before tax

2008 2007 2008 2007

Financial assets at fair value through profit or loss Shares in Spectrum ASA 178 - 124 - Shares in Ziebel AS 8 135 - (4 067) -

total non-current other financial assets 8 312 - (3 943) -

Financial liabilities at fair value through profit or loss Interest rate swaps 16 298 - (15 840) -

total non-current other financial liabilities 16 298 - (15 840) -

Shares in Spectrum ASAFollowing the sale of the seismic business, GGS holds 53 685 shares (0.66 %) in Spectrum ASA. The fair value of the shares is determined by reference to published price quotations in an active market (Oslo Axxess listed company).

Shares in ziebel ASGGS was compensated for the sale of well innovation patents to Ziebel AS by shares in Ziebel AS and a share of future profits. The fair value of the unquoted ordinary shares has been estimated using benchmarking of trading multiples for listed companies, as well as company specific information relating to issuance of convertible bond loan. The valuation requires management to make certain assumptions about the input.

Interest rate swapsUSD 80 million of the loans is secured through 2 fixed interest swaps with maturity 20 November 2012. The swaps are both of USD 40 million, and at fixed interest rates of 3.13 % and 3.15 %. According to IFRS, this does not qualify as a hedging transaction.

Market to market valuations of the swaps are carried out by professional financial institutions, and depicts estimate of the mid-market value of the swaps as at 31 December 2008.


note 23. DeFerreD revenueS

deferred revenues

tnok 2008 2007

At 1 January - -Deferred during the year 300 063 -Released to the income statement (28 367) -

at 31 December 271 696 -

Current 90 454 -Non current 181 242 -

271 696 -

Revenues related to the period prior to start of drilling (mobilization and transit rates) are deferred and booked in the profit or loss over the lease period, normally 3-5 years.

note 24. GuaranteeS anD CommitmentS

GUARANTEESGGS is guaranteeing the financial lease for the 2D seismic vessel GGS Atlantic. The vessel was taken over by, and is being operated by, Spectrum ASA as part of the sale 30 June 2008 (see note 7).

The vessel GGS Atlantic was in 2007 hired from Atlantic Seismic, where Arne Blystad, who also owns Spencer Energy AS, is the majority owner. The lease runs until 2013.

COMMITMENTS

tnok rent Charter hire yardstay

2009 2 389 25 891 174 973 2010 1 481 - -

2011-2013 - - -

total 3 870 25 891 174 973

RentIn August 2007 a 3-year tenancy agreement with Tycoon Industrier AS (related party) concerning the rental of office space at Sjølyst Plass 2 was agreed. For 2009 the annual rent will be NOK 1.1 million.

In March 2008 a 23-months agreement for offices in Singapore was signed. For 2009 the annual rent will be NOK 0.3 million. Apartments are rented for key expatriate employees in Singapore. For 2009 annual rent will be NOK 1 million. The rental agreements run until January 2010.

Charter hireGGS has a commitment to fulfil the contract with Reliance Inc, shooting seismic offshore India. The commitment is expected to be fulfilled by June 30 2009. Expected revenues for the part of the work to be undertaken in 2009 are NOK 30 million; expected costs are NOK 25.9 million.

yard stayPrior to commencing on a new contract, the rig Alligator will undergo maintenance and upgrades at a shipyard in Singapore. Preliminary budget is USD 25 million.


note 25. ContinGenCieS

The Group entered into a long-term consultancy agreement with K. G. Finstad on 1 February 2004. Finstad’s main task was related to the sale and marketing of the Group’s seismic data along with the development of new seismic projects. The Group has terminated the agreement. Finstad has demanded compensation for the termination of the contract. The Group disputes his claim for compensation (NOK 8.0 million). The case is up for trial in 2009.

The consultancy contract with former Chairman of the Board M. Andersen has been terminated. This consultancy contract includes a right to severance pay of TNOK 388 equivalent to 3 months of fees. GGS has taken the position that the consultancy agreement is not validly entered into. As a consequence, GGS will not pay termination fees as set forth in the agreement. Furthermore, GGS has presented a claim for repayment to former Chairman of the Board M. Andersen in the amount of TNOK 3 750. A settlement has been reached in 2008 with limited financial consequences for the Group.

Further compensation payable was also agreed on with the CSPL owners (Cunningham and Ramsden), worth between USD 0.75 million and USD 2.2 million, based on agreed performance-related criteria (earn-out) in connection with multi-client projects carried out by CSPL in the first three years after the share purchase agreement was entered into. Part of the earn-out, USD 0.25 million, was paid in 2006 and another USD 0.125 million in 2007. There is a dispute between Cunningham and Ramsden on one hand and GGS on the other hand related to the earn-out. A claim of USD 1.45 million plus interest for remaining earn-out has been made. GGS has, through the company CSPL, made counterclaims related to excess payments to Pacific Exploration (registered in Singapore), where the former directors have a substantial investment. A court case in 2008 concluded in favor of the former directors and owners (NOK 8.0 million). GGS has appealed.

Former GGS employee and consultant to the Group G. Robert has filed a claim against CSPL Singapore for the rights of bonuses for alleged sale of seismic activities (NOK 1.2 million). The Group dismisses the charges.

Former Board members E. Bergsaker and I. Ramberg have filed claims for various fees from 2007 (NOK 0.8 million). The Group is currently evaluating these claims.

note 26. Group entitieS

Company

Country

equity interest as per

31.12.2008*

GGS Invest AS Norway 100 %Global Tender Barges AS** Norway 100 %Global Tender Barges Pte Ltd** Singapore 90 % (indirectly ownership)CSPL Singapore Singapore 100 %

CSPL Hong Kong Hong Kong 100 %

*voting rights are the same as equity interest**the shares are secured for bank loans (see note 22)

note 27. SuBSequent eventS

In January 2009 Global Tender Barges Pte Ltd in Singapore increased the share capital by USD 16.7 million. USD 15 million was subscribed by Global Tender Barges AS, a 100 % owned subsidiary of GGS ASA. The current minority owner Abbott Group contributed with USD 1.7 million.




