PROSPECTUS Spectrum ASA€¦ · Investing in the Company and the Company’s Shares involves material risks and uncertainties. See Section 2 “Risk Factors” and Section 4 “Cautionary

PROSPECTUS

Spectrum ASA

Listing of 10,000,000 New Shares issued in connection with a Private Placement completed on

1 June 2015 at a Subscription Price of NOK 32 per New Share

Subsequent Offering and listing of up to 1,500,000 Offer Shares at a Subscription Price of

NOK 32 per Offer Share with non-transferable Subscription Rights for Eligible Shareholders

This prospectus (the “Prospectus”) relates to, and has been prepared in connection with (i) the

listing (the “Listing”) on Oslo Børs (“Oslo Børs”), of 10,000,000 new shares, each with a nominal

value of NOK 1 (the “New Shares”) in Spectrum ASA (“Spectrum” or the “Company”, and

together with its consolidated subsidiaries, (“the Group”) issued in connection with a Private

Placement (the “Private Placement”) conducted on 1 June 2015, and which was approved by an

extraordinary general meeting in the Company on 23 June 2015 at a subscription price of NOK 32

per New Share, and (ii) a subsequent offering (the “Subsequent Offering”) and listing on Oslo

Børs of up to 1,500,000 offer shares, each with a nominal value of NOK 1, in the Company (the

“Offer Shares”) at a subscription price of NOK 32 per Offer Share, the “Subscription Price”).

The existing shareholders of the Company as at the end of 1 June 2015, as appeared in the

Norwegian Central Securities Depository (the “VPS”) on 3 June 2015 (T+2) (the “Record Date”),

who were not invited to participate in the Private Placement and who are not resident in a

jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway)

require any prospectus filing, registration or similar action (the “Eligible Shareholders”), are being

granted non-transferable subscription rights (the “Subscription Rights”) that, subject to applicable

law, provide the right to subscribe for and be allocated Offer Shares at the Subscription Price.

The Subscription Rights are non-transferable. Subscription Rights that are not used to

subscribe for Offer Shares before the expiry of the Subscription Period will have no value and

will lapse without compensation to the holder.

Investing in the Company and the Company’s Shares involves material risks and uncertainties. See

Section 2 “Risk Factors” and Section 4 “Cautionary Note Regarding Forward-Looking Statements”.

Joint- Lead Managers and Joint Bookrunners:

The date of this Prospectus is 3 July 2015

Spectrum ASA

1

Important Notice

Please refer to Annex A “Definitions” for definitions of terms used throughout this Prospectus,

which also apply to the front page and this Section “Important Notice”.

This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June

2007 no.75 (the “Norwegian Securities Trading Act”) and related secondary legislation and

regulations including the EC Commission Regulation EC/809/2004 implementing the Directive

2003/71/EC regarding information contained in prospectuses, as amended (the “Prospective

Directive”), and as implemented in Norway.

The Prospectus has been prepared solely in the English language. The Financial Supervisory

Authority of Norway (the “Norwegian FSA”) has reviewed and approved this Prospectus in

accordance with the Norwegian Securities Trading Act Section 7-7 and Section 7-8, cf. Section 7-3

of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the

accuracy or completeness of the information given in this Prospectus. The approval given by the

Norwegian FSA only relates to the Company’s descriptions pursuant to a pre-defined check list of

requirements, The Norwegian FSA has not made any form of control or approval relating to

corporate matters described in or otherwise covered by this Prospectus.

The Company has furnished the information in this Prospectus. The Company has engaged ABG

Sundal Collier ASA and Danske Bank, Norwegian branch (“Danske Bank”) as joint lead managers

and bookrunners (the ”Managers”) for the Private Placement and the Subsequent Offering. The

Managers makes no representation or warranty, express or implied, as to the accuracy or

completeness of the information in this Prospectus, and nothing contained in this Prospectus is, or

shall be relied upon as, a promise or representation by the Managers. Neither the Company nor the

Managers have authorised any other person to provide investors with any other information related

to the Private Placement and/or the Subsequent Offering, and neither the Company nor the

Managers will assume any responsibility for any information other persons may provide.

The information contained herein is subject to change, completion and amendment without notice.

In accordance with section 7-15 of the Norwegian Securities Trading Act, every significant new

factor, material mistake, or inaccuracy relating to the information included in the Prospectus, which

is capable of affecting the assessment of the Company’s Shares between the time when the

Prospectus is approved and the date of Listing of the New Shares and the Offer Shares on Oslo Børs

will be published and announced promptly as a supplement to this Prospectus. Publication of this

Prospectus shall not create any implication that there has been no change in the Group’s affairs or

that the information herein is correct as of any date subsequent to the date of the Prospectus.

The distribution of this Prospectus may in certain jurisdictions be restricted by law.

Accordingly, this Prospectus may not be distributed or published in any jurisdiction except

under circumstances that are in compliance with any applicable laws and regulations. The

Company and the Managers require persons in possession of this Prospectus to inform

themselves about, and to observe, any such restrictions. The Company and the Managers

require persons in possession of this Prospectus, in possession of Subscription Rights/rights to

subscribe the Offer Shares or considering to subscribe for Offer Shares to inform themselves

about, and to observe, any such restrictions.

An investment in the Company involves inherent risks. Potential investors should carefully consider

the risk factors set out in Section 2 “Risk Factors” as well as the information regarding forward-

looking statements in Section 4 “Cautionary note regarding forward looking statements” and all

other information contained herein before making an investment decision. An investment in the

Company is suitable only for investors who understand the risk factors associated with this type of

investment and who can afford a loss of their entire investment.

Spectrum ASA

2

In the ordinary course of their respective businesses, the Managers and certain of its affiliates have

engaged, and will continue to engage, in investment and commercial banking transactions with the

Company.

This Prospectus does not constitute an offer of, or an invitation to subscribe or purchase, any

of the Offer Shares in any jurisdiction in which such offer or subscription or purchase would

be unlawful. No one has taken any action that would permit a public offering of the Shares,

the Subscription rights or the Offer Shares to occur outside of Norway. Furthermore, the

restrictions and limitations listed and described herein are not exhaustive, and other

restrictions and limitations in relation to the Private Placement, the Subsequent Offering

and/or the Prospectus that are not known or identified by the Company and the Managers at

the date of this Prospectus may apply in various jurisdictions as they relate to the Prospectus.

Neither the Shares nor the Subscription Rights have been, and will not be, registered under

the U.S. Securities Act or with any securities regulatory authority of any state or other

jurisdiction in the United States, and are being offered and sold: (i) in the United States only

to persons who are "qualified institutional buyers" (QIBs) in reliance on an exemption from

the registration requirements under the U.S. Securities Act; and (ii) outside the United States

in compliance with Regulation S. The distribution of this Prospectus and the offer and sale of

the Offer Shares in certain jurisdictions may be restricted by law. Persons in possession of

this Prospectus are required to inform themselves about and to observe any such restrictions.

For further details regarding selling and transfer restrictions, see Section 21 (“Selling and

transfer restrictions”) of this Prospectus.

Without limiting the manner in which the Company may choose to make any public

announcements, and subject to the Company’s obligations under applicable law, announcements

relating to the matters described in this Prospectus will be considered to have been made once they

have been received by Oslo Børs and distributed through its information system.

This Prospectus and terms and conditions of the Private Placement and the Subsequent Offering

shall be governed by and constructed in accordance with Norwegian law. The courts of Norway,

with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out

of or in connection with the Private Placement, the Subsequent Offering or this Prospectus.

Spectrum ASA

3

TABLE OF CONTENTS

1. SUMMARY ............................................................................................................................ 4

2. RISK FACTORS ................................................................................................................... 20

3. STATEMENT OF RESPONSIBILITY ................................................................................ 29

4. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ........ 30

5. ACQUISITION OF MULTI-CLIENT SEISMIC LIBRARY FROM FUGRO ................. 31

6. THE COMPLETED PRIVATE PLACEMENT ................................................................. 33

7. SUBSEQUENT OFFERING ................................................................................................ 38

8. FUGRO SEISMIC LIBRARY .............................................................................................. 48

9. PRESENTATION OF THE COMPANY ........................................................................... 57

10. THE COMPANY’S BUSINESS AND INDUSTRY .......................................................... 76

11. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES ............................... 81

12. FINANCIAL INFORMATION .......................................................................................... 97

13. UNAUDITED CONDENSED PRO FORMA FINANCIAL INFORMATION .......... 108

14. OPERATING AND FINANCIAL REVIEW .................................................................. 123

15. CAPITAL RESOURCES ................................................................................................... 128

16. SHARES AND SHARE CAPITAL .................................................................................. 137

17. LEGAL MATTERS ............................................................................................................ 144

18. SHAREHOLDER MATTERS AND NORWEGIAN SECURITIES LAW ................... 147

19. NORWEGIAN TAX CONSIDERATIONS ..................................................................... 156

20. DOCUMENTS ON DISPLAY .......................................................................................... 160

21. SELLING AND TRANSFER RESTRICTIONS .............................................................. 161

ANNEX A – DEFINITIONS

ANNEX B – ARTICLES OF ASSOCIATION

ANNEX C – INDEPENDENT ASSURANCE REPORT ON THE PRO FORMA FINANCIAL

INFORMATION

ANNEX D – ANNUAL REPORT FMCS AS

ANNEX E – SUBSCRIPTION FORM

Spectrum ASA

4

1. SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These Elements are

numbered in Sections A – E (A.1 – E.7) below. This summary contains all the Elements required to

be included in a summary for these types of securities and the Company. Because some Elements

are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of

securities and issuer, it is possible that no relevant information can be given regarding the Element.

In this case, a short description of the Element is included in the summary with the mention of “not

applicable”.

Section A – Introduction and Warnings

A.1 Warnings The following summary should be read as an introduction to

the Prospectus and in conjunction with, and is qualified in its

entirety, by the more detailed information and the Appendices

appearing elsewhere in this Prospectus. Any decision to invest

in the securities should be based on consideration of the

Prospectus as a whole by the investor, including the documents

incorporated by reference.

Where a claim relating to the information contained in this

Prospectus is brought before a court, the plaintiff might under

the applicable legislation have to bear the costs of translating

the Prospectus before the legal proceedings are initiated. Civil

liability attaches to those persons who have tabled the

summary including any translation thereof, and applied for its

notification, but only if the summary is misleading, inaccurate

or inconsistent when read together with the other parts of the

Prospectus.

A.2 Consent to use of the

prospectus

Not applicable; no consent is granted by the Company for the

use of the Prospectus for subsequent resale or final placement

of the Shares.

Spectrum ASA

5

Section B – Issuer

B.1 Legal and commercial

name

Spectrum ASA

B.2 Domicile and legal form,

legislation and country

of incorporation

The Company is a Norwegian public limited liability company

organised under the laws of Norway in accordance with the

Norwegian Public Limited Companies Act. The Company was

incorporated on 25 March 2008 with registration number 992

470 763.

B.3 Current operations,

principal activities and

markets

The principal activities of Spectrum are the production and

sale of multi-client seismic surveys and imaging of seismic

data for both multi-client surveys and proprietary customers

operating in the global oil and gas market. Multi-client sales

represent 99.0% of the Group`s gross revenue in 2014 (98.5%

in 2013 and 97.6% in 2012). Consequently, the Company has

one segment as defined in IFRS 8 operating segments.

Spectrum’s operational headquarters are at Woking, England

with subsidiaries in Houston (USA), Australia, Singapore and

Beijing (China), together with a Joint Venture operation in

Egypt. Spectrum and its affiliates employs around 200 persons

worldwide.

Spectrum has four key geographical areas considered as high

impact areas for multi-client studies:

North and South America

The Mediterranean Sea

Africa

North West Europe

The Group’s customers for data processing and multi-client

data are mainly oil and gas companies worldwide. The demand

for marine geophysical services is influenced by several

factors, the most important being the demand for oil and gas,

the level of the oil companies’ exploration and production

spending and developments in technology that affect the cost,

quality and reliability of marine seismic data.

B.4a Significant recent trends

affecting the Company

and the industry in

which it operates

Seismic spending will most likely be reduced during 2015 due

to the current downturn in the oil and gas industry. By the end

of 2014 it became clear that the oil price was under pressure

and that oil companies were to cut back on their exploration

spending.

The recent downturn in the oil price has also impacted the

seismic industry, but the management in Spectrum believe that

the Company’s asset light business model is resilient to a

cyclical downturn. The Company also believes that offshore

seismic data is needed in order to keep up the volume of

conventional offshore oil production.

Spectrum ASA

6

B.5 Description of the

Group

Spectrum is the parent company of the Group, and has the

following direct and indirect subsidiaries: Spectrum Geo Ltd

(UK), Spectrum Geo Pty Ltd (Australia), Spectrum Geo Inc.

Ltd (Singapore), Spectrum Geo do Brasil Servicos Geofisicos

Ltda (Brazil), Carmot Seismic AS (Norway), Carmot

Processing AS (Norway), Spectrum Geo Inc (USA) and % of

Spectrum Geopex Egypt Ltd (Egypt) and Geo Bridge Pte Ltd

(Singapore).

The legal structure is as follows:

B.6 Interests in the

Company and voting

rights

All Shares of the Company are of the same class and are equal

in all respects, including the voting rights. Each Share carries

one vote.

Shareholders owning 5 per cent or more of the Company have

an interest in the Company’s share capital which is notifiable

to the market according to the Norwegian Securities Trading

Act. The following shareholders in the Company own more

than 5 per cent of the issued share capital as of 8 June 2015:

- Altor Invest 1 AS: 8,000,232 shares (15.00%)

- Altor Invest 2 AS: 8,000,232 shares (15.00%)

- Spencer Trading Inc: 5,659,022 shares (10.61%)

As far as the Company is aware, there is no other natural or

legal person other than the above mentioned, which directly or

indirectly has a shareholding in the Company above 5 per cent

which is notifiable under Norwegian Law.

Spectrum ASA

7

B.7 Selected historical key

financial information

The consolidated financial statements of the Group has been

prepared in accordance with International Financial Reporting

Standards (IFRS) as adopted by the EU.

The following tables present data extracted from selected

financial information for the Company based on audited

financial statements as of, and for each of the three years

ended 31 December 2014, 2013 and 2012, and based on the

unaudited quarterly reports for the three months period ended

31 March 2015 and 31 March 2014. All table figures are in

USD thousands.

Figures in USD thousands

(Unaudited)

01.01-31.03

2015

01.01-31.03

2014

Year ended

31 December

2014

Year ended

31 December

2013

Year ended

31 December

2012

SELECTED INCOME STATEMENT ITEMS

Total operating revenues 14,887 38,001 183,298 143,023 116,972

Total operating expenses (7,814) (9,242) (32,936) (38,364) (29,330)

EBITDA 7,073 28,759 150,362 104,659 87,642

D&A (11,376) (20,259) (97,567) (63,017) (48,287)

Operating (loss) / profit (4,303) 8,500 52,795 41,642 39,355

Net profit/(loss) for the year (3,322) 5,958 38,229 29,156 23,115

SELECTED BALANCE SHEET ITEMS

Multi-Client library 129,328 - 131,266 137,109 87,087

Total non-current assets 157,019 - 157,055 137,109 109,525

Total current assets 82,788 - 94,324 59,203 76,580

Total assets 239,808 - 251,379 196,313 186,105

Total equity 171,994 - 174,267 138,041 105,391

Total non-current liabilities 1,500 - 2,066 766 14,587

Total current liabilities 66,315 - 75,045 57,506 66,128

Total shareholders’ equity and liabilities 239,808 - 251,379 196,313 186,105

SELECTED CASH FLOW STATEMENT ITEMS

Profit / (loss) before tax (4,814) 8,704 54,654 42,905 30,954

Working capital change 10,757 8,947 (10,023) (11,955) 8,329

Net cash flow from operating activities 17,994 33,414 128,170 78,571 92,531

Net cash flow from investing activities (8,934) (19,042) (117,305) (89,572) (78,728)

Net cash from financing activities 246 275 (4,928) (2,120) (2,788)

Net change in cash and cash equivalents 9,306 14,647 5,937 (13,121) 11,015

Net foreign exchange differences (unrealised) 3 (292) (1,147) 21

Cash and cash equivalents at beginning of period 8,364 2,719 2,719 16,988 5,953

Cash and cash equivalents at end of period 17,670 17,369 8,364 2,719 16,988

Spectrum ASA

8

B.8 Selected key pro forma

financial information

The unaudited pro forma condensed financial information for

the Company does not include all of the information required

for financial statements under International Financial

Reporting Standards, and should be read in conjunction with

the historical information of the Company.

The unaudited pro forma condensed financial information has

been prepared for illustrative purposes only to show how the

acquisition of the Library, might have affected the

Company’s consolidated income statement for 2014, if the

acquisition occurred on 1 January, 2014. The unaudited pro

forma income statement for 1 January to 31 March 2015 has

been compiled as if the transaction occurred on 1 January

2015 and the unaudited pro forma condensed statement of

financial position as of 31 March 2015 as if the transaction

occurred on 31 March 2015. The unaudited pro forma

financial information has been prepared assuming the

transaction will be approved.

Because of its nature, the unaudited condensed pro forma

financial information addresses a hypothetical situation and

therefore does not represent the Company’s actual financial

position or results as if the transactions had in fact occurred

on those dates and is not representative of the results of

operations for any future periods. Investors are cautioned not

to place undue reliance on this unaudited pro forma financial

information.

Spectrum ASA

9

The table below sets out the Company's unaudited pro forma consolidated condensed income

statement for the year ended 31 December 2014, as if the Transaction had taken place at 1 January

2014.

Figures in USD thousands Note Spectrum Group Total

Fugro

Unaudited

Harmonization

differences

Unaudited

Pro forma

adjustments

Unaudited

Total pro

forma

Unaudited

Net operating revenue 183,298 95,366 - - 278,664

Amortisation of Multi-Client library 1 (94,414) (91,981) - (10,782) (197,178)

Impairment of Multi-Client library 2 - (155,268) - - (155,268)

Operating expenses 3 (34,106) (19,039) - (517) (53,662)

Share of profit/(loss) of joint ventures 1,170 - - - 1,170

Depreciation (3,153) (7) - - (3,160)

EBIT 52,795 (170,931) - (11,299) (129,435)

Interest expense, net 4 (452) (16,942) - 16,035 (1,359)

Foreign exchange profit / (loss) (260) 2,974 - - 2,713

Other financial items 2,571 - - - 2,571

Profit / (Loss) before tax 54,654 (184,898) - 4,736 (125,509)

Tax expense 5 (16,425) 49,839 - (1,421) 31,993

Net Profit / (Loss) to equity holders 38,229 (135,060) - 3,315 (93,516)

The table below sets out the Company's unaudited pro forma income statement for the quarter

ended 31 March 2015, as if the Transaction had taken place at 1 January 2015.

Figures in USD thousands Note

Spectrum

Group

Total Fugro

Harmonization

differences

Pro-forma

adjustments

Total pro forma



Operating expenses 3 (7,814) (206) - (458) (8,478)

Depreciation (765) - - - (765)

EBIT (4,303) (10,561) - (3,174) (18,038)

Interest expense, net 4 (60) (1,731) - 1,193 (598)

Foreign exchange profit / (loss) (420) - - - (420)

Other financial items (31) - - - (31)

Profit / (Loss) before tax (4,814) (12,292) - (1,981) (19,087)

Tax expense 5 1,492 2,692 - 594 4,778

Net Profit / (Loss) to equity holders (3,322) (9,600) - (1,387) (14,309)

Spectrum ASA

10

The table below sets out the Company's unaudited pro forma Statement of financial position as of

31 March 2015, as if the Transaction had taken place at 31 March 2015.

Figures in USD thousands Note Spectrum

Group

Total Fugro Harmonization

differences

Pro-forma

adjustments

Total

pro- forma

Assets

Non-current assets

Deferred tax assets 6 2,732 6,934 - (6,934) 2,732

Goodwill 7 12,481 - - 2,287 14,768

Software 8 2,360 8,262 - (8,262) 2,360

Multi-client library 9 129,328 161,790 - (46,790) 244,328

Financial assets 10 2,842 486 - (486) 2,842

Fixtures, fittings and office equipment 2,789 - - - 2,789

Other receivables 4,488 - - - 4,488

Total non-current assets 157,020 177,472 - (60,185) 274,307

Current assets

Work in Progress 23,500 - - - 23,500

Accounts receivable 28,299 9,328 - - 37,627

Other receivables 11 13,318 5,405 - (13) 18,710

Cash and cash equivalents 12 17,670 9,508 - (2,182) 24,996

Total current assets 82,787 24,241 - (2,195) 104,833

Total assets 239,808 201,713 - (62,380) 379,141

Shareholders' Equity and Liabilities -

Shareholders' equity -

Share capital 13 7,534 615 - 656 8,805

Share premium 13 29,838 - - 39,395 69,233

Other paid-in capital 13 59,254 51,622 - (51,622) 59,254

Retained earnings 13 77,835 (159,984) - 154,319 72,171

Foreign translation reserve (2,467) (694) - - (3,161)

Total equity 171,995 (108,441) - 142,748 206,302

Long term liabilities -

Deferred tax liability 6 390 24,014 - (21,265) 3,139

Long term interest bearing debt 14 1,081 - - 44,347 45,428

Other liabilities 15 29 272,876 - (272,876) 29

Total long term liabilities 1,500 296,890 - (249,794) 48,596

Short term interest bearing debt 14 1,281 - - 30,000 31,281

Accounts payable 16 19,413 11,218 - (987) 29,644

Tax and other public duties payable 17 9,829 - - (710) 9,119

Other liabilities 15 35,792 2,045 - 16,363 54,200

Total current liabilities 66,315 13,264 - 44,666 124,245

Total shareholders' equity and liabilities 239,808 201,713 - (62,380) 379,141

Spectrum ASA

11

B.9 Profit forecast or

estimate

Not applicable. No profit forecasts or estimates are made.

B.10 Audit report

qualifications

Not applicable. Ernst & Young AS has audited the Company’s

financial statements for the financial years 2014, 2013 and

2012. Their reports are incorporated by reference in Section 20

(“Documents on display). The Auditor’s report for 2014 and

2013 and 2012 were issued without qualifications.

B.11 Insufficient working

capital

Not applicable. The Company is of the opinion that the

working capital available to the Group is sufficient for the

Group’s present requirements, for the period covering at least

12 months from the date of this Prospectus.

Spectrum ASA

12

Section C – Securities

C.1 Type and class of

securities being

offered and admitted to

trading and

identification number

The Company has one class of shares, and all Shares carry

equal rights as set out in Section 4-1 of the Norwegian Public

Limited Companies Act.

The shares are registered with the VPS with ISIN

NO0010429145, and the Company’s registrar is Danske Bank

(Transaction Services, Søndre Gate 13-15, N-7466

Trondheim).

The New Shares and the Offer Shares are in all respects equal

to the existing Shares in the Company.

C.2 Currency The New Shares and the Offer Shares are issued in NOK, and

will be quoted and traded in NOK on Oslo Børs.

C.3 Number of shares in

issue and par value

As of the date of this Prospectus, the Company’s share capital

is currently NOK 53,326,625 divided into 53,326,625 Shares

each with a nominal value of NOK 1.

The share capital increase related to the Subsequent Offering

(assuming full subscription) will be NOK 1,500,000 divided

into 1,500,000 Shares, each with a nominal value of NOK 1.

Following the Subsequent Offering (assuming full

subscription), the total number of issued Shares will increase

to 54,826,625, each with a nominal value of NOK 1 per Share.

C.4 Rights attached to the

securities

The New Shares and the Offer Shares are ordinary shares in

the Company, i.e. the same class as the Shares already issued

and listed on Oslo Børs.

The Private Placement: The New Shares carried full

shareholders rights in the Company, including the right to

dividends, from the time at which the share capital increase

relating to the New Shares was registered in the Norwegian

Company Register, on 26 June 2015.

The Subsequent Offering: The Offer Shares will carry full

shareholders rights in the Company, including the right to

dividends, from the time at which the share capital increase

relating to the Subsequent Offering is registered in the

Norwegian Company Register, expected to be on or about 28

July 2015.

The Company’s Shares have equal rights to the Company’s

profits, in the event of liquidation and to receive dividends

unless shareholders of the Company approve otherwise.

Spectrum ASA

13

C.5 Restrictions on

transferability

The Subscription Rights are non-transferable. The New Shares

and the Offer Shares will be freely transferable and subject to

the Company’s Articles of Association and any applicable

securities law, there are no restrictions in the Company’s

securities.

C.6 Admission to trading The Company’s Shares are listed on Oslo Børs under the ticker

code; “SPU”.

The listing on Oslo Børs of the New Shares is subject to the

approval of this Prospectus by the Norwegian FSA under the

rules of the Securities Trading Act. Such approval was granted

on 3 July 2015. The first day of trading on Oslo Børs of the

New Shares, will be on or about 3 July 2015.

The Offer Shares will be listed on Oslo Børs as soon as the

Offer Shares have been registered with the Norwegian

Company Register and the VPS, expected to be on or about 29

July 2015.

C.7 Dividend policy The Company’s overall objective is to combine strong growth

through reinvestment with dividend payments. The Board

expects to pay an annual dividend in the range of 15 - 25% of

earnings over the next few years and an increasing payout ratio

as the business matures.

The Company has paid dividend per share of USD 0.12, 0.10

and 0.08 respectively in 2014, 2013 and 2012.

Spectrum ASA

14

Section D – Risks

D.1 Key risks specific to the

Company or its industry

The key risks related to the business of the Group and the

market and the industry in which the Group operates:

Downturn in customer markets and to the industry:

Changes in the demand for geophysical services may

materially adversely affect revenues, profitability, cash

flow and the financial conditions of the Group.

Risks related to oil and gas prices: Oil and natural gas prices

are unstable and are subject to fluctuation. Should the

current oil price level persist for the years to come this will

have a significant impact on the oil and gas industry as a

whole, including the demand for the Group’s products and

services. Lower oil and gas prices should also be expected

to impede the Group’s ability to finance future

developments.

Risks related to the sale of seismic data: The Group’s future

sales of multi-client data licenses are uncertain and depend

on a variety of factors, many of which will be beyond the

Company’s control, and which may materially adversely

affect the Group’s future business, results of operations

and financial condition.

Risks related to the competitive situation: The seismic industry

is highly competitive. There can be no assurance that the

Group will be able to respond to existing and new sources

of competition. Increased competition in the seismic

market may materially adversely affect the Group’s

business, results of operations and financial condition.

Economic, political and legal risk: Changes in the economic,

regulatory and political situation in the regions of which

the Group’s operations are dependent on could have

material adverse effect on exploration, production and

development activity and could, directly or indirectly,

materially adversely affect the Group’s business, results of

operations and financial condition.

Operational risks:

Operational risk and harm to personnel and property:

Preforming offshore seismic surveys are associated with

inherent risks, including but not limited to unexpected

failure or damage to vessels and technical equipment, work

accidents, or adverse weather conditions. These risks can

cause personal injury, prevent surveys to be performed as

scheduled and other business interruptions, property and

equipment damage, pollution and environmental damage,

leading to unexpectedly high operating costs, substantial

Spectrum ASA

15

losses, additional investments, etc., which may have a

material negative effect on the Group’s operating results

and financial position.

Technological risks: The seismic and oil service industry are

characterised by rapid changes in technology. There can be

no assurance that the Group will be able to successfully

patent, develop, and commercialise new technology or be

able to respond to new technological developments and

challenges or identify and respond to new market

opportunities. The effort to respond to technological

innovations may require significant financial investments

and resources.

Trade secrets and intellectual property risks: Trade secrets

and other non- patented intellectual property are

recognised by the Company as important assets. There can

be no assurance that the Group’s efforts to implement

protective measures and to register (where appropriate) and

defend its trade secrets and other non-patented intellectual

property rights will be sufficient.

Contractual and counter-party risks: The Group’s income

depends on contracts with customers regarding collection

and sale / licensing of seismic data. Each contract normally

involves a substantial value or consideration to the Group.

The Group’s revenues, profitability, cash flows and

financial condition may be materially adversely affected if

it fails to continue its current agreements or establish new

agreements on similar terms.

Risks related to jointly controlled entities: There can be no

assurance that the Group’s joint operation partners will

continue their relationships with the Group in the future or

that the Group will be able to pursue its stated strategies

with respect to its joint operations in the markets in which

they operate. The Group’s ability to receive dividends and

other payments from its joint operations depends not only

upon the joint operations’ cash flows and profits, but also

upon the terms of agreements with the Group’s joint

partners.

Risks related to uninsured losses: There can be no

assurance that the Group’s insurances will cover all the

potential risks associated with its operations. Any

uninsured loss or unpaid claim cloud have a material

adverse effect on the Group’s operating results and

financial condition.

Dependence on key personnel: The loss of the services of

management personnel or other key employees could have

Spectrum ASA

16

a material adverse effect on the financial condition of the

Group.

Disputes: The Group may in the future become, involved

in various disputes and legal, administrative and

governmental proceedings in Norway and other

jurisdictions that potentially could expose the Group to

significant losses and liabilities.

Financial Risks:

Liquidity risks: There can be no assurance that the Group

may not experience net cash flow shortfalls exceeding the

Group’s available funding sources. Furthermore, there can

be no assurance that the Company will be able to raise new

equity, or arrange new borrowing facilities, on favourable

terms and in amounts necessary to conduct its ongoing and

future operations, should this be required.

Loan covenants: Failure to comply with financial and other

covenants may have a material adverse effect on the

Group, including potential increased financial cost,

requirements for additional security or cancellation of

loans.

Risks associated with taxation: The amounts of taxes the

Group pays in different jurisdictions could increase

substantially as a result of changes in laws or their

interpretations by the relevant tax authorities, which could

have a material adverse effect on the Group’s liquidity and

results of operations.

Risk factors relating to the Transaction

The Company’s commercial return on the Library: The

Company has the obvious risk that the acquired Library

gives the Company the desired financial return on

investment.

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D.3 Key risks specific to the

securities

Risk factors relating to the shares, the Private Placement and

the Subsequent Offering:

The price of the Shares may fluctuate significantly: The

trading price of the Company’s Shares may experience

volatility.

Eligible Shareholders who do not participate in the

Subsequent Offering may experience significant dilution

on their shareholding: To the extent that an Eligible

Shareholder does not exercise its Subscription Rights such

Eligible Shareholder’s proportionate ownership and voting

interests in the Company will be significantly diluted.

Future issuance of Shares or other securities may dilute

the holdings of shareholders and could materially affect

the price of the Share: Any additional offering of shares in

the Company could reduce the proportionate ownership

and voting interest of holders of Shares, as well as earnings

per Share and the net asset value per Share.

Norwegian law may limit the shareholders’ ability to bring

action against the Company: The rights of holders of

shares are governed by Norwegian law and by the articles

of association. These rights differ from the rights of

shareholders in other jurisdictions.

Risk for holders of Shares that are registered in a nominee

account: Beneficial owners of Shares that are registered in

a nominee account (e.g., through brokers, dealers or other

third parties) may not be able to vote such Shares unless

their ownership is re-registered in their names with the

VPS prior to the Company's general meetings.

A delay in commencement of Listing of the Shares A delay

in the commencement of listing of the New Shares and the

Offer Shares on Oslo Børs, would affect the liquidity and

pricing of the New Shares and the Offer Shares and restrict

the sale of the New Shares and the Offer Shares until these

are allowed for Listing.

The transfer of Shares is subject to transfer restrictions:

The Shares or the New Shares/Offer Shares may not be

offered or sold in the United States or to a U.S. person

except pursuant to an exemption from the registration

requirements of the US Securities Act and applicable

securities laws.

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Section E – Offer

E.1 Net proceeds and

estimated expenses

The net proceeds from the Private Placement and the

Subsequent Offering (assuming full subscription) will be

approximately NOK 352,400,000.

The total fees and expenses related to the Private Placement

and the Subsequent Offering are estimated to amount to

approximately NOK 15,600,000.

Transaction cost related to the New Shares, the Offer Shares

and all other directly attributable costs in connection with the

Private Placement and the Subsequent Offering will be paid by

the Company.

E.2a. Reasons for the Offering

and use of proceeds

The net proceeds from the Private Placement of NOK

306,600,000 will be used to finance the Transaction.

The Subsequent Offering is being made as an offering with

non-transferable Subscription Rights for Eligible Shareholders,

so as to enable Eligible Shareholders to reduce the dilution

they experienced as a result of the Private Placement. The net

proceeds from the Subsequent Offering of up to NOK

45,800,000 will be used to strengthening the Company’s

balance sheet.

E.3 Terms and conditions of

the Offering

The Subsequent Offer (assuming full subscription) consist of

an offer by the Company to issue a total of 1,500,000 Offer

Shares at a subscription price of NOK 32,00 per Offer Share

(equal to the subscription price in the Private Placement),

raising a gross proceeds of NOK 48,000,000.

