EMGS: Establishes new business platform within Subsea Construction through vessel acquisition – no equity required

Electromagnetic Geoservices ASA ("EMGS" or the "Company") is pleased to announce a significant step in the Company’s strategic development through the establishment of a new business platform within the offshore subsea construction market. EMGS has entered into a set of agreements for a transaction (the "Transaction”) whereby a newly formed subsidiary of the Company will acquire the OSCV Siem Day (the "Vessel”) from Siem Day II AS (the "Seller”).

The Siem Day, built in 2013 by Vard, Brattvåg, is a subsea construction vessel of the design type OSCV 11L.

The acquisition represents a strategic diversification for EMGS, complementing the Company’s existing electromagnetic ("EM") operations and expanding into the growing subsea construction segment. Importantly, this diversification aims to enhance the combined Company’s resilience and long-term value potential.

Transaction Structure and Financing

Under the Transaction, EMGS will enter into a five-year bareboat charter agreement with the Seller at a rate of USD 42,000 per day until 31 December 2025, increasing to USD 45,000 per day thereafter. The charter includes purchase options exercisable at the third and fourth anniversaries of the charter commencement, as well as an unconditional purchase obligation at the end of the charter period. The total acquisition price of USD 108.90 million is structured to minimize upfront cash outlay, with an initial payment of USD 10.89 million due at charter commencement, and the remaining balance gradually offset against charter payments, culminating in a final payment at the time of purchase.

The Transaction will not require new capital from existing shareholders. The initial payment is expected to be financed through an increase of the Company’s existing bond loan, where the Company’s two largest shareholders and bondholders have committed to fully underwrite the additional amount. There will be no issuance of new equity in connection with this Transaction.

Strategic and Financial Upside for Shareholders

The Vessel is chartered on market rates until 31 December 2025. The day rate under this existing charter agreement, which will be novated to EMGS, is expected to be sufficient to cover the Company’s charter payments under the bareboat agreement as well as the budgeted daily operating expenses. Following the expiry of the current charter on 31 December 2025, EMGS plans to operate the Vessel on term contract whilst remaining open to shorter term opportunities. Spot charter rates are currently estimated to range between USD 100,000 and USD 140,000 per day, according to an industry report by independent brokers.

The long-term strategy for EMGS is to pursue growth in the subsea sector through the addition of further vessels. By acquiring a high-quality asset already under contract and with opportunities in a dynamic subsea market beyond 2025, EMGS will provide its shareholders with direct exposure to potential value appreciation from a new, profitable business area. The existing EM business will continue to operate in parallel, ensuring that EMGS maintains and develops its core competencies while diversifying into new market opportunities in a related sector.

Corporate Governance and Fairness Opinion

The Seller is a wholly-owned subsidiary of Siem Offshore AS ("Siem Offshore”). It is expected that Perestroika AS ("Perestroika”) will acquire a 20% ownership stake in the Seller (resulting in each of Siem Offshore and Perestroika owning, respectively, 80% and 20% of the Seller). As this is a related party transaction, Arctic Securities AS has delivered a fairness opinion which concludes, subject to customary qualifications, that the Transaction is fair from a financial perspective to all EMGS shareholders. The fairness opinion is attached hereto.

In accordance with Chapter 3 (V) of the public limited liability companies Act (the "PLLCA”), the Board of Directors (excluding two conflicted board members) have prepared a statement on the Transaction, as required under Sections 3-15 and 3-19 of the PLLCA. The statement has been published on the Company’s webpage www.emgs.com.

As part of the Transaction, the Company will issue a parent company guarantee (the "PCG”) to the Seller. Approval of the PCG will be subject to a shareholder vote in accordance with Section 3-13 of the PLLCA. It is the Company’s current assessment that in this vote, the Company’s largest shareholder, Momentum S.à r.l. (an affiliate of Siem Offshore), will be prohibited from voting its shares The Board of Directors (excluding the two conflicted board members) recommends that the general meeting approves the PCG and, implicitly, the Transaction. Perestroika is committed to voting in favour of approving the PCG at the general meeting.

It is currently expected that this shareholder vote will be included at the Company’s ordinary general meeting in June 2025.

Operational Setup

To ensure efficient operations without increasing the Company's fixed cost base, EMGS intends to engage Aurora Offshore Management AS for technical and commercial ship management, with management fees at market terms.

Including other costs related to the operation of the Vessel, including crewing, the Company budgets with daily operating cost of approx. USD 22,000.

Siem Offshore owns and controls 40% of the share capital of Aurora Offshore Management AS.

Addressing convertible bond maturity and Next Steps

In connection with the Transaction, the Company intends to propose an extension of the maturity date of the outstanding convertible bonds by five years. The two largest shareholders and bondholders have committed to vote in favour of the extension.

As part of the proposed extension, EMGS expects to include certain other changes to the bond terms, providing flexibility for the diversified strategy and adjusting the conversion price for FX movements. Additionally, a tap issue mechanism will be incorporated into the bond terms to facilitate the expected increase to the bond issue to finance the initial payment under purchase of the Vessel as further described above.

Further details regarding the Transaction will be announced in due course.

Contact
Anders Eimstad, CFO, +47 948 25 836

This information is published in accordance with the Norwegian Securities Trading Act § 5-12.

About EMGS
EMGS, the marine EM market leader, uses its proprietary electromagnetic (EM) technology to support oil and gas companies in their search for offshore hydrocarbons. EMGS supports each stage in the workflow, from survey design and data acquisition to processing and interpretation. The Company's services enable the integration of EM data with seismic and other geophysical and geological information to give explorationists a clearer and more complete understanding of the subsurface. This improves exploration efficiency and reduces risks and the finding costs per barrel. CSEM technology can also be used to detect the presence of marine mineral deposits (primarily Seabed Massive Sulphides) and in other offshore construction and exploration activity.

Attachment

• Project Shift - Arctic opinion letter 6 May 2025