inCome Statement

For the year ended December 31

tnok note 2008 2007

Seismic revenues 2 60 759 45 328 Other revenues 2 1 383 3 101

total operating revenues 62 142 48 429

Payroll expenses 4 (8 743) (8 706) Other operating expenses 5 (95 752) (71 119)

total operating expenses (104 495) (79 825)

earnings before interest, tax, depreciation, amortization and impairment (eBitDa) (42 353) (31 396)

Depreciation and amortization 8 (37 114) (46 806) Write-down MCL 8 - (18 524)

operating profit/ (loss) (79 467) (96 726)

Interest income 53 651 14 312 Interest expense 6 (3 032) (15 326) Foreign exchange gain/ (loss) 6 129 064 (18 903) Write down financial assets 15 - (28 826) Reversal write-down financial assets 15 - 63 956 Provision for bad debt subsidiaries (7 497) 20 684 Other financial items 6 11 868 (13 498)

net financial items 184 054 22 400

profit/ (loss) before tax 104 587 (74 326)

Tax expense 7 - -

net profit/ (loss) for the year 104 587 (74 326)

transfer to/(from) Other paid-in equity 12 - (26 999) Share premium reserve 12 - (47 327) Retained earnings 12 104 587 -

total transfers 104 587 (74 326)


BalanCe Sheet - aSSetS

as at December 31

tnok note 2008 2007

intangible non-current assets Multi-client library 8 6 856 97 654

tangible non-current assets Machinery and equipment 8 - 17 512

Financial non-current assets Investment in subsidiaries 15 120 150 171 Other investments 57 - Receivables from group companies 15 716 395 - Other non-current receivables 9 150 000 -

total non-current assets 873 428 265 337

Current assets Trade receivables 9 13 120 3 937 Other receivables 9 14 444 14 804 Receivables from group companies 15 6 211 23 208 Restricted cash 10 13 631 117 843 Cash and cash equivalents 115 228 500 435

total current assets 162 635 660 227

total assets 1 036 063 925 565


BalanCe Sheet - equity anD liaBilitieS

as at December 31

tnok note 2008 2007

equity attributable to equity holders of the company Issued capital 12 80 528 80 528 Share premium reserve 12 826 263 826 263 Retained earnings 12 56 709 (47 876)

total equity 963 500 858 915

Current liabilities Trade payables 3 543 19 207 Deferred revenues 4 641 - Liabilities to group companies 15 4 785 344 Prepayment from customers 22 257 17 207 Other current liabilities 37 337 29 892

total liabilities 72 563 66 650

total equity and liabilities 1 036 063 925 565

Oslo, 14 April 2009





CaSh Flow Statement

For the year ended December 31

tnok note 2008 2007

operatinG aCtitvitieS

Profit/loss before tax 104 587 (74 326) Finance income and expense (184 054) (57 888) Depreciation and amortization 8 37 114 46 806 Write-down MCL 8 - 18 524 Working capital changes (191 311) 25 931 Net foreign exchange differences (unrealised) 157 472 (5 455)

net cash flows from operating activities (76 192) (46 408)

inveStinG aCtitvitieS

Investments in MCL 8 (1 840) (82 976) Investment in fixed assets 8 (162) (14 917) Investments in subsidiaries - (21 455) Proceeds from sale of assets 6 128 688 6 936 Interest received 11 884 14 312

net cash flows from investing activities 138 570 (98 100)

FinanCinG aCtitvitieS

Repayment of borrowings - (156 553) Loans granted to subsidiary 6 (520 357) -Issued capital - 986 469 Equity transaction costs - (40 710) Interest paid (3 032) (13 598)

net cash flows from financing activities (523 389) 775 608

Net change in cash and cash equivalents (461 011) 631 100 Effect of currency changes (28 408) (13 926) Restricted cash at January 1 10 117 843 859 Restricted cash at December 31 10 13 631 117 843 Cash and cash equivalents at January 1 500 435 245

Cash and cash equivalents at end of period 115 228 500 435


Note 1 Accounting policies 70

Note 2 Segment information 72

Note 3 Financial risk management 73

Note 4 Personnel expenses 73

Note 5 Other expenses 75

Note 6 Financial items 76

Note 7 Income taxes 77

Note 8 Non-current intangible and tangible assets 78

Note 9 Trade and other receivables 79

Note 10 Restricted cash 79

Note 11 Share capital and shareholder information 80

Note 12 Equity 81

Note 13 Guarantees and commitments 81

Note 14 Related parties 82

Note 15 Subsidiaries and joint ventures 83

Note 16 Contingencies 84

Note 17 Subsequent events 84

noteS to FinanCial StatementS parent Company


note 1. aCCountinG poliCieS

GENERALThe financial statements have been prepared in accordance with the Norwegian Accounting Act and Norwegian generally accepted accounting principles in Norway (NGAAP). The accompanying notes are an integral part of the financial statements. The financial statements for the parent company is presented in NOK, rounded to the nearest thousand. NOK is also the functional currency for the parent company.

USE OF ESTIMATESThe management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses and information on potential liabilities in accordance with generally accepted accounting principles in Norway.

BALANCE ShEET CLASSIFICATIONCurrent assets and current liabilities consist of receivables and payables due within one year. Other balance sheet items are classified as non-current assets or non-current liabilities.

INvESTMENTS IN SUBSIdIARIES ANd jOINT vENTURESInvestment in subsidiaries and joint ventures are recognised at cost. The investment is valued as cost of shares in the subsidiary/joint venture, less any impairment losses. An impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a later period.

Dividends, Group contribution and other distributions are recognised in the same year as they are recognised in the subsidiary’s financial statement. If dividends / Group contribution exceed withheld profits after acquisition, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recognised value of the acquisition in the balance sheet for the parent company.

FOREIGN CURRENCy TRANSLATIONTransactions in foreign currency are translated using the exchange in effect on the date of transaction. Monetary assets and liabilities in foreign currency are translated into NOK using the exchange rate in effect on the balance sheet date. Non-monetary assets and liabilities measured at historical cost in foreign currency are translated using the exchange rate in effect on the date of transaction. Changes to exchange rates are recognised in the income statement as they occur during the accounting period.

REvENUE RECOGNITIONMulti-client projects are projects where the Company, at its own risk and expense, conducts all or parts of the collection of geophysical data. The data can be sold to an unlimited number of customers. Multi-client revenues are recorded when earned and when the company has a binding agreement with the customer.