Existing Shareholders based on their registered holding of

Shares in VPS on Record Date, who were not given the

opportunity to subscribe for New Shares in the Private

Placement and who are not resident in a jurisdiction where

such offering would be unlawful or (other than in Norway)

would require any filing, registration or similar action, will

receive non-transferable Subscription Rights providing a

preferential right to subscribe for and be allocated Offer Shares

in the Subsequent Offering. Each Eligible Shareholder will

receive one (1) Subscription Right for every eight (8) Shares

held as of Record Date. The number of Subscription Rights

issued to each Shareholder will be rounded down to the nearest

whole number of Subscription Rights. Each Subscription Right

grants the right to subscribe for and be allocated one (1) Offer

Share in the Subsequent Offering.

E.4 Material and conflicting

interests

The Managers and its affiliates have provided from time to

time, and may provide in the future, investment and

commercial banking services to the Company and its affiliates

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19

in the ordinary course of business, for which they may have

received and may continue to receive customary fees and

commissions. The Managers, its employees and any affiliate

may currently own existing Shares in the Company. The

Managers do not intend to disclose the extent of any such

investments or transactions otherwise than in accordance with

any legal or regulatory obligation to do so.

The Managers will receive a success fee of a fixed percentage

of the gross proceeds raised in the Private Placement and the

Subsequent Offering and, as such, have an interest in the

Private Placement and the Subsequent Offering.

In addition, Danske Bank is the Company’s main bank and

major lender, see also Section 5.2 (“Financing of the

Transaction”)

Other than what is set out above, there are no other interests

(including conflict of interests) of natural and legal persons

involved in the Private Placement or in the Subsequent

Offering.

E.5 Selling shareholders and

lock-up agreements

Not applicable. There are no selling shareholders in the Private

Placement or in the Subsequent Offering, nor are there any

lock-up restrictions on the shares offered in the Private

Placement or the Subsequent Offering.

E.6 Dilution resulting from

the Offering

The Company’s total number of Shares increased by

10,000,000 shares following the Private Placement and will

increase by 1,500,000 shares as a result of the Subsequent

Offering (assuming full subscription), resulting in a total

number of 54,826,625 outstanding Shares.

Shareholders who did not participate in the Private Placement

were subject to a direct dilution of their ownership of

approximately 18.8%.

Shareholders who do not participate either in the Private

Placement nor the Subsequent Offering will be subject to a

direct dilution of their ownership of approximately 21.0%.

E.7 Estimated expenses

charged to the investor

Not applicable. The expenses related to the Private Placement

and the Subsequent Offering will be paid by the Company and

not charged to the investor.

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20

2. RISK FACTORS

Investing in the Offer Shares involves inherent risks. Prior to making any investment decision, an

Investor should carefully consider all of the information contained in this Prospectus, and in

particular the following risks and uncertainties described in this Section 2 “Risk Factors”.

The risks and uncertainties described below are the principal known risks and uncertainties faced

by the Group as at the date hereof that the Company believes are the material risk relevant to an

investment in the Offer Shares. Should any of the following risk factors occur, it could have a

material adverse effect on the Group’s business, prospects, result of operations, cash flows and

financial condition, and the price of the Company’s securities may decline, causing investors to

lose all or part of their invested capital.

It is not possible to quantify the significance to the Group of each individual risk factor as each of

the risk factors mentioned below may materialize to a greater or lesser degree and have a material

adverse effect on the Group’s business, results of operations, cash flows and financial condition,

and the price of the Company’s securities may decline, causing investors to lose all or part of their

invested capital. The order in which the individual risks are presented below is not intended to

provide an indication of the likelihood of their occurrence nor of the severity of significance of

individual risks.

An investment in the Shares in the Company is suitable only for investors who understand the risk

factors associated with this type of investment and who can afford a loss of all of the investment.

The information is presented in this Section 2 “Risk Factors” is as of the date of this Prospectus.

2.1 Market risk

2.1.1 Risks related to the industry and downturn in customer markets

Demand for offshore geophysical services depends on the level of activity and capital spending by

oil and gas companies, particularly exploration and development expenditures. Capital

expenditures, and in particular exploration and development expenditures, by oil and gas companies

can be negatively affected by a number of factors including, but not limited to, decreases in oil and

gas prices, fluctuations in production levels and disappointing exploration results. Changes in the

demand for offshore geophysical services may materially adversely affect revenues, profitability,

cash flows and the financial condition of the Group.

On the supply side, there is uncertainty when it comes to the level of construction of new seismic

vessels, the upgrading and maintenance of existing production units, and the conversion of other

vessel types to seismic vessels.

2.1.2 Risks related to oil and gas prices

Oil and natural gas prices are unstable and are subject to fluctuation. Demand for offshore

exploration, development and production has historically been volatile and closely linked to the

prices of oil and gas.

Over the 12 months leading up to the date of this Prospectus, the price of oil has experienced a

sharp decline. Low oil prices typically lead to a reduction in capital expenditures as the oil and gas

companies scale down their investment budgets. Sustained periods of substantially reduced capital

expenditures by oil and gas companies may reduce the demand for the Group’s products and

services. For assets that have booked value in the Company’s financial statements, large reductions

in the oil and gas prices may result in write-downs. Lower oil and gas prices should also be

expected to impede the Group’s ability to finance future developments.

Spectrum ASA

21

Should the current oil price level persist for the years to come this will have a significant impact on

the oil and gas industry as a whole, including the demand for the Group’s products and services.

Several of the oilfields under productions will be uneconomical, while new discoveries will need to

be bigger to meet the economical thresholds. However, the future market indicates a recovery in the

oil and gas prices over the next years but the uncertainty related to the future price development

remains high.

2.1.3 Risks related to the sale of seismic data

The Company has invested significant amounts in acquisition and processing of seismic data that

the Company owns (“multi-client data”). The multi-client data is being licenced to third parties for

non-exclusive use in the oil and gas exploration, development and production activities. However,

the Company cannot guarantee how much of the seismic data it will be able to license or at which

price the seismic data will be sold in the future. There can be no assurance that the Company will be

able to recover all costs and investments associated with acquiring and processing multi-client data.

If the Group is affected by any material adverse change in the general prospects for oil and gas

exploration, development and production activities in areas where the Group acquires multi-client

data, the value of such seismic data would be impaired and the Company may be required to take

charges against its earnings. The value of the multi-client data could also be impaired by

technological or regulatory changes and by other industry or general economic developments. In

general, the Group’s future sales of multi-client data licenses are uncertain and depend on a variety

of factors, many of which will be beyond the Company’s control, and which may materially

adversely affect the Group’s future business, results of operations and financial conditions.

2.1.4 Risks related to the competitive situation

The seismic industry is highly competitive. The Group competes with other companies with an

equal or larger resource base. There can be no assurance that the Group will be able to respond to

existing and new sources of competition. Overcapacity, increased competition and price pressure in

the seismic market may materially adversely affect the Group’s business, results of operations and

financial conditions.

2.1.5 Economic, political and legal risks

Changes in the legislative and fiscal framework governing the oil and gas industry may have

material impact on the business of the Group. The Group’s seismic activities take place in several

foreign countries and regions and changes in political regimes could constitute a material risk factor

for the Group’s operations. All seismic companies operating in international waters are also subject

to risks of war or other armed conflicts, terrorist activities and political, civil or labour disturbances

and embargos. Furthermore, the Group’s operations in foreign countries and regions may cause

both legal and practical difficulties in case of a dispute or conflict. The Group operates in regions

where the ability to protect contractual and other legal rights may be more limited than compared to

regions with more well-established markets. Changes in the economic, regulatory and political

situation in the regions of which the Group’s operations are dependent on could have material

adverse effect on exploration, production and development activity and could, directly or indirectly,

materially adversely affect the Group’s business, results of operations and financial conditions.

2.2 Operational risk

2.2.1 Operational risks and harm to personnel and property

There will always be operational risks involved in performing offshore seismic surveys. This

includes among others unexpected failure or damage to vessels and technical equipment, work

Spectrum ASA

22

accidents, or adverse weather conditions. These risks can cause personal injury, prevent surveys to

be performed as scheduled and other business interruptions, property and equipment damage,

pollution and environmental damage. The Group may be subject to claims as a result of these

hazards. The Group seeks to prevent loss or damages from such incidents by insurances, contractual

regulations and emergency routines. However, there will always be some exposure to technical and

operational risks, with unforeseen problems leading to unexpectedly high operating costs,

substantial losses, additional investments, etc., which may have a material negative effect on the

Group’s operating results and financial position. If e.g. a vessel is rendered a total loss, the charter

party will be void and the Group will under such circumstances experience a shortfall of income

that would otherwise come from operating this vessel. Additionally, the occurrence of any of these

risks could damage the Group’s reputation.

2.2.2 Technological risks

Segments of the seismic and oil service industry are characterised by rapid changes in technology.

The development of new technology may render it necessary to develop and protect new technology

through registration of patents. There can be no assurance that the Group will be able to

successfully patent, develop, and commercialise new technology. Furthermore, there can be no

assurance that the Group will be able to respond to new technological developments and challenges

or identify and respond to new market opportunities.

The Group’s technology projects and efforts to respond to technological innovations may require

significant financial investments and resources. There can be no assurance that the Group will have

the necessary financial and human resources to respond to new technological changes and

innovations and emerging competition.

2.2.3 Trade secrets and intellectual property risks

Trade secrets and other non- patented intellectual property are recognised by the Company as

important assets and potential reasons for disputes and legal battles. The Company relies on a

combination of development, non-disclosure and other contractual provisions and restrictions on

disclosure to protect the Company’s non-patented intellectual property rights and trade secrets.

However, there can be no assurance that the Company’s efforts to implement protective measures

and to register (where appropriate) and defend its trade secrets and other non-patented intellectual

property rights will be sufficient.

2.2.4 Contractual and counter-party risks

The Group’s income depends on contracts with customers regarding collection and sale / licensing

of seismic data. Each contract normally involves a substantial value or consideration to the Group.

Thus, the income of the Group will depend of the financial position of the customers and the

willingness of these customers to honour their obligations towards Spectrum in a timely matter.

Any breach or alleged breach or other contractual disputes related to the Group’s contracts might

result in material losses or other negative effects on the Group. Contracts may be governed by

foreign laws which may create both legal and practical difficulties in case of a dispute or conflict.

The Group also operates in regions where the ability to protect contractual and other legal rights

may be limited compared to regions with more well-established markets.

Further, there can be no assurance that the Group will be able to renew its existing customer

contracts and/or establish additional customer agreements, or that any such future agreements will

be on terms equally favourable to the Group as is currently the case. The Group’s revenues,

Spectrum ASA

23

profitability, cash flows and financial condition may be materially adversely affected if it fails to

continue its current agreements or establish new agreements on similar terms.

2.2.5 Risks related to jointly controlled operations

The Company has made, directly and indirectly, investments in certain joint operation projects and

companies. The Company does not fully control these joint operation projects and companies, and

the Company is dependent on its joint venture partners in order to make the decisions in relation to

the relevant operations that it believes is in the best interest of the Company.

The Group's ability to receive dividends and other payments from its joint operations and

companies depends not only upon the joint operations’ cash flows and profits, but also upon the

terms of agreements with the Group's partners in such operations. Conflict or disagreement with

joint operation partners may lead to deadlock and result in the Group's inability to pursue its

desired strategy and/or force it to exit from the joint operations. Also, the agreements with the joint

operation partners may restrict the Group's freedom to carry out its business outside the framework

of the joint operations.

There can be no assurance that the Group’s joint operation partners will continue their relationships

with the Group in the future or that the Group will be able to pursue its stated strategies with respect

to its joint operations and in the markets in which they operate. Furthermore, the joint operation

partners may (a) have economic or business interests or goals that are inconsistent with those of the

Group; (b) undergo a change of control; (c) experience financial and other difficulties; or (d) be

unable or unwilling to fulfil their obligations under the joint operations, which may materially

adversely affect the Group's revenues, profitability, cash flows and financial condition.

2.2.6 Risks related to uninsured losses

The Group’s business is subject to a number of risks and hazards, including adverse environmental

conditions, accidents, unusual or unexpected geological conditions, changes in the regulatory

environment and natural phenomena such as inclement weather conditions. There can be no

assurance that the Group’s insurances will cover all the potential risks associated with its

operations. In addition, it may not be able to procure adequate insurance coverage at commercially

reasonable rates in the future. Any uninsured loss or unpaid claim could have a material adverse

effect on the Group’s operating results and financial condition.

2.2.7 Risks related to environmental, health and safety issues

The Group’s operations are subject to numerous national and supra-national, environmental, health

and safety laws, regulations, treaties and conventions (together, “Regulations”), including, inter

alia, those controlling the discharge of materials into the environment, requiring removal and clean-

up of environmental contamination, establishing certification, licensing, health and safety, taxes,

labour and training standards, operation of the vessels or otherwise relating to the protection of

human health and the environment. The amendment or modification of existing Regulations or the

adoption of new Regulations curtailing or further regulating the Group’s business could have a

material adverse effect on the Group’s operating results and financial condition. The Group cannot

predict the extent to which future earnings or capital expenditures may be affected by compliance

with such new Regulations.

In addition, the Group may be subject to significant fines, penalties or liability if it does not comply

with any such existing or future Regulations.

Spectrum ASA

24

2.2.8 Dependence on key personnel

The Group is dependent upon attracting and retaining key employees and management personnel.

The seismic business faces competition for skilled personnel, and it is always a risk that

management personnel or other key employees may decide to leave the Group. Competition for

qualified personnel is intense and the Group may be unable to identify and recruit such personnel if

and when needed on short notice. The loss of the services of management personnel or other key

employees could have a material adverse effect on the financial condition of the Group.

2.2.9 Disputes

The Group operates in a legal and regulatory environment that exposes it to litigation and regulatory

risks. Such claims, disputes and legal proceedings are subject to many uncertainties, and their

outcomes are often difficult to predict, particularly in the earlier stages of a case or an investigation

As a result, the Group may in the future become, involved in various disputes and legal,

administrative and governmental proceedings in Norway and other jurisdictions that potentially

could expose the Group to significant losses and liabilities. For more information, see Section 17.3

“Legal and arbitration proceedings”.

2.3 Financial risks

2.3.1 Liquidity risks

Liquidity risk is the risk that the Group may not be able to meet its liabilities as they fall due and as

a result, cease trading. The Group’s policy on overall liquidity is to ensure that there are sufficient

cash and other liquid funds available which, are sufficient to meet the funding requirements from

time to time for the foreseeable future. The Group is actively using a system for planning and

forecasting of cash flows in order to ensure long term liquidity and to plan for the necessary

financing to fund future operations and investments. The Company consider the current liquidity

risk to be low to moderate, and the Group is well position to meet its future working capital

commitments through internally funded cash flows. However, there can be no assurance that the

Group may not experience net cash flow shortfalls exceeding the Group’s available funding

sources. Furthermore, there can be no assurance that the Company will be able to raise new equity,

or arrange new borrowing facilities, on favourable terms and in amounts necessary to conduct its

ongoing and future operations, should this be required.

2.3.2 Currency risks

All entities in the Group have USD as their functional currency. Operating revenues and the

majority of expenses are denominated in USD. Primary currency exposure originates from expenses

incurred in currencies other than USD, mainly NOK, but also EUR, GBP, as well as other

currencies. Fluctuations in NOK and other currencies versus USD may materially adversely affect

the Group and its subsidiaries’ cash flows and financial condition.

2.3.3 Risk for interest rate increases

Interests on the Group’s borrowings from time to time are subject to fluctuations in the applicable

interest rates. Increase in such interest rates will increase the Group’s interest payments and may

have a negative effect on the Group’s liquidity and financial position.

2.3.4 Loan covenants

The Group has a number of covenants related to its loans and other financial commitments, see

Section 15.2 (“Capitalisation and indebtedness”). At the date of this Prospectus, the Group is in

compliance with these covenants. Failure to comply with financial and other covenants may have a

Spectrum ASA

25

material adverse affect on the Company, including potential increased financial cost, requirement

for additional security or cancellation of loans.

2.3.5 Risks associated with taxation

As a multinational organisation, the Group is subject to taxation in many jurisdictions around the

world with increasingly complex tax laws. The amounts of taxes the Group pays in these

jurisdictions could increase substantially as a result of changes in these laws or their interpretations

by the relevant tax authorities, which could have a material adverse effect on the Group’s liquidity

and results of operations. In addition, those authorities could review tax returns and impose

additional taxes and penalties, which could be material.

2.4 Risk factors relating to the Transaction

2.4.1 The Company’s commercial return on the Library

As described in Section 2.1.3 (“Risks related to the sale of seismic data”), the Company has made

considerable investments in acquiring and processing multi-client data in past, including the

acquisition of the Library. The Company has the obvious risk that the acquired Library gives the

Company the desired financial return on investment.

The multi-client data is being licensed to third parties for non-exclusive use in the oil and gas

exploration, development and production activities. However, the Company does not know with

certainty how much of the multi-client data is will be able to license or at what price. There can be

no assurance that the Company will be able to recover all costs and investments associated with

acquiring and processing multi-client data. If there is a material adverse change in the general

prospects for oil and gas exploration, development and production activities in areas where the

Company acquires multi-client data, the value of such multi-client data could be impaired and the

Company could be required to take a charge against its earnings. The value of multi-client data

could also be impaired by technological or regulatory changes and by other industry or general

economic developments. In general, the Company’s future sales of multi-client data licenses are

uncertain and depend on a variety of factors, many of which will be beyond the Company’s control.

2.5 Risk factors relating to the Shares and the Subsequent Offering

2.5.1 The prices of the Shares may fluctuate significantly

The trading price of the Company’s Shares may experience volatility. The market price of the

Shares could fluctuate significantly in response to a number of factors, including but not limited to,

actual or anticipated quarterly variations in operating results, adverse business developments,

changes in financial estimates and investment recommendations or ratings by securities analysts,

announcements by the Group or its competitors of significant acquisitions, strategic partnerships,

joint ventures or capital commitments, additions or departure of key personnel, changes to the

regulatory environment in which its operates or general market and economic conditions.

Moreover, in recent years, the stock market in general has experienced large price and volume

fluctuations. These broad market fluctuations may adversely affect the Company’s stock price,

regardless of its operating results.

2.5.2 Earnings in subsidiaries and joint operations

A substantial part of the Group’s operations is conducted by its subsidiaries and its joint operation

projects. As a result, the Company’s ability to make dividend payments depends on the subsidiaries

and the joint operations and their ability to distribute funds to the Company. If the Company is

Spectrum ASA

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unable to obtain funds from its subsidiaries and joint operations, the Board may exercise its

discretion not to declare or pay dividends.

2.5.3 Future sale of Shares may depress the price of the Shares

The market price of the Shares could decline as a result of sale of a large number of Shares in the

market after the Subsequent Offering or the perception that these sale could occur, Theses sales, or

the possibility that these sales may occur, might also make it more difficult for holders to sell

Shares at a time and at a price that the deem appropriate.

2.5.4 Eligible Shareholders who do not participate in the Subsequent Offering may experience

significant dilution on their shareholding

Subscription Rights that are not exercised by the end of the Subscription Period will automatically

lapse without compensation to the holder. To the extent that an Eligible Shareholder does exercise

its Subscription Rights prior to the expiry of the Subscription Period, whether by choice or due to

failure to comply with the procedures set forth in Section 7.8 (“Subscription procedures”), or to the

extent that an Eligible Shareholder is not permitted to subscribe for Offer Shares, such Eligible

Shareholder’s proportionate ownership and voting interests in the Company after compilation of the

Subsequent Offering will be significantly diluted.

2.5.5 Future issuance of Shares or other securities may dilute the holdings of shareholders and

could materially affect the price of the Share

It is possible that the Company in the future may decide to offer additional Shares or other

securities in order to finance new acquisitions, in connection with unanticipated liabilities or

expenses or for any other purpose. Any such additional offering could reduce the proportionate

ownership and voting interest of holders of Shares, as well as earnings per Share and the net asset

value per Share. Depending on the structure of any future offering, certain existing shareholders

may not be able to purchase additional securities. For reasons relating to foreign securities laws or

other factors, foreign investors may not be able to participate in a new issuance of shares or other

securities and may face dilution as a result.

In addition, the Company has commitments to issue additional Shares upon exercise of outstanding

share options, which have been granted to several of the Group’s employees under the Group’s

share-based incentive scheme.

Spectrum ASA

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2.5.6 Pre-emptive rights may not be available to U.S or other shareholders

Under Norwegian law, existing shareholders will have pre-emptive rights to participate on the basis

of their existing share ownership in the issuance of any new Shares for cash consideration, unless

those rights are waived by a resolution of the shareholders at a general meeting or the Shares are

issued on the basis of an authorization to the board of directors under which the board may waive

the pre-emptive rights. Shareholders in the United States, however, may be unable to exercise any

such rights to subscribe for new Shares unless a registration statement under the U.S. Securities Act

is in effect in respect of such rights and Shares or an exemption from the registration requirements

under the U.S. Securities Act is available. Shareholders in other jurisdictions outside Norway may

be similarly affected if the rights and the new Shares being offered have not been registered with, or

approved by, the relevant authorities in such jurisdiction. The Company is under no obligation to

file a registration statement under the U.S. Securities Act or seek similar approvals under the laws

of any other jurisdiction outside Norway in respect of any such rights and Shares. To the extent that

the Company’s shareholders are not able to exercise their rights to subscribe for new Shares, their

proportional interests in the Company will be reduced and they may be financially diluted.

2.5.7 Norwegian law may limit the shareholders’ ability to bring action against the Company

The Company is a public limited liability company incorporated under the laws of Norway. The

rights of holders of shares are governed by Norwegian law and by the articles of association. These

rights differ from the rights of shareholders in other jurisdictions. In particular, Norwegian law

limits the circumstances under which shareholders of Norwegian companies may bring derivative

actions. Under Norwegian law, any action brought by a company in respect of wrongful acts

committed against the company takes priority over actions brought by shareholders in respect of

such acts. In addition, it may be difficult to prevail in a claim against the Company under, or to

enforce liabilities predicated upon, securities laws in other jurisdictions.

2.5.8 The Company's investors outside of Norway are subject to exchange rate risk

The Shares are traded in NOK, and any future payments of dividends on the New Shares and the

Offer Shares will be made in NOK. Accordingly, investors outside of Norway are subject to adverse

movements in NOK against their local currency, and as a consequence thereof the foreign currency

equivalent of any dividends paid on the New Shares and the Offer Shares or received in connection

with any sale of the New Shares and the Offer Shares could be materially adversely affected.

2.5.9 Risk for holders of Shares that are registered in a nominee account

Beneficial owners of Shares that are registered in a nominee account (e.g., through brokers, dealers

or other third parties) may not be able to vote such Shares unless their ownership is re-registered in

their names with the VPS prior to the Company's general meetings. The Company cannot guarantee

that such beneficial owners of Shares will receive the notice for a general meeting in time to instruct

their nominees to either effect a re-registration of their Shares or otherwise vote their Shares in the

manner desired by such beneficial owners. Further, beneficial owners of Shares that are registered

in a nominee account may not be able to exercise other shareholder rights under the Norwegian

Public Limited Companies Act (such as e.g. the entitlement to participate in a rights offering) as

readily as shareholders whose Shares are registered in their own names with the VPS.

2.5.10 A delay in commencement of listing of the Shares

The Company will request that the New Shares and the Offer Shares shall be admitted to trading on

Oslo Børs. A delay in the commencement of Listing of the New Shares and the Offer Shares on

Oslo Børs, would affect the liquidity and pricing of the New Shares and the Offer Shares and

Spectrum ASA

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restrict the sale of the New Shares and the Offer Shares until there are allowed for listing. Such

delay may also adversely influence liquidity and pricing of the Shares of the Company.

2.5.11 The transfer of Shares is subject to transfer restrictions

The transfer of the New Shares or the Shares is subject to restrictions under the securities laws of

the United States and other jurisdictions. The Company’s shares have not been registered under the

U.S. Securities Act of 1933 or any U.S. state securities laws or any other jurisdiction outside

Norway and are not expected to be registered in the future. As such, the Shares or the New Shares

may not be offered or sold in the United States or to a U.S. person except pursuant to an exemption

from the registration requirements of the US Securities Act and applicable securities laws.

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3. STATEMENT OF RESPONSIBILITY

3.1 Board of Directors

The Board of Directors of Spectrum ASA is responsible for this Prospectus and its contents.

The Board of Directors of Spectrum ASA accepts responsibility for the information contained in the

Prospectus. The members of the Board of Directors hereby declare that, having taken all reasonable

care to ensure that such is the case, the information contained in the Prospectus is, to the best of

their knowledge, in accordance with the facts and contains no omission likely to affect its import.

Oslo, 3 July 2015

The Board of Directors of Spectrum ASA

Glen Ole Rødland

(Chairman)

Pål Stampe

(Board Member)

Linda Rudolfsen Myklebust

(Board Member)

Ingrid Elvira Leisner

(Board Member)

Maria Tallaksen

(Board Member)

3.2 Third-party information

The information in this Prospectus that has been sourced from third parties has been accurately

reproduced and, as far as the Company is aware and is able to ascertain from information published

by such third party, no facts have been omitted which would render the reproduced information

inaccurate or misleading. The source of third party information is identified where used.

Spectrum ASA

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4. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements, including without limitation, projections and

expectations regarding the Group’s future financial position, business strategy, plans and objectives.

All forward-looking statements included in the Prospectus are based on information available to the

Company, and views and assessments of the Group, as of the date of this Prospectus. Except as

required by the applicable stock exchange rules or applicable law, the Company does not intend,

and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of

the information included in this Prospectus, including forward-looking information and statements,

whether to reflect changes in the Company’s expectations with regard thereto or as a result of new

information, future events, changes in conditions or circumstances or otherwise on which any

statement in this Prospectus is based.

When used in this document, the words “anticipates”, “assumes”, “believes”, “can”, “could”,

”“expects”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will”, and similar

expressions, as they relate to the Company, its Subsidiaries or its management, are intended to

identify forward-looking statements. The Company can make no assurance as to the correctness of

such forward-looking statements and investors are cautioned that any forward-looking statements

are not guarantees of future performance. Such forward-looking statements involve known and

unknown risks, uncertainties and other factors, which may cause the actual results, performance or

achievements of the Company and its Subsidiaries, or, as the case may be, the industry, to

materially differ from any future results, performance or achievements expressed or implied by such

forward-looking statements. Such forward-looking statements are based on numerous assumptions

regarding the Group’s present and future business strategies and the environment in which the

Company and its subsidiaries operate.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue

reliance on any of these forward-looking statements.

Forward-looking statements are included in Sections 1 “Summary,” 2 “Risk Factors”, 5

“Acquisition of Fugro’s Multi-Client Seismic Library”, 8 Fugro Seismic Library” 9 “Presentation of

the Company,” 10 “The Company’s Business and Industry,” 12 “Financial Information” and 13

“Unaudited Condensed Pro Forma Financial Information”.

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5. ACQUISITION OF MULTI-CLIENT SEISMIC LIBRARY FROM FUGRO

5.1 Background and purpose of the Transaction

On 1 June 2015, the Company entered into a transaction agreement (the “Transaction

Agreement”) with Fugro Norway AS, Fugro Holdings (Australia) Pty Ltd, Fugro Finance AG and

Fugro Multi Client Services Inc ( together referred to as “Fugro”), whereby the Company has

agreed to acquire all outstanding shares in Fugro Multi Client Services AS, Fugro Multi Client

Services Pty Ltd and Fugro Data Services GmbH holding the Fugro multi-client data library,

including certain multi-client data surveys owned by Fugro Mulit Client Services Inc in the United

States (the “Transaction”).

The Transaction includes the entire Fugro multi-client library, with the exception of certain non-

transferrable items, among them any surveys in Russia or with Russian partners (“the Library”).

No employees from Fugro will be transferred to the Company as part of the Transaction.

The main purpose of the Transaction is to further strengthen the Group’s position in relation to

seismic investments and studies. The Transaction is in line with the growth strategy of the

Company to become a leading multi-client company. Due to the Transaction, Spectrum will

increase its 2D library by 115% in line km and increase its market position in the 3D multi-client

market.

The new combined Spectrum multi-client library will exceed 3,000,000 km of 2D multi-client

seismic data and 160.000 km2 MC3D seismic data covering all major sedimentary basins

worldwide.

The purchase price for the Library was USD 115 million on a cash- and debt-free basis paid at

completion of the Transaction on 30 June 2015.

5.2 Financing of the Transaction

The Transaction is fully funded by new bank facility and refinancing of existing bank facilities with

Danske Bank, available cash and by the proceeds from the Private Placement. The Company has

available a USD 50 million term loan, and a revolving credit tranche of NOK 195.0 million. In total

the Company has available bank facilities of approximately USD 74.8 million.

For further details on the completed Private Placement, see this Prospectus Section 6 (“The

Completed Private Placement”) below.

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5.3 The Subscription and Underwriting Agreements

In connection with the Private Placement, the Company has entered into a subscription and

underwriting agreement (the “Subscription and Underwriting Agreement” with its existing

shareholders Altor Invest 1 AS, Altor Invest 2 AS, Spencer Trading Inc, Corona Maritime Holding

AS, Folketrygdfondet and Nordea Fondene Norge AS (the “Supporting Shareholders”). The

Supporting Shareholders have pre-subscribed and guaranteed for their pro-rata shareholding in the

Private Placement as set out in the table below:

Supporting Shareholders: Address: Underwriting commitment (Shares): Underwriting commitment (NOK)

Altor Invest 1 AS Tjuvholmen alle 19, 0252 Oslo 1,500,232 New Shares NOK 48,007,424

Altor Invest 2 AS Tjuvholmen alle 19, 0252 Oslo 1,500,232 New Shares NOK 48,007,424

Spencer Trading Inc Pb 1468 Vika, 0116 Oslo 1,061,200 New Shares NOK 33,958,400

Corona Maritime Holding AS Utsiktsveien 31. 1369 Stabekk 434,890 New Shares NOK 13,916,780

Folketrygdfondet Haakon VIIs gate 2, 0123 Oslo 458,850 New Shares NOK 14,683,200

Nordea Fondene Norge AS Middelthuns gt. 17,0107 Oslo 188,300 New Shares NOK 6,025,800

The Supporting Shareholders are entitled to an underwriting fee of 2% based on their underwriting

commitment as set out in the table above.

In addition, the Company has entered into an underwriting agreement with ABG Sundal Collier

ASA and Danske Bank (the “Underwriters”) which have undertaken to underwrite the remaining

part of the Private Placement (the “Underwriting Agreement”).

Underwriters: Address: Underwriting commitment ( Shares): Underwriting commitment (NOK)

ABG Sundal Collier ASA Munkedamsveien 45,0115 Oslo 2,428,736 New Shares NOK 77,700,736

Danske Bank Bryggetorget 4, 0250 Oslo 2,428,736 New Shares NOK 77,700,736

The Underwriters are entitled to an underwriting fee of 2% of their respective underwriting

commitment as set out above.

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6. THE COMPLETED PRIVATE PLACEMENT

6.1 Background and the use of Proceeds

On 2 June 2015, the Company announced that it had raised approximately NOK 320 million in

gross proceeds through the Private Placement of 10,000,000 New Shares, each with a par value of

NOK 1 and a subscription price of NOK 32 per New Share.

The Private Placement was subscribed and underwritten by the Supporting Shareholders and the

Underwriters, see Section 5.3 (“The subscription and underwriting agreements”).

The Transaction shall be settled by cash payment. The cash payment is partly financed by the

Private Placement, while the remaining payment will be financed by available cash and new and

existing bank facilities as described in Section 5.2 (“Financing of the Transaction”). The proceeds

from the Private Placement will be used to finance the Transaction.

6.2 The Private Placement

The 10,000,000 New Shares offered in the Private Placement were offered to selected large

shareholders of the Company as well as some new investors who met the criteria of institutional and

professional investors. The Private Placement was conditional upon a resolution by the Company's

extraordinary general meeting to issue the New Shares.

On 23 June 2015, the Company's Extraordinary General Meeting (the “EGM”) resolved to issue the

New Shares and thereby to waive the pre-emptive right of existing shareholders to subscribe for the

New Shares in relation to the Private Placement.

After consideration duly made, the Board’s was of the opinion that the acquisition of the Library

and financing of the Transaction, in part, by means of the Private Placement was in the best interest

of the Company and its Shareholders. For the purposes of arriving at this conclusion, the Board

took into consideration, among other things, the potential and anticipated benefits for the Company

and its Shareholders from acquiring the Library, the alternative means of financing of the

Transaction and the timeliness of such alternative means of financing, as well as the implementation

of the Subsequent Offering to limit the dilutive effect of the Private Placement for the shareholders

of the Company that were not invited to participate in the Private Placement.

Prior to the Private Placement, the Company’s issued share capital was NOK 43,326,625 divided

into 43,326,625 Shares, each with a nominal value of NOK 1.

6.3 Resolution relating to the Private Placement and issue of the New Shares

The New Shares were issued pursuant to the following resolution passed at the EGM held on 23

June 2015:

(i) The share capital shall be increased with NOK 10,000,000, from NOK 43,326,625 to NOK

53,326,625 by issue of 10,000,000 new shares, each with a nominal value of NOK 1.00.

(ii) The subscription price shall be NOK 32.00 per share. Payment shall be made in cash.

(iii) The shares may be subscribed for by any of Danske Bank and ABG Sundal Collier ASA, on

behalf of, and pursuant to proxies from (and on the account and risk of),investors having

been allocated shares in the Private Placement. The shares shall be subscribed for on a

separate subscription form within 24 June 2015. Existing shareholders' preferential rights

pursuant to Section 10-4, cf. Section 10-5, of the Norwegian Public Limited Liability

Companies Act are waived.

Spectrum ASA

34

(iv) Payment for the new shares shall be made within two business days after the subscription

and no later than 26 June 2015. The payment shall be made to the Company's account for

share issues.

(v) The new shares shall carry rights to dividend and have shareholder rights from registration

of the share capital increase with the Norwegian Register of Business Enterprises.

(vi) The total expenses of the share issue, are estimated to approximately NOK 13.4 million, of

which NOK 6.0 million are fees to Danske Bank and ABG Sundal Collier ASA, and NOK 1

million are legal fees and costs related to the preparation of a listing prospectus. The costs

of the share issue also include an underwriting fee of 2 per cent of the subscription amount

payable in cash.

(vii) Section 4 of the Articles of Association is amended to read: "The Company’s share capital is

NOK 53,326,625 divided into 53,326,625 shares, each with a nominal value of NOK 1. The

company’s shares shall be registered in the Norwegian securities depository (VPS).

(viii) The resolution is conditional upon the approval by the General Meeting of the resolution

proposed in item 5 below."

The EGM resolution was immediately announced to the market by the Company on 23 June 2015.

6.4 Subscription price and proceeds in the Private Placement

The Subscription Price was set to a fixed price of NOK 32 per New Share after consultation with

certain larger shareholders of the Company.

The total gross proceeds from the Private Placement amounted to approximately NOK 320 million.

The subscribers will not incur any costs related to the subscription for, or the allotment of, the New

Shares. There was no maximum subscription amount in the Private Placement.

6.5 Disparity between the Subscription Price and price to Affiliates

The table below shows the disparity between the Subscription Price and the purchase price paid by

and/or the exercise price of options granted to members of the Board and the member of the

management of the Company during the past 12 months:

Name Date Number of shares Price

Board members:

Corona Maritime Holding AS*) 01.06.2015 2,059,106 35.00

Management:

Henning Olset (CFO) 01.09.2014 17,777 33.96

Jon Scholmeesters 04.09.2014 12,000 32,22

Rune Eng (CEO) 09.09.2014 74,609 13.4031**)

Henning Olset (CFO) 10.09.2014 3,574 31.60

Jan Schoolmeesters (COO) 11.09.2014 7,460 13.4031***)

Kim Gunn Maver (EVP North West Europe) 15.09.2014 8,200 32.16

Hennig Olset ( CEO) 02.03.2015 195,000****) 11.50

Raymond Miller 02.03.2015 195,000****) 11.50

Raymond Miller 03.03.2015 122,060 31.10

*) A company controlled by the chairman of the Board Glen Rødland

**) Rune Eng converted NOK 1,000,000 bonds into 74,609 share in the Company

***) Jan Schoolmeesters 100,000 bonds into 7,460 share in the Company

****) Henning Olset and Raymond Miller exercised 195,000 options each at NOK 11.50 per Share

Spectrum ASA

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6.6 Subscription period of the New Shares

The New Shares that were offered in the Private Placement were placed in the period between 1

June 2015 at 16:30 CET and 2 June 2015 08:30 CET. The Private Placement was directed towards

large shareholders of the Company as well as certain new investors who met the criteria of

institutional and professional investors. The minimum order in the Private Placement was set at the

NOK equivalent of EUR 100,000.

6.7 Allocation, Settlement and Delivery of the New Shares

Allocation of the New Shares was made on 1 June 2015. Notification of conditional allotment was

sent to subscribers on 2 June 2015 and the formal result of the Private Placement was made public

through an announcement by the Company on 2 June 2015.

The New Shares were paid for by 25 June 2015 and delivered on 26 June 2015. The shares have

remained unlisted until this Prospectus was approved by the Norwegian FSA on 3 July 2015.

The New Shares were filed for registration with the Norwegian Company Register immediately

after settlement of the Subscription Price for the New Shares and was delivered following

registration.

The New Shares were registered in the Company Registry on 26 June 2015.

The following allocations were made to (i) members of the Company’s management, supervisory

and administrative bodies or (ii) investors which were allocated more than 5% of the New Shares

issued in the Private Placement:

Name of investor Number of allocated shares

Altor Invest 1 AS 1,500,323

Altor Invest 2 AS 1,500,232

Spencer Trading Inc 1,061,000

Fidelity 755,173

Polygon Investment Partners LLP 580,000

Swedbank Robur Fonder Ab 553,964

Corona Maritime Holding AS*) 434,889

*) A company controlled by the chairman of the Board, Glen Rødland

Other than listed above, no other major shareholder holding more than 5% before the Private

Placement or any members of the Company’s management, supervisory and administrative bodies

were allocated New Shares in the Private Placement.

6.8 Admission to trading

The Company’s Shares are listed on Oslo Børs under the ticker code; “SPU”.

The New Shares issued in the Private Placement are of the same class as the existing Shares already

in issue, which are listed on Oslo Børs under the securities identification code ISIN

NO0010429145.

In anticipation of the publication of this Prospectus, the New Shares have since issuance been

registered with the VPS under a temporary ISIN NO0010740038 and not been tradable on Oslo

Børs. At the time of publication of this Prospectus, the New Shares will shift ISIN to the ordinary

ISIN of the Shares issued by the Company ISIN NO0010429145 and become tradable on Oslo

Børs. The Company’s Shares are not listed on any other regulated market place and the Company

does not intend to seek such listing.

Spectrum ASA

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The Company's VPS registrar (operator of the Company's shareholders register with the VPS) is

Danske Bank – Transaction Services, Søndre Gate 13-15, N-7466 Trondheim.

6.9 Share capital following the Private Placement

Upon registration of the share capital increase in connection with the Private Placement which

occurred on 26 June 2015 (prior to the Subsequent Offering), the Company’s share capital was

NOK 53,326,625 divided on 53,326,325 Shares, each with a nominal value of NOK 1.

6.10 The rights of the New Shares

The rights attached to the New Shares are the same as those attached to the Company’s other

existing Shares. The Company has only one class of shares outstanding and all Shares are freely

transferable.

The New Shares are issued electronically and rank pari passu with the existing Shares in all respects

from such time as the share capital increase in connection with the issuance of the New Shares was

registered in the Norwegian Company Register.

The holders of the New Shares are entitled to any dividend the Company may declare from the date

of registration of the share capital increase relating to the New Shares in the Norwegian Company

Register. Pursuant to the Norwegian Public Limited Companies Act, all shareholders have equal

rights to the Company’s profits, in the event of liquidation and to receive dividend, unless all the

shareholders approve otherwise. Please see Section 18 (“Shareholders Matter and Norwegian

Securities Law”) on more details concerning the rights attached to the Shares and issues regarding

shareholdings in a Norwegian Public Limited Company.

There are no particular restrictions or procedures in relation to the distribution of dividends to

shareholders who are resident outside of Norway, other than an obligation of the Company to

deduct withholding tax as further described in Section 19 (“Norwegian Tax considerations”).

6.11 Managers and legal advisor

ABG Sundal Collier ASA and Danske Bank acted as joint-lead managers and joint bookrunners in

the Private Placement.

Haavind has acted as legal advisor to the Company. Grette acted as legal advisor to the Managers.

6.12 Interests of natural and legal persons involved in the Private Placement

The Managers and its affiliates have provided from time to time, and may provide in the future,

investment and commercial banking services to the Company and its affiliates in the ordinary

course of business, for which they may have received and may continue to receive customary fees

and commissions, and may come to have interests that may not be aligned or could potentially

conflict with the interests of the Company and investors in the Company. Danske Bank are lenders

under loan facilities made available to the Company in conjunction with the Transaction and under

a revolving credit facility, see Section 14 "Interest bearing debt"..

The Managers, its employees and any affiliate may currently own existing Shares in the Company.

The Managers do not intend to disclose the extent of any such investments or transactions otherwise

than in accordance with any legal or regulatory obligation to do so.

The Managers will receive a success fee of a fixed percentage of the gross proceeds raised in the

Private Placement of approximately NOK 6,000,000 and, as such, have an interest in the Private

Placement. In addition, the Supporting Shareholders and the Underwriters are entitled to an

Spectrum ASA

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underwriting fee of 2% of their underwriting commitment as further set out in Section 5.3 (“The

subscription and underwriting agreement”).

Other than as set out above, there are no other interests (including conflicts of interests) of natural

and legal persons involved in the Private Placement.

6.13 Expenses and net proceeds of the Private Placement

The total expenses of the Private Placement, are estimated to amount to approximately NOK

13,400,000, of which NOK 6,000,000 are fees to the Managers, in addition to an underwriting fee

of 2% to the Supporting Shareholders and the Underwriters.

The net proceeds of the Private Placement are estimated to amount to approximately NOK

306,600,000.

6.14 Dilution

Shareholders who did not participate in the Private Placement were subject to a direct dilution of

their ownership as set forth in the table below:

Prior to the Private Placement Subsequent to the Private Placement

Number of Shares, each with a nominal value of NOK 1 43,326,625 53,326,625

% dilution 0.0% 18.8%

6.15 Governing law

The New Shares are issued pursuant to the Norwegian Public Limited Companies Act (Norwegian:

“Allmennaksjeloven”).

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7. SUBSEQUENT OFFERING

7.1 Background

The Company’s EGM held on 23 June 2015 authorized the Board to implement the Subsequent

Offering of up to 1,500,000 Offer Shares through share capital increase of up to NOK 1,500,000

raising gross proceeds of up to approximately NOK 48,000,000 at a Subscription Price of NOK 32

per Offer Share, being equal to the Subscription Price in the Private Placement.

The purpose of the Subsequent Offering is to provide the Eligible Shareholders the opportunity to

subscribe for shares at the same terms as in the Private Placement.

Eligible Shareholders, being the Company’s shareholders as of 1 June 2015 as documented by the

shareholder register in the VPS on the Record Date, who were not given the opportunity to

subscribe for shares in the Private Placement and who are not resident in a jurisdiction where such

offering would be unlawful or (other than Norway) would require any filing, registration or similar

action, will receive non-transferable Subscription Rights based on their shareholdings as of that

date. Oversubscription and subscription without Subscription Rights will be allowed. Due to the

purpose of the Subsequent Offering, the preferential right of the existing shareholders to subscribe

for new shares pursuant to Section 10-4 of the Norwegian Public Limited Liability Companies Act

was waived.

The proceeds from the Subsequent Offering will be used to strengthen the Company’s balance

sheet.

7.2 Resolution relating to the Subsequent Offering

Pursuant to the authorization granted to the Board at the Company’s EGM on 23 June 2015, the

Board made the following resolution in connection with the Subsequent Offering on 2 July 2015:

(i) The share capital is increased between NOK 1 and NOK 1,500,000, by issue of between 1 and

1,500,000 new ordinary shares, each with a nominal value of NOK 1.

(ii) The new shares may, subject to any restrictions in applicable securities legislation, be

subscribed for by those of the Company’s shareholders as at the end of 1 June 2015 (as

recorded in VPS as of 3 July 2015, the “Record Date”) who were not invited to participate in

the Private Placement (the “Eligible Shareholders”). Consequently, the preferential right of

the existing shareholders to subscribe for new shares pursuant to Section 10-4 of the

Norwegian Public Limited Liability Companies Act is waived.

(iii) Each Eligible Shareholder will be granted one (1) non-transferable subscription rights for

every eight (8) shares in the Company registered as held by such shareholder as of the

Record Date (rounded down to the nearest subscription right). Each subscription right will,

subject to applicable securities legislation, give the right to subscribe for and be allocated

one (1) new share in the subsequent offering. Over-subscription and subscription without

Subscription Rights is allowed, but the subsequent offering is limited to 1,500,000 shares in

accordance with item 1 above. Allocation of the new shares shall be made by the board of

directors in accordance with the allocation criteria’s as further set out in the Prospectus (as

defined below).

(iv) The subscription price shall be NOK 32 per new share. Payment shall be made in cash.

(v) A prospectus, which shall be approved by the Financial Supervisory Authority of Norway in

accordance with Chapter 7 of the Norwegian Securities Trading Act, shall be prepared in

connection with the share capital increase (the “Prospectus”). Unless the Company’s board

of directors decides otherwise, the Prospectus will not be registered with, or approved by, any

Spectrum ASA

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foreign authorities. The new shares may not be subscribed by investors in jurisdictions in

which it is not permitted to offer new shares to the investors in question without the

registration or approval of the Prospectus.

(vi) The subscription period shall commence on 9 July 2015 and end at 16:30 (CET) on 23 July

2015. If the Prospectus is not approved by the Financial Supervisory Authority of Norway in

time for the subscription period to commence on 9 July 2015, the subscription period shall

commence on the first day of trading on Oslo Børs after such approval has been obtained and

end two weeks thereafter. In no event shall the subscription period end later than 14 August

2015. Subscription shall be made by signing and returning the subscription form to be

attached to the Prospectus.

(vii) The due date for payment for the new shares is 27 July 2015. If the subscription period is

postponed in accordance with item (vi) above, the due date for the payment of the new shares

shall be adjusted accordingly. Each subscriber with a Norwegian bank account shall by

completion of the subscription form, grant the managers a one-time power of attorney to debit

a stated bank account for the subscription amount. For subscribers without a Norwegian

bank account, payment shall be made pursuant to the instructions in the Prospectus.

(viii) The new shares shall carry rights to dividend and have shareholders rights from registration

of the share capital increase with the Norwegian Register of Business Enterprises.

(ix) Section 4 of the Articles of Association is to be amended to reflect the new number of shares

and the new share capital following the share capital increase.”

(x) The board of directors may decide to withdraw the Subsequent Offering pending

consideration of the development in the trading price of the Company’s shares and prevailing

market conditions in the period until commencement of the Subscription Period as set out in

item (vi).”

7.3 Timetable

The timetable below provides certain indicative key dates for the Subsequent Offering (subject to

extension):

Last day of trading in the Shares incl. Subscription Rights………... 1 June 2015

First day of trading in the Shares excl. Subscription Rights……….. 2 June 2015

Record Date…………………………………………………………. 3 June 2015

Start of Subscription Period………………………………………… 9 July 2015 (09:00 CET)

End of Subscription Period…………………………………………. 23 July 2015 (16:30 CET)

Allocation of Offer Shares………………………………………….. 23 July 2015

Allocation letters distributed………………………………………… 24 July 2015

Payment Due Date for the Offer Shares………………............... 27 July 2015

Registration of share capital increase……………………………… On or about 28 July 2015

Delivery and listing of the Offer Shares…………………………… On or about 29 July 2015

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7.4 Subscription Price and proceeds in the Subsequent Offering

The Subscription Price per Offer Share in the Subsequent Offering is NOK 32, and assuming

subscription in full the Subsequent Offering will raise gross proceeds of NOK 48,000,000. The

Subscription Price is equal to the subscription price in the Private Placement, and was set to a fixed

price of NOK 32 per New Share after consultation with certain larger shareholders of the Company.

The subscribers will not incur any costs related to the subscription for, or allotment of, the Offer

Shares.

7.5 Subscription period

The Subscription Period for the Subsequent Offering will commence on 9 July 2015 (09:00 CET

and expire on 23 July 2015 (16:30 CET). The Subscription Period may be extended by the Board,

but may not in any event be later than 14 August 2015. An extension, if any, will be announced by a

press release through www.newsweb.no and on the Company’s webpage www. spectrumgeo.com.

In case of an extension of the Subscription Period, all relevant deadlines will be extended

accordingly. The Subscription Period may not be closed earlier than 16:30 CET on 23 July 2015.

7.6 Eligible shareholders and Record Date

Eligible Shareholders as of the end of 1 June 2015, as appeared in the Company’s shareholder

register with the Norwegian Central Security Depository (VPS) on 3 June 2015 (being the Record

Date) will receive non-transferable Subscription Rights based on their registered holding of Shares

on the Record Date.

Provided that the delivery of traded Shares were made with ordinary T+2 settlement in the VPS,

Shares that were acquired until and including 1 June 2015, give right to receive Subscription Rights,

whereas Shares that were acquired from and including 2 June 2015, did not give right to receive

Subscription Rights. For the purposes of determining eligibility to Subscription Rights of

shareholders that were not invited to participate in the Private Placement, the Company will look

solely to its register of shareholders with the VPS as of the Record Date, which will show

shareholders as of expiry of the end of 1 June 2015.

7.7 Subscription Rights

The Subsequent Offering comprises up to 1,500,000 non-transferable Subscription Rights. Eligible

Shareholders will be granted Subscription Rights giving a right to subscribe for and be allocated

Offer Shares in the Subsequent Offering.

Each Eligible Shareholder will be granted one (1) Subscription Rights for every eight (8) Shares

registered as held by such Eligible Shareholder on the Record Date. The number of Subscription

Rights issued to each Shareholder will be rounded down to the nearest whole number of

Subscription Rights.

Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for

and be allocated one (1) Offer Share, rounded down to the nearest whole Share, in the Subsequent

Offering. Over-subscription and subscription without Subscription Rights is allowed.

The Subscription Rights will be credited to and registered on each Eligible Shareholder’s VPS

account on or about 8 July 2015 under ISIN NO0010741523. The Subscription Rights will be

distributed free of charge to Eligible Shareholders.

The Subscription Rights are non-transferable and will accordingly not be listed on any regulated

market place.

http://www.newsweb.no/

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The Subscription Rights must be used to subscribe for Offer Shares in the Subsequent Offering

before the expiry of the Subscription Period on 23 July 2015 at 16.30 (CET). Upon subscription, the

Eligible Shareholders may oversubscribe. Offer Shares subject to unexercised Subscription Rights

will be allocated in accordance with the allocation principles set out in Section 7.10 ("Allocation").

Subscription Rights which are not exercised before 23 July 2015 at 16.30 (CET) will have no

value and will lapse without compensation to the holder. Holders of Subscription Rights

should note that subscriptions for Offer Shares must be made in accordance with the

procedures set out in this Prospectus.

Subscription Rights of Eligible Shareholders resident in jurisdictions where the Prospectus may not

be distributed and/or with legislation that, according to the Company’s assessment, prohibits or

otherwise restricts subscription for Subsequent Offering Shares (the “Ineligible Shareholders”)

will initially be credited to such Ineligible Shareholders’ VPS accounts. Such credit specifically

does not constitute an offer to Ineligible Shareholders to subscribe for Offer Shares. The Company

will instruct the Managers to, as far as possible, withdraw the Subscription Rights from such

Ineligible Shareholders’ VPS accounts with no compensation to the holder.

7.8 Subscription procedures

Subscription for Offer Share must be made by submitting correctly completed Subscription Form (a

copy of which is appended hereto as ANNEX E to one of the Managers at the subscription office set

out below during the Subscription Period or, for Norwegian citizens, made online as further

described below.

Correctly completed Subscription Forms must be received by the Managers no later than 16:30 CET

on 23 July 2015 at the following address, or e-mail (the “Subscription Offices”):

ABG Sundal Collier ASA Danske Bank

Munkedamsveien 45, 7th floor

P.O. Box Postboks 1444 Vika

N-0115 Oslo, Norway

Bryggetorget 4

P.O Box 1170 Sentrum

N-0250 Oslo, Norway

E-mail: [email protected] E-mail: [email protected]

www.abgsc.no www.danskebank.no/emisjoner

Subscribers who are Norwegian residents with a Norwegian personal identification number

may also subscribe for Offer Shares through the VPS online subscription system (or by

following the link on www.danskebank.no or www.abgsc.no, which will redirect the

subscriber to the VPS online subscription system). All online subscribers must verify that they

are Norwegian residents by entering their national identification number (Norwegian:

“personnummer”).

Neither the Company nor the Managers may be held responsible for postal delays, unavailable fax

lines, internet lines or servers or other logistical or technical problems that may result in

subscriptions not being received in time or at all by the Subscription Offices. Subscription Forms

received after the end of the Subscription Period and/or incomplete or incorrect Subscription Forms

and any subscription that may be unlawful may be disregarded at the sole discretion of the

Company and/or the Managers without notice to the subscriber.

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Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the

subscriber after having been received by the Managers. The subscriber is responsible for the

correctness of the information filled into the Subscription Form. By signing and submitting a

Subscription Form, the subscribers confirm and warrant (i) that they have read this Prospectus and

are eligible to subscribe for Offer Shares under the terms set forth herein, and (ii) that they

irrevocably confirm their request to subscribe for the number of Offer Shares specified in the

Subscription Form subject to the terms and conditions set out in this Prospectus and authorize and

instruct each of the Managers (and anyone appointed by either of the Managers to subscribe for

such Offer Shares on their behalf (and for their account and risk).

There is no minimum subscription amount for which subscriptions by any individual investor in the

Subsequent Offering must be made, other than as set out in Section 21 ("Selling and Transfer

Restrictions"). Over-subscription (i.e., subscription for more Offer Shares than the number of

Subscription Rights held by the subscriber entitles the subscriber to be allocated) is permitted.

Subscription without Subscription Rights is permitted. In each case, however, there can be no

assurance that Offer Shares will be allocated for such subscriptions. See Section 7.10 (“Allocation”)

below for further details on applicable allocation principles.

Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are allowed. Please

note, however, that two separate Subscription Forms submitted by the same subscriber with the

same number of Offer Shares subscribed for on both Subscription Forms will only be counted once

unless otherwise explicitly stated in one of the Subscription Forms. In the case of multiple

subscriptions through the VPS online subscription system or subscriptions made both on a

Subscription Form and through the VPS online subscription system, all subscriptions will be

counted.

7.9 Financial intermediaries

All persons or entities holding Shares or Subscription Rights through financial intermediaries (i.e.,

brokers, custodians and nominees) should read this Section. All questions concerning the

timeliness, validity and form of instructions to a financial intermediary in relation to the exercise of

Subscription Rights should be determined by the financial intermediary in accordance with its usual

customer relations procedure or as it otherwise notifies each beneficial shareholder.

The Company is not liable for any action or failure to act by a financial intermediary through which

Shares or Subscription Rights are held.

7.9.1 Subscription Rights

If an Eligible Shareholder holds Shares registered through a financial intermediary on the Record

Date, the financial intermediary will customarily give the Eligible Shareholder details of the

aggregate number of Subscription Rights to which it will be entitled. The relevant financial

intermediary will customarily supply each Eligible Shareholder with this information in accordance

with its usual customer relations procedures.

Eligible Shareholders holding Shares through a financial intermediary should contact the financial

intermediary if they have not received information with respect to the Subsequent Offering.

7.9.2 Subscription period

The time by which notification of exercise instructions for subscription of Offer Shares must validly

be given to a financial intermediary may be earlier than the expiry of the Subscription Period. Such

deadline will depend on the financial intermediary. Eligible Shareholders who hold their Shares

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through a financial intermediary should contact their financial intermediary if they are in any doubt

with respect to deadlines.

7.9.3 Subscription

Any Eligible Shareholder who holds its Subscription Rights through a financial intermediary and

wishes to exercise its Subscription Rights, should instruct its financial intermediary in accordance

with the instructions received from such financial intermediary. The financial intermediary will be

responsible for collecting exercise instructions from the Eligible Shareholders and for informing the

Managers of their exercise instructions.

7.9.4 Method of payment

Any Eligible Shareholder who holds its Subscription Rights through a financial intermediary should

pay the Subscription Price for the Offer Shares that are allocated to it in accordance with the

instructions received from the financial intermediary. The financial intermediary must pay the

Subscription Price in accordance with the instructions in this Prospectus.

Payment by the financial intermediary for the Offer Shares must be made to the Managers no later

than the Payment Date. Accordingly, financial intermediaries may require payment to be provided

to them prior to the Payment Date.

7.10 Allocation

Allocation of the Offer Shares will take place on or about 23 July 2015 to subscribers having

validly exercised their Subscription Rights during the Subscription Period. Each Subscription Right

will give the right to subscribe for and be allocated one Offer Share. The allocation of the Offer

Shares will be made according to the following criteria:

1. First, Offer Shares will be allotted to subscribers based on allotted Subscription Rights

which are duly exercised during the Subscription Period.

2. Secondly, in the event that not all issued Subscription Rights are exercised, subscribers who

have subscribed on the basis of Subscription Rights and who have over-subscribed, will be

allotted further Offer Shares proportionally to the number of Subscription Rights they have

exercised.

3. Thirdly, any Offer Shares remaining after allocation to the holders of Subscription Rights,

including any allocated as a result of an over-subscription, may be allocated to other

shareholders.

4. Lastly, Offer Shares that have not been allotted in accordance with paragraphs 1, 2 and 3

above, may be allocated to other investors.

The result of the Subsequent Offering is expected to be published on 24 July 2015 in the form of a

stock exchange notification from the Company through Oslo Børs’ information system.

Subscription Rights that are not used to subscribe for Offer Shares before the expiry of the

Subscription Period will have no value and will lapse without compensation to the holder. No

fractional Offer Shares will be allocated. The Company reserves the right to round off, reject or

reduce any subscription for Offer Shares not covered by Subscription Rights.

Notifications of allocated Offer Shares and the corresponding subscription amount to be paid by

each Subscriber are expected to be distributed in a letter by the Managers on or about 24 July 2015.

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7.11 Payment for the Offer Shares

The payment for Offer Shares allocated to a subscriber falls due on 27 July 2015 (the “Payment

Date”). Payment must be made in accordance with the requirements set out in Sections 7.11.1

(”Subscribers who have a Norwegian bank account”) and 7.11.2 (“Subscribers not having a

Norwegian bank account”).

7.11.1 Subscribers who have a Norwegian bank account

Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form,

provide the Managers with a one-time irrevocable authorisation to debit a specified bank account

with a Norwegian bank for the amount payable for the Offer Shares which are allocated to the

subscriber.

The specified bank account is expected to be debited on or after the Payment Date. The Managers

are only authorised to debit such account once, but reserves the right to make up to three debit

attempts, and the authorisation will be valid for up to seven working days after the Payment Date

The subscriber furthermore authorizes the Managers to obtain confirmation from the subscriber’s

bank that the subscriber has the right to dispose over the specified account and that there are

sufficient funds in the account to cover the payment.

If there are insufficient funds in a subscriber’s bank account or if it for other reasons is impossible

to debit such bank account when a debit attempt is made pursuant to the authorisation from the

subscriber, the subscriber’s obligation to pay for the Offer Shares will be deemed overdue.

Payment by direct debiting is a service that banks in Norway provide in cooperation. In the

relationship between the subscriber and the subscriber’s bank, the standard terms and conditions for

“Payment by Direct Debiting – Securities Trading”, which are set out on page 2 of the Subscription

Form, will apply, provided, however, that subscribers who subscribe for an amount exceeding NOK

5 million by signing the Subscription Form provide Danske Bank (on behalf of the Managers) with

a one-time irrevocable authorisation to directly debit the specified bank account for the entire

subscription amount.

7.11.2 Subscribers not having a Norwegian bank account

Each subscriber who does not have a Norwegian bank account and who subscribes for Offer Shares

by using the Subscription Form, must ensure that payment for their allotted Offer Shares with

cleared funds is made to Danske Bank (on behalf of the Managers), as further described in the

instructions on the allotment notification, no later than the Payment Date.

7.11.3 Overdue payments

Overdue and late payments will be charged with interest at the applicable rate from time to time

under the Norwegian Act on Interest on Overdue Payment of the 17 December 1976 No. 100, which

is currently 9.25 % per annum. If payment for the allotted Offer Shares will, subject to the

restrictions in the Norwegian Public Limited Companies Act, not be delivered to the subscriber.

In order to enable timely registration of the share capital increase relating to the Subsequent

Offering with the Norwegian Company Register, the Company reserves the right to make

arrangements for advances of payment on behalf of subscribers who have not made payment of the

Offer Shares by the Payment Date by a person other than the subscriber (a "Payment Advancing

Person") pursuant to Section 10-12 of the Norwegian Public Limited Companies Act. To the extent

such payment advance is made on behalf of a non-paying subscriber, the Offer Shares subscribed by

the non-paying subscriber shall be provisionally registered in a separate account with the VPS, in

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anticipation of settlement by the non-paying subscriber. If the non-paying subscriber has not made

payment within three days after the Payment Date, the Payment Advancing Person may from and

including the fourth day after the Payment Due Date either assume ownership of the Offer Shares

subscribed by the non-paying subscriber by notifying the Company, or sell such Offer Shares for

the non-paying subscriber's account and risk without further notice to the subscriber in question in

accordance with Section 10-12, fourth paragraph of the Norwegian Public Limited Companies Act.

The non-paying subscriber will be liable for any loss, cost and expenses suffered or incurred by the

Company and/or a Payment Advancing Person as a result of or in connection with such disposals.

The non-paying subscriber shall remain liable for payment of the entire amount due; interest, costs,

charges and expenses accrued (and will not be entitled to profits, if any), and the Company and/or

the Payment Advancing Person may enforce payment for any such amount outstanding.

7.12 Mandatory Anti-Money Laundering Procedure

The Subsequent Offering is subject to the Norwegian Money Laundering Act No. 11 of March 6,

2009 and the Norwegian Money Laundering Regulations No. 302 of March 13, 2009 (collectively

the “Anti-Money Laundering Legislation”).

Subscribers who are not registered as existing customers with the Managers must verify their

identity in accordance with the requirements of the Anti-Money Laundering Legislation, unless an

exemption is available. Subscribers who have designated an existing Norwegian bank account and

an existing VPS account on the Subscription Form are exempted, unless verification of identity is

requested by the Managers. The verification of identity must be completed prior to the end of the

Subscription Period. Subscribers that have not completed the required verification of identity may

not be allocated Offer Shares.

7.13 VPS registration

The Offer Shares will be registered in book-entry form with the VPS under ISIN NO0010429145.

The Company’s register of shareholders with the VPS is administrated by Danske Bank –

Transaction Services, Søndre Gate 13-15, N-7466 Trondheim, Norway.

The Offer Shares will not be delivered to the investors’ VPS accounts before they are fully paid,

registered with the Norwegian Company Register and the Offer Shares have been registered in the

VPS.

7.14 Delivery and listing of the Offer Shares

Assuming that payments from all Subscribers are made when due, delivery of the Offer Shares is

expected to take place on or about 29 July 2015. Assuming that payments from all Subscribers are

made when due, it is expected that the share capital increase will be registered in the Norwegian

Company Register on or about 28 July 2015. The final deadline for registration of the share capital

increase pertaining to the Subsequent Offering with the Norwegian Register of Business

Enterprises, and, hence for the delivery of the Offer Shares, is, pursuant to the Norwegian Public

Limited Companies Act, three months from the expiry of the Subscription Period, i.e. on 14

October 2015.

All of the Offer Shares will be tradable on Oslo Børs as of the time of issuance of such Offer

Shares. Assuming timely payment by all subscribers, the Company expects that trading in the Offer

Shares on Oslo Børs will commence on or about 29 July 2015. The Offer Shares will not be sought

or admitted to trading on any other regulated market than Oslo Børs.

Spectrum ASA

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The Company has not entered into any underwriting agreements, stabilization agreement, market

making agreements or similar agreements for trading of its Shares on Oslo Børs in relation to the

Subsequent Offering.

7.15 Share capital following the Subsequent Offering

The maximum number of Offer Shares to be issued is 1,500,000 all with a nominal value of NOK 1

per Offer Share. If fully subscribed, the Subsequent Offering would give a further increase in the

Company’s total number of issued Shares post the Private Placement from 53,326,625 to

54,826,625, each share with a nominal value of NOK 1 per Share.

7.16 Publication of information related to the Subsequent Offering

In addition to press releases at the Company’s website, the Company will use Oslo Børs’

information system to publish information in respect of the Subsequent Offering.

General information on the result of the Subsequent Offering is expected to be published on or

about 24 July 2015 in the form of a release through Oslo Børs’ information system and the

Company’s website.

7.17 Shareholder rights relating to the Offer Shares

The rights attached to the Offer Shares will be the same as those attached to the Company’s existing

Shares. The Company has only one class of shares outstanding and all Shares are freely

transferable.

The Offer Shares are issued electronically and rank pari passu with existing shares in all respects

from such time as the share capital increase in connection with the issuance of the Offer Shares is

registered in the Norwegian Company Register.

The holders of the New Shares will be entitled to dividend from the date of registration of the

respective share capital increase in the Norwegian Company Register. Pursuant to the Norwegian

Public Limited Companies Act, all shareholders have equal rights to the Company’s profits, in the

event of liquidation and to receive dividend, unless all the shareholders approve otherwise. Please

see Section 18 (“Shareholders Matter and Norwegian Securities Law”) on more details concerning

the rights attached to the Shares and issues regarding shareholding in a Norwegian Public Limited

Company.