Revenue from ongoing surveys is recognised according to the percentage of completion. Determination of the percentage of completion is based on the amount of accrued expenses relative to the estimated total expenses of the survey. The survey is defined as completed on the date when the seismic data is collected and the vast majority of the data is processed. Future recognition of revenue follows the principle of completed projects.

The Company recognises the sale of seismic data for completed projects on the date of delivery. The process up until delivery comprises ordinary collection, processing and delivery. Delivery of seismic could be contingent on permission from the authorities and can only be conducted when such permission is given.

Contract seismic projects are projects where the Company collects predefined geophysical services on behalf of a customer. Revenue from contractual seismic data is recognised when earned and according to the percentage of completion.

Revenue from the processing of seismic data is recognised at delivery.

INTANGIBLE ASSETSMulti-client libraryThe multi-client library comprises completed projects and projects under development that can be licensed to a number of customers. All direct costs related to data collection, processing and completion of seismic projects are capitalised.

The multi-client library is capitalised at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated according to accrued revenues for each survey as a share of the estimated total revenue for each project relative to estimated total cost for each project. This implies that the amortisation of the project is finished when the estimated total revenues are attained. Estimated revenues are reviewed continuously. Judgements about the estimated revenues have to be made when determining the amortisation rate and these can change over time according to changes in market conditions. The amortisation of the multi-client library can therefore change according to the actual recording of revenue and estimated remaining revenue.


In addition, the Company has a minimum amortisation policy where the carrying amount one year after completion is at a maximum 60 % of cost. This maximum level is reduced by 20 percentage points for each of the three subsequent years. The PC2000 library is amortised over 7 years.

TANGIBLE ASSETSTangible assets are stated at cost, less accumulated depreciation and any accumulated impairment losses. Depreciation is made on a straight line basis over the useful lives of the asset and recognised in the income statement. Calculated depreciations take into account the expected remaining value if not insignificant. Expenses regarding major replacements and renewals are capitalised, while all other replacements, renewals, maintenance and repairs are recognized in the income statement.

Estimated useful lives are as follows:Office machinery 3-4 yearsVehicles and furniture 6-7 yearsSeismic equipment 10 years

IMPAIRMENT OF TANGIBLE ANd INTANGIBLE NON-CURRENT ASSETSTangible and intangible non-current assets are assessed for impairment at each reporting period and always when events occur or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When impairment is considered, the assets are grouped at the lowest level for which there are separate identifiable cash generating units. Impairment is calculated as the difference between the assets carrying amount and the recoverable amount. The recoverable amount is the highest of the asset’s fair value less cost to sell and the value in use for the company. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. When it is assumed that the asset’s value is lower than its carrying amount, the asset is written down to the recoverable amount. The impairment amount is recognised in the income statement in those expense categories consistent with the type of the impaired asset.

Previously recognised impairment losses are only reversed if there have been changes in the estimates used to determine the recoverable amount. The reversed amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.

TRAdE ANd OThER RECEIvABLESTrade and other receivables are recognised initially at nominal values less provision for doubtful accounts Provision for doubtful accounts are based on an individual assessment of the different receivables based on the maturity and information about the customer’s financial position or other relevant information.

CASh ANd CASh EqUIvALENTSCash and cash equivalents comprise cash at bank and short-term deposits with an original maturity of three months or less. Bank overdrafts are presented as current liabilities.

PROvISIONSProvisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that the obligation has to be settled and that a reliable estimate of the obligation can be made.

INTEREST-BEARING LOANS ANd BORROWINGSInterest-bearing loans and borrowings are initially recognised at fair value. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Non-amortised transaction costs are recognised together with the loan and the amortisation costs are reflected in the income statement as interest expenses. Gains and losses are recognised in net profit or loss when the liabilities are derecognised and through the amortisation process. The interest expenses are expensed continuously.

TRAdE ANd OThER PAyABLESTrade and other payables are recognised at cost.

PENSIONSThe Company has defined contribution plans. The defined contribution plan is a pension plan under which the Company pays fixed contributions to pension plans. The Company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The Company pays contributions to publicly or privately administered pension plans. The contributions are recognised as employee benefit expenses when they are due. Prepaid contributions are recognised as an asset to the extent that the cash refund or reduction in future payments is available.

SEGMENT REPORTINGTheCompanyhasonebusinesssegments:seismicdata.Furthermore,thecompanyisorganisedintogeographicalsegments.


INCOME TAxTax expenses comprise both tax payable and changes in net deferred tax. The tax includes expected tax payable on the year’s taxable income using existing tax rates on the balance sheet date and any corrections on previous tax payables. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply at the time the assets are realized or the liability is settled, on the basis of temporary differences existing between the values in the accounts and the tax-related values. The calculation also includes tax loss carry-forwards at the end of the financial year. Tax increasing and tax reducing temporary differences that reverse or can be reversed in the same period are netted in the balance sheet.

Deferred tax assets are recognised in the balance sheet when it is probable that the Company will have sufficient profit for tax purposes to utilise the tax asset.

CASh FLOW STATEMENTThe cash flow statement is prepared using the indirect method. Restricted bank deposits related to the operations are included in cash equivalents.

UNCERTAIN LIABILITIES ANd CONTINGENT ASSETSAccounting of events with an uncertain outcome is done by using best judgement, and it must be based on a probability consideration. When it is highly probable that the unsecured liability will be settled, and if its value can be reliably measured, the liability will be recognised. Contingent assets are not normally accounted for.

SUBSEqUENT EvENTSNew information regarding events existing at year end is accounted for in the estimates. Information regarding events after the end of the year is disclosed in the notes.

note 2. SeGment inFormation

GGS offered in 2007 and first half of 2008 geophysical services, including the collection and processing of seismic data. Most of the seismic business was sold in June 2008, only the Iranian libraries (PC2000) are left in GGS as at 31 December 2008. For further details on the sale, see note 6. GGS subsidiary Global Tender Barges AS owns 90 % of the shares of Global Tender Barges Pte Ltd, which purchased three tender rigs in the first quarter 2008, and going forward the strategic management of these rigs will be the main activity of GGS.

Segment information is given for geographical segments. There have been no transactions between the individual segments in the reporting period.

The geographical distribution of earnings is determined by the location in which the data was collected. Operational expenses relating to general operations, including general administration costs and head office costs are split according to revenues.