There are no particular restrictions or procedures in relation to the distribution of dividends to

shareholders who are resident outside Norway, other than an obligation on the Company to deduct

withholding tax as further described in Section 19 (“Norwegian Tax considerations)”.

7.18 Dilution

Shareholders who do not participate either in the Private Placement nor the Subsequent Offering

(assuming full subscription) will be subject to a direct dilution of their ownership as set forth in the

table below, calculated on the basis that the Subsequent Offering is fully subscribed:

Prior to the Private

Placement

Subsequent to the Private

Placement

Subsequent to the Private

Placement and

Subsequent Offering

Number of Shares, each with a nominal value of NOK 1 43,326,625 53,326,625 54,826,625

% dilution 0% 18.8% 21.0%

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7.19 Managers and legal advisors

ABG Sundal Collier ASA and Danske Bank acted as joint-lead managers and joint bookrunners in

the Subsequent Offering

Haavind has acted as legal advisor to the Company. Grette acted as legal advisor to the Managers.

7.20 Interests of natural and legal persons involved in the Subsequent Offering

The Managers and its affiliates have provided from time to time, and may provide in the future,

investment and commercial banking services to the Company and its affiliates in the ordinary

course of business, for which they may have received and may continue to receive customary fees

and commissions, and may come to have interests that may not be aligned or could potentially

conflict with the interests of the Company and investors in the Company. Danske Bank are lenders

under a loan facilities made available to the Company in conjunction with the Transaction and

under a revolving credit facility, see Section 14 "Interest bearing debt".

The Managers, its employees and any affiliate may currently own existing Shares in the Company.

The Managers do not intend to disclose the extent of any such investments or transactions otherwise

than in accordance with any legal or regulatory obligation to do so.

The Managers will receive a success fee of a fixed percentage of the gross proceeds raised in the

Subsequent Offering and, as such, have an interest in the Subsequent Offering.

Other than what is set out above, there are no other interests (including conflict of interests) of

natural and legal persons involved in the Subsequent Offering.

7.21 Expenses and net proceeds of the Subsequent Offering

The total expenses of the Subsequent Offering, are estimated to the amount to approximately NOK

2,200,000, of which NOK 2,000,000 are fees to the Managers.

The net proceeds of the Subsequent Offering are estimated to amount to approximately NOK

45,800,000 (assuming subscription in full).

7.22 Lock-up

No lock-up agreements were entered into in connection with the Subsequent Offering.

7.23 Governing law and jurisdiction

The Offer Shares are issued pursuant to the Norwegian Public Limited Companies Act (Norwegian:

“Allmennaksjeloven”). This Prospectus and the terms and conditions of the Subsequent Offering as

set out herein shall be governed by and construed in accordance with Norwegian law. The courts of

Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may

arise out of or in connection with the Subsequent Offering or this Prospectus.

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8. FUGRO SEISMIC LIBRARY

If not otherwise indicated in the text, the source and responsibility of the information in this Section

is the Company and/or Fugro. Company Information which has been sourced from a third party

has been accurately reproduced. As far as the Company is aware and able to ascertain from

information published by that third party, no facts have been omitted which would render the

reproduced information inaccurate or misleading.

8.1 Overview

On 1 June 2015, the Company entered into the Transaction agreement with Fugro whereby the

Company has agreed to acquire all outstanding shares in Fugro Multi Client Services AS, Fugro

Multi Client Services Pty Ltd and Fugro Data Services GmbH holding the Fugro multi-client data

library, including certain multi-client data surveys owned by Fugro Mulit Client Services Inc in the

United States. The Transaction includes the entire Fugro multi-client library, with the exception of

certain non-transferrable items, among them any surveys in Russia or with Russian partners.

The acquired Library was owned by the following companies:

The acquired database includes:

In excess of 141,800 km² of MC3D

90,500 km² original 3D acquisition

51,300 km² reprocessed 3D

In excess of 1.6 million km of MC2D

430,000 km original 2D acquisition

810,000 km reprocessed 2D

380,000 km data jointly owned with TGS

http://no.wikipedia.org/wiki/M%C2%B2



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Overview Fugro’s Library – presented as three regions

The following is a brief description of selected surveys within Fugro’s different regions. These are

provided as an example subset of the library.

Total:

Total 3D: ~41,000 km²

Total 2D: ~660,000 km

Highlights 3D:

~25,000 km² in Norway

~11,000 km² in Netherlands

~3,500 km² in the UK

Highlights 2D:

~380,000 km in North Sea,

Norwegian Sea, Barents Sea

and Greenland

~25,000 km in Eastern

Mediterranean

Total:

Total 3D: ~20,000 km²

Total 2D: ~320,000 km

Highlights 3D:

~12,000 km² in Florida

~7,500 km² in Brazil

Highlights 2D:

~175,000 km in the deep

water GoM and Florida and

Brazil

~45,000 km Fugro acquired

data in Brazil

Total:

Total 3D: ~81,000 km²

Total 2D: ~630,000 km

Highlights 3D:

~80,000 km² in Australia

Highlights 2D:

~20,000 km in the Seychelles

Europe North and South America Asia Pacific

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8.1.1 Key Surveys Europe

Survey name Location Country Type Size

(km / km2)

Vintage Partner

South West Barents 2012 Barents Sea Norway 3D 8,167 2012

South West Barents 2011 Barents Sea Norway 3D 5,314 2011

North Sele High 2012 Barents Sea Norway 3D 1,432 2012

Finnmark Platform 2012 Barents Sea Norway 3D 1,059 2012

Barents Sea Tile 4 Barents Sea Norway 3D 540 2009

Vøring Basin Tile 1 Norwegian Sea Norway 3D 3,211 2010

Møre Basin Tile 1 Norwegian Sea Norway 3D 1,761 2011

Någrind East 2004 Norwegian Sea Norway 3D 1,215 2004

Halten Terrace 2007 Norwegian Sea Norway 3D 524 2007 Det Norske

Blakeney 2011 - Quad 20&21 North Sea UK 3D 2,200 2011 Dolphin

NL-DEF North Sea Netherlands 3D 7,511 2012 Logic Concepts

NL-AB12 North Sea Netherlands 3D 331 2012 Logic Concepts

Enten Schnabel 2002 North Sea Netherlands 3D 3,331 2002 Logic Concepts

AMI-Scandinavia (NSR, MNR, NBR) North/Norwegian/Barents Sea Multiple 2D 123,473 2002-2013 TGS

AMI-Greenland (NEG) Greenland Greenland 2D 8,513 2008-2012 TGS

Lebanon 3D Levantine Basin Lebanon 3D 575 2012 Spectrum

EMED East Med East Med 2D 12,304 2000 Spectrum

Gulf of Taranto 2008 / Infill 2008 Italy Italy 2D 5,976 2008

Calabrian Arch 1999 Repro 2000 Italy Italy 2D 3,344 1999 Wavetech

Malta Escarpment Margin (2007) Malta Malta 2D 1,301 2007

SWB12 (2012)

Many drill or drop decisions in 2015 and

2016

Two wells and discoveries within SWB12

in 2014

The main target are Jurassic fault blocks

that are analog and conjugate to Skrugard

and Havis. Cretaceous submarine fan

deposits also form significant reservoir

sandstones

SWB12 (2012)

Large share of open acreage

The main targets are a large Middle

Jurassic fault assisted three-way closure

and Late Cretaceous-Middle Eocene

submarine fan deposits that form

significant reservoir sandstones. Late

Cretaceous-Middle Eocene sand deposits

occur in both rotated fault blocks and

stratigraphic traps

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NBR (2006-2012)

Norwegian Barents Sea

Regional, 120,000 line km

Open acreage, coupled with

infrastructure to be built

Possible Barents Sea

Southeast disappointments

could shift interest back into

this region

Some announced blocks in

23rd round

MNR (2004-2011)

Mid-Norway Regional,

110,000 line km

Large parts still open

acreage

Vøring Basin and Halten

Terrace with a lot of

exploration, recent

discoveries and Polarled

pipeline to Aasta Hansteen

with capacity, seeking gas

resources

NSR (2003-2011)

North Sea Renaissance,

some UK, Denmark and

Germany

150 000 line km

Operators seeking resources

to tie-in to existing assets to

pro-long lifetime and reduce

unit operating costs

General

Jointly owned by Fugro and TGS, the AMI 2D dataset

covers approx. 380,000km in Scandinavia, the UK, the

Netherlands and Greenland

Surveys shot from 2002 to 2013

Regularly reprocessed

Regular and consistent grid, which allows infill and

extension

The dataset has been a consistent top seller, representing a

large portion of Fugro library revenues

Covering the majority of the North Sea, Norwegian Sea and

Barents Sea, the unique dataset represents an exceptional

offering to clients

Unparalleled basis for planning new multi-client surveys by

sanctioned projects

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8.1.2 Key surveys North and South America


(km / km2)

Vintage Partner

Florida 3D (516 blocks) Florida USA 3D 12,023 2012

Deep Focus GoM USA 2D 135,989 2007

Deep East GoM USA 2D 35,563 2007

Jamaica Walton Basin Walton Basin Jamaica 2D 6,961 2006 PCJ

Jamaica 2010 Reprocessing Walton Basin Jamaica 2D 3,358 Repro

Alto Cabo Frio 3D Campos & Santos Brazil 3D 4,000 Repro

Cabo Frio 3D Campos & Santos Brazil 3D 2,655 1999

Brasil Deep Focus Campos & Santos Brazil 2D 15,845 2007

Bahia Camamu 2D Camamu-Almada Brazil 2D 17,000 2012

Para-Maranhao 2D (Perseus) Para-Maranhao Brazil 2D 11,523 2012

Florida 3D (2012)

Survey covers 516 blocks, of

which fast track covers 258

Covers Lloyd Ridge and The

Elbow

Covers parts of the Eastern GoM

area not under Moratoria

Full survey has been depth

processed by CGG

Deep Focus 2D (2007)

Regional non exclusive long

offset seismic and gravity survey

Offshore deepwater in central and

western Gulf of Mexico

135,989 km (84,500 miles)

Deep East 2D (2011)

Regional long offset seismic,

gravity and magnetic survey

No competing surveys

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Cabo Frio 3D (1999)

Recent Petrobras discovery

in license partly covered by

Alto Cabo could generate

more interest and drive new

seismic sales


Partly covering open

acreage, partly production

licenses

Alto Cabo Frio 3D

(Reproduced)

No recent or high quality

competing surveys

Survey covers only open

acreage

QGEP farm-in in nearby

Atlanta and Olivia field

could spark new exploration

activity

Jamaica Walton Basin 2D

(2006)

111 lines

6,961 km

200-3,300 m water dept

Jamaica 2010 Reprocessing

56 lines

3,358 km

3 vintages 1978-1983

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8.1.3 Key surveys North and South America


(km /

km2)

Vintage Partner

Barrow/Browse/Bonaparte Ultra Cubes Carnarvon / Browse Australia 3D 37 200 Repro Searcher

Eendracht 3D Carnarvon Australia 3D 7 920 2010

Zeebries 3D Carnarvon Australia 3D 3 783 2011

Zeus 3D Phase I + II Carnarvon Australia 3D 2 034 2011

Zeester 3D Part A & B Carnarvon Australia 3D 3 854 2012

Phoenix 3D Carnarvon Australia 3D 1 100 2011

Beagle 3D Carnarvon Australia 3D 1 584 Repro

Tiffany Browse Australia 3D 731 2010

Cartier Main 3D Browse Australia 3D 2 770 2010

Cartier West 3D Browse Australia 3D 517 2010

Schild Browse Australia 3D 2 375 2013 CGG

Zeemeermin 3D Browse Australia 3D 1 171 2009

Kyranis Bonaparte Australia 3D 9 353 2013 ANP

Zeekoet Bonaparte Australia 3D 592 2013

Great Australian Bight (2D&3D) Great Australian Bight Australia 2D/3D 41 792 Repro MCG

Seychelles Seychelles Seychelles 2D 19 529 Repro Geomahakarsa

PNG Lahara PNG PNG 2D 45 407 Repro Searcher

Gorontalo 2D 2006 Gorontalo Basin Indonesia 2D 5 643 2006

Semai 2D Non-Exclusive 2D Semai Indonesia 2D 5 221

Sula 2D PSTM Non Exclusive Sula Basin Indonesia 2D 3 829 Repro

NewLOOK 2D Gorontalo Basin Indonesia 2D 2 366

West Timor PSTM Repro Timor Timor 2D 1 435 Repro

India Deep Focus I + II West India India 2D 3 636 2009 IDGH

Cartier Main 3D (2011)

Little overlap with other surveys

Covers open acreage

A number of licenses expire in 2016

Under-explored area with nearby producing

fields (Montara, Swift)

The primary objective is the productive Puffin

Formation with secondary objectives of the

Middle To Lower Jurassic aged Nome

Formation and deeper Permian plays

Shild 3D (2013)

Little overlap with other surveys

Covers acreage proposed in the 2014

announcement

Covers open acreage which was previously

relinquished

Giant discoveries both west (Ichthys and

Prelude) and east (Poseidon) of survey

Spectrum ASA

55

Zeebries 3D (2011)


Covers open acreage and 16 prospects

WA-418-P with potential relinquishment

in 2015

Few exploration wells drilled. Likely

more activity in the future

Many E&P companies with equities in

nearby licensees

Close to infrastructure, tie-in

opportunities

Survey aims to define play level under

the Muderong Shale formation including

the Triassic Mungaroo fault block plays

in the central part of the survey area and

Jurassic-Triassic horsts and wrench-

controlled troughs to the east in

WA-418-P

Barrow UltraCube Projects BUCPs (2013

reproduction)

Covers open acreage

New vintage reproduction of a large data

set

Many E&P companies present in the area

Covers large discoveries such as Gorgon,

Wheatstone, Lago and Pluto

E&P companies are looking for potential

tie-back opportunities

A number of licenses expires in the

upcoming years towards 2018

Survey covers 2014 proposed acreage

Eendracht 3D (2010)

Low seismic coverage and competition

Under-explored region, few exploration wells

drilled

Covers open acreage

Challenging acquisition conditions due to

currents in the ocean. Fugro utilized state-of-

the-art hardware technology

Discoveries and producing fields nearby

Large licenses expire in the next two years

Spectrum ASA

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8.2 Transaction rationale

Spectrum believes that a combined Spectrum/Fugro library is attractive for several reasons

where the most important are:

The Transaction enables Spectrum to achieve a leading position in MC2D and will give

the Company a bigger footprint of data coverage and a bigger interface with oil

companies.

Spectrum can offer volume deals and attract a lot more interest with global exploration

super majors.

Spectrum will have a unique offering to National Oil Companies that are seeking

investments abroad.

Oil companies are seeking a rare combination of political stability, high hydrocarbon

prospectively and regular license rounds. This can be found in Norway, USA,

Australia and arguably Brazil.

A combined SPU/Fugro library gives Spectrum a substantial MC3D library focused on

Australia, Norway, UK, Netherlands and US GOM.

A combined SPU/Fugro library gives Spectrum an increased capacity to finance new MC

investments.

The combined library has minimal overlap and increases footprint in key areas like

Norway, Brazil and Australia.

8.3 Growth potential

Near-term sales potential:

Ongoing and future License rounds and block negotiations.

AMI data co-owned with TGS is a consistent top seller.

Covers the majority of the North Sea, the Norwegian Sea and the Barents Sea.

80,000 km2 of high quality 3D data with minimal overlapping competing surveys.

Three unique surveys surrounding Apache’s 2014 Phoenix discovery.

Extensive 2D & 3D coverage of Campos & Santos basin attractive to new entrants

New, unique 2D coverage in Para Maranhao and Camamu-Almada.

Extensive coverage of unlicensed blocks in Barents Sea.

Important provider of data around Polarled pipeline.

Spectrum ASA

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9. PRESENTATION OF THE COMPANY

9.1 General

The Company’s legal and commercial name is Spectrum ASA. The Company is a Norwegian

public limited liability company organised under the laws of Norway in accordance with the

Norwegian Public Limited Companies Act. The Company’s registered organisation number is 992

470 763.

The principal activities of Spectrum are the production and sale of multi-client seismic surveys and

imaging of seismic data for both multi-client surveys and proprietary customers operating in the

global oil and gas market. Spectrum’s operational headquarters are at Woking, England with

subsidiaries in Houston (USA), Australia, Singapore and Beijing (China), together with a Joint

Venture operation in Egypt. Spectrum has four key geographical areas considered as high impact

areas for multi-client studies:

North and South America

The Mediterranean Sea

Africa

North West Europe

As of the date hereof Spectrum including affiliates has a total of approximately 200 employees.

The Company’s registered office is the following:

Spectrum ASA

Sjølyst Plass 2

0278 Oslo

Norway

Telephone: +47 23 01 49 60

Facsimile: +47 23 01 49 61

www.spectrumgeo.com

http://www.spectrumgeo.com/

Spectrum ASA

58

9.2 Historical background and development

The Company was incorporated on 25 March 2008 as a wholly owned subsidiary of GTB. On 16

April 2008, the board of directors of GTB and Spectrum agreed to transfer the major part of GTB’s

seismic business (the “Seismic Business”) to Spectrum pursuant to an arm’s length transaction

against a cash consideration of NOK 275 million (the “Separation”). The transaction agreement was

entered into on 2 May 2008.

Since the Company’s operations are continuations of certain parts of GTB’s Seismic Business, a

brief background and history of GTB and its Seismic Business will be set out below.

GTB was incorporated in 1999 as Mid East Geophysical Alliance (MEGA) in order to collect multi-

client 2D and 3D seismic data offshore Iran in the Persian Gulf and the Oman Sea. The name was

changed to Global Geo Services ASA in connection with the conversion from a private limited

liability company to a public limited liability company in 2000. GTB was listed on Oslo Børs’ SMB

list later the same year. In 2009 the name was changed to Global Tender Barges ASA. Up to late

2003, the majority of GTB’s seismic activities were related to the acquisition and sale of the PC

2000 survey. In September 2004, GTB in partnership with BGP International Equipment signed a

contract with the Government of the República Democrática de Timor Leste (East Timor) to carry

out 6,000 line kilometres of multi-client seismic data. Based on this contract, data was collected and

processed in 2005 and marketed for the first East Timor licensing round announced in the summer

of 2005.

During 2004 and 2005, GTB carried out multi-client surveys in the Joint Petroleum Development

Area (JPDA) between East Timor and Australia, Indonesia and off the west coast of Florida. The

Florida survey was approved by the Florida state authorities for a multi-client seismic program

planned off the west coast of Florida more than 150 kilometres from the coastline. The program

called Big Wave – Eastern Gulf of Mexico Escarpment, was planned for more than 10,000 line

kilometers for the initial stage. In December 2005, GTB and BGP agreed to establish `Geo Bridge -

a BGP GTB company` as a jointly owned limited company registered in Singapore. Geo Bridge Pte.

Ltd. targets the seismic market in the Asia Pacific region with multi-client geophysical surveys as

its priority area.

In December 2005, GTB acquired Spectrum Energy and Information Technology limited (Spectrum

UK), a seismic niche player providing non-exclusive surveys, seismic data processing and

electronic data management services. Spectrum UK has its headquarters in Woking, England, with

operational centers in Houston, Beijing and Cairo. Spectrum UK is a party to joint ventures and

technical agreements in Buenos Aires, Islamabad and New Delhi. The Group has centralized

computer hardware facilities based in Houston.

Spectrum UK was established in 1986.

In May 2007, a private share placement of NOK 200 million provided GTB with two new strategic

shareholders, Spencer Energy and AS Ferncliff.

In February 2008, GTB completed the acquisition of three tender barge rigs for a consideration of

USD 215 million.

On 16 April 2008, the board of directors of GTB resolved the Separation regarding transfer of the

majority of the seismic assets of GTB to Spectrum.

The purchase price for the seismic assets acquired was NOK 275 million. In order to fund this, the

Company collected NOK 150 million from the capital market through a share issue. Of the NOK

Spectrum ASA

59

150 million collected, Spectrum paid NOK 125 million to GTB as consideration for the asset

purchase, and the remaining NOK 25 million was used for the purpose of paying costs and as

working capital. The remaining NOK 150,000,000 of the consideration plus accrued interest was

redeemed by Spectrum.

Spectrum was listed on Oslo Axess on 1 July 2008.

In Q4 2008, the Company completed the acquisition and processing of Big Wave Phase III: 28,000

km of seismic and gravity data in the Gulf of Mexico together with TGS Nopec Geophysical

Company ASA.

On 12 November 2009 Spectrum incorporated a 100% subsidiary in Singapore.

On 16 March 2010 the Company announced that it had entered into an agreement with the

management and shareholders of Australian Seismic Brokers Pty Limited ("ASB") to purchase

100% of the issued share capital of the company. ASB was established in 1988 and is Australia's

leading supplier of MC 2D seismic surveys to the oil, gas and mining industry. The company was

based in Perth, Western Australia and had a multi-client library comprised of over 150,000 km of

2D PSTM reprocessed data from Australia and the Asia Pacific region. In addition ASB had one of

the region's largest and most extensive well log data libraries and an analogue library.

On 19 May 2011 the Company signed a framework agreement with SeaBird for the acquisition of

2D seismic data worth USD 23 million over the next 36 months. Under the Assignment and

Assumption Agreement the bareboat charter of the Vessel was assigned to Seabird until August

2012 on the same terms formerly enjoyed by Spectrum. The effective date of these agreements was

20 May 2011.

On 28 July 2011, Spectrum and CGGV entered into an asset purchase agreement, whereby

Spectrum agreed to acquire all of the marine MC2D seismic data library of the CGGV group,

except the Kazakhstan region, adding more than 500,000 km MC2D data to the library. The

purchase price for the business assets was USD 40 million, and was settled partly by shares in the

Company and partly by cash. The share component of USD 23 million of the purchase price,

consisted of 8,862,826 shares (each with a par value of NOK 1 and a subscription price of NOK

14), representing 25% of the shares in the Company. The cash consideration consisted of two

elements, one element of USD 13 million paid at completion of the transaction, and USD 4 million

upon successful transfer of certain assets held by CGGV. The initial cash consideration USD 13

million was financed by the issuance of a NOK 77 million convertible loan, underwritten by CGGV

(50%) and other major shareholders in the Company (50%).

On 21 December 2011, the Company announced that CGGV had converted their bonds to shares. In

total 27,682,970 bonds, each at a nominal value of NOK 1, were converted into 1,977,355 shares.

Post the conversion CGGV held 10,840,181 shares in Spectrum ASA, representing 28,96%.

On 24 April 2012, the Company announced that it had submitted an application to Oslo Børs to

transfer the listing of the Company's shares from Oslo Axess to Oslo Børs. On 28 June 2012 the

Norwegian FSA ("Finanstilsynet") authorized the use of the Summary Document prepared by the

Company in connection with the listing transfer. On 2 July 2012 the transferred from Oslo Axess to

Oslo Børs was finalized.

On 17 August 2012, the company announces the start of its first multi-client 3D survey. The survey

is located offshore Lebanon and will have a minimum size of 1,500 square kilometers.

On 13 February 2013, the Company announced it had signed a SPA to acquire the Norwegian

companies Carmot Seismic AS and Carmot Processing AS. The acquisition established a significant

Spectrum ASA

60

footprint for Spectrum on the Norwegian Continental Shelf adding 3D seismic data cubes covering

approximately 125,000 square kilometers of the Norwegian Continental Shelf and more than 80,000

kilometers of merged and matched 2D data in the Barents Sea. The Company, following the

acquisition offer 3D cubes covering approximately 60,000 sq km in the North Sea, approximately

50,000 sq.km in Mid-Norway and approximately 17,000 sq. km in the Barents Sea. Total purchase

price of the Carmot companies was approximately USD 3,8 million, including stay-on bonus for

key personnel. Acquisition of Carmot Seismic and Carmot Processing was formally closed 05

March 2013.

On the 20 February 2013, the Company announced that CGG had sold 3,965,181 shares in

Spectrum. After the transaction CGG no longer hold any shares or rights to shares in the Company.

On 24 April 2015, the Company announced that that it entered into a cooperation agreement with

Schlumberger, to acquire 50% ownership in Spectrum's Pelotas multi-client program. The

cooperation agreement included more than 30,000 km of regional 2D seismic data in the new

frontier Pelotas Basin, offshore Brazil.

On 19 May 2015, the Company announced that it had entered into a cooperation agreement with

Schlumberger, to jointly acquire and process Spectrum’s offshore Mexico 2D program. The

cooperation agreement includes more than 44,000 km of regional 2D seismic data in the new

frontier Campeche/Yucatan area. The new 2D regional program provides a seamless tie to

Spectrum's Big Wave Multi-Client program in the northern and eastern areas in the US Section of

the Gulf of Mexico.

On 1 June 2015, the Company entered into the Transaction Agreement with Fugro Norway AS,

Fugro Holdings (Australia) Pty Ltd, Fugro Finance AG and Fugro Multi Client Services Inc (

together referred to as (“Fugro”), whereby the Company agreed to acquire all outstanding shares in

Fugro Multi Client Services AS (“FMCS AS”), Fugro Multi Client Services Pty Ltd (“FMCS Pty

Ltd”) and Fugro Data Services GmbH (“FDS GmbH”) holding the Fugro multi-client data library,

including certain multi-client data surveys owned by Fugro Mulit Client Services Inc in the United

States. The new combined Spectrum multi-client library exceeds 3,000,000 km of MC2D seismic

data and 160,000 km2 MC3D seismic data covering all major sedimentary basins worldwide. See

Section 5 (“Acquisition of multi-client seismic library from Fugro”) for more information regarding

the Transaction.

Spectrum ASA

61

9.3 Legal structure of the Spectrum Group

Spectrum ASA is the holding company in the Group. The legal structure of the Group is set out

below.

The legal structure of the Group

Source: Company

9.3.1 Subsidiaries

The table below provides an overview of the Group’s subsidiaries.

Subsidiary Group’s

ownership

Group’s voting

rights

Registered office Segment

Spectrum Geo Ltd 100% 100% Dukes Court, Duke Street Woking,

Surrey GU21 5BH, UNITED

KINGDOM

Data processing and

multi-client surveys

Spectrum Geo Pty Ltd

(Australia)

100% 100% 105 St Georges Terrace, Perth, WA

6000., AUSTRALIA

Multi-client surveys

Spectrum Geo Pte Ltd

(Singapore)

100% 100% 152 Beach Road, Level 28, Gateway

East, SINGAPORE


Spectrum Geo do Brasil

Servicos Geofisicos Ltda

100% 100% 29 Andar 4 Sala Grupo 401/404,

Parte 20.030-060 Centro, Rio De

Janeiro, BRAZIL


Spectrum Geo Inc 100% 100% 11750 Katy Freeway, Suite 900,

Houston, Texas 77079, USA

Data processing and

multi-client surveys

Carmot Seismic AS 100% 100% Tankbåtvegen 2

4056 Tananger

NORWAY

Seismic consulting

services

Carmot Processing AS 100% 100% Tankbåtvegen 2

4056 Tananger

NORWAY

Seismic consulting

services

Spectrum Geopex Egypt Ltd 50% 50% Spectrum-Geopex Building, Nasar

City Public Free Zone, Block 1-A,

Cairo, EGYPT

Data processing

Geo Bridge Pte Ltd 50% 50% 152 Beach Road, Level 28, Gateway

East, SINGAPORE


Spectrum ASA

62

Spectrum ASA

Spectrum ASA is the parent company in the Group. It was incorporated on 25 March 2008 in

connection with the purchase of certain seismic assets from GTB, as described in Section 9.2

(“Historical background and development”). Spectrum’s business as defined in the Articles of

Association state that ‘the company shall be engaged in the business of offering services related to

the acquisition, processing and marketing of geophysical, aeromagnetic and gravity data, and other

services related to such businesses, including the participation in other companies engaged in

similar and related business. Spectrum owns (directly and indirectly) the shares in Spectrum Geo

Ltd, Spectrum Geo Pty Ltd, Spectrum Geo Pte Ltd, Spectrum Geo do Brasil Servicos Geofisicos

Ltda, Spectrum Geo Inc, Carmot Seismic AS, Carmot Processing AS, and 50% of the shares in

Spectrum Geopex Egypt Ltd and Geo Bridge Pte Ltd. In addition, Spectrum ASA owns a multi-

client library. The combined group’s multi-client library is composed of data and reports from many

of the major oil producing and frontier regions of the world. The library comprises approximately

1.3 million km of 2D data. In addition Spectrum holds approximately 5,300 km2 of new 3D data

sets offshore Lebanon, and approximately 11,300 km2 of acquired 3D data offshore Brazil that is

currently in processing. Furthermore, Spectrum holds approximately 125.000 km2 of seamless

seismic merged 3D data on the Norwegian continental shelf. Spectrum ASA also includes some

corporate functions such as group management and finance.

Spectrum Geo Ltd (UK)

Spectrum UK was established in 1986, and was acquired by GTB on 28 December 2005. The

company is incorporated, registered and located in the UK. Spectrum UK provides non-exclusive

seismic data surveys, seismic data processing and electronic data management services. Spectrum

UK owns 100% of the shares of Spectrum Geo Inc, a company incorporated under the laws of

Texas (“Spectrum US”) and 50% of the shares in Spectrum-Geopex Egypt Limited (“Spectrum-

Geopex Egypt”). Spectrum owns 100% of the shares of Spectrum UK Ltd.

Spectrum Geo Pty Ltd (Australia)

Spectrum Australia was established in 1988 under the name Australian Seismic Brokers. The

company is incorporated, registered and located in Australia. In March 2010, the company was

acquired by Spectrum and changed its name to Spectrum Geo Pty Ltd. Spectrum Australia provides

non-exclusive seismic data surveys, specializing in the Australian and Far East region.

Spectrum Geo Pte Ltd (Singapore)

Spectrum Singapore was established in 2009 as a direct subsidiary of Spectrum ASA. The company

is incorporated, registered and located in Singapore. The company provides non-exclusive seismic

data surveys, specialising in the Australian and Far East region.

Spectrum Geo do Brasil Servicos Geofisicos Ltda (Brazil)

Spectrum Brazil was established in 2009 as a direct subsidiary of Spectrum. The company is

incorporated, registered and located in Brazil. Spectrum Brazil provides seismic data surveys,

specializing in the region surrounding Brazil.

Carmot Seismic AS (Norway)

Carmot Seismic was established in January 2013 to provide seismic data surveys, seismic data

processing and electronic data management services. The company is incorporated, registered and

located in Norway. Carmot Seismic has developed a high quality 3D merge process which is

applied to public domain 3D data. Carmot Seismic was acquired by Spectrum on 13 February 2013.

Spectrum ASA

63

Carmot Processing AS (Norway)

Carmot Processing was established in January 2013 to provide seismic data surveys, seismic data

processing and electronic data management services. The company is incorporated, registered and

located in Norway. On 13 February 2013 Carmot Processing was acquired by Spectrum.

Spectrum Geo Inc (US)

Spectrum Inc was established in 1988. The company provides non-exclusive seismic data surveys

and seismic data processing. The Groups’ main computer facilities are housed in its premises and

operated via remote access from other processing centres. Spectrum UK is the 100% owner of the

shares of Spectrum US Inc. Spectrum ASA is the 100% owner of the shares of Spectrum UK.

Spectrum-Geopex Ltd (Egypt)

Spectrum-Geopex was established as a 50% Joint Venture with Geopex Ltd in 1996. It is based in

the Nasr City Public Free Zone and is fully authorised by EGPC for 3D and 2D seismic data

processing, seismic and well log data scan-vectorisation and post scan processing and integrated

data processing /reprocessing and interpretation in co-operation with Geopex Ltd.

Geo Bridge Pte Ltd (Singapore)

On 5 December 2005, GTB established, together with BGP, Geo Bridge Pte. Ltd., which is a 50/50

owned company incorporated, registered and located in Singapore. The company owns certain

multi-client geophysical surveys which are marketed by companies within the Group. BGP is a

major land and shallow water geophysical contractor based in China. Geo Bridge Pte Ltd is not

consolidated into the Spectrum Group.

9.4 Strategy and mission

Spectrum’s vision is to become a world class provider of frontier multi-client surveys and seismic

imaging solutions by achieving world leading performance through persistence, dedication and

commitment to quality, by supplying global seismic solutions through dedicated and experienced

people and by working in partnership with its customers to deliver consistent quality multi-client

seismic data and seismic imaging services on time and to budget.

Spectrum has a strategy to

grow the company organically through project development combined with acquisition of

strategic data libraries,

initiate and execute projects relevant to the global oil and gas industry to a high professional

standard and delivering the results at the right time and place and

attract the best people by offering performance based incentive programs together with the

opportunity to be awarded equity in the company.