2008

tnok asia

middle east,

africa and europe north america

unallocated

items total

Seismic revenues 8 419 31 353 20 987 - 60 759 Other revenues - - 1 383 - 1 383 Investments - - 2 002 - 2 002

Carrying amount assets 5 932 880 440 - 149 692 1 036 063

2007

tnok asia

middle east, africa

and europe north america

unallocated

items total

Seismic revenues 14 313 7 962 23 053 - 45 328Other revenues - 3 101 - - 3 101Investments 14 729 17 68 247 14 900 97 893

Carrying amount assets 6 227 211 724 70 075 637 539 925 565


note 3. FinanCial riSk manaGement

GENERALThis note presents information about the company’s exposure financial risks.

The Board of Directors has the overall responsibility for the establishment and oversight of the company’s risk management framework. The Board regulates its work through Board meetings, audit committee and general interaction with the management.

The company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their role and obligations. The audit committee oversees how the management monitors compliance with the company’s risk management work and reviews the adequacy of the risk management framework in relation to the risks faced by the company.

CAPITAL MANAGEMENTThe primary objective of the company’s management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The company monitors capital on the basis of its book equity ratio which is calculated as total equity divided by total assets. It is the company’s policy that this ratio be 20 % or higher.

tnok 2008 2007

Total equity 963 500 858 915 Total assets 1 036 063 925 565

Ratio 93.00 % 92.80 %

CURRENCy RISKRevenues and expenses are given mostly in USD and NOK. The management considers the currency risk to be limited. Therefore no currency hedging transactions have been made. The company’s available liquid assets are held in NOK and USD. As at 31 December 2008 foreign currency debts totalled USD 5.3 million. Foreign currency receivables totalled USD 2.3 million.

INTEREST RATE RISKThe company has no interest-bearing debt as of 31 December 2008.

LIqUIdITy RISK The company’s liquidity situation as of 31 December 2008 is good. The company held NOK 115.2 million in cash, NOK 41.1 million in current receivables, NOK 72.6 million in current liabilities and NOK 13.6 million in restricted cash as at 31 December 2008.

CREdIT RISKA credit risk is posed by the fact that the company first makes its investment before receiving payments from customers. GGS makes limited investments, and is working to improve payment terms.

note 4. perSonnel expenSeS

Salaries are the total cost of remuneration to the employees, including direct salaries and holiday allowance, in addition to official taxes relating to the employment. Other remuneration consists of company car, phone and other similar allowances.

tnok 2008 2007

Salaries 7 434 6 770Pension costs 320 226Bonuses* 875 1 600Other remuneration 115 110

total 8 743 8 706

Average number of employees 7 6


PENSIONSGGS operates a pension scheme in accordance with the law on obligatory pension schemes in Norway. Costs related to this scheme totalled NOK 0.3 million in 2008.

The age of retirement is 67 years.

BONUSESA bonus scheme for key employees was launched at the annual assembly in 2008. The bonus scheme is based on company specific results, as well as individual goals, and is set as a percentage of salary. For 2008 no bonus was awarded.

REMUNERATION FOR ThE COMPANy’S MANAGEMENT ANd BOARd

tnok 2008

Salaries

other


CEO 1 1 667 6 49 875 2 596 CFO 2 1 317 6 45 - 1 367 Chairman Board of Directors 3 375 - - - 375 Other members Board of Directors 4 660 30 - - 690

total 4 019 41 93 875 5 028

1) K. Øversjøen. The bonus relating to 2007 was paid out in 2008.

2) J. Weseth (NOK 150 thousands) was the CFO until J. Elde (NOK 1 168 thousands) was appointed 1 February 2008

3) The Board now comprises G.Reitan (Chairman) appointed at the general meeting in 2008, G. Hvammen, Ø. Stray Spetalen, E. Roaldset and T. Bjørnov. The chairman of GGS ASA receives an annual remuneration of NOK 250 thousands. Board members receive NOK 160 thousands per year.

4) Other remuneration is to the nomination committee

tnok 2007

Salaries

other


CEO 1 2 339 - 52 1 600 3 991 CFO 2 1 631 - 51 - 1 682 Chairman Board of Directors 3 250 - - - 250 Other members Board of Directors 3 75 350 - - 425

total 4 295 350 103 1 600 6 348

1) The CEO position was in 2007 held by T. Christoffersen (salary NOK 1 052 thousands), E. Berglund (salary NOK 578 thousands, bonus NOK 1 600 thousands) and K. Øversjøen (salary NOK 709 thousands) who was appointed 6 August 2007.

2) The CFO position was in 2007 held by J. Kildahl (NOK 800 thousands) and J. Weseth (NOK 831 thousands).

3) Other remuneration to the Board of Directors’ is consulting fees to former members. Salaries to Board are NOK 825 thousands less NOK 500 thousands due to reduction in 2006 fee.

GUIdELINES FOR dETERMINING SALARIES ANd OThER COMPENSATION FOR COMPANy MANAGEMENTIn accordance with the regulations in paragraph 6-16a in the Norwegian Public Limited Companies Act, the Board of Directors has established a statement regarding salary and remuneration to the management of the company. The focus of the company is to hire qualified mangers and to pay according to the market. Salary and remuneration of the CEO is determined by the Board of Directors, and payments to other employees are determined by the CEO according to guidelines from the Board of Directors.

The CEO in GGS is entitled to receive post payment for 3 months after his termination period (3 months) if the contract is terminated by the company. This agreement is not valid if the CEO is fired due to major breaches of agreements.


note 5. other expenSeS

OPERATING ExPENSES

tnok 2008 2007

Office expenses 2 334 1 531 External services 21 686 25 124 Seismic expenses 65 540 35 721 Losses on account receivables 2 900 (108) Travel expenses 1 497 1 789 Other 1 795 7 062

total 95 752 71 119

Seismic expenses are rent of seismic vessel and cost of processing seismic data. The main reason for the increase from 2007 to 2008 is transportation expenses in connection with the mobilization of the seismic vessel GGS Atlantic from West Florida to Asia.

External services are audit, consulting and legal assistance.

Remuneration to auditors

tnok aSa 2008 aSa 2007

Statutory audit 3 095 1128Other assurance services 1 282 813Tax services 33 50

Non-audit services 435 32

total 4 845 2 023

All amounts specified excluding VAT


note 6. FinanCial itemS

INTEREST ExPENSES


Interest expenses bank loan - 12 531 Other interest expenses 3 032 2 795

total 3 032 15 326

GGS has no interest bearing debt as at 31 December 2008.

FOREIGN ExChANGE GAIN/ LOSS

tnok 2008 2007

Foreign exchange gain 201 643 27 357 Foreign exchange losses (72 579) (46 260)

total 129 064 (18 903)

GGS has lent its subsidiary GTB AS USD 96 million (NOK 671.9 million). USD 81 million (NOK 566.9 million) was used to purchase 90 % of the shares in GTB Pte in Singapore, USD 15 million (NOK 104.9 million) served as a deposit for shipyard stay of tender rigs Barracuda and Al Baraka. The amount was released in November 2008, and in January 2009 GTB AS converted the last 15 MUSD into equity in GTB Pte. The intercompany loan to GTB AS (denominated in USD) resulted in an unrealized gain of NOK 159.3 million as at 31 December 2008.

OThER FINANCIAL ITEMS


Issued warrants 1 - (11 060) Gain from spin off 2 14 082 -Other (2 215) (2 438)

total 11 868 (13 498)

1) Issued warrants Atlas Capital Management and Bank2 ASA expensed in 2007.

2) On 16 April 2008, the board of directors of GGS ASA and Spectrum ASA agreed to transfer the majority of GGS’ seismic business to Spectrum ASA pursuant to an arm’s length transaction. The transaction was effective June 30 2008.

Entities,operationsandassetssoldfromGGSASAtoSpectrumASAcomprise:• SharesinSpectrumGeoLtdintheUK

Spectrum Geo Ltd offers seismic data processing, multi-client surveys and offshore acquisition to the oil and gas sector. Spectrum Geo Ltd had a subsidiary in Houston US (Spectrum US Inc), and held a 40 % stake in a joint venture in Libya (Spectrum Geo Libya) and a 50 % stake in a joint venture in Egypt (Spectrum Geo Egypt).

• SharesinGeobridgeIncinChina The Group held a 50 % stake in the joint venture GeoBridge in China, together with BGP Inc. The company offers seismic data consulting.

• LeaseagreementfortheseismicvesselGGSAtlanticGGShaveanoptiontousetheGGSAtlanticforconductingseismicworkoffshore India in the first quarter 2009

• MultiClientLibraries/surveysinWestFloridaandEastTimor

• AccountsreceivableamountingtoNOK34.2million.

The sale was settled partly in cash (NOK 125 million) and partly by loan (NOK 150 million) from GGS to Spectrum ASA. The loan matures on 31 December 2011. Interest payable during the term of the loan is NIBOR 3-months + 300bps. Spectrum may prepay the loan earlier without incurring penalties. The Loan Agreement contains standard provisions relating to covenants and events of default.

Note that the PC2000, the Iranian Pseudo 3D surveys, and all the other Iran related surveys of GGS were not comprised by the transaction and will remain with GGS.


note 7. inCome taxeS

Themajorcomponentforincometaxexpensefortheyearsended31December2008and2007are:

tnok 2008 2007

Current income tax Current income tax charge - - Deferred income tax Relating to origination and reversal of temporary differences - -

income tax expense reported in the income statement - -

Areconciliationofcurrentincometaxchargefortheyearsended31December2008and2007isasfollows:

tnok 2008 2007

profit before tax 104 587 (74 326)

Non-taxable income - - Non-deductable expenses 55 144 Non-taxable gains/losses on sales of shares in subsidiaries (7 286) - Write-down shares in subsidiaries - 28 826 Reversal write-down shares in subsidiaries - (63 956)Write-down loan to subsidiary 7 497 (20 684)Equity transaction expenses charged directly to equity - (40 710)Other permanent differences - 13 088 Change in temporary differences (154 104) (12 074)Correction from previous year 11 892 -

Basis current income tax charge: (37 359) (169 692)

Current income tax charge: - -

Deferredincometaxat31Decemberrelatestothefollowing:

tnok 2008 2007

Deferred tax liability (net)Current receivables - 3 330 Non-current receivables/liabilities in foreign currency 44 613 -

Profit and loss account 17 -

44 630 3 330

Deferred tax assets (net)Tangible assets (672) (287)Shares outside the non-tax method ("fritaksmetoden") (7 017) (7 017)Accrued expenses (1 097) -

Tax losses carried forward (227 613) (217 299)

(236 399) (224 603)

Deferred tax assets (net) (191 769) (221 274)Deferred tax assets not recognised in balance sheet 191 769 221 274

Deferred tax assets in balance sheet - -

The company has not recognized any deferred tax assets as at 31 December 2008. Deferred tax assets are the value of tax losses and other tax positions. Deferred tax assets are recognized only to the extent that it has become probable that the company will have sufficient future taxable profit to allow deferred tax assets to be recovered.

There is no limit for the right to carry forward the tax losses of NOK 227.6 million (gross NOK 812.9 million).


note 8. non-Current intanGiBle anD tanGiBle aSSetS

tnok

multi-client

library

machinery

and equipment total

CostAt 1 January 2007 838 850 10 633 849 483 Additions 82 976 14 917 97 893 Disposals (7 851) (2 100) (9 951)

at 31 December 2007 913 975 23 450 937 425 Additions 1 840 162 2 002 Disposals (151 605) (21 475) (173 080)

at 31 December 2008 764 209 2 138 766 347

amortization and depreciationAt 1 January 2007 (752 240) (4 689) (756 929) Amortization/depreciation for the year (45 557) (1 249) (46 806) Write-down (18 524) - (18 524)

at 31 December 2007 (816 321) (5 938) (822 259) Amortization/depreciation for the year (35 141) (1 973) (37 114) Disposals 94 109 5 773 99 882

at 31 December 2008 (757 353) (2 138) (759 491)

useful life 4-7 years 3-5 years

net book valueAt 31 December 2008 6 856 - 6 856

At 31 December 2007 97 654 17 512 115 166

There are no discrepancies between assumed useful lives and plans for depreciation and amortisation. For further information on disposals, see note 6.