Spectrum ASA

64

9.5 Business model

Spectrum aims to become one of the leading pure play marine multi-client companies based on an

asset-light business model. The Spectrum business model is to

a) acquire and process seismic data at its own expense and (9.6; Processing of Seismic Data)

and

b) to sell these data on a non-exclusive basis oil companies as possible (9.7: Sale of Multi-

Client Seismic Data)

The main focus is on 2D and 3D seismic data. A typical project would be the acquisition and

processing of seismic data prior to a license round, enabling oil companies to better understand the

prospects of the area and reduce their risk of exploration activities. Spectrum does not own seismic

vessels, but charter seismic vessels and crew from third parties on project to project basis, retaining

flexibility to choose the most appropriate technology and the vessels with the lowest cost for each

individual seismic survey. A typical project last 0.5 – 3 months, but this is completely dependent on

the size of the specific project. After the survey is acquired Spectrum process, market and sell user

licenses to the data to multiple clients on a non-exclusive basis. Processing is usually performed in-

house, but may also be outsourced to third parties depending on client preferences and Spectrum’s

available capacity.

Before and during the acquisition of surveys Spectrum aims to secure early sales from oil

companies to part-finance and de-risk the investment. In return for the early commitment, the

customers are given the opportunity to influence the project specifications and license the data at a

more favourable price. The level of targeted early sales varies from survey to survey depending on

the total expected sales potential and risk profile. Sales after the data has been acquired and

processed is categorized as late sales.

From time to time and on a project to project basis, Spectrum chooses to enter into cooperation

agreements with other companies to jointly acquire and process specific multi client projects. On

such projects the companies split the initial investment, and thus also the revenue. The gross

revenue from such projects are then netted the partners share of the revenue and finally recorded as

net revenue.

9.6 Processing of Seismic Data

Seismic imaging is provided from the Group’s processing centers in the UK, US, Egypt and

Indonesia. Spectrum’s seismic processing technology is based on third party software

complemented by Spectrum’s production processing platform, which is constantly being enhanced

with new processing techniques. Processing / imaging sales represent 1% of the Group`s gross

revenue in 2014 (1.5% in 2013 and 2.4% in 2012). In 2014 84% (2013: 85%, 2012: 82%) of the

gross revenues in the division was internal revenue related to processing data for the multi-client

library.

Irrespective of location, Spectrum’s offices are equipped with high-speed communication

capabilities facilitating a global 24-hour processing operation.

Spectrum offers a wide range of modern seismic imaging techniques. The Company’s geophysicists

provide sophisticated 3D and 2D data processing services. The management is of the opinion that

the company is both staffed and equipped to process the current and planned multi-client

investments.

Spectrum ASA

65

Offering within time processing include:

Noise Attenuation

Statics

Time Velocity Analysis

Multiple Removal

Pre-Stack Time Migration

QC Displays/Tools

Offering within depth processing include:

Tomography & Velocity Modelling

Pre-Stack Depth Migration

QC Display/Tools

Integrated services include

GeoProcessing

MULLOCK

AVO & Inversion

For a detailed description of Spectrum’s seismic processing technology and production processing

platform, please visit www.spectrumgeo.com

The Geoscience team

The Spectrum Geoscience team offers a wide range of sub-surface expertise and experience. The

team is led by several chief explorationists who have extensive global expertise gained in major

international and national major operating companies such as Amoco, Britoil, Premier, BP, BG and

PEMEX. The Spectrum Geoscience team have over 20 years’ experience working for a variety of

companies and for national institutes.

The team members are highly qualified, many up to PhD level, from several top UK universities

including Royal Holloway, University College London and University of Birmingham. The team

has developed an extensive global knowledge, having worked in many different basins and

environments, acquiring a very diverse skill set including interpreting large 2D and 3D datasets,

integrating potential field data, tectonic analysis, petrophysics, hydrocarbon play assessment and

prospect evaluation. The team produce prospectively reports and is proactive in identifying new

global exploration opportunities.

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/noise-attenuation

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/statics-all

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/velocity-analysis

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/multiple-removal

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/pre-stack-time-migration

http://www.spectrumgeo.com/imaging-services/land-environment/time-processing/qc-tools

http://www.spectrumgeo.com/imaging-services/land-environment/depth-processing/velocity-modelling

http://www.spectrumgeo.com/imaging-services/land-environment/depth-processing/pre-stack-depth-migration

http://www.spectrumgeo.com/imaging-services/land-environment/depth-processing/qc-tools


Spectrum ASA

66

Examples of Technologies

A Radon de-multiple stack before and after diffracted noise attenuation

The diffracted noise is treated as a spike, on the assumption that this noise is higher amplitude and

frequency than the data around it. The despike is applied to the NMO corrected gathers such that

any non-hyperbolic signal is removed.

Velocity Analysis Display

Comparison of Full Offset Stack and Poisson’s Ratio volume over known gas field

AVO describes the effect of variations in reflection amplitudes with offset, or more correctly

incident angle, which are caused by contrasts in the physical properties of the rocks. The relative

change in reflection coefficient is particularly significant when Poisson’s ratio varies greatly either

side of an interface. It is this phenomenon which allows AVO effects to be used in the detection of

hydrocarbons.

Before After

Time Section – Stacking Velocity Section Stacking Velocity CMP Gather

Full Offset Stack Poisson’s Ratio Volume

Spectrum ASA

67

9.7 Sale of Multi-Client Seismic Data

Spectrum is a pure play multi-client company and management has organized the entity as one

segment based upon services provided. Consequently the Company has one segment as defined in

IFRS 8 operating segments. Multi-client sales represent 99.0% of the Group`s gross revenue in

2014 (98.5% in 2013 and 97.6% in 2012).

The Spectrum library of multi-client seismic data specializes in regional coverage and includes

projects from the foremost oil producing regions of the world. The Company’s strategy focuses on

both the major, established hydrocarbon-producing regions of the world in addition to frontier

areas. Data comprises new acquisition, reprocessing complimented by strategically selected

reprocessing projects and interpretation reports. This Enable risk diversification by making the

company less dependent on specific surveys, countries and regions.

The combined group’s multi-client library comprises approximately 1.3 million km of 2D data. In

addition Spectrum holds approximately 5,300 km2 of new 3D data sets offshore Lebanon, and

approximately 11,300 km2 of acquired 3D data offshore Brazil that is currently in processing.

Furthermore, Spectrum holds approximately 125.000 km2 of seamless seismic merged 3D data on

the Norwegian continental shelf.

In most cases the data is owned by the country in which the data is acquired, and Spectrum enters

into a long term agreement with the relevant governing body (normally the Ministry of Oil) to

acquire and sell licenses of the data on behalf of the Ministry, to international oil companies. These

agreements vary from country to country.

From time to time Spectrum enters into cooperation agreements with other companies to jointly

acquire and process seismic data. In such arrangements the parties agree to share a certain

percentage of the investments and thus also the revenue generated from the sale of the seismic date.

In addition to its own multi-client library, Spectrum also has interests in certain other companies’

multi-client data. Spectrum processes multi-client data on behalf of such companies at cost. In

return, Spectrum charge a percentage share of any revenues generated, the revenue generated from

such sales represents a small percentage of multi-client sales.

Older surveys are screened and evaluated to determine their sales potential. The surveys can be

located in frontier, sedimentary basins or recycled acreage in traditional hydrocarbon provinces.

Depending on the risk profile of a project whether newly acquired or reprocessed, Spectrum may

choose to undertake the project with a strategic business partner. For instance, Spectrum recently

announced it entered into a cooperation agreement with Schlumberger, to acquire 50% ownership in

Spectrum’s Pelotas multi-client program. Through such processes Spectrum aims to reduce

financial risk and to increase market exposure with both partners promoting the data.

The chart below illustrates the geographical distribution of the Group’s MC library before and after

the acquisition of MC library from Fugro.

Spectrum ASA

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Company MC library pre/post Fugro acquisition from Fugro

Source: Company

Overview Spectrum’s Library (highlighted in yellow)

The following is a brief overview of selected surveys within Spectrum’s multi-client library. These

are provided as an example subset of the library.

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69

Northwest Europe

Below is a brief description of recent Spectrum multi-client surveys in Northwest Europe.

During the summer of 2013 Spectrum completed the acquisition of the first phase of a new 2D

Multi-Client seismic survey in the Hoop area in the Barents Sea. This survey included a large

number of blocks available for the 23rd licensing round. It focused on the Triassic plays with lines

tying existing and planned wells. In Q2 2014, the second phase was started with the acquisition of

5,300 kilometre of MC2D data, as well as induced polarization (IP) data over some of the seismic

lines. IP is a geoelectric method that measures the anomalies in electric potential.

GoM

Below is a brief description of recent Spectrum multi-client surveys in the Gulf of Mexico.

On 19 May 2015, the Company announced that that it had entered into a cooperation agreement

with Schlumberger to jointly acquire and process Spectrum's offshore Mexico Campeche-Yucatan

2D regional Multi-Client program. The cooperation agreement includes more than 44,000 km of

regional 2D seismic data in the new frontier Campeche/Yucatan area.

Spectrum ASA

70

Brazil

Below is a brief description of recent Spectrum multi-client surveys in Brazil.

In December 2013, Spectrum and CGG announced that they jointly would launch a large, high-end

BroadSeis™ 3D Multi-Client survey program offshore Brazil that focuses on a large proportion of

open acreage in the Foz do Amazonas Basin. CGG and Spectrum are working as equal partners on

this project which has received high early sales from a number of major industry players. Covering

11,330 square kilometres, the Foz do Amazonas survey was acquired by the Oceanic Endeavour

deploying Sercel’s next-generation Sentinel RD solid streamer. The survey commenced in January

2014 and completed at the end of the third quarter 2014. The high-end BroadSeis™ data set is being

processed in CGG’s Rio de Janeiro subsurface imaging centre and final products are scheduled to

be available in Q3 2015.

In May 2014, Spectrum commenced a 10,000 kilometre Multi-Client 2D seismic survey offshore

Brazil in the Sergipe and Alagoas basins along the Eastern Margin of Brazil. The acquisition of data

was completed in Q3 2014, and PSTM and PSDM data became available in Q1 2015. Immediately

after the completion of the initial phase of the project, a second phase was commenced. This is a

6,000 kilometre infill to provide 5 x 5 kilometre grid spacing over a subset of the area covered in

phase 1. The acquisition of phase 2 was completed mid Q4 2014 and the final products became

available in Q1 2015, well ahead in time of the 13th offshore licensing round which is scheduled to

be held in October 2015.

Spectrum ASA

71

Africa

Below is a brief description of recent Spectrum multi-client surveys in Africa.

In April 2014, Spectrum started and completed a 2,700 kilometre MC2D survey in the Orange basin

in Namibia, infilling its existing data coverage in the basin. A follow up survey in South Africa is

planned for 2015. In Eastern South Africa a 2,100 kilometre MC2D survey was carried out in the

Durban basin during Q2. This survey complements the 4,800 kilometre MC2D data that was

acquired during 2013 and both surveys were carried out in partnership with CGG, utilizing their

BroadSeisTM acquisition solution.

Mediterranean

Below is a brief description of recent Spectrum multi-client surveys in the Mediterranean.

In July 2013 Spectrum signed a contract with the Ministry of Economy in Croatia for the rights to

acquire Multi-Client 2D seismic data offshore Croatia. Spectrum commenced the acquisition of

approximately 14,700 kilometre of long offset seismic data in the first half of September. This

survey covers both the northern and southern parts of the Croatian Adriatic Sea and connects with

Spectrum’s reprocessed seismic data covering the Italian Adriatic. During the first quarter of 2014

Spectrum ASA

72

the acquisition was completed and processed products were available by April 1st 2014. The

Government of Croatia officially opened Croatia’s first offshore license round on April 2nd 2014.

9.8 Customers

Spectrum sells seismic data to oil and gas companies worldwide. In 2014, the largest customer of

the Spectrum group accounted for 15% of consolidated revenues (2013: 9%). Spectrum does not

disclose a breakdown of customers that account for 5%-10% of group revenues as management

consider this information to be confidential and commercially sensitive in nature. Spectrums

customers are the big international oil and gas companies. There is a high dynamic in the Group’s

customer base and the customer mix one year could change considerably the following year.

9.9 Environmental issues

The Group’s activities involving the collection of seismic data mean that there is a level of

interaction with the external environment. Spectrum is continually working on its operational

procedures in order to minimize the environmental and social impact on the people, communities

and the surroundings in which the company operate. The Group is not aware of any specific

environmental issues that are likely to have a negative effect on the utilization of its assets.

9.10 Dependence on research and development, patents and licences

Currently, the Company does not own any patents for the technology used in relation to the

Company’s seismic surveys and the processing of seismic data. However, the development of new

technology may render it necessary with protection of intellectual property rights through

registration of patents.

The Company does not hold any licences, except for regular licences to use ordinary software and

computers.

Other than the long term contracts that Spectrum enters into to acquire and sell seismic data in

various countries, as of the date of this Prospectus, the Company’s business is not dependent on any

industrial, commercial or financial contracts or research and development, or on particular patents

or licences.

The Group has not incurred any research and development costs during the period covered by the

historical financial information in this Prospectus.

9.11 Property, plant and equipment

Spectrum leases its offices and other premises. The lease agreements are on commercial terms and

satisfactory to the current and expected future needs of the Company, in terms of required office

space. The only exception is Egypt where the 50% subsidiary Spectrum- Geopex (Egypt) Ltd owns

its own building. The Spectrum-Geopex building comprises 700 square metres of space over three

floors in the Nasar City Public Free Zone in Cairo. The building is owned outright by the Spectrum-

Geopex joint venture company but the land that the building sits on is leased from the General

Investment Authority & Free Zone for a period of ten years. The lease was renewed on 14 July

2006 and will expire on 13 July 2016. The facilities are used for offices and as an IT processing

center.

Current leases of offices

Spectrum ASA has an office lease agreement expiring in May 2017 at an annual rent of NOK

1,288,000. The office is 500 square metres and is used as office. In addition Spectrum ASA has an

Spectrum ASA

73

office lease agreement for the Stavanger offices expiring in December 2016 at an annual rent of

NOK 218,500. The office is 200 square metres and is used as office and data center.

The subsidiary Spectrum Geo Ltd in Woking UK has an office lease agreement expiring in May

2017at an annual rent of GBP 204,720. The office is 1,000 square metres and is used as office and

data center.

The subsidiary Spectrum Geo Inc in Houston USA has a tenancy agreement expiring in February

2024 at an annual rent of USD 689,159 rising to USD 806,186 in its final year. The office is 2,400

square metres and is used as office. In addition the subsidiary has a tenancy agreement expiring in

March 2020 at an annual rent of 528,000. The office is 500 square metres and used as a data center.

The subsidiary Spectrum Geo do Brasil Servicos Geofisicos Ltda has an office lease agreement

expiring in March 2016 at an annual rent of BRL 115,000. The office is 25 square metres and is

used as office.

The subsidiary Spectrum Geo Pty Ltd has a tenancy agreement expiring in May 2017 at an annual

rent of AUD 110,000 . The office is 150 square metres and used as office and data storage.

Equipment

In general, all equipment needed to conduct seismic data processing and data administration is

owned by the companies in the Group except some software packages where ordinary license

agreements are in place. All acquisition of new seismic data is performed using third party

operators, these companies provide a full solution and utilize their own equipment.

At the date of this Prospectus, the Group has no outstanding orders for new equipment, nor do they

believe there are any environmental issues that may have an effect on the utilization of any of the

existing tangible fixed assets. As of year-end 2014 the book value of the Group’s software was

USD 2.6 million compared to USD 2.1 million year end 2013.

As of year-end 2014 the book value of other fixtures, fittings and office equipment equal USD 3.0

million compared to USD 3.0 million in 2013.

9.12 Trends

By the end of 2014 it became clear that the oil price was under pressure and that oil companies are

cutting back on their exploration spending. As E&P spending, including spending on seismic

services, is closely linked to the oil price, the recent downturn in the oil price (2014/2015) has

impacted, and is expected to continue to impact the oil companies exploration spending, including

spending on seismic data in a negative way. This is also evident looking at revenue from Q1 2015.

However, the management in Spectrum believe that the Company’s asset light business model is

resilient to a cyclical downturn. The Company also believes that offshore seismic data is needed in

the future order to keep up the volume of conventional offshore oil production.

The Company is not aware of any trends, uncertainties, demands, commitments or events that are

reasonable likely to have a material effect on the Group’s prospects for the current financial year.

The Company is also not aware of any technological innovations in the industry during the last year

that would diminish the value of the Company’s assets, or reduce the Company’s competitiveness

going forward.

Please also see Section 10 (“The Company’s business and industry”), Section 12 (“Financial

Information”), Section 14 (“Operating and Financial Review”) and Section 15 (“Capital

Resources”) for more information about significant recent trends in the Group’s business and

relevant markets.

Spectrum ASA

74

9.13 Significant changes in the Groups financial or trading position since 31 March

2015

Cooperation agreements with Schlumberger 1

On 24 April 2015, the Company announced that that it entered into a cooperation agreement

with Schlumberger, to acquire 50% ownership in Spectrum's Pelotas multi-client program.

The cooperation agreement includes more than 30,000 km of regional 2D seismic data in the

new frontier Pelotas Basin, offshore Brazil. The program includes the recently acquired

Pelotas Phase 1 seismic acquisition, comprising 7,438 km of 2D data. Pelotas Phase 2,

currently being acquired, consists of up to 12,000 km of 2D data and more than 12,000 km of

recently reprocessed regional 2D data.

For the already acquired seismic data Schlumberger paid USD 7.9 million, equalling 50% of

the initial investment. Investments and revenues from the Pelotas MC program going forward

will be split 50/50 between Spectrum and Schlumberger.

Cooperation agreements with Schlumberger and PGS 2

On 19 May 2015, the company announced that it had entered into a cooperation agreement

with Schlumberger, to jointly acquire and process Spectrum’s offshore Mexico Campeche-

Yucatan 2D regional Multi-Client program. The cooperation agreement includes more than

44,000 km of planned regional 2D seismic data in the new frontier Campeche/Yucatan area.

On 1 July 2015, the company announced that this cooperation agreement was expanded to

also include PGS. The collaboration will now acquire 80,000 - 100,000 kilometers of

modern, long-offset 2D data encompassing all the major hydrocarbon provinces offshore

Mexico. This includes areas currently on offer for Mexico's Round 1 in the Perdido Fold Belt,

Mexican Ridges Province, Campeche Deep Sea Basin and will also provide seamless

coverage across the Yucatan Platform tying to Spectrum's Big Wave program in the eastern

area of the US Gulf of Mexico. The previously announced PGS MultiClient Mexico Well Tie

program, which commenced on May 16, 2015, will be included in this collaboration. Two

GeoStreamer vessels have already acquired over 10,000 line kilometers with Fast Track

products available as part of this program. Spectrum and Schlumberger commenced

operations on June 10 with a third vessel and an additional vessel is enroute to commence

operations in early July. These strategically placed surveys will help provide greater insight

to clients preparing for Round 1. Investments and revenues from this cooperation agreement

will be split three ways between Schlumberger, PGS and Spectrum.

1 The cooperation agreement with Schlumberger are made on a project by project basis and are currently not

organised through any joint ventures. 2 The cooperation agreement with Schlumberger and PGS are made on a project by project basis and are

currently not organised through any joint ventures.

Spectrum ASA

75

Acquisition of Fugro’s MC library

On 1 June 2015, the Company and Fugro entered into the Transaction Agreement, whereby

the Company agreed to acquire the marine multi-client seismic data library of the Fugro

group. For more information see Section 5 (“Acquisition of multi-client seismic library from

Furgo”) and 8 (“Fugro seismic library”). On 30.06.2015 the Company announced that the

acquisition of the Fugro global multi client library was completed.

Operational update

The Company’s management expects an improvement in Q2 2015 Net Revenues vs. Q1 2015

and estimates approx. USD 35 as Net Revenues for the second quarter. This includes sales

from the existing Spectrum library and sales from the acquired Fugro library from 1 June

2015. Sales from the acquired Fugro library for the period 1 January 2015 to 31 May 2015

(approx. USD 9 million) will not be recorded in Spectrum P/L, but economic benefits from

those sales will be part of the balance as of end Q2 2015. Based on the existing sales pipeline,

ongoing licence rounds and full consolidation of revenue related to the acquired Fugro Multi

Client library, Spectrum management expects Q3 to offer a good sales potential.

Except for the above mentioned, there have been no other significant changes in the financial

or trading position of the Group since 31 March 2015.

Spectrum ASA

76

10. THE COMPANY’S BUSINESS AND INDUSTRY

If not otherwise indicated in the text, the source and responsibility of the information in this

Section is the Company. The Company has used Danske Bank Corporate Finance in

compilation of some of the Sections below, but Danske Bank, Corporate Finance has not

independently verified the correctness of such data. Company Information which has been

sourced from a third party has been accurately reproduced. As far as the Company is aware

and able to ascertain from information published by third parties, no facts have been omitted

which would render the reproduced information inaccurate or misleading.

10.1 Introduction to the seismic industry

The market for geophysical seismic survey is driven by the oil industry’s willingness to

invest in exploration and production. The incentives to invest are a direct consequence of

global oil and gas demand / supply balance, as well as acreage available for exploration.

These factors are in turn affected by global production levels, prices for alternative energy,

government policies and the political stability in the oil producing countries. The

International Energy Agency projects that the global demand for oil will average 93.6 million

barrels per day in 2015, an increase of 1.1 million barrels per day from 20143.

From 2001-2014 the oil and gas industry experienced escalating exploration costs as the oil

companies were driven to search for new reserves in deeper waters and more complex

environments. Following the recent increase in production from US Shale and a

corresponding decline in oil price, investment in exploration and production is expected to

decline in 2015 compared to 20144.

Seismic technologies: 2D versus 3D and 4D

Seismic acquisition is the primary tool used by the oil companies both to explore for new

reserves, field appraisal and development programs of already discovered fields.

Historically, 2D surveys have been the core of the industry, where marine seismic primarily

have been associated with the search for hydrocarbons. When there is limited information

available about conditions, 2D data will typically be acquired in the early stage of assessing

the potential developments since it is a relatively cost efficient alternative. Prior to

development, 3D will typically be acquired to verify and map the subsurface in more detail.

4D seismic relates to repetition of surveys over a certain time interval (The 4th dimension is

time). This means that 3D surveys are carried out on an operated field over multiple time

periods, in order to be able to identify structural changes in the reservoirs. This will show the

oil companies how the fields evolve when production is in progress, and is a valuable tool for

deciding upon future measures. Over the past years, the industry has seen a strong growth in

the demand and supply for 3D and 4D surveys. 3D and 4D surveys are more costly to

perform and process, but provide higher dissolution and better understanding of the

geological seabed conditions than 2D surveys.

3 IEA Higlights (13 May 2015) https://www.iea.org/oilmarketreport/omrpublic/

4 Danske Bank Corporate Finance

https://www.iea.org/oilmarketreport/omrpublic/

Spectrum ASA

77

Contract vs. Multi-Client

There are two prevailing business models in the seismic industry, contract and multi-client. In

the contract model data is acquired exclusively under contract for one specific client. In the

multi-client model the seismic companies plan, acquire and process the data at their own risk.

The processed data is then offered to multiple clients on a non-exclusive basis.

Multi-client data is usually sold at a lower price than contract data as it is sold on a non-

exclusive basis. However, as the data may be marketed and sold to several clients the

potential revenue from a multi-client survey can exceed the revenue otherwise derived from

an exclusive contract survey. As the multi-client data is acquired without secured revenue to

cover all investments, the multi-client model has higher risk.

During a downturn it appears E&P companies are more likely to cut or delay seismic

spending in the more high-end segments which usually are contract based, while multi-client

sales may be less affected. However, in some regions work commitments related to licenses

may have little room for adjustment and thus these will not be cut.

10.2 Drivers of Demand for Marine Seismic Services

The demand for marine geophysical services is influenced by several factors, the most

important being:

The demand for oil and gas

The level of the oil companies’ exploration and production spending

Developments in technology that affect the cost, quality and reliability of marine seismic

data

Oil demand growth vs. Global GDP growth*

*Global GDP growth from EIA not available for 2014 as of the date of the prospectus

Source: World Development Indicators Database, EIA

Growth in oil demand has historically correlated with growth in global GDP. Oil demand

growth fell 5% during the financial crisis in 2009 after several years with continued growth

after year 2000. Following the global recovery, demand has picked up, however at more

moderate growth levels the last couple of years.

1.1 % 1.3 %

-0.8 %

-1.2 %

3.4 %

1.1 % 1.0 %

1.6 % 8%

13%

10%

-5%

10% 11%

2% 3%

-8%

-3%

2%

7%

12%

17%

-2.0 %

-1.0 %

0.0 %

1.0 %

2.0 %

3.0 %

4.0 %

2006 2007 2008 2009 2010 2011 2012 2013

Oil demand growth GDP growth

Spectrum ASA

78

Development in E&P spending 2006-2014

Source: Company with information supplied by Danske Bank Corporate Finance

E&P spending has historically increased together with higher oil price and escalating

exploration costs. The recent downturn in the oil price (2014/2015) has impacted, and is

expected to continue to impact the oil companies exploration spending in a negative way,

including spending on seismic surveys. As 3D and 4D surveys are more costly to perform

compared to 2D surveys, spending on these surveys are in general expected to be more

sensitive to changes in the oil price.

Correlation Oil Price and E&P spending


10.3 Supply

Companies offering seismic services span a continuum from large integrated full service

companies to smaller low-end, low-technology companies. There are only a few fully

integrated seismic players delivering a comprehensive set of services to the E&P-companies.

Western-GeCo, PGS and CGG, together with, Polarcus, Dolphin and BGP are the major

players having high end seismic streamer capacity. For lower-end vessels and 2D vessels the

ownership is more spread out with many small players offering capacity.

439

532

647

588

664

733

837 892

916

16

19

21

18

18

21

24 25

23

27.5 %

21.1 %

21.5 %

-9.4 %

12.6 % 10.6 %

14.3 %

6.4 %

2.4 %

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

700

800

900

1,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

E&P Spending Seismic and G&G YoY growth

2,469

5,909

4,656

(699) (1,527)

5,891

3,871

5,667

1,243

-

20

40

60

80

100

120

(2,000)

(1,000)

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Change in E&P spending (% yoy) Brent crude oil

Spectrum ASA

79

Streamer capacity has increased steadily from 2006 to 2014. Following the recent decline in

oil price several larger seismic companies have announced that they will warm stack vessels,

retire a number of older fleet vessels and in some instances, postpone or cancel new build

contracts. This is expected to reduce the total 3D and 2D fleet.

Development in streamer capacity


Spectrum does not own seismic vessels, but charter seismic vessels and crew from third parties on

project to project basis, on short to medium term charters. Hence, high vessel availability

together with high demand for seismic is the optimal situation for Spectrum. Management is

under the opinion that there will be vessels available both within the 2D and the 3D the next

years.

331

392

472

541 530

640

717

664 622

6,146

7,420

8,380

6,753 6,256

7,204

8,456

9,558 9,000

0

2,000

4,000

6,000

8,000

10,000

12,000

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010 2011 2012 2013 2014

Net Streamers Contract and MC revenues

Spectrum ASA

80

10.4 Positioning of Spectrum

The three largest integrated seismic players measured by number of vessels; CGG,

Schlumberger / WesternGeco and PGS compete in all major markets and have great capacity

and technological competence both within contract and multi-client work.

TGS, MultiClient Geophysical and Spectrum are all pure multi-client companies focusing

solely on the multi-client segment of the market. Spectrum’s business model is to lease

vessels and crew on short to medium term charters. Hence, high vessel availability together

with high demand for seismic is the optimal situation for Spectrum.

Spectrum’s main focus has historically been on 2D data. After the Transaction, Spectrum will

have the world’s largest multi-client 2D library and also a meaningful multi-client 3D library

globally (measured in survey km/km2). Through increased diversification both in terms of

regional coverage and product offering the Company becomes less dependent on specific

surveys, countries and regions. This is expected to broaden the Company’s customer base and

reduce its risk.

Overview market shares 2014 measured in survey km/km2


With its long track record, Spectrum has established what it believes to be strong

relationships with several oil companies.

Multi-client 2DMC2D(1)

Thousand Km, 2014

480401

11049 13

CGGIONPGS DOLPMCGSPU + FUGRO

2,600

1,600

1,400

TGS

3,000

Multi-client 3D

45% 39% 7% 6% 2% 1% 0%

Market share (%)

MC3DThousand Km2, 2014

540

494

446 425

29 4

39

IONDOLPPLCSPGS(2)

160

20

SPU +

FUGRO

TGSCGG WG

FugroSpectrum

25% 23% 21% 20% 7% 2% 1% 0%

(1) Excluding WG MC2D (library data unknown)

(2) PGS MC3D data exclude double-counting of reprocessed data and old merged data

Source: Company reporting

• The Fugro transaction will increase the

size of Spectrum’s MC 2D library with

~115% (measured in survey km )

• Spectrum + Fugro will be the market

leader in MC2D (measured in survey

km)

• The Fugro

transaction will

increase the size of

Spectrum’s MC 3D

library with ~700%

km2

• Spectrum + Fugro will

have a meaningful

market position in

MC3D

Spectrum ASA

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11. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES

11.1 Organisational Structure

The Company’s organisational structure is illustrated below.

Organisational structure

Source: Company

11.2 Corporate Governance

The objective for Spectrum is to adhere to all relevant laws and regulations affecting the

company and its business activities in the regions of operation, as well as the Norwegian

Code of Practice for Corporate Governance (the “Code of Practice”) from 21 October 2010,

revised in October 2011, 2012, 2013 and 2014, which itself is based on company, accounting,

stock exchange and securities legislation, as well as Stock Exchange Rules, as in force at 1

October 2010, and includes provisions and guidance that in part elaborate on existing

legislation and in part cover areas not addressed in legislation.

Except as set out below, the Company complies with the Code of Practice.

According to the Code of Practice Section 12, last sentence “Performance-related

remuneration should be subject to an absolute limit”. This requirement has not been

implemented in the Company in relation to the share option program, according to which

such conditions as the number of options, the time of exercise and the strike, are fixed for

each entitled person. The Company may, based on its discretion, choose between issuing

shares and a cash payment of the balance between market price and strike. There is no limit

on such cash payment, which is not in compliance with the said provision in the Code of

Practice. The reasons for this are commercial. The Company wants to attract the best

managers available and to incentivise such managers appropriately. Any limit on the option

payment would be considered an undesired limit the Company’s ability to attract the best

managers and also an undesired limit in the incentives given to such managers.

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11.3 Board of Directors

11.3.1 Overview

The administration of the Company pertains to the Board, which include ensuring the proper

and satisfactory organisation of the Company's business and affairs. The Board shall

supervise the administration of the Company, including the Chief Executive Officer.

The following table sets forth the composition of the Board at the date of this Prospectus.

Name of director Director since Current term expires Business address

Glen Ole Rødland 2008 2017 Sjølyst plass 2, 0278 Oslo, Norway

Pål Stampe 2015 2016 Tjuvholmen allé 19, 0252 Oslo

Ingrid Elvira Leisner 2011 2017 Sjølyst plass 2, 0278 Oslo, Norway

Linda Rudolfsen Myklebust 2012 2016 Strandveien 4, 1366 Lysaker

Maria Tallaksen 2015 2017 Tjuvholmen allé 19, 0252 Oslo

Source: Minutes GM May. 2015, Annual reports

11.3.2 Description of the Board members

Glen Ole Rødland (1964), Chairman

Mr. Rødland is a director and co-investor of Direct Active Investments in Ferncliff TIH AS.

Mr. Rødland has PhD studies in Finance from the Norwegian school of Economics and

Business administration (NHH) and UCLA. He has worked as a management consultant in

PwC and research assistant at NHH. Mr. Rødland has also worked as a market and

investment analyst at JEBSENS, a shipping company based in Bergen. Mr. Rødland has

worked 15 years with portfolio management and investment banking for Vital (two years)

and First Securities (formerly Elcon Securities) (13 years). Mr. Rødland’s experience is

mainly within Energy, Basic Materials and Shipping, where he has significant transaction

experience. Mr. Rødland is a member of the board of directors of several companies,

including Weifa ASA and Aqualis ASA. He has previously been a member of the board of

directors of First Securities ASA, Norske Finansanalytikeres Forening, Standard Drilling

ASA and Noble Denton. Mr. Rødland joined Ferncliff TIH AS in early 2006 as a partner. Mr.

Rødland is a Norwegian citizen and lives in Oslo, Norway.

Pål Stampe (1975), Board member

Mr. Stampe is a partner at Spectrum’s largest shareholder Altor Equity Partners. He has

previously held positions at Danske Securities and McKinsey & Company. Mr. Stampe holds

a Master’s degree in Mathematics and Physics from NTNU, Trondheim. Mr. Stampe is a

member of the board of directors of several companies, including Petroleum Service Group

ASA, Cd Group AS, Constructor Group AS, Enhanced Drilling Holding AS, Eds Group,

Emgods AS and Cannseal AS. Mr. Stampe is a Norwegian citizen and lives in Oslo, Norway.

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83

Ingrid Elvira Leisner (1968), Board member

Mrs. Leisner has previously worked as Head of Portfolio Management for Electric Power in

Statoil Norge AS. She also has a background as a trader of different oil and gas products in

her 15 years in Statoil ASA. Mrs. Leisner is member of the audit committee in Spectrum

ASA. She holds a Bachelor of Business degree (Siviløkonom) with honors from the

University of Texas at Austin. Mrs. Leisner has served on the Board of several companies

listed on the Oslo Børs, including Imarex ASA, Intex ASA, Icefire Diamonds AS and Norex

Resources AS. She currently serves on the board of directors of Aurora LPG Holding ASA.

Mrs. Leisner is a Norwegian citizen and lives in Oslo, Norway

Linda Rudolfsen Myklebust (1974), Board member

Mrs. Rudolfsen Myklebust has broad experience as legal counsel in the oil service branch.

She currently holds the position as General Counsel in Odfjell Drilling. Previous positions

include Senior Associate in the lawfirm Wikborg, Rein & Co and Senior Legal Counsel in

Petroleum Geo-Services. She holds a Master of Law degree from the University of Bergen,

Norway. Mrs. Myklebust is a Norwegian citizen and lives in Bergen, Norway.

Maria Tallaksen (1980), Board member

Ms. Tallaksen is a director at Spectrum’s largest shareholder Altor Equity Partners. She has

previously held positions at Morgan Stanley’s Investment Banking Division. Ms. Tallaksen

holds a Master of Science in Business (Siviløkonom) from BI Norwegian School of

Management. Ms. Tallaksen is a member of the Board of Directors of several companies,

including Petroleum Services Group ASA, Enhanced Drilling Holding AS, Eds Group AS,

Curato Holding AS, Altor Oil Service Invest AS and Cannseal AS. Ms. Tallaksen is a

Norwegian citizen and lives in Oslo, Norway.

11.3.3 Independence from Management and Large Shareholders

The Board is sufficiently independent of any sectional interests in accordance with the

independence requirements of the Code of Practice, and as further described below.

The Board is in compliance with the requirement that at least two of the shareholders elected

members should be independent of the Company’s main shareholders, as at least two out of

five Board members can be regarded as independent in this respect.

Furthermore, the Board is in compliance with the requirement that more than half of the

members of the Company’s Board should be independent of the Company’s management.

Finally, the Board is in compliance with the requirement that more than half of the members

of the Board should be independent of the Company’s main business partners.

Spectrum ASA

84

11.4 Management

11.4.1 Executive management

The executive management team of Spectrum comprises the following:

Name of director Position Date of appointment Business address

Rune Eng CEO Dec 2010 Sjølyst Plass 2, 0278 Oslo, Norway

Henning Olset CFO May 2011 Sjølyst Plass 2, 0278 Oslo, Norway

Jan Schoolmeesters COO Aug 2011 Sjølyst Plass 2, 0278 Oslo, Norway

Jørn Berle Christiansen CTO Oct 2012 Sjølyst Plass 2, 0278 Oslo, Norway

Karyna Rodriguez Director Geoscience July 2013 Dukes Court, Duke Street,Woking, Surrey

GU21 5BH, UK

Richie Miller EVP Americas Dec 2010 11750 Katy Freeway, Suite 900


Graham Mayhew EVP Africa Feb 2013

Dukes Court, Duke Street,

Woking, Surrey

GU21 5BH, UK

Kim Gunn Maver EVP North West Europe Jan 2013 Sjølyst Plass 2, 0278 Oslo, Norway

Mike Ball EVP Seismic Imaging Mar 2013 11750 Katy Freeway, Suite 900


Neil Hodgson EVP Mediterranean and Middle East June 2012

Dukes Court, Duke Street,

Woking, Surrey

GU21 5BH, UK

Svein O. Staalen General Counsel March 2012 Sjølyst Plass 2, 0278 Oslo, Norway

Source: Company

Rune Eng (1961), Chief Executive Officer

Rune Eng was appointed as CEO of Spectrum in November 2010. Mr. Eng was a key

acquisition from competitor Petroleum Geo-Services (PGS) where he had worked in various

executive positions the previous six years. He has a broad range of experience in the seismic

industry, having held various positions within the oil industry, principally in Fugro-Geoteam,

Sevoteam, an operating company involved in offshore seismic studies, and a senior

consultant position in Digital Equipment Computing (DEC) promoting the use of reservoir

simulation in the oil industry. Mr. Eng is a Norwegian citizen and lives in Oslo, Norway.

Henning Olset (1959), Chief Financial Officer

Henning Olset has earlier worked for IBM and been the CFO of two other companies listed

on the Oslo Stock Exchange. In his previous assignment Mr. Olset joined Staples in 2006

with the acquisition of Andvord Tybring-Gjedde ASA, where he was CFO. Complementing

his professional experience, Mr. Olset holds a Master of Science (Siv.ing) from Norges

Tekniske Høyskole (NTH) and Master of Business Administration (with honors) from

Handelshøyskolen BI. Mr. Olset has also previously served as non-executive director in

boards of public companies. Mr. Olset is a Norwegian citizen and lives in Oslo, Norway.

Spectrum ASA

85

Jan Schoolmeesters (1966), Chief Operating Officer

Jan Schoolmeesters holds a PhD in geophysics from Delft University of Technology (the

Netherlands) and joined Spectrum as COO in August 2011. He has substantial experience in

the seismic industry having served 16 years in various roles in PGS with both a technical,

operational, and commercial background. His latest position was with PGS as President of

Asia Pacific. Dr Schoolmeesters is a Dutch citizen and lives in Asker, Norway.

Jørn Berle Christiansen (1952), Chief Technical Officer (CTO)

Mr. Christiansen joined Spectrum after 27 years in TGS-NOPEC Geophysical Company

(TGS) where he was part of the management team for many years. His last position in TGS

was Principal Advisor. He also has experience from oil companies and mineral industry and

his main focus has been on interpretation, multi-client projects and business development as

well as new technologies applicable to the multi-client business. Mr. Christiansen graduated

as Diplom Geophysiker from TU Clausthal, Germany, in 1980. Mr. Christiansen is a

Norwegian citizen and lives in Drammen, Norway.

Karyna Rodriguez (1966), Director Geoscience

Ms. Rodriguez joined Spectrum in July 2013 bringing 25 years of multidisciplinary technical

experience in UK North Sea, Mexico and global offshore and onshore exploration-inclined

projects. Working in companies like BG and PEMEX she gained diverse experience from

regional play and prospect generation and evaluation, to working closely with high level

management on their portfolio strategies. Karyna currently manages Spectrum’s Geology,

Geophysics and GIS technology team, working on projects on a global scale and enhancing

the data library by providing geoscientific rationale and justification. Ms. Rodriguez is a

British citizen based in the UK office.

Richie Miller (1963), Executive Vice President Multi-Client, Americas

Mr. Miller brings with him a wealth of knowledge, gained from over 22 years of experience

within the seismic industry. He joined Spectrum from CGGVeritas where he held the position

as Director of Marketing & Business Development. During that time, he was responsible for

developing the data library, identifying new South American libraries. His other positions

with other global companies included Marine Acquisition Manager, Senior Geophysicist and

Director of Geology & Geophysics. Mr. Miller is a US citizen and lives in Houston, Texas,

USA.

Graham Mayhew (1961), Executive Vice President Multi-Client, Africa

Graham Mayhew holds a BSc in geophysics from Southampton University (1983) and joined

Spectrum as EVP - Africa in February 2013. Mr. Mayhew has 30 years’ experience in the

seismic industry and prior to joining Spectrum held a number of management positions in

WesternGeco, with the last 6 years driving rapid growth in WesternGeco Multi-Client as

Multi-Client Manager for Europe and Africa. Earlier roles with Landmark, Cogniseis and

Western Geophysical gave him a broad experience that included technical, operational and

sales responsibilities in seismic acquisition, processing and software. Mr. Mayhew is a

British citizen and lives in Horsham, United Kingdom.

Spectrum ASA

86

Kim Gunn Maver (1963), Executive Vice President, North West Europe

Mr. Maver joined Spectrum in January 2013 from RXT where he had worked as VP of Sales

and Marketing since 2011. He started his career as a research assistant at the Danish and

Greenland Geological Survey in 1989. In 1994 he joined Odegaard, which was a service

company focused on extracting rock properties from seismic data and as Managing Director

he developed the company into a leading service and software provider. In 2006

Schlumberger acquired Odegaard and Mr. Maver became the Vice President of the merged

Odegaard and Schlumberger seismic reservoir characterization businesses. Mr. Maver has a

M.Sc. and Ph.D. in Geology from Copenhagen University and a MBA from Copenhagen

Business School. He is a British citizen living in Oslo, Norway and Copenhagen, Denmark.

Mike Ball (1958), Executive Vice President, Seismic Imaging

Mike Ball graduated from Texas A&M University with a Bachelor’s degree in Marine

Science and Geophysics. He has been in the oil and gas industry for 30 years. He previously

worked for TGS-Nopec Geophysical Company, Schlumberger Geco-Prakla, and Western

Geophysical in various seismic imaging and project management positions. In his last role at

TGS-Nopec Geophysical Company, he oversaw acquisition and processing quality control

and managed G&G assets for Multi-Client projects. Mr. Ball is a US citizen and lives in

Houston, Texas, USA.

Neil Hodgson (1961), Executive Vice President, Mediterranean and Middle East

Dr. Hodgson is an exploration geoscientist with 28 years of experience working for operating

oil and gas explorers, gained following a Ph.D. from Leicester University. Neil has worked

for BP plc, BG plc, and Premier Oil plc, developing technology led new ventures strategy and

building successful exploration portfolios in the Far East, Asia, Russia, North and West

Africa and the North Sea. Most recently Neil directed the exploration activities of AIM listed

junior oil company, Matra Petroleum plc. Dr. Hodgson is a British citizen and lives in

Newbury, England.

Svein O. Staalen (1971), General Counsel/Lawyer

Mr. Staalen has earlier worked as Legal Counsel at Det Norske Veritas (DNV) and Nycomed

Group. Prior to that, he worked several years as a lawyer in the law firm Haavind. Mr.

Staalen holds a Master of Law degree from the University of Oslo and a Diploma in English

Commercial Law from the College of Law, London. Mr. Staalen is a Norwegian citizen and

lives in Bærum, Norway.

Spectrum ASA

87

11.5 Conflicts of interest, etc.

To the Company’s knowledge, there are no potential conflicts of interest between any duties

to the Company, of the members of the Board, the Company’s management or the

Nomination Committee, and their private interests or other duties, other than mentioned

below.

Renting of office

Spectrum ASA rents office space in Oslo from Tycoon Industrier AS, a subsidiary of

Ferncliff TIH AS, which is owned by Øystein Stray Spetalen. The contract is at market rates

and requires 3 months’ notice on either side to terminate.

Family relations etc.

There are no family relationships between any of the Company’s Board members or

management. Other than mentioned in footnote, no member of the Board or the senior

management has during the last five years preceding the date of this document,:

any convictions in relation to indictable offences or convictions in relation to fraudulent

offences;

received any official public incrimination and/or sanctions by any statutory or regulatory

authorities (including designated professional bodies) or ever been disqualified by a court

from acting as a member of the administrative, management or supervisory bodies of a

company or from acting in the management or conduct of the affairs of any company; or

been declared bankrupt or been associated with any bankruptcy, receivership or

liquidation in his capacity as a founder, director or senior manager of a company5.

*Glen Ole Rødland was Chairman of NEL Hydrogen AS that went bankrupt in 2013.

None of the directors or senior management are appointed or employed subject to

shareholders’ agreements or agreements with the Company’s customers and/or suppliers or

other contracting parties.

Over the five years preceding the date of this Prospectus, the members of the Board and the

senior management hold or have held the following directorships (apart from their

directorships of the Company and its subsidiaries) and/or partnerships:

5 Glen Ole Rødland was Chairman of NEL Hydrogen AS that went bankrupt in 2013

Spectrum ASA

88

Name Current directorships/partnerships Directorships/partnerships previous 5 years

BoD

Glen Ole Rødland Chairman:

Strata Marine & Offshore AS, Nordic

Construction Barges II AS, Corona

Maritime Holding AS, Nordic Construction

Barges III AS, Nordic Construction Barges

IV AS, Nordic Construction Barges I AS,

Corona Maritime AS, Aqualis ASA

Board member:

Gross Management AS

CEO / Management positions: NA

Chairman:

Prospector Offshore Drilling SA, Akland Property AS,

Akland Eiendom AS, Standard Investering AS, Gerox AS,

Standard Holding AS, Strata Key Invest AS, Eiken

Mekaniske Verksted AS, Stugaard Invest AS, Berganodden

Båtservice AS, Hydrogen Technologies Holding AS,

Enerquip AS

Board member:

Grøndalselva AS, Van Severen & Co AS, Namdalen

Træsliberi AS, Namdal Skoger AS, Ferndrill Management

AS, Namdal Transitt AS, NEL Hydrogen AS, Strata Marine

& Offshore AS, Hydrogen Technologies Holding AS,

Ferncliff Asset Management Holding AS, Skeie Capital

Investment AS, SD Standard Drilling Plc


Pål Stampe Chairman:

Altor Equity Partners AS, Altor Investment

Advisory AS, Petroleum Holding AS

Board member:

Constructor Group AS, Enhanced Drilling AS, Norsk Gjenvinning AS, Rossignol

(Chartreuse et Mont Blanc SAS)

CEO / Management positions:

Altor Equity Partners AS - CEO

Altor Investment Advisory AS - CEO

Chairman: NA

Board member: NA


Ingrid Elvira Leisner Chairman: NA

Board member:

Fortuna Mare AS, Aurora LPG Holding

ASA, Vistin Pharma AS


Chairman: NA

Board member:

Intex Resources ASA, Imarex ASA, International Maritime

Exchange ASA, Saga Tankers ASA, GTB ASA (SinOceanic)


Linda Rudolfsen Myklebust Chairman: NA

Board member: NA


Chairman: NA

Board member: NA


Maria Tallaksen Chairman: NA

Board member:

Curato Holding AS, Enhanced Drilling

Holding AS, Petroleum Services Holding

AS


Chairman: NA

Board member:

AGR Group ASA, Ketlav Invest AS


Name Current directorships/partnerships Directorships/partnerships previous 5 years

Management

Rune Eng Chairman:

Eng Invest AS

Board member: NA


Chairman:

Dalmorneftegeofizika PGS AS

Board member:

PGS Exploration (Nigeria) Limited, PGS Geophysical

(Angola) Ltd


PGS Shipping AS, PGS Overseas AS, PGS Exploratian AS,

PGS Geophysical AS, Multiklient Invest AS,

Dalmorneftegeofizika PGS AS, PGS Falcon AS

Spectrum ASA

89

Henning Olset Chairman:

Chello Invest AS

Board member: NA


Chello Invest AS

Chairman:

Staples Nordic AS, ATG Nye Drift AS

Board member:

Staples Norway AS, Binders Norge AS, EMO AS, Grieg

Kalenderforlag AS, Andvord Grafisk AS, Otrum ASA,

Staples Sweden AB, Staples Denmark AS


Staples Nordic AS - CFO

Jan Schoolmeesters Chairman: NA

Board member: NA


Chairman: NA

Board member: NA


Petroleum Geo-Services Asia Pacific Pte Ltd, PGS Japan KK

Karyna Rodriguez Chairman: NA

Board member: NA


Chairman: NA

Board member: NA


Richie Miller Chairman: NA

Board member: NA


Chairman: NA

Board member: NA


Graham Mayhew Chairman: NA

Board member: NA


Chairman: NA

Board member: NA


WesternGeco - Multi-Client Manager for Europe and Africa

Kim Gunn Maver Chairman: NA

Board member: NA


Chairman: NA

Board member:

Schlumberger Danmark (Denmark), Ødegaard A/S

(Denmark)


Mike Ball Chairman: NA

Board member:

Spectrum Geopex Egypt Ltd


Chairman: NA

Board member: NA


TGS - Director Data Management and QC

Neil Hodgson Chairman: NA

Board member: NA


Chairman: NA

Board member:

Matra Petroleum plc.


Matra Petroleum plc.- Exploration Director

Jørn Berle Christiansen Chairman: NA

Board member:

Kimberlitt AS


Chairman: NA

Board member:

Abyssinia Resources Development AS


TGS – Principal Advisor

Svein O. Staalen Chairman: NA

Board member: NA


Chairman: NA

Board member:

DNV Climate Change Services ASCEO / Management

positions: NA

Source: Company

Spectrum ASA

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11.6 The nomination committee

The nomination is elected by the general meeting for a period of two years. The current

committee was elected in May 2015 and consists of three independent individuals:

Kjetil Erikstad (Chairman)

Ragnhild Wiborg

Jon Christian Syvertsen

The mandate of this committee is to propose members to the Board and fees to be paid.

11.7 Audit Committee

The Board has an Audit Committee comprising Ingrid Leisner, Maria Tallaksen and Glen

Rødland, which was elected in May 2014. The Audit Committee is elected by the Board of

Directors to assist the Board in fulfilling its responsibilities concerning the Company and the

consolidated Group in respect of:

Monitoring financial reporting

Overseeing internal controls and external audit activities

Assessing the performance of internal control and external auditors

Overseeing legal and regulatory compliance

The members of the Audit Committee are elected by the Board for a period of two years

consistent with the election of directors of the Board. The Committee shall consist of at least

two members of the Board.

11.8 Remuneration Committee

The Company’s Remuneration Committee is comprised of the Board members Pål Stampe

and Ingrid Leisner.

The Committee shall prepare the Board’s annual review of the CEO's terms and conditions

and consider methods for evaluating the remuneration, bonus, share option and other

incentive plans for the executive management. The Committee shall discuss and make

proposals to the Board regarding guidelines for remuneration to senior executives. This

information shall be submitted to the General Assembly. The Committee shall consider the

information about senior executive's salary, pensions and working conditions which will be

disclosed in the Company's annual report and consider the extent to which the decided

compensation policy may affect the Company's reputation.

Spectrum ASA

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11.9 Remuneration and benefits

11.9.1 Remuneration of the Board

The remuneration of the Board is not linked to the company’s performance but reflects the

level of responsibility, expertise, time and the complexity of the company’s activities. The

company’s annual general meeting on 22nd of May 2015 determined the remuneration to the

Board members for the period 2014-15 as follows ’remuneration of the Board should be

NOK450,000 to the chairman and NOK 300,000 to the directors’ each. The table below

outlines the remuneration to members of the Board of Directors in 2013 and 2014. Numbers

in USD thousands.

Position Remuneration 2013 Remuneration 2014

Directors fee for Chairman 51 60

Directors fee for all other Board members (USD) 203 198

Total 254 258

Source: Annual report 2014

None of the members of the Board are parties to any additional service contracts with the

Company entitling them to consideration or remuneration in addition to the remuneration

determined by the AGM. Further, the Company has no outstanding loans or guarantees to any

member of the Board.

11.9.2 Remuneration Nomination Committee, Audit Committee and Compensation

Committee

The annual remuneration in 2014 to the members of the Nomination Committee was NOK

45,000 for Chairman and NOK 30,000 for members. The company’s annual general meeting

on 22nd of May 2015 determined the remuneration to the Nomination Committee for the

period 2014-2015 as follows: NOK 45,000 for Chairman and NOK 30,000 for members

The annual remuneration in 2014 to the members of the Audit Committee was NOK 150,000

for Chairman and NOK 100,000 for members. The company’s annual general meeting on

22nd of May 2015 determined the remuneration to the members of the Audit Committee for

the period 2014-2015 as follows: NOK 150,000 for Chairman and NOK 100,000 for

members.

The company’s annual general meeting on 22nd of May 2015 determined the remuneration to

the members of the Compensation Committee to be NOK 20,000 each, unchanged from

2014.

11.9.3 Remuneration of the senior executives

Salaries and other remuneration to management and the Board. Salaries and other benefits are

paid in local currencies, and USD figures in the table will fluctuate with the exchange rates.

Spectrum ASA

92

All figures in USD Thousands

Name of director Period Remuneration Share

options*

Pension Other short

term

benefits

Rune Eng (CEO) 12 months 903 385 28 0

Henning Olset (CFO) 12 months 457 47 30 0

Jan Schoolmeesters (COO) 12 months 728 130 23 0

Jørn Berle Christiansen (CTO) 12 months 298 186 11 0

Karyna Rodriguez (Director Geoscience) 6 months 193 1 12 0

Richie Miller (EVP Americas) 12 months 518 70 16 0

Graham Mayhew (EVP Africa) 12 months 364 131 22 0

Kim Gunn Maver (EVP North West Europe) 12 months 272 139 12 0

Mike Ball (EVP Seismic Imaging) 12 months 378 96 14 0

David Rowlands, EVP MC, Mediterranean and Middle East

**

(6 months) 224 100 13 0

Neil Hodgson (EVP Mediterranean and Middle East) 6 months 340 24 20 0

Arne Helland (EVP Strategy & Business Development) 12 months 380 165 13 0

Svein O. Staalen (General Counsel) 12 months 307 101 12 0

* Share options expense - not options vested in the year

** Replaced by Neil Hodgson during 2014

11.9.4 Severance pay etc.

In case of termination by Spectrum, the CEO and President is entitled to a severance payment

equal to one and a half years base salary from a six month notice period which would

commence on the first day of the month following the issue of termination notice.

In case of termination by the CEO and President, Spectrum will pay severance pay equal to

one year of annual base salary from the expiry of the above notice period providing that the

CEO and President has been employed by Spectrum for at least five years. If the CEO and

President terminates his employment before this five year period no severance payment will

be made.

In case of termination by Spectrum or the CFO, Spectrum will pay severance pay equal to

one year of annual base salary from the expiry of the above notice period.

In case of termination by Spectrum or the COO, Spectrum will pay severance pay equal to

one year of annual base salary from the expiry of the above notice period.

No other in the Executive Management Team or Board have other termination benefits, other

than ordinary benefits within employment region.

11.9.5 Pension Costs

The Company is required to have an occupational pension scheme for their employees in

Norway under the Act on Mandatory occupational pensions through a defined contribution

plan. The Company’s pension cost for 2014 was USD 189k (2013: 174k).

Spectrum Ltd and Spectrum Inc make payments for eligible employees to defined

contribution pension plans. Employees become eligible after an initial probationary period of

employment.

Spectrum ASA

93

11.9.6 Loans or Guarantees to the management

The Company has no outstanding loans or guarantees to any member of the management.

11.10 Shareholdings and options of management and Board

11.10.1 Board of Directors

As of the date of this Prospectus, the following members of the Board hold Shares in the

Company (either personally or through holding companies):

Name of director Position Number for shares % of shares Note

Glen Ole Rødland Chairman 2,059,106 4.75 % a)

Pål Stampe Board member 0 0 %

Ingrid Elvira Leisner Board member 0 0 %

Linda Rudolfsen Myklebust Board member 0 0 %

Maria Tallaksen Board member 0 0 %

Shares held by Corona Maritime Holding AS. As of the date of this prospectus Glen Ole Rødland has no restriction related to the sale of his

shares

None of the members of the Board holds any share options in the Company as of the date of

the release of this Prospectus

11.10.2 Executive Management

As of the date of this Prospectus, the following members of the executive management hold

Shares and options in the Company (either personally or through holding companies). As of

the date of this prospectus, there are no restrictions related to sale of shares for Executive

Management.

Name of director Position Number of shares % of shares

Rune Eng CEO 109,609 0.25%

Henning Olset CFO 0 0.00%

Jan Schoolmeesters COO 34,461 0.08%

Jørn Berle Christiansen CTO 0 0.00%

Karyna Rodriguez Director Geoscience 0 0.00%

Richie Miller EVP Americas 219,505 0.51%

Graham Mayhew EVP Africa 4,000 0.01%

Kim Gunn Maver EVP North West Europe 8,200 0.02%

Mike Ball EVP Seismic Imaging 5,000 0.01%

Neil Hodgson EVP Mediterranean and Middle East 0 0.00%

Svein O. Staalen General Counsel 0 0.00%

Spectrum ASA

94

11.11 Incentive Program

The Company has implemented a share option program for key management in the Group. In

addition, there are a number of sales based commission schemes for the sales staff and

geophysicists.

The share option program

Number of options:

The Board approved a stock option program for senior executives in the Group in

2010.Under this program, up to 10 million options may be awarded by the Board. The

program was extended from 6 million to 8 million in EGM on 13 November 2012, and from

8 million to 10 million in GM on 23 May 2014.

Name of director Position Number of Options

Rune Eng CEO 2,850,000

Henning Olset CFO 0

Jan Schoolmeesters COO 905,000

Jørn Berle Christiansen CTO 300,000

Karyna Rodriguez Director Geoscience 5,000

Richie Miller EVP Americas 200,000

Graham Mayhew EVP Africa 280,000

Kim Gunn Maver EVP North West Europe 240,000

Mike Ball EVP Seismic Imaging 170,000

Neil Hodgson EVP Mediterranean and Middle East 160,000

Svein O. Staalen General Counsel 355,000

Source: Company

Exercise price:

The exercise price of the options is equal to the Volume-weighted average price (VWAP) for

shares in Spectrum ASA in the 20 trading days prior to the date of each agreement.

Vesting Options:

For each participant, the share options vest in tranches of

15% in the first year,

20% in year 2,

25% in year 3 and

40% in year 4

The Board may decide that the annual vesting date and the proportion of the options which

vest at each vesting date, deviate from the above in relation to senior executives. Exercise of

options shall take place minimum two times per year as decided by the Board.

Partial or full vesting is subject to the appreciation in Spectrum’s share price relative to the

exercise price for the options calculated on a rolling basis over the 20 days VWAP per share

prior to the relevant vesting date. Upon a 30% or 70% appreciation in the share price for

Spectrum ASA

95

options granted pre 2014 and upon a 25% and 50% appreciation in the share price for options

granted in 2014 or later, 50% or 100% of the share options will vest respectively.

Conditions:

The participant must be employed from the allotment date through to the date of the close of

the relevant exercise window. Participants are permitted to accumulate the options until the

final option expiry date. This is regardless of whether the applicable share price appreciation

vesting condition threshold has been met or exceeded at the vesting date for each relevant

tranche of options. If a participant does not notify the company in writing of their intention to

accumulate any options that have vested by the close of the exercise window for that tranche

of options, the options will automatically expire. Any remaining un-exercised options will

also automatically expire on the closure of the last exercise window for the scheme or if the

participant resigns or if their employment is terminated except when this is due to the

participant’s death, disability or permanent injury.

Settlement:

The fair value of the share options is estimated at the grant date using a Monte Carlo pricing

model, taking into account the terms and conditions upon which the share options were

granted. The contractual term of each option granted is 4.5 years. The Board may decide at its

sole discretion (at the request of the participant or otherwise) to settle any options in cash on

exercise.

11.12 Pension obligations

The Spectrum Group operates defined contribution plans. The defined contribution plan is a

pension plan under which the group pays fixed contributions into a separate entity. The group

pays contributions to government and privately administered pension plans. The

contributions are recognised as employee benefit expenses when they are due. The payment

into privately administered pension plans equal 5% of total fixed salary less the Company’s

contribution to the collective pension scheme for the CEO Rune Eng. For the COO, Jan

Schoolmeesters, the payment into privately administered pension plans equal 6% less the

contribution to the collective pension scheme and for the CFO, Henning Olset, is 8%.

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11.13 Employees

As of the date of the Prospectus, the Group has approximately 200 employees. Of these, 63

are working with MC business development and sales, 91 with seismic imaging and 46 in the

administration. The table below illustrates the development in number of employees over the

last three years (excluding affiliates), as per the end of each calendar year.

Subsidiary Location 2012 2013 2014 As of date

Spectrum ASA Oslo 7 13 16 15

Spectrum Geo Ltd Woking 61 69 72 75

Spectrum ASB Pty Ltd Perth 7 6 4 4

Spectrum Geo Pte Ltd Singapore 2 1 1 1

Spectrum Geo do Brasil Servicos Geofisicos Ltda Rio De Janeiro 0 1 2 3

Spectrum Geo Inc Houston 56 69 70 63

Carmot Seismic AS Tananger NA 0 0 0

Carmot Processing AS Tananger NA 0 0 0

Spectrum Geopex Egypt Ltd Nasar 36 38 40 39

Geo Bridge Pte Ltd Sinapore 0 0 0 0

Group 114 197 205 200

Source: Company

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12. FINANCIAL INFORMATION

The Company reports are available at the Company’s website, www.spectrumgeo.com, and at

www.newsweb.no under the ticker “SPU”.

12.1 Summary of significant accounting policies

The consolidated financial statements of Spectrum ASA and all its subsidiaries (the Spectrum

Group) have been prepared in accordance with International Financial Reporting Standards

(IFRS) as adopted by the EU.

The IFRS principles have been applied consistently for 2014, 2013 and 2012. The

consolidated financial statements for 2014, 2013 and 2012 have been audited by Ernst &

Young AS, Spectrum’s statutory auditor; see Section 12.4 (“Statutory auditor”) for more

information.

The interim condensed consolidated financial statements for the three months period ended

31 March 2014 and 31 March 2013 are unaudited. There were no new standards or

interpretations implemented in Q1 2015 which had a significant impact on the Company’s

Financial Statements. Please refer to the financial statements for 2014 for description of the

accounting policies.

Please see the following link for the Company’s significant accounting policies:

http://www.spectrumgeo.com/wp-content/uploads/Spectrum-Annual-Report-2014.pdf


Spectrum ASA

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12.2 Historical consolidated financial information

The following tables present data extracted from selected financial information for the

Company based on audited financial statements as of, and for each of the three years ended

31 December 2014, 2013 and 2012, and based on the unaudited quarterly for the three

months period ended 31 March 2015 and 31 March 2014. All table figures are in USD

thousands. The information incorporated by reference in this Prospectus shall be read in

connection with the cross-reference list set out Section 20 (“Documents on display”).

12.2.1 Consolidated income statement

The table below summarizes the condensed consolidated income statements for the Group for

the years ended 31 December 2014, 2013 and 2013, and the three months period ended 31

March 2015 and 31 March 2014.

Statement of Comprehensive Income


01.01-31.03

2015

Unaudited

01.01-31.03

2014

Unaudited

Year ended

31 December

2014

Unaudited

Year ended

31 December

2013

Unaudited

Year ended

31 December

2012

Unaudited

Total operating revenues 14,887 38,001 183,298 143,023 116,972

Total operating expenses (7,814) (9,242) (32,936) (38,364) (29,330)

EBITDA 7,073 28,759 150,362 104,659 87,642

D&A (11,376) (20,259) (97,567) (63,017) (48,287)

Operating (loss) / profit (4,303) 8,500 52,795 41,642 39,355

Interest expense (net) (60) (162) (452) (1,231) (1,782)

Other financial items (451) 366 2,311 2,495 (6,619)

Profit/Loss before tax (4,814) 8,704 54,654 42,906 30,954

Tax 1,492 (2,746) (16,425) (13,750) (7,839)

Net profit/(loss) for the year (3,322) 5,958 38,229 29,156 23,115

Earnings per share:

Basic loss for the year attributable to

ordinary equity holder of the parent (0.08) 0.14 0.90 0.72 0.60

Diluted loss for the year attributable to

ordinary equity holder of the parent (0.07) 0.12 0.79 0.62 0.50

Source: Q1 2015 report and annual report 2014, 2013 and 2012

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12.2.2 Consolidated statements of financial position

The table below summarizes the consolidated statements of financial position for the Group

as of 31 March 2015 and for the three years ended 31 December 2014, 2013 and 2012.

Statement of Financial Position

Assets


31 March 2015

(Unaudited)

31 Dec.2014

31 Dec.2013

31 Dec.2012

ASSETS

Non-current assets

Deferred tax assets 2,732 342 5,425 4,311

Goodwill 12,481 12,481 12,481 11,563

Investment in subsidiaries and joint ventures 2,842 2,842 1,720 1,720

Software 2,360 2,611 2,090 2,343

Multi-Client library 129,328 131,266 112,400 87,087

Fixtures, fittings and office equipment 2,789 3,026 2,993 2,502

Other receivables 4,488 4,488 - -

Total non-current assets 157,019 157,055 137,109 109,525

Current assets

Work in progress 23,500 48,016 9,216 3,189

Accounts receivables 28,299 27,806 39,219 49,903

Other receivables 13,318 10,137 8,049 6,500

Cash and cash equivalents 17,670 8,364 2,719 16,988

Total current assets 82,788 94,324 59,203 76,580

Total assets 239,808 251,379 196,313 186,105

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Statement of Financial Position

Shareholders’ Equity and Liabilities


31 March 2015

(Unaudited)

31 Dec.2014

31 Dec.2013

31 Dec.2012

SHAREHOLDERS EQUITY

Shareholders’ equity

Issued capital 7,534 7,473 7,351 6,847

Share premium 29,838 29,195 27,509 21,627

Other paid-in capital 59,254 58,909 57,415 56,163

Retained earnings 77,835 81,156 48,233 23,222

Foreign translation reserve (2,467) (2,467) (2,467) (2,467)

Total equity 171,994 174,267 138,041 105,391

LIABILITIES

Non-current liabilities

Deferred tax liability 390 567 723 34

Long term interest bearing debt 1,081 1,470 43 5,895

Other long term liabilities 29 29 - 8,657

Total non-current liabilities 1,500 2,066 766 14,587

CURRENT LIABILITIES

Short term interest bearing debt 1,281 1,455 2,860 1,602

Taxes payable 19,413 7,346 13,343 19,699

Accounts payable 9,829 20,153 8,577 13,181

Other short term liabilities 35,792 46,091 32,726 31,647

Total current liabilities 66,315 75,045 57,506 66,128

Total shareholders’ equity and liabilities 239,808 251,379 196,313 186,105


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12.2.3 Consolidated cash flow statement

The table below summarizes the Group’s consolidated cash flow statements for the years

ended 31 December 2014, 2013 and 2013, and the three months period ended 31 March 2015

and 31 March 2014.