PC2000The management investigated in 2007 and 2008 indications of impairment of the multi-client library PC-2000. There were no indications of impairment of the multi-client library PC2000 as at 31 December 2007 or as at 31 December 2008. PC2000 will be fully amartized by Q2-09.

The regulations that set the framework for PC2000 stipulate an earnings sharing with Iranian companies and authorities after GGS has covered its costs. GGS will, after the costs have been covered, have the right to approximately 40 % of the net sales earnings from PC2000.

West Florida phase 1The management investigated in 2007 indications of impairment of the multi-client library West Florida phase 1. A fall in earnings indicated impairment, and an estimate was made for the recoverable amount. A value in use assessment was carried out by PWC on behalf of GGS on 31 December 2007, based on knowledge about sales and about the future up until November 2007. The pre tax discount rate was set at 14.7 %. The rate was set by calculating the weighted required rate of return, adjusted for asset specific risk. The cash flows used in the estimate were up until 2015 inclusive, and a residual value of 2 time net sales in 2015 was assumed. The value in use assessment valued the library at NOK 21.2 million of 31 December 2007. This prompted a write-down of NOK 18.5 million in 2007.

West Florida 1 was sold 30 June 2008 (see further details in note 6).

West Florida phase 3The management investigated in 2007 indications of impairment of the multi-client library West Florida phase 3. Higher investment costs than budgeted and uncertainties regarding revenues were indications of impairment, and an estimate was made for the recoverable amount. A value in use value assessment was carried out by PWC on behalf of GGS on 31 December 2007, based on knowledge about sales and about the future up until November 2007. The pre tax discount rate was set at 14.7 %. The rate was set by calculating the weighted required rate of return, adjusted for asset specific risk. The cash flows used in the estimate was up until 2012 inclusive, and a residual value of two time net sales in 2012 was assumed. The value in use assessment valued the library at NOK 53.4 million as of 31 December 2007. The valuation showed no need for a write-down in 2007.

West Florida 3 was sold 30 June 2008 (see further details in note 6).


note 9. traDe anD other reCeivaBleS

TRAdE RECIvIBALES

total not past due

up to 3 months

past due

3-6 months

past due

over 6 months

past due

2008 13 120 - 805 10 709 1 606

2007 3 937 - 3 937 - -

A provision has been made for losses incurred from trade receivables of NOK 1.2 million as of 31 December 2008 (NOK 11.1 million in 2007).

OThER RECEIvABLES

tnok 2008 2007

CurrentPrepaid expenses 272 227 Other receivables 6 945 1 861 Earned, not invoiced revenue 7 227 12 716

14 444 14 804

non currentInterest bearing receivable* 150 000 -

total 164 444 14 804

*The sale of the seismic business in 2008 was settled partly in cash (NOK 125 million) and partly by a loan from GGS (NOK 150 million) from GGS to Spectrum ASA with interest rate of NIBOR 3-months plus 300bps. The loan matures 31 December 2011, and is presented as a non-current receivable.

note 10. reStriCteD CaSh

Restricted cash as at 31 december

tnok 2008 2007

Bid bond 12 830 - Employee tax deductions 397 444 Deposit 404 117 400

total 13 631 117 843

The bid bond is related to the Reliance contract in India (see note 13). Bid bond is the amount that is put on a secured account as a guarantee for the future work that is to be performed by GGS.

Deposit in 2007 was for purchase of tender rigs by subsidiary Global Tender Barges Pte Ltd in Singapore.


note 11. Share Capital anD ShareholDer inFormation

The company’s registered share capital is NOK 80 527 668.70 divided into 805 276 687 shares, each at a nominal value of NOK 0.10. The share capital is fully paid. All shares have the same rights.

2008 2007

Issued No of share No of share

Ordinary shares of NOK 0.1 per share 805 276 687 805 276 687

20 largest shareholders and ownership interest as at 31 December 2008

SPENCER ENERGY AS 161 100 000 20.01 %FERNCLIFF DAI 1 AS 121 435 711 15.08 %SOLAN CAPITAL AS 21 000 000 2.61 %SEB ENSKILDA ASA 18 690 000 2.32 %KOV OIL SERVICES AS 14 600 000 1.81 %GROSS MANAGEMENT AS 14 160 000 1.76 %SVELA EIENDOM AS 12 007 400 1.49 %SKAGEN VEKST 10 000 000 1.24 %MORGAN STANLEY & CO INTL PLC 7 125 000 0.88 %TVENGE 7 000 000 0.87 %LINUX SOLUTIONS NORGE AS 6 500 000 0.81 %HAVTRÅL AS 6 294 173 0.78 %CAMACA AS 5 010 000 0.62 %HANDELSBANKEN MARKETS 5 000 000 0.62 %VERDIPAPIRFONDET NORDEA SMB 4 615 000 0.57 %BANK OF NEW YORK, BRUSSELS BRANCH 4 543 050 0.56 %THORENDAHL INVEST AS 4 500 000 0.56 %DNB NOR NAVIGATOR 4 033 249 0.50 %JOHANSEN 4 020 000 0.50 %MATSPECIALEN AS 4 000 000 0.50 %

totals 435 633 583 54.10 %

Other shareholders (4 831) 369 643 104 45.90 %

GGS owns zero treasury shares as of 31 December 2008 (zero in 2007).

Shares owned by the GGS’ Board of directors and management as of 31 december 2008

note total no of shares

Ferncliff Dai 1 AS 1 121 435 711 15.08 %Gross Management AS 1 14 160 000 1.76 %Kov Oil Services AS 2 14 600 000 1.81 %Solan Capital AS 3 21 000 000 2.61 %JE Oil Services AS 4 3 500 000 0.43 %K. Jensen 5 1 100 000 0.14 %Gunnar Reitan Holding AS 6 250 000 0.03 %

E. Roaldset, Board member 59 233 0.01 %

1) Board member Ø. Stray Spetalen controls Ferncliff Dai 1 AS, Gross Management AS, and various related parties. Combined interest of 17.15 %

2) CEO K. Øversjøen controls Kov Oil Services AS

3) Board member G. Hvammen controls Solan Capital AS

4) CFO J. Elde controls JE Oil Services AS

5) VP Rig Operations K. Jensen with related parties

6) Board member G. Reitan controls Gunnar Reitan Holding AS


The Annual General Meeting on 28 May 2008 voted to authorise the Group’s board to buy back the Group’s own shares. The authorisation is valid until next General Annual Meeting. The authorisation has not been used on 31 December 2008.