Statement of Cash Flows


01.01-31.03

2015

(Unaudited)

01.01-31.03

2014

(Unaudited)

Year ended

31 December

2014

Year ended

31 December

2013

Year ended

31 December

2012

Cash flows from operating activities:

Profit / (loss) before tax (4,814) 8,704 54,654 42,905 30,954

Income tax paid - (5,245) (12,878) (15,315) (2,344)

Depreciation and amortisation 11,376 20,259 97,567 63,017 48,287

Share options granted 615 486 1,497 2,821 2,789

Interest income - - (32) (39) (16)

Interest expense 60 162 484 1,271 1,799

Other financial items - 101 (3,100) (4,133) 2,733

Working capital change 10,757 8,947 (10,023) (11,955) 8,329

Net cash flow from operating activities 17,994 33,414 128,170 78,571 92,531

Cash flows from investing activities:

Investment in Multi-Client library (13,164) (17,709) (113,280) (85,200) (76,162)

Investment in goodwill

- (918) -

Investment in non-current tangible assets (277) (1,333) (3,866) (3,420) (2,566)

Payments received from sale of tangible assets 4,507

(159) (34) -

Net cash flow from investing activities (8,934) (19,042) (117,305) (89,572) (78,728)

Cash flows from financing activities:

Share issue 704 - 268 2,075 1,382

Dividends - - (5,306) (4,145) (3,228)

Proceeds from borrowings - 907 2,421 2,081 1,561

Payment of borrowings (418) (486) (1,846) (1,570) (1,634)

Interest paid (40) (146) (465) (561) (869)

Net cash from financing activities 246 275 (4,928) (2,120) (2,788)

Net change in cash and cash equivalents 9,306 14,647 5,937 (13,121) 11,015

Net foreign exchange differences (unrealised) - 3 (292) (1,147) 21

Cash and cash equivalents at beginning of period 8,364 2,719 2,719 16,988 5,953

Cash and cash equivalents at end of period 17,670 17,369 8,364 2,719 16,988

Undrawn facilities 22,251 10,000 16,100 10,000 -


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12.2.4 Statement of changes in equity

The table below shows the statement of changes in equity as of 31 December 2014, 2013 and

2012, and the three months period ended 31 March 2015

Changes in Consolidated Equity

Numbers in USD thousands

Issued

Capital

Share

premium

Other paid-

in capital

Retained

Earnings

Foreign

Currency

Translation

Reserve Total Equity

Equity at 1 January 2012 6,556 73,270 1,452 107 (1,886) 79,499

Share Issue 28 March 1 11 - - - 12

Share issue 3 April 105 1,363 - - - 1,468

Share issue 9 May 100 879 - - - 979

Share issue 30 May 67 865 - - - 932

Share issue 25 June 19 384 - - - 403

Share issue 10 October 0,1 5 - - - 5

Repayment of capital - (3,228) - - - (3,228)

Reduction of paid in capital - (51,922) 51,922 - - -

Share options granted - - 2,789 - - 2,789

Transaction cost - - - - - -

Profit / (Loss) for period - - - 23,115 - 23,115

Other comprehensive income - - - - (581) (581)

Equity at 31 December 2012 6,847 21,627 56,163 23,222 (2,467) 105,391

Share Issue 3 May 187 1,887 - - - 2,074

Share issue 2 October 316 3,993 - - - 4,310

Share issue 9 November 0,1 2 - - - 2

Dividends - - - (4,145) - (4,145)


Other comprehensive income - - - 29,155 - 29,155


Share issue 122 1,686 - - - 1,809

Dividends - - - (5,306) - (5,306)


Other comprehensive income - - - 38,229 - 38,229


Share issue 61 643 - - - 704

Dividends - - - - - 0

Share options granted - - 345 - - 345

Profit / (Loss) for period - - - (3,322) - (3,322)

Equity at 31 March 2015 (unaudited) 7,534 29,838 59,254 77,834 (2,467) 171,994

Source: Annual report 2014, 2013 and 2012 and Quarterly Report Q1 2015

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12.3 Segment information

Spectrum is a pure play multi-client company and mangement has organized the entity as one

segment based upon services provided. Consequently the company has one segment as

defined in IFRS 8 operating segments. Multi-client consist of 99.0% of the Group`s gross

revenue.

Multi-client information is given for operating segments which are identified on a

geographical basis. Separate financial information is recorded for these geographical

segments and reported for management accounting purposes to the Chief Operating Decision

Maker (CODM). In the Spectrum Group the executive management and the Board are

considered to be the CODM.

The Multi-client services operating segment manages the acquisition and processing of new

seismic surveys and the reprocessing of existing survey data to produce seismic datasets that

Spectrum either owns or has the right to sell licences to third parties on a non-exclusive basis.

Spectrum classifies multi-client revenue as early sales or late sales based on the products

sold. Revenue from seismic imaging, PSTM (Time) and PSDM (Depth) is treated as separate

products and classified as other revenue.

The tables below shows segment revenues and profits / (losses) for 2014, 2013 and 2012.

Reported segment revenues and profits / (losses) 2014

Segment revenues and profits /

(losses) 2014 (USD thousands)

North/South

America Africa

Europe/

Middle East/

Asia Australia

Group functions

and seismic

imaging incl. elim. Consolidated

Gross early sales 139,094 6,763 18,988 - 164,845

Gross late sales 31,257 22,233 31,059 - 84,549

Other revenue - - - 2,578 2,578

Gross revenue 170,351 28,996 50,047 2,578 251,972

Revenue share (56,614) (8,340) (3,685) (36) (68,674)

Net early sales 87,073 6,285 17,206 - 110,564

Net late sales 26,663 14,371 29,157 - 70,191

Other revenue - - - 2,542 2,542

Net revenues 113,737 20,656 46,363 2,542 183,298

Operating expenses (3,818) (1,271) (8,082) (20,935) (34,106)

Share of profit/(loss) of joint ventures - - - 1,170 1,170

Amortisation (62,344) (8,493) (23,577) - (94,414)

Depreciation (226) (200) (448) (2,279) (3,153)

Operating profit/(loss) 47,349 10,692 14,256 (19,502) 52,795


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Reported segment revenues and profits / (losses) 2013



North/South

America Africa

Europe/

Middle East/

Asia Australia

Group functions

and seismic


Gross early sales 18,149 11,916 14,176 - 44,241

Gross late sales 66,940 26,970 21,356 - 115,266

Other revenue - - - 2,494 2,494

Gross revenue 85,089 38,886 35,532 2,494 162,001

Revenue share (2,304) (9,284) (7,390) - (18,978)

Net early sales 18,149 11,703 13,943 - 43,795

Net late sales 64,636 17,899 14,199 - 96,734

Other revenue - - - 2,494 2,494

Net revenue 82,785 29,602 28,142 2,494 143,023


Share of profit/(loss) of joint ventures - - - - -

Amortisation (33,671) (13,311) (12,904) - (59,886)

Depreciation (201) (178) (390) (2,362) (3,131)



Segment revenues and profits / (losses) 2012 (Not reported)



North/South

America Africa

Europe/

Middle East/

Asia Australia

Group functions

and seismic


Gross early sales 47,020 9,118 3,745 0 59,882

Gross late sales 34,742 23,350 19,797 0 77,889

Other revenue 0 0 0 3,365 3,365

Gross revenue 81,762 32,468 23,541 3,365 141,136

Revenue share (7,616) (11,068) (5,480) 0 (24,164)

Net early sales 47,113 4,725 3,634 0 55,471

Net late sales 27,033 16,676 14,427 0 58,136

Other revenue 0 0 0 3,365 3,365

Net revenue 74,146 21,400 18,061 3,365 116,972


Share of profit/(loss) of joint ventures 0 0 0 0 0

Amortisation (32,723) (7,124) (5,910) 0 (45,757)

Depreciation (99) (33) (86) (2,312) (2,530)


Source: Company

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12.4 Statutory auditor

The Company’s statutory auditor is Ernst & Young AS (EY), Oslo Atrium, Dronning Eufemias gate

6, PO Box 20, NO-0051 Oslo, Norway. EY has been the Company’s auditor since incorporation in

2008. The audit partners of EY are member of The Norwegian Institute of Public Accountants.

EY has audited the Company’s financial statements for the financial years 2014, 2013 and 2012 in

accordance with laws, regulations, and auditing standards and practices generally accepted in

Norway, including International Standards on Auditing. Their reports are incorporated by reference

in Section 20 (“Documents on display”). The Auditor’s report for 2014 and 2013 and 2012 were

issued without qualifications.

EY has issued an Independent Assurance report on the unaudited pro forma condensed financial

information included in ANNEX C. EY has not audited, reviewed or produced any report on any

other information provided in this Prospectus.

12.5 Dividend policy

Spectrum’s overall objective is to combine strong growth through reinvestment with dividend

payments. The Board expects to pay an annual dividend in the range of 15 - 25% of earnings over

the next few years and an increasing payout ratio as the business matures.

Year ended

31 December 2014

Year ended

31 December 2013

Year ended

31 December 2012

Total dividends (NOK) 43,326,625 31,695,240 24,124,442

Dividend per share (NOK) 1.00 0.75 0.60

Dividends per share (USD) 0.12 0.10 0.08

Source: Company

12.6 Financial market exposure

General

The Company is exposed to a number of different financial market risks arising from the group’s

normal business activities. Financial market risk is the possibility that fluctuations in exchange rates

and interest rates will affect the value of the group’s assets, liabilities and future cash flows. In

order to manage and reduce these risks, management periodically reviews its primary financial

market risks and actions are taken to mitigate specific risks identified. The Company’s investments

are primarily financed through early sales from customers and cash flow generated from sales of

existing multi-client library.

The Company has various financial assets such as trade receivables and cash. These are mainly in

USD which is the reporting currency for the group and the functional currency for Spectrum ASA

and all the entities in the group. The principal financial liabilities comprise trade payables, finance

lease commitments related to premises and data processing equipment and commitments related to

acquisition of new surveys.

Capital management

The Company`s capital management is primarily focused on ensuring the groups capacity to invest

in new high quality multi-client projects, to improve operations and to minimize the cost of and risk

to capital. The main source of financing is equity. Equity share per year end 2014 is 69.3% and

71.7% as of 31.03.2015. In addition the Company in October 2011 issued a convertible loan to

partly finance the acquisition of the CGGVeritas marine 2D seismic library. Per year end 2014 the

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all outstanding convertible bond was converted to equity. Spectrum’s capital therefore in this

context, consists of equity and minimum working capital.

Management is of the opinion that the above process achieved the group’s capital management

objectives in 2014. The Company has paid an annual dividend over the past years with an

increasing dividend per share.

Funds are mainly cash and cash equivalents of which the majority is held in USD, the currency of

the primary economic environment in which the group operates, although some funds are held in

local currency at a local level to fund forecasted local requirements for the following 3 months. It is

the policy of the Company to hold liquid funds in BRL, AUD, EUR, SGD, USD, GBP and NOK.

The group has per year end 2014 no fx-contracts in operation. To further reduce the currency risk

Spectrum established early 2014 a USD account linked to and managed by the Spectrum Brazil

entity. As of the date of this Prospectus there are no restrictions related to the Company’s cash and

cash equivalents

Financial instruments

The carrying amount of accounts receivable, other receivables, cash and cash equivalents, and

current liabilities approximate to their fair values because of the short maturities of these

instruments. From time to time, The Company engage in currency hedging activities USD/NOK in

connection with larger settlements. As of the date of this prospectus the Company does not have

any financial derivatives.

Liquidity risk

The Board considers the liquidity risk to be low to moderate due to substantial operational cash

flow being expected from sales going forward and high cash flow focus on new acquisition projects

initiated. Some new projects are also de-risked by inviting third parties to participate. Early sales

levels are a key component in the decision process of new acquisitions. Liquidity risk is primarily

related to lower sales than expected from new projects. At 31 March 2015 the Company had current

assets of USD 82.8 million (31.12.2014: USD 94.3 million and 31.12.2013: USD 59.4 million) and

current liabilities of USD 66.3 million (31.12.2014: USD 75.0 million and 31.12.2013: USD 56.0

million). The Company held USD 17.7 million in cash and cash equivalents at 31 March 2015

(31.12.2014: 8.4 million and 2013: USD 2.7 million) .

The Company has during 2014 further enhanced the forecasting system implemented in 2012

covering among others cash flow forecasting. Forecasting is done for the remaining part of the year

and this is a regular part of the monthly close process. In addition a new 60 days focused cash

management system has been established. The forecasting process involves several functions in the

group and is considered a critical part of the business control environment. It forms the basis for

estimating our capacity to finance new projects.

Currency and interest rate risk

Revenues and expenses are denominated largely in USD. The Company aims to minimize exposure

to currency risk by balancing receivables in other currencies with expenses in those currencies. In

addition the Company have established a USD account linked to the Brazilian legal entity. This

reduces currency risk related to the Brazilian activities. Spectrum Geo Ltd has changed to USD

from GBP as their functional currency per. 1 January 2013 due to increased revenue and CAPEX in

USD. In the group’s subsidiaries in UK and Norway local salaries and office expenses are mainly in

GBP and NOK.

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The analysis exclude the impact of movements in market variables on the carrying value of the non-

financial assets and liabilities of foreign operations.

The sensitivity of the relevant income statement item is the effect of the assumed changes in

respective market risks. This is based on the financial assets and financial liabilities held at 31

December 2014 and 2013 and is the same assumption adopted in the prior period.

Based on the current expense level, a 5% strengthening of USD vs. GBP and NOK will impact the

result positively by approx. USD 0.6 million in Ltd and USD 0.3 million in ASA respectively.

These sensitivities can be used to assess larger currency fluctuations.

The risk related to interest rates is considered limited since the operation has limited interest bearing

debt. As such, the management see the exposure to fluctuations in interest rates very low. A

sensitivity analysis on movements in interest rates has been considered not relevant.

Credit risk

The customers of the Company are mainly large oil- and gas companies that are well known to the

group. The maximum exposure to credit risk at the reporting date is the sum of the carrying

amounts of financial assets in each class. Management considers that the provisions booked in each

group company are sufficient to cover any uncertain receivable balances and believes that the credit

risk strategies adopted are sufficient to ensure that the overall credit risk is low. In addition the

Company has the right to net receivables against future payables in some partner agreements.

Market and political risk

The activities that the Company’s customers are engaged in are inherently affected by changes in

both current prices of Oil and Gas and future expectations of prices, which are themselves subject to

a number of external influences such as political policies. The Oil and Gas market is known to be

cyclical in nature, and the Company’s profitability is largely governed by the demand for the

services that they provide to these clients.

Other

Apart from the above mentioned risks, the Group’ operations have not, directly or indirectly, been

materially affected, and to the best of the Board’s knowledge could not, directly or indirectly, be

materially affected, by any governmental, economic, fiscal, monetary or political policies or factors.

See also Section 2 for risk factors which could materially affect some or all of the Company's

activities, the industry in which it operates and the securities being offered.

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13. UNAUDITED CONDENSED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma condensed financial information for the Company does not include all of

the information required for financial statements under International Financial Reporting

Standards(IFRS) as adopted by the EU, and should be read in conjunction with the historical

information of the Company.

13.1 Introduction

On 1 June 2015, the Company entered into a transaction agreement (the “Transaction

Agreement”) with Fugro Norway AS, Fugro Holdings (Australia) Pty Ltd, Fugro Finance AG and

Fugro Multi Client Services Inc (together referred to as “Fugro”), whereby the Company has

agreed to acquire all outstanding shares in Fugro Multi Client Services AS (“FMCS AS”), Fugro

Multi Client Services Pty Ltd (“FMCS Pty Ltd”) and Fugro Data Services GmbH (“FDS GmbH”)

holding the Fugro multi-client data library, including certain multi-client data surveys owned by

Fugro Mulit Client Services Inc in the United States (the “Transaction”).

The scope of the transaction includes the entire Fugro N.V multi-client library, with the exception

of certain non-transferrable items, among them any surveys in Russia or with Russian partners

(“the Library”). The library amounted to the majority of Multi Client revenues within Fugro

N.V.’s reportable segment Geosciences. The consolidated financial statement from Fugro N.V are

incorporated by reference to this Prospectus; see Section 20 “Incorporation by Reference;

Documents on Display”. The financial statement of FMCS AS is available in ANNEX D.

The main purpose of the Transaction is to further strengthen the Group’s position in relation to

seismic investments and studies. The Transaction is in line with the growth strategy of the

Company to become a leading Multi-Client company. The new combined Spectrum library will

exceed 3,000,000 km of MC2D seismic data and 160.000 km2 MC3D seismic data covering all

major sedimentary basins worldwide. No employees of the Fugro group will be transferred to the

Group as part of the Transaction.

The purchase price for the Library is USD 115 million on a cash- and debt-free basis, to be settled

in cash. In addition the fair value of current receivables, current payables and cash remaining in the

companies at the date of the closing, estimated to USD 8.79 million will also be settled in cash. The

cash consideration will be payable at completion of the Transaction.

Completion of the Transaction is envisaged to take place on or around 30 June 2015 with effect

from 1 January 2015. The completion is subject e.g. to a no material adverse change clause with

respect to the Library and other customary conditions. Final settlement will in addition to the

consideration be the value for all working capital as of 1 January 2015 still outstanding less certain

agreed items. All assets and liabilities in the companies outside of the scope of the transaction are to

be carved out, and transferred to other Fugro entities prior to completion of the transaction.

Either party may terminate the TA in the event that the Transaction has not been completed prior to

1 December 2015.

13.2 Independent Practitioner’s Assurance Report on Unaudited Pro Forma Financial

Information

With respect to the Unaudited Pro Forma Financial Information included in this Prospectus,

Ernst & Young AS has applied assurance procedures in accordance with International Standard on

Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma

Financial Information Included in a Prospectus, in order to express an opinion as to whether the

Unaudited Pro Forma Financial Information has been properly compiled on the basis stated, and

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109

that such basis is consistent with the accounting policies of the Company; see ANNEX C

“Independent Practitioner’s Report on Unaudited Pro Forma Financial Information”.

13.3 Purpose of the unaudited pro forma condensed financial information

The unaudited pro forma condensed financial information has been prepared for illustrative

purposes only to show how the acquisition of the Library, described above, might have affected the

Company’s consolidated income statement for 2014, if the acquisition occurred on January 1, 2014.

The unaudited pro forma income statement for 1 January to 31 March 2015 has been compiled as if

the transaction occurred on 1 January 2015 and the unaudited pro forma condensed statement of

financial position as of 31 March 2015 as if the transaction occurred on 31 March 2015.

Because of its nature, the unaudited pro forma condensed financial information addresses a

hypothetical situation and therefore does not represent the Company’s actual financial position or

results as if the transactions had in fact occurred on those dates and is not representative of the

results of operations for any future periods. Investors are cautioned not to place undue reliance on

this unaudited pro forma financial information.

The unaudited pro forma condensed financial information has been compiled in connection with the

Listing of 10,000,000 new shares issued in connection with a Private Placement completed on 2

June and the Subsequent Offering and Listing of up to 1,500,000 offer shares in the Subsequent

Offering to comply with the Norwegian Securities Trading Act and the applicable EU-regulations

including EU Regulation No 809/2004 pursuant to Section 7-7 of the Norwegian Securities Trading

Act.

The Private Placement was completed after approval by the shareholders of the Company at an

extraordinary general meeting held on 23 June 2015 (“EGM”).

This information is not in compliance with SEC Regulation S-X, and had the securities been

registered under the U.S: Securities Act of 1933, this unaudited pro forma financial information,

including the report by the auditor, would have been amended and / or removed from the offering

document.

13.4 Sources and Basis for Preparation of the Unaudited Pro Forma Financial

Information

The unaudited pro forma condensed income statement for the year ended 31 December 2014 has

been compiled based on the following information;

The audited consolidated financial statements of the Company prepared in accordance with

IFRS as adopted by the EU.

The audited financial statement for FMCS AS prepared in accordance with NGAAP.

Unaudited management accounts covering FMCS Pty Ltd, FDS GmbH and the MC Library

Assets acquired. The unaudited management accounts are sourced from Fugro NV internal

consolidation schedules. The consolidated financial statement of Fugro NV is prepared in

accordance with IFRS as adopted by the EU. The management accounts are prepared in EUR

and are translated to USD as described in Section 2.5. There are no financial statements or

management reports for the units on a stand-alone basis. As such the figures are presented

consolidated as it has not been possible to separate the figures by entity in a reasonable manner.

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110

The unaudited pro forma condensed financial information for the 3 months period ended 31 March

2015 has been compiled based on the following information;

Unaudited condensed interim financial statement of the Company

Unaudited condensed interim financial statement of FMCS AS

Unaudited management accounts covering FMCS Pty Ltd, FDS GmbH and the MC Library

Assets covered by the transaction. The unaudited management accounts are sourced from Fugro

NV’s internal consolidation schedules and translated to EURO as described in Section 2.5.

There are no management reports for the units on a stand-alone basis. As such the figures are

presented on a consolidated basis only as it has not been possible to separate the figures by

entity in a reliable manner.

The financial statements from the Company and Fugro N.V. are incorporated by reference to this

Prospectus; see Section 20 (“Documents on Display”). The financial statement of FMCS AS is

available in ANNEX D.

The pro forma adjustments are made by the Company’s Executive management based on currently

available information and certain assumptions.

The Company applies IFRS as adopted by the EU and financial information from the entities and

assets subject to the acquisition is partly prepared based on NGAAP and partly derived from

Management accounts extracted from Fugro NV’s consolidation schedule. Certain deviations from

IFRS and different election of accounting principles have been identified. Since the unaudited pro

forma financial information shall be prepared using the same accounting principles, some

harmonisation and GAAP adjustments have been made to be aligned with the Company’s

accounting principles. The basis for adjustments and effects are outlined below.

The unaudited Pro Forma condensed Financial Information does not include all information

required for financial statements under IFRS, and should be read in conjunction with the Annual

Financial Statements as of and for the year ended 31 December 2014 and the unaudited financial

statements for the three months period ended 31 March 2015 for the Company. The Unaudited Pro

Forma Financial Information has been prepared by using the same accounting policies as for the

Annual Financial Statements as of and for the year ended 31 December 2014 for the Company.

There were no new standards or interpretations implemented in Q1 2015 which had a significant

impact on the Company’s Financial Statements. The unaudited pro forma condensed financial

information has been prepared under the going concern assumption. Please refer to the financial

statements for 2014 for description of the accounting policies.

The unaudited pro forma condensed financial information does not give effect to any integration

costs, synergies, cost savings or operating efficiencies that may result from the Acquisition; or

restructuring costs that may be incurred to integrate the acquired entities/assets.

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13.5 Purchase accounting

The Transaction of the three wholly owned subsidiaries of Fugro and the MC Library Assets as

described above will be accounted for as a business combination under IFRS 3 by Spectrum, as the

companies are all perceived to have input, processes and output. The transaction will be funded

through;

i) a private placement of 10 million new shares amounting to NOK 320 million (equal to USD 40.6

million based on the exchange rate 7.869 in forward contract NOK/USD on time of expected

closing). The Private Placement was fully underwritten by the Supporting Shareholders and by

Danske Bank, and was approved by an Extraordinary General Meeting on 23 June 2015, and

ii) a loan facility with Danske Bank. The loan facility with Danske Bank is a term loan facility of

USD 50 million and a revolving facility of NOK 195 million (equal to USD 24.8 million based on

the exchange rate 7.869 in forward contract), together the “Loan Faclities”. Both facilities will be

utilised to finance the transaction.

The assets and liabilities of the subsidiaries of Fugro and MV Library Assets purchased will be

measured at fair value as of the date of acquisition. Spectrum has for the purposes of the unaudited

pro forma consolidated condensed financial information presented below a preliminary purchase

price allocation and estimated the fair value of the assets and liabilities. The consideration for the

acquisition has been agreed at USD 115 million for the Library on a cash- and debt-free basis, to be

settled in cash. The preliminary purchase price allocation (PPA) identified less value of USD 37.5

million on the multi-client library in Australia and Switzerland combined, and an excess value of

USD 8.5 in Norway. The allocation to the surveys was based upon assessment made by Spectrum’s

management In addition the fair value of current receivables, current payables and cash remaining

in the companies at the date of the closing, estimated to USD 8.79 million will also be settled in

cash.

However, the value of the consideration may be different as of the acquisition date depending on

the amount of working capital that has been settled and the amount of cash transferred to other

Fugro entities. Further, the preliminary purchase price allocation is based upon the information

available and is subject to change. Therefore, the final allocation may significantly differ from this

preliminary allocation and this could materially have affected the depreciation, amortization and

deferred tax expense in the pro forma income statement and the fair value of technical goodwill and

deferred tax liability in the pro forma statement of financial position.

Fugro and Spectrum will adjust the final settlement of working capital, based on the difference

between USD 8.79 million and actual fair value of the working capital as of completion date. The

adjustment will include adjustments if any liabilities has arisen based on events prior to 1 January

2015 or if any of the receivables as of 1 January not yet collected are deemed bad debt in the time

before the completion of the transaction. The difference will be settled in cash.

Based on the preliminary purchase price allocation assuming that completion of the Transaction

occurred as of 31 March 2015, the fair value of the Fugro net assets and liabilities for Spectrum are

as follows (some fair value adjustments are due to the fact that these assets and liabilities are not

part of the Transaction (*))

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Fair value adjustments of net assets and liabilities acquired

All figures in USD 1000

Total Fugro on Spectrum's

accounting principles Fair value adjustments

Fair value of assets and

liabilities

Assets

Deferred tax assets 6,934 (6,934) -

Goodwill - 2,287 2,287

Software * 8,262 (8,262) -

Multi-client library 161,790 (46,790) 115,000

Financial assets * 486 (486) -

Total non-current assets 177,472 (60,185) 117,287

Current assets

Accounts receivable 9,328 - 9,328

Other receivables 5,405 (13) 5,392

Cash and cash equivalents 9,508 - 9,508

Total current assets 24,241 (13) 24,228

Total assets 201,714 (60,198) 141,516

Liabilities

Deferred tax liability 24,014 (21,265) 2,749

Other liabilities * 272,876 (272,876) -

Total long term liabilities 296,890 (294,141) 2,749

Accounts payable 11,218 (987) 10,231

Other liabilities 2,045 - 2,045

Total current liabilities 13,264 (987) 12,277

Total liabilities 310,154 (295,128) 15,026

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13.6 Fugro Business

As described above, no annual or interim financial reports have been prepared for the combined

Fugro companies that will be part of the Transaction. The table below shows the differences

between the audited financial statement of FMCS AS as of 31 December 2014 in NOK prepared

under NGAAP to IFRS figures used in management accounts in NOK and then converted to EUR.

FMCS AS condensed income statement 1 January - 31 December 2014

NGAAP IFRS adjustment IFRS IFRS

Note

NOK 1000

NOK 1000

Unaudited

NOK 1000

Unaudited

EUR 1000

Unaudited

Net operating revenue

382,343 - 382,343 45,660

Amortisation of Multi-Client library

(173,062) - (173,062) (20,667)

Impairment of Multi-Client library

(292,547) - (292,547) (34,936)

Operating expenses

(70,242) - (70,242) (8,388)

Depreciation (47) - (47) (6)

EBIT (153,555) - (153,555) (18,336)

Interest expense, net

(21,089) - (21,089) (2,518)

Foreign exchange profit / (loss) 11,789 - 11,789 1,408

Profit / (Loss) before tax (162,855) - (162,855) (19,447)

Tax expense i 4,566 39,420 43,986 5,253

Net Profit / (Loss) to equity holders (158,289) 39,420 (118,869) (14,194)

The differences and IFRS adjustments are related to;

i) Tax expense – tax effects of group contribution

The table below shows the differences between the unaudited financial statement of FMCS AS as of

31 March 2015 in NOK prepared under NGAAP to IFRS figures used in management reports in

NOK and then converted to EUR.

FMCS AS condensed income statement 1 January - 31 March 2015

NGAAP IFRS adjustment IFRS IFRS

Note NOK 1000

Unaudited

NOK 1000

Unaudited

NOK 1000

Unaudited

EUR 1000

Unaudited

Gross operating revenue 23,033 - 23,033 2,638

Revenue share - - - -

Net operating revenue 23,033 - 23,033 2,638

Amortisation of Multi-Client library (22,117) - (22,117) (2,533)

Impairment of Multi-Client library - - - -

Operating expenses (1,109) - (1,109) (127)

Share of profit/(loss) of joint ventures - -

Depreciation - - - -

EBIT (192) - (192) (22)

Interest expense, net (2,279) - (2,279) (261)

Foreign exchange profit / (loss) - - - -

Other financial items - - - -

Profit / (Loss) before tax (2,471) - (2,471) (283)

Tax expense (751) - (751) (86)

Net Profit / (Loss) to equity holders (3,222) - (3,222) (369)

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The table below shows the differences between the unaudited financial position of FMCS AS as of

31 March 2015 in NOK prepared under NGAAP to IFRS figures used in management reports in

NOK and then converted to EUR.

FMCS AS condensed statement of financial position as of 31 March 2015

NGAAP

NOK 1000

Unaudited

IFRS adjustment

NOK 1000

Unaudited

IFRS

NOK 1000

Unaudited

IFRS

EUR 1000

Unaudited

Assets

Non-current assets

Deferred tax assets 16,676 39,420 56,096 6,445

Multi-client library 299,026 - 299,026 34,357


Current assets

Accounts receivable 69,915 - 69,915 8,033

Other receivables 40,454 - 40,454 4,648

Cash and cash equivalents (3,673) - (3,673) (422)

Total current assets 106,696 - 106,696 12,259

Total assets 422,398 39,420 461,818 53,061

Shareholders' Equity and Liabilities

Shareholders' equity

Share capital 4,830 - 4,830 555

Other paid-in capital 278,747 - 278,747 32,027

Retained earnings (265,596) (106,580) (372,176) (25,987)

Foreign translation reserve 1,871 - 1,871 215

Total equity 19,853 (106,580) (86,727) (9,965)

Liabilities

Long term liabilities

Other liabilities 379,681 146,000 525,681 60,399

Total long term liabilities 379,681 146,000 525,681 60,399

Current liabilities

Accounts payable 10,679 - 10,679 1,227

Other liabilities 12,185 - 12,185 1,400

Total current liabilities 22,864 - 22,864 2,627

Total shareholders' equity and liabilities 422,398 39,420 461,818 53,061

The IFRS amounts in EUR have been included in the table summarizing the Fugro entities and

assets below.

The Norwegian entity FMCS AS has statutory reporting requirements, and as such the pro forma

financial information is based on the Annual Report for 2014 and unaudited Q1 management report

prepared in NOK.

The table below shows unaudited combined financial information for FMCS AS and the other

Fugro subsidiaries and the MC Library Assets, which will be transferred to Spectrum on the

effective date of the Transaction. There are no financial statements or management reports for the

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other Fugro units on a stand-alone basis. As such the figures are presented consolidated as it has as

described not been possible to separate the figures by entity in a reliable manner.

The financial information has been translated from EUR to USD which is Spectrum’s reporting

currency. Historical financial information is translated to USD using an average exchange rate for

the income statement period Q1-2015 of USD/EUR 1.13, and the year ended 31 December 2014 of

USD/EUR 1.32 and for the statement of Financial Position based on actual closing rate on March

31, 2015 of USD/EUR 1.08.