In January 2007 Atlas Capital Management Ltd and Bank 2 ASA put forward a proposal for a loan transaction. In August 2007, the loan from Atlas Capital Management of NOK 110 million was redeemed. Global Geo Service ASA agreed on a settlement in the dispute with Atlas Capital Management Ltd and Bank 2 ASA over the loan agreement of NOK 110 million. GGS ASA agreed to issue 6 million shares at a subscription price of NOK 1.00 per share to the lenders.

In addition, GGS ASA issued warrants A and B where warrants A expires on 31 December 2008 and warrants B expired on 5 September 207, giving ACM and Bank2 the right to subscribe for a total of 10 million shares at a subscription price of NOK 2.00 per share. The warrants are valued by using the Black & Scholes formula with adjustments for the impact of dilution.

Total value of issued warrants equals TNOK 11 060. The amount is expensed in 2007.

note 12. equity

tnok paid in equity

Share premium

reserve

other paid-in

equity

retained

earnings total equity

equity at January 1 2007 8 359 - 15 939 (47 876) (23 578)Equity issue 72 169 914 300 - - 986 469 Issued subscription rights - - 11 060 - 11 060 Equity transcation costs - (40 710) - - (40 710)Profit/ loss for the year - (47 327) (26 999) - (74 326)

equity at December 31 2007 80 528 826 263 - (47 876) 858 915

Profit/ loss for the year - - - 104 587 104 587

equity at December 31 2008 80 528 826 263 - 56 709 963 500

note 13. GuaranteeS anD CommitmentS

GUARANTEESGGS is guaranteeing the financial lease for the 2D seismic vessel GGS Atlantic. The vessel was taken over by, and is being operated by, Spectrum ASA as part of the sale 30 June 2008 (see note 6). The lease runs until 2013.

COMMITMENTS

TNOK Rent Charter hire

2009 1 089 25 891 2010 635 -

2011-2013 - -

total 1 724 25 891

RentIn August 2007 a 3-year tenancy agreement with Tycoon Industrier AS (related party) concerning the rental of office space at Sjølyst Plass 2 was agreed. For 2009 the annual rent will be NOK 1.1 million.

Charter hireGGS has a commitment to fulfil the contract with Reliance Inc, shooting seismic offshore India. The commitment is expected to be fulfilled by June 30 2009. Expected revenues for fulfilling the project are NOK 30 million; expected costs are NOK 25.9 million.


note 14. relateD partieS

A party is related to an entity if the party directly or indirectly through one or more intermediaries controls, is controlled or is under common control with the entity, has an interest in the entity that gives it significant influence over the entity or has joint control over the entity. Furthermore, a related party is an associate, a joint venture partner or a close family member.

A related party transaction is a transfer of resources, services or obligations between related parties regardless of whether a price is charged.

Inordertoensurethatsuchinformationismadepublic,thefollowingrelatedpartyrelationshipsaredescribedindetail:

tnok

purchase from


receivable/

(payable) as at

31.12.2008

purchase from


receivable/

(payable) as at

31.12.2007

Tycoon Industries 1 543 (570) 2 006 - Std Engineering 345 (345) - -Jake AS - - 800 - Gram, Hambro & Garman - - 2 682 - Songa Shipping - - 17 304 - K. G. Finstad/ Upfront AS - - 4 483 (3 660) M. Andersen / Navigator AS - - 2 154 (1 061) Venja Kapital AS - - 262 -

C Ramsden & A Cunningham - - 8 264 (7 492)

2008GGS leases its premises from Stray Spetalen’s company Tycoon Industrier AS.

GGS is guaranteeing the financial lease for the 2D Seismic Vessel GGS Atlantic. The vessel is operated by Spectrum ASA. GGS Atlantic is owned by Atlantic Seismic where A. Blystad, who also owns Spencer Energy AS, is the majority owner.

CEO K. Øversjøen’s wholly owned company, Kov Oil Services AS, borrowed in 2007 NOK 10 million from each of the two companies Ferncliff TIH AS and Spencer Energy AS. Ferncliff TIH AS is owned by Stray Spetalen, who is a member of the Board of Directors of GGS and also the sole owner of the company Ferncliff DAI I AS. Spencer Energy AS is the largest shareholder of GGS. Kov Oil Services AS bought shares in GGS from Spencer Energy, Ferncliff and related parties. The share prices were set based on a combination of the market prices at the time of the transactions and a calculated cost of the sales restrictions set forth in the agreement based on option pricing. The sales restrictions are gradually released through a two year period.

The investment company of CFO J. Elde has borrowed NOK 5.0 million and the investment company VP Rig Operations K. Jensen has borrowed NOK 1.5 million from the two companies Ferncliff TIH AS and Spencer Energy AS. These investment companies bought GGS shares through Oslo Stock Exchange. See note 11 for share holdings. The conditions set forth in the agreements between the investment companies and the two major shareholders are considered to be at market terms.

The consultancy contract with former chairman of the Board M. Andersen has been terminated. This consultancy contract includes a right to severance pay of TNOK 388 equivalent to 3 months of fees. GGS has taken the position that the consultancy agreement is not validly entered into. This was settled in 2008 between the parties with limited financial consequences for the company.

2007On 18 April 2007 the company appointed Gram, Hambro and Garman Advokatfirma AS as legal advisors to the Group. M. Garman, former chairman of the Board, is a partner.

J. Kildal, who owns Jake AS, was appointed as the interim CFO of GGS in the last half of 2007. Kildal is working as the CEO of Standard Drilling ASA and as Executive President of Stray Spetalen’s company Ferncliff TIH AS.

The vessel GGS Atlantic was until 20 April 2007 hired from Songa Shipping Pte Ltd which is owned by A. Blystad who also own Spencer Energy AS.

The former management of the subsidiary CSPL, which resigned in December 2007, has a substantial investment in Pacific Exploration (registered in Singapore). During 2006 CSPL bought goods and services worth TNOK 36 009 (TSGD 8 831) from Pacific Exploration. CSPL also received earnings of TNOK 2 547 (TSGD 625) from this company. In 2007 CSPL received net invoices totalling TNOK 12 532 (TSGD 3 224).


GGS had a consultancy contract with former chairman of the Board M. Andersen.

In Q1 2002 GGS entered into a tenancy agreement with Fagerstrand Næringsbygg AS, a company owned by a consultant to the company and former board member K. G. Finstad. This agreement has not been renewed and came to an end on 31 March 2007.

E. Berglund was the CEO of GGS between May and August 2007. In October 2006 GGS entered into an agreement with Venja Kapital AS and E. Berglund concerning assistance in connection with shareholder days and projects.

note 15. SuBSiDiarieS anD Joint ventureS

ShARES IN SUBSIdIARIES

Company registered office

equity interest

as at 31 Dec 2008

voting rights

as at 31 Dec 2008GGS Invest AS Norway 100 % 100 %Global Tender Barges AS* Norway 100 % 100 %Global Tender Barges Pte Ltd* Singapore 90 % (indirectly ownership) 90 %CSPL Singapore Singapore 100 % 100 %

CSPL Hong Kong Hong Kong 100 % 100 %*The shares are secured for bank loans.

The carrying amount of the shares in subsidiaries is per 31 December 2008 NOK 120 thousands (Global Tender Barges AS). The carrying amount of the shares GGS Invest AS and CSPL are 0.

The carrying amount of the shares in subsidiaries per 31 December 2007 was NOK 150.2 million. Based on a value in use assessment of subsidiaries Spectrum Ltd and Spectrum Inc accumulated write-down per 1 January 2007 of TNOK 63 956 was reversed in 2007. Carrying amount of the shares in Spectrum as of 31 December 2007 was NOK 149.0 million. The shares in GGS Invest AS and CSPL are written down to 0. The loan to GGS Invest AS amounting to TNOK 20 562 in 2007 was converted to equity and then written down to 0, while CSPL was written down with additional TNOK 8 264 in 2007. The shares in the joint venture, GeoBridge, had a carrying amount of NOK 1.0 million and Global Tender Barges AS was established at a cost of TNOK 120, and Global Tender Barges Pte Ltd at a cost of $ 1.

jOINT vENTURESAfter the sale of seismic business in June 2008, GGS no longer holds any interest in any joint ventures (for more details see note 6). In2007GGSheldthefollowinginterests:-50 % share in Geo Bridge Pte Ltd

RECEIvABLES ANd LIABILITIES RELATEd TO SUBSIdIARIES

2008 GGS invest CSpl GtB aS GtB pte total

tnok tnok tnok tnok tnok

Non-current receivables 31/12/08 48 818 - 703 261 - 752 079 Provision bad debt 31/12/08 (35 683) - - - (35 683)

net non-current receivables 13 135 - 703 261 - 716 395

Current receivables 31/12/08 - 7 280 - 6 211 13 491 Provision bad debt 31/12/08 - (7 280) - - (7 280)

net current receivables - - - 6 211 6 211

net receivables 13 135 - 703 261 6 211 722 606

Current liabilities 31/12/08 - 4 785 - - 4 785

Interest income 2008 3 578 - 31 226 - 34 804

Interest expense 2008 - - - - -


2007 GGS invest CSpl GtB pte Spectrum inc GeoBridge total

tnok tnok tnok tnok tnok tnok

Current receivables 31/12/07 37 445 5 662 5 677 - 8 272 57 056 Provision bad debt 31/12/07 (28 186) (5 662) - - - (33 848)

net current receivables 9 259 - 5 677 - 8 272 23 208

Current liabilities 31/12/07 - - - 344 - 344

Interest income 2007 2 344 - - - - 2 344

Interest expense 2007 - - - (566) - (566)

note 16. ContinGenCieS

The company entered into a long-term consultancy agreement with K. Finstad on 1 February 2004. K. Finstad’s main task was related to the sale and marketing of the Company’s seismic data along with the development of new seismic projects. The Company has terminated the agreement. Finstad has demanded compensation for the termination of the contract. The Company disputes his claim for compensation (NOK 8.0 million). The case is up for trial in 2009.

The consultancy contract with former Chairman of the Board M. Andersen has been terminated. This consultancy contract includes a right to severance pay of TNOK 388 equivalent to 3 months of fees. GGS has taken the position that the consultancy agreement is not validly entered into. As a consequence, GGS will not pay termination fees as set forth in the agreement. Furthermore, GGS has presented a claim for repayment to former Chairman of the Board M. Andersen in the amount of TNOK 3 750. A settlement has been reached in 2008 with limited financial consequences for the company.

Further compensation payable was also agreed on with the CSPL owners (Cunningham and Ramsden), worth between USD 0.75 million and USD 2.2 million, based on agreed performance-related criteria (earn-out) in connection with multi-client projects carried out by CSPL in the first three years after the share purchase agreement was entered into. Part of the earn-out, USD 0.25 million, was paid in 2006 and another USD 0.125 million in 2007. There is a dispute between Cunningham and Ramsden on one hand and GGS on the other hand related to the earn-out. A claim of USD 1.45 million plus interest for remaining earn-out has been made. GGS has, through the company CSPL, made counterclaims related to excess payments to Pacific Exploration (registered in Singapore), where the former directors have a substantial investment. A court case in 2008 concluded in favour of the former directors and owners (NOK 8.0 million). GGS has appealed.

Former GGS employee and consultant to the company G. Robert have filed a claim against CSPL Singapore for the rights of bonuses for alleged sale of seismic activities (NOK 1.2 million). The company evaluates these charges.

Former Board members E. Bergsaker and I. Ramberg have filed claims for various fees from 2007 (NOK 0.8 million). The company is currently evaluating these claims.

note 17. SuBSequent eventS

In January 2009 Global Tender Barges Pte in Singapore increased the share capital by USD 16.7 million. USD 15 million was subscribed by Global Tender Barges AS, a 100 % owned subsidiary of GGS ASA. The current minority owner Abbott Group contributed with USD 1.7 million.

Global Geo Services aSa org. nr. 980 585 522

Sjølyst plass 2, 0278 oslo tel.: +47 23 01 49 70 Fax: +47 23 01 49 71

www.ggs.no

sign

atur

.no

•

2813

85

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ANNUAL REPORT 2008 - SinOceanic Shipping · GGS Annual Report 2008 | 3 ... Presentation of...

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