Fugro condensed income statement 1 January - 31 December 2014

All figures are unaudited FMCS AS Fugro other units and assets Total Total Fugro

EUR 1000 EUR 1000 EUR 1000 USD 1000

Net operating revenue 45,660 26,580 72,240 95,366

Amortisation of Multi-Client library (20,667) (49,009) (69,676) (91,981)

Impairment of Multi-Client library (34,936) (82,681) (117,617) (155,268)

Operating expenses (8,388) (6,034) (14,422) (19,039)

Depreciation (6) - (6) (7)

EBIT (18,336) (111,144) (129,481) (170,931)

Interest expense, net (2,518) (10,315) (12,833) (16,942)

Foreign exchange profit / (loss) 1,408 845 2,253 2,974

Profit / (Loss) before tax (19,447) (120,615) (140,062) (184,898)

Tax expense 5,253 32,501 37,753 49,839

Net Profit / (Loss) to equity holders (14,194) (88,114) (102,308) (135,060)

Fugro condensed income statement 1 January - 31 March 2015

All figures are unaudited FMCS AS Fugro other units and assets Total Total

EUR 1000 EUR 1000 EUR 1000 USD 1000

Net operating revenue 2,638 510 3,148 3,545

Amortisation of Multi-Client library (2,533) (9,810) (12,343) (13,900)

Operating expenses (127) (56) (183) (206)

EBIT (22) (9,356) (9,378) (10,561)

Interest expense, net (261) (1,276) (1,537) (1,731)

Profit / (Loss) before tax (283) (10,632) (10,915) (12,292)

Tax expense (86) 2,476 2,390 2,692

Net Profit / (Loss) to equity holders (369) (8,156) (8,525) (9,600)

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Fugro condensed statement of financial position as of 31 March 2015

All figures are unaudited FMCS AS Fugro other units and assets Total Total Fugro

EUR 1000 EUR 1000 EUR 1000 USD 1000

Assets

Non-current assets

Deferred tax assets 6,445 - 6,445 6,934

Software - 7,679 7,679 8,262

Multi-client library 34,357 116,019 150,376 161,790

Financial assets - 452 452 486


Accounts receivable 8,033 637 8,670 9,328

Other receivables 4,648 376 5,024 5,405

Cash and cash equivalents (422) 9,259 8,837 9,508

Total current assets 12,259 10,272 22,531 24,241

Total assets 53,061 134,422 187,483 201,713

Shareholders' Equity and Liabilities

Share capital 555 17 572 615

Other paid-in capital 32,027 15,953 47,980 51,622

Retained earnings (42,762) (105,936) (148,698) (159,984)

Foreign translation reserve 215 (860) (645) (694)

Total equity (9,965) (90,826) (100,791) (108,441)

Long term liabilities

Deferred tax liability - 22,320 22,320 24,014

Other liabilities 60,399 193,227 253,626 272,876

Total long term liabilities 60,399 215,547 275,946 296,890

Current liabilities

Accounts payable 1,227 9,200 10,427 11,218

Other liabilities 1,400 501 1,901 2,045

Total current liabilities 2,627 9,701 12,328 13,264

Total shareholders' equity and liabilities 53,061 134,422 187,483 201,713

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13.7 Unaudited pro forma condensed income statement

Unaudited pro forma condensed income statement 1 January - 31 December 2014

All figures in USD thousands Note Spectrum

Group

Unaudited

Total Fugro

Unaudited

Harmonization

differences

Unaudited

Pro forma

adjustments

Unaudited

Total pro forma

Unaudited



Impairment of Multi-Client library 2 - (155,268) - - (155,268)

Operating expenses 3 (34,106) (19,039) - (517) (53,662)

Share of profit/(loss) of joint ventures 1,170 - - - 1,170

Depreciation (3,153) (7) - - (3,160)

EBIT 52,795 (170,931) - (11,299) (129,435)

Interest expense, net 4 (452) (16,942) - 16,035 (1,359)

Foreign exchange profit / (loss) (260) 2,974 - - 2,713

Other financial items 2,571 - - - 2,571

Profit / (Loss) before tax 54,654 (184,898) - 4,736 (125,509)

Tax expense 5 (16,425) 49,839 - (1,421) 31,993

Net Profit / (Loss) to equity holders 38,229 (135,060) - 3,315 (93,516)

Unaudited pro forma condensed income statement 1 January - 31 March 2015

All Figures in USD thousands Note Spectrum

Group

Unaudited

Total Fugro

Unaudited

Harmonization

differences

Unaudited

Pro forma

adjustments

Unaudited

Total pro forma

Unaudited



Operating expenses 3 (7,814) (206) - (458) (8,478)

Depreciation (765) - - - (765)

EBIT (4,303) (10,561) - (3,174) (18,038)

Interest expense, net 4 (60) (1,731) - 1,193 (598)

Foreign exchange profit / (loss) (420) - - - (420)

Other financial items (31) - - - (31)

Profit / (Loss) before tax (4,814) (12,292) - (1,981) (19,087)

Tax expense 5 1,492 2,692 - 594 4,778

Net Profit / (Loss) to equity holders (3,322) (9,600) - (1,387) (14,309)

13.8 Notes to the unaudited pro forma income statement

The explanations of the harmonisation and unaudited pro forma adjustments as outlined below refer

to the note references as included in the unaudited pro forma condensed income statement for 2014

and for the three months ending 31 March 2015 as presented above:

Pro forma adjustments

1. Amortisation of Multi-Client library

The pro forma adjustment to amortisation of multi-client library reflects amortisations as if the

transaction occurred on 1 January 2014 and 1 January 2015 respectively using Spectrum’s fair value

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of the acquired surveys determined in the preliminary purchase price allocation as of 31 March

2015 (see Section 13.4 above and 13.8) and Spectrum’s accounting principles of linear amortisation

over expected remaining lifetime of the assets. As such amortisation of surveys exceeding

Spectrum’s estimated fair value of the surveys has been adjusted. The pro forma amortisations

increased with USD 10.8 million and USD 2.7 million for the period ended 31 December 2014 and

for the period ended 31 March 2015 respectively. The pro forma adjustments are expected to have a

continuing impact.

2. Impairment of Multi-Client library

Fugro recorded an impairment of USD 155.3 million for the period ended 31. December 2014. No

pro forma adjustments have been made to the impairment charges recorded by Fugro. In the PPA

the Company has not allocated any additional fair value to libraries impaired by Fugro.

3. Operating expenses

The pro forma adjustment to operating expenses for both periods ended 31 December 2014 and 31

March 2015 represents USD 0.5 million (ex VAT) in estimated transaction costs. Refer to note 13,

14 and 17 for explanation of pro forma adjustments of transaction costs directly related to share

issuance. The pro forma adjustments are expected to have a continuing impact.

4. Interest expense, net

The adjustment to interest expense reflects the finance structure as if the Transaction and related

financing occurred on 1 January 2014 and 1 January 2015 respectively. As such interest expense

and borrowing costs on Fugro intercompany loans (which will be settled prior to the completion

date) has been eliminated in full, and replaced by interest expenses as if the Loan Facilities were

entered into on 1 January 2014 and 1 January 2015 respectively based on contractual interest rates

in the financing agreements with Danske Bank in addition to directly attributable borrowing

expenses.

USD thousands 1 January - 31 December 2014 1 January - 31 March 2015

Interest Fugro intercompany loans 19.0 2.0

Cost of loan facility 0.5 (0.2)

Interest on loan facility (2.4) (0.7)

Total 16.0 1.2

The pro forma interest expense decreased with net USD 16.0 million and with net USD 1.2 million

for the period ended 31 December 2014 and for the period ended 31 March 2015 respectively. The

decrease is due to the transaction partly being funded through equity and that the intercompany

loans eliminated exceeds the purchase price. The pro forma adjustments are expected to have a

continuing impact.

5. Tax expense

Spectrum has applied an estimated group average tax rate of 30% for Q1 which is consistent with

the actual average tax rate last year. It is assumed that there will be no material change to this group

average tax rate post the transaction, and the rate has been applied to the net effects of other pro

forma adjustments to find the tax effects of the adjustments, leading to an adjustment of tax expense

of USD negative 1.4 million and USD 0.6 million for the periods ended 31 December 2014 and 31

March 2015 respectively. The pro forma adjustments are expected to have a continuing impact.

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13.9 Unaudited pro forma statement of financial position

Unaudited pro forma condensed statement of financial position as of 31 March 2015

All Figures in USD thousands Note Spectrum

Group

Unaudited

Total Fugro

Unaudited

Harmonization

differences

Unaudited

Pro forma

adjustments

Unaudited

Total pro

forma

Unaudited

Assets

Non-current assets

Deferred tax assets 6 2,732 6,934 - (6,934) 2,732

Goodwill 7 12,481 - - 2,287 14,768

Software 8 2,360 8,262 - (8,262) 2,360

Multi-client library 9 129,328 161,790 - (46,790) 244,328

Financial assets 10 2,842 486 - (486) 2,842

Fixtures, fittings and office equipment 2,789 - - - 2,789

Other receivables 4,488 - - - 4,488

Total non-current assets 157,020 177,472 - (60,185) 274,307

Current assets

Work in Progress 23,500 - - - 23,500

Accounts receivable 28,299 9,328 - - 37,627

Other receivables 11 13,318 5,405 - (13) 18,710

Cash and cash equivalents 12 17,670 9,508 - (2,182) 24,996

Total current assets 82,787 24,241 - (2,195) 104,833

Total assets 239,808 201,713 - (62,380) 379,141

Shareholders' Equity and Liabilities -

Shareholders' equity -

Share capital 13 7,534 615 - 656 8,805

Share premium 13 29,838 - - 39,395 69,233

Other paid-in capital 13 59,254 51,622 - (51,622) 59,254

Retained earnings 13 77,835 (159,984) - 154,319 72,171

Foreign translation reserve (2,467) (694) - - (3,161)

Total equity 171,995 (108,441) - 142,748 206,302

Long term liabilities -

Deferred tax liability 6 390 24,014 - (21,265) 3,139

Long term interest bearing debt 14 1,081 - - 44,347 45,428

Other liabilities 15 29 272,876 - (272,876) 29

Total long term liabilities 1,500 296,890 - (249,794) 48,596

Short term interest bearing debt 14 1,281 - - 30,000 31,281

Accounts payable 16 19,413 11,218 - (987) 29,644

Tax and other public duties payable 17 9,829 - - (710) 9,119

Other liabilities 15 35,792 2,045 - 16,363 54,200

Total current liabilities 66,315 13,264 - 44,666 124,245

Total shareholders' equity and liabilities 239,808 201,713 - (62,380) 379,7141

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13.10 Notes to the unaudited pro forma statement of financial position

The explanations of the harmonization and unaudited pro forma adjustments as outlined below refer

to the note references as included in the unaudited pro forma statement of financial position as

presented above:

Pro forma adjustments

6. Deferred tax

The less value allocated to the Mult-Client library in Australia and Switzerland leads to a potential

deferred tax asset of USD 11.2 million based on current company tax rate in Australia and

Switzerland. However it is considered uncertain if the deferred tax asset will be utilised based on

the companies stand-alone position, and as such it is not included in the PPA or in the pro forma

condensed statement of financial position. Due to the excess value of the library in Norway a

deferred tax liability of USD 2.3 million was recorded based on the tax rate in Norway. A technical

goodwill of USD 2.3 million arises as opposite entry to the deferred tax on excess values.

Fugro has a booked net deferred tax as of 31 March of USD 6.9 million in FMCS AS. This consist

of effects of group contribution (described below), a deferred tax asset of USD 2.5 million related to

loss on a receivable and a deferred tax liability of USD 0.5 million related tax effects of a loss/gain

account. It has been agreed that any tax benefit that arises from the loss on the receivable will be

transferred to Fugro when it is utilised by Spectrum. As such the deferred tax asset has no value to

Spectrum and has been adjusted for in the PPA and as a pro forma adjustment. This leads to an

adjustment in deferred tax asset of USD 2.1 million (the net deferred tax asset) and an adjustment in

deferred tax liability of USD 0.5 million (the tax effects of the loss/gain account).

The Fugro group will distribute a group contribution based on 2014 to FMCS AS. The tax effect of

the contribution is included in FMCS AS figures under NGAAP but adjusted for under IFRS and as

such a deferred tax asset is included in the statement of financial position as of 31 March 2015. The

contribution will become effective under IFRS when the AGM approves the contribution in Q2, and

the tax effect eliminated before the closing. As such the tax effect is adjusted for as a pro forma

adjustment of USD 4.8 million.

FMCS Pty Ltd has been a part of the Fugro holding company’s tax group in Australia. As such the

net deferred tax liability of USD 24.0 million will be at head company level, and will be eliminated

upon transaction and is adjusted for in the PPA and in the pro forma financial information. All the

pro forma adjustments described are expected to have a continuing impact.

7. Goodwill

Changes in goodwill relate to the USD 2.3 million in deferred tax liability due to excess value

identified in the Multi-Client library described in note 6. The technical goodwill is recorded as the

opposite entry to the deferred tax on excess values. The pro forma adjustment is expected to have a

continuing impact.

8. Software

The assets are not in scope of the transaction and are carved out of the units before the closing of

the transaction, and are as such adjusted for in the pro forma financial information. The pro forma

adjustment is expected to have a continuing impact.

9. Multi-Client library

The pro forma adjustment to the multi-client library reflects the net book value as if the transaction

occurred on 31 March 2015 using Spectrum’s fair value of the acquired surveys determined in the

preliminary purchase price allocation as of 31 March 2015. The pro forma adjustments decrease the

multi-client library net book value with USD 46.8 million as of 31 March 2015. The pro forma


10. Financial assets

The assets are not in scope of the transaction and are carved out of the units before the closing of

the transaction, and are as such adjusted for in the pro forma financial information. The pro forma


11. Other receivables

Fugro intercompany balances will be eliminated upon transaction and are adjusted for in the pro

forma financial information. The pro forma adjustment is expected to have a continuing impact.

12. Cash and cash equivalents

The subscription of new shares and loan financing exceeds the estimated acquisition cost by USD

0.4 million which is adjusted to cash (financing described in note 13 and 14). The pro forma cash

effect of the estimated transaction costs of USD 0.6 million which will be recorded as operational

cost and USD 2.0 million recorded against equity (described in note 13) are also adjusted for in the

cash balance. Total adjustments to cash and cash equivalents are USD 2.2 million. The pro forma

adjustments are expected to have a continuing impact except for the transaction costs incurred in

connection with the acquisition.

13. Equity

Since Spectrum is the acquiring party, the shareholders' equity in the Fugro companies amounting

to USD 0.6 million will be eliminated upon consolidation, while the subscription of new shares in

Spectrum in the Private Placement increases the share capital by USD 1.3 million and the share

premium by USD 39.4 million. Effects of the Subsequent Offering not considered in the pro forma

statement of financial position as it will happen after the date of the Prospectus and is not

guaranteed. Changes in retained earnings relates to USD 1.2 million (net of taxes) in cost related to

the listing of new shares (including guarantee fee to the supporting shareholders and Danske Bank)

in addition to adjustments described in other notes. The pro forma adjustments are expected to have

a continuing impact except for effect on retained earnings related to the transaction costs incurred in

connection with the acquisition described under note 12.

14. Interest bearing debt

In connection with the Transaction the Company has secured a loan facility with Danske Bank.

Total available amount under the facility is USD 50 million, which is expected to be utilised to

finance the Transaction. Final maturity date for the facility is 15 months from the date on which the

utilisation is made (“Closing Date”), and USD 30 million is classified as current liability.

In addition Spectrum has a revolving facility totalling USD 24.8 million (NOK 195.0 million) with

Danske Bank which will be utilised in the transaction. The revolving facility is classified as non-

current liability.

The cost of the loan facilities is amortised over the term of the loan, and as the pro forma statement

of financial position is presented as if the transaction occurred on 31 March 2015 the transaction

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cost is recorded as a reduction in cash (note12) and as reduction of long term interest bearing debt

of USD 0.4 million (net of tax). The pro forma adjustments are expected to have a continuing

impact.

15. Other liabilities

As of 31 March the Fugro companies have a remaining intercompany liability of USD 272.9

million. The intercompany liability will be reduced by the net working capital that is settled before

the date of the transaction and used to repay the loan before it is eliminated on transaction. The net

working capital as of 31 March is considered a current liability for Spectrum at that time and a pro

forma adjustment of USD 16.4 million. The working capital that is settled before the time of the

transaction will be used to repay intercompany loans before they are eliminated and as such reduce

Spectrum’s liability. The liability at the time of the transaction is estimated to USD 8.8 million. The

pro forma adjustments are expected to have a continuing impact.

16. Accounts payable

Part of the payable is related to assets not in scope of the transaction and as such the relevant part of

the payable are carved out before the closing of the transaction. USD 1.0 million is adjusted for in

the pro forma financial information. The pro forma adjustment is expected to have a continuing

impact.

17. Tax and other public duties payable

Changes in payable tax relates is the tax effect of cost related to the listing of new shares (including

guarantee fee to the supporting shareholders and Danske Bank) as described in note 13 of USD 0.5

million and the tax effect of cost related to the transaction recorded as operational cost as described

in note 3 of USD 0.2 million. The pro forma adjustments are expected to have a continuing impact.

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14. OPERATING AND FINANCIAL REVIEW

The following discussion of the financial condition and results of operations should be read in

conjunction with the financial statements included in this Prospectus.

14.1 Management discussion and analysis of financial condition and results of operations

Pre-tax profit and amortization and changes in working capital constitute the Group’s operating

cash flow’s main items. Multi-client consists of 99% of the group’s gross revenue. Spectrum

management has hence determined that it was appropriate to recognise only one CGU reflecting the

operating segment: multi-client surveys.

Cash flow from investing activities consists mainly of investments in multi-client library and

investments in subsidiaries and fixed assets. Cash flow from financing activities is mainly

comprised of equity issues and cash flow related to the Group’s bank facilities and leasing

arrangements.

The main impact on the Company’s cash flow statement is the level of seismic MC investments the

Company makes and the corresponding revenue and amortisations from these investments. As the

Company is amortising 40% of sales over the first 12 months of any finished survey and thereafter

on a linear basis over the next 3 years, the level of investments will impact amortisations

accordingly, except when the Company makes forced amortisations.

14.1.1 The three month ended 31 March 2015 and 31 March 2014

Income statement

Net multi-client revenues totalled MUSD 14.6 in the first quarter of 2015 (Q1 2014: MUSD 37.3).

Early sales recognized in the quarter was MUSD 7.4 (Q1 2014: MUSD 26.0), Late sales ended at

MUSD 3.9 (Q1 2014: MUSD 11.3), and other revenue was MUSD 3.4 (Q1 2014: MUSD 0.0).

Total net operating revenues for the group were MUSD 14.9 (Q1 2014: MUSD 38.0). The decline

in seismic sales in Q1 2015 is related to the sharp decline of the oil price since mid-June 2014

which resulted in a more cautious spending pattern among oil companies.

Operating expenses were MUSD 7.2 (Q1 2014: MUSD 8.5). The decrease is mainly due to

increased multi-client workload in the data processing department and lower salaries cost due to

development in exchange rates.

Multi-client amortizations in the first quarter ended at 71.3 % of net MC revenue (Q1 2014: 51.3%).

The high amortization level is mainly due to forced amortizations on Lebanon, Santos Campos and

Gulf of Mexico surveys.

EBIT for the first quarter was MUSD (4.3) (Q1 2014: MUSD 8.5).

Profit Before Tax in the first quarter ended at MUSD (4.8) (Q1 2014: MUSD 8.7).

Statement of financial position

The total assets of the group were MUSD 239.8 (end Q4 2014: MUSD 251.4) at the end of the

quarter, split between non-current assets of MUSD 157.0 (end Q4 2014: MUSD 157.0), and current

assets of MUSD 82.8 (end Q4 2014: MUSD 94.3).

These were funded by equity of MUSD 172.0 (end Q4 2014: MUSD 174.3), long term liabilities of

MUSD 1.5 (end Q4 2014: MUSD 2.1) and current liabilities, including accrued revenue share, of

MUSD 66.3 (end Q4 2014: MUSD 75.0).

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During Q1 2015 Spectrum invested MUSD 13.2 (2014: MUSD 17.7) in the multi-client library.

This increase in carrying value of the multi-client library was offset by amortization of MUSD 10.6

(2014: MUSD 19.5). The net book value of the multi-client library at end Q1 is MUSD 129.3 (end

Q4 2014: MUSD 131.3).

The cash and cash equivalents balance increased by MUSD 9.3 from end Q4 2014 to MUSD 17.7.

As of 31.03.15 the group has an additional liquidity reserve through a drawing facility of MUSD

7.4 (MNOK 60), and a revolving facility totalling MUSD 14.8 (MNOK 120) with a Nordic bank.

The facility was undrawn as of 31.03.15. Management considers that the Company has sufficient

liquidity to meet its ongoing operational obligations.

The reported equity balance is MUSD 172.0 (end Q4 2014: MUSD 174.3). This equates to an

equity ratio of 71.7%.

Long term interest bearing debt was MUSD 1.5 (end Q4 2014: MUSD 2.1) and consist mainly of

financial leases.

Cash flow

The cash and cash equivalents balance increased by MUSD 9.3 from end Q4 2014 to MUSD 17.7.

Net cash flow from operating activities was MUSD 18.0 (Q1 2014: MUSD 33.4) for the quarter.

The decline in cash from operating activities and investments in Q1 2015 compared to Q1 2014 is

related to the decline in the oil price and related cutback in E&P spending among the oil companies.

Working capital decreased by MUSD 10.8 (Q1 2014: decrease of MUSD 8.9).

Net cash flow from investing activities was MUSD 8.9 in the quarter (Q1 2014: MUSD 19.0).

MUSD 13.2 was invested in the multi-client library (Q1 2014: MUSD 17.7).

Net cash inflow in the quarter from financing activities was MUSD 0.2 (Q1 2014: MUSD 0.3).

The decline in cash from operating activities and investments in Q1 2015 compared to Q1 2014 is

related to the decline in the oil price and related cutback in E&P spending among the oil companies.

As seen from the financials, the Company is able to scale down its operations in accordance with

the change in demand for its services.

Multi-Client Operations

Net multi-client revenues of MUSD 14.6 in the quarter represent a decrease of 61% vs. 1st quarter

2014 (2014: MUSD 37.3). In Q1 72% of the Net multi-client revenues came from North and South

America, 22% came from Europe, Middle East and Asia/Australia and 6% from Africa. Revenue

from multi-client sales was 98.1% of total revenue in the first quarter of 2015.

Spectrum’s multi-client library is composed of data and reports from many of the major oil

producing and frontier regions of the world. The library comprises approximately 1.3 million km of

2D data. The 2D Multi-Client library presents a number of new opportunities to enhance the value

of these datasets through reprocessing in addition to the pipeline of new acquisition surveys that are

being developed around the world. In addition Spectrum holds 5,360 km2 of new 3D data sets

offshore Lebanon, and 11,330 km2 of acquired 3D data offshore Brazil that is currently in

processing. Furthermore, Spectrum holds 125.000 km2 of seamless seismic merged 3D data on the

Norwegian continental shelf.

Spectrum and CGG finished the acquisition of the 11,330 km² MC3D survey in Foz do Amazonas

Basin in Brazil in Q3 2014. The high-end BroadSeis™ data set will be processed in CGG's Rio de

Spectrum ASA

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Janeiro subsurface imaging center, and final products are planned to be available during the 2nd

half of 2015.

Spectrum commenced a phase 2 of the multi-client 2D seismic survey offshore Brazil in the Sergipe

and Alagoas basins along the Eastern Margin of Brazil in Q4. The phase 1 was a 10 000 km survey,

and the phase 2 is an approximately 6,000 kilometer infill to provide 5 x 5 km grid spacing over a

subset of the area covered in phase 1. The final products were completed in Q2 2015.

Spectrum commenced a 4,200 km multi-client 2D seismic survey in the South Carnarvon Basin and

North Perth Basin, offshore Western Australia in Q1 2015. The new acquisition program has been

designed to complement the newly acquired Geoscience Australia research survey in the Houtman

Basin, and also ties the wells DSDP 0263, Herdsman 1 and Pendock 1. The acquired data will be

processed using broadband processing technologies with final products available in Q3 2015.

Spectrum commenced in February 2015 a 12,000 kilometer multi-client 2D seismic survey offshore

the Pelotas Basin of Brazil. The new acquisition program will infill both Spectrums’ new 7,500

kilometer survey acquired in 2014 and 12,000 kilometers of data reprocessed in 2014, covering

open acreage in the Pelotas basin and providing industry with over 31,000 kilometers of new data

over the area. It is highly anticipated that the area will be included in the next licensing round,

expected in late 2015. The final products will be available early Q3 2015.

Spectrum has early April commenced a phase 2 of the Namza survey. The phase 2 is 3,500 km to

complete the 6,000 km survey over the Namibia-South Africa border of the Orange Basin, which is

an underexplored area that has seen increased interest and activity. The survey ties any discoveries

between Namibia & South Africa and provides continuous data coverage. The final products will be

available in Q3 2015. All the surveys on-going during the quarter were supported by industry

funding.

14.1.2 Financial year 2014

Income statement

Multi-client sales for 2014 totalled MUSD 249.5 (2013: MUSD 159.7). Early sales 2014 came in at

MUSD 164.8 (2013: MUSD 46.6) and Late sales 2014 ended at MUSD 84.7 (2013: MUSD 113.0).

Total revenue for the group was MUSD 252.0 (2013: MUSD 162.0). The revenue share during

2014 was MUSD 68.7 (2013: MUSD 19.0). The increase in revenue is mainly due to increased MC

investments.

Operating expenses for 2014 were MUSD 34.1, including MUSD 1.3 costs of stock options (2013:

MUSD 38.4 including MUSD 3.8 costs of stock options). The decrease is mainly due to increased

Multi-client workload in the data processing department and lower transaction taxes in Brazil.

Amortizations during 2014 came in at 52.2% of net MC revenue (2013: 42.6%). The high level is

mainly due to forced amortizations of the Lebanon, Santos Campos and Gulf of Mexico surveys.

Group EBIT for 2014 was MUSD 52.8 (2013: MUSD 41.6), an EBIT margin of 28.8% of reported

net revenue (2013: 29.1%). Management has through the year assessed that based on the current

business mix the normalized operating consolidated tax rate is approximately 31%. Based on

preliminary tax calculations the group tax rate is 30.0% for 2014.


The total assets of the group were MUSD 251.4 at the end of the quarter, split between non-current

assets of MUSD 157.0, and current assets of MUSD 94.3. These were funded by equity of MUSD

174.3, long term liabilities of MUSD 2.1 and current liabilities, including accrued revenue share, of

MUSD 75.0.

For the full year 2014 the investment in the multi-client library was 113.3 (2013: MUSD 85.2),

offset by amortization of MUSD 94.4 (2013: MUSD 59.9). The net book value of the multi-client

library at end Q4 is MUSD 131.3 (2013: MUSD 112.4).

The cash and cash equivalents balance decreased by MUSD 0.9 from end Q3 2014 to MUSD 8.4.

As of 31.12.14 the group had an additional liquidity reserve through a drawing facility of MNOK

120 with a Nordic bank. Early 2015 a new revolving facility totalling MNOK 120 was secured, and

the overdraft facility was reduced to MNOK 60. This new structure is more in line with Spectrums

current requirements. Management considers that the Company has sufficient liquidity to meet its

ongoing operational obligations. The reported equity balance is MUSD 174.3. This equates to an

equity ratio of 69.3%. Long term interest bearing debt was MUSD 2.1 and consist mainly of

financial leases. The convertible loan that was issued in 2011 to finance the 2D Marine Library

acquisition from CGG is now converted in full.

Cash flow

For the full year the net cash flow from operating activities was MUSD 128.2 (2013: MUSD 78.6).

Working capital increased by MUSD 9.0 (2013: increase of MUSD 12.0).

Net cash outflow from investing activities was MUSD 117.3 in 2014 (2013: MUSD 89.6) of which

MUSD 113.3 was investments in the multi-client library (2013: MUSD 85.2).

Net cash outflow in the year from financing activities was MUSD 4.9 (2013: MUSD outflow 2.1).

This includes distribution of MUSD 5.3 in dividend.

Operational cash flow for the year is positively impacted by increased profit before tax due to

increased MC investments. The increased investments has been financed through cash flow from

operations.

As of 31 December 2014, the Group had cash and cash equivalents of USD 8.4 million.

14.1.3 Financial year 2013

Income statement

Multi-client sales for 2013 totalled MUSD 159.7 (2012: MUSD 137.8). Early sales 2013 came in at

MUSD 46.6 (2012: MUSD 58.7) and Late sales 2013 ended at MUSD 113.0 (2012: MUSD 79.0).

Total revenue for the group of MUSD 162.0 (2012: MUSD 141.1). The revenue share for 2013 was

MUSD 19.0 (2012: MUSD 24.2). The revenue share, as a percentage of gross sales, was lower than

in 2012 due to a change in sales mix with a high portion of sales coming from sales of projects with

no or low revenue sharing.

Operating expenses 2013 were MUSD 38.3, including MUSD 3.8 as cost of stock options (2012:

MUSD 29.3 including MUSD 2.8 as cost of stock options) The increase in operating cost is partly

due to the expansion of the organization, increase in certain tax elements in Brazil, MUSD 1.3, and

a reduction of internal DP revenue (capitalized). Amortizations 2013 came in at 42.6% of net MC

revenue (2012:40.3%).

Spectrum ASA

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Group EBIT 2013 was MUSD 41.6 (2012: MUSD 39.4). EBIT represents 29.1% of reported net

revenue (2012: 33.6%).


The total assets of the group were MUSD 196.3 year end 2013, split between non-current assets of

MUSD 137.1, and current assets of MUSD 59.2. These were funded by equity of MUSD 138.0,

long term liabilities of MUSD 0.7 and current liabilities, including accrued revenue share, of

MUSD 57.5. Of the current liabilities MUSD 0.8 represents a contingent payment to a third party.

A formal impairment review of all multi-client surveys is performed once a year based on 30th

September figures. There were no impairment indicators based on the 30th September 2013

analysis.

The cash and cash equivalents balance decreased by MUSD 0.3 from end Q3 2013 to MUSD 2.7.

The group has an additional liquidity reserve through a drawing facility of MUSD 10.0 with a

Nordic bank. Management considers that the Company has sufficient liquidity to meet its ongoing

operational obligations.

The reported equity balance is MUSD 138.0. Long term interest bearing debt was reduced by

MUSD 13.7 to MUSD 0.8 (end Q3 2013:15.5) and consist mainly of financial leases. 88% of the

convertible loan that was issued to finance the 2D Marine Library acquisition from CGG in 2011 is

now converted. The remaining part MUSD 3.9 is reclassified from long term to current liabilities.

Cash flow

For the full year the net cash flow from operating activities was MUSD 78.5 (2012: MUSD 92.5).

Working capital increased by MUSD 11.2 (2012: decrease of MUSD 8.3).

Net cash outflow from investing activities was MUSD 89.6 in 2013 (2012: MUSD 78.7) of which

MUSD 85.2 was investments in the multi-client library (2012: MUSD 76.2).

Net cash outflow in the year from financing activities was MUSD 2.1 (2012: MUSD outflow 2.8).

This includes distribution of MUSD 4.2 in repayment of capital and dividends.

Operational cash flow for the year is positively impacted by increased profit before tax due to

increased MC investments and negatively impacted by changes in working capital.

The increased investments has been financed through cash flow from operations.

As of 31.12.2013 the Group had cash and cash equivalents of USD 2.7 million.

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128

15. CAPITAL RESOURCES

As of 31 December 2014, the Group had cash and cash equivalents of USD 8.4 million (USD 2.7

million in 2013 and 17.0 million in 2012). As of 31 March 2015, the Group had cash and cash

equivalents of USD 17.7 million.

For the past three financial years, the Group’s primary source of cash has been cash generated from

operating activities. The Company’s long term debt consists of bank facilities in Danske Bank and

long-term financial leasing commitments in the subsidiary Geo Ltd. The Group is currently

primarily financed by equity. Going forward, the optimal finance structure will be evaluated and

other finance alternatives could be utilized.

As of the date of this Prospectus, the Group has no hedging arrangements.

15.1 Working capital statement

In the opinion of the Company, its working capital is sufficient to cover the Company's and the

Group’s present requirements, for a period of at least 12 months from the date of this Prospectus.

15.1.1 Key ratios*


(Unaudited)

01.01-31.03

2015

Year ended

31 December

2014

Year ended

31 December

2013

Year ended

31 December

2012

Working capital ratio* 1.25 1.26 1.03 1.16

Debt/equity ratio 0.01 0.02 0.02 0.07

Solidity 0.72 0.69 0.70 0.57

*Working capital ratio is defined as current assets/liabilities, debt/equity ratio is calculated as total interest bearing debt/total equity and solidity is

defined as total equity/total assets

15.2 Capitalisation and indebtedness

The table below shows the Group’s unaudited capitalisation as of 31 March 2015, and the changes

following the Share Issue and the bank loans.


(Unaudited)

01.01-31.03

2015

Changes following the

Share Issue

Changes following the

Bank Loan

Post the Share Issue

and the Bank Loan

Current liabilities

Guaranteed - - - -

Secured - - 39,781 39,781

Unguaranteed 66,315 - - 66,315

Total current liabilities 66,315 - 39,781 106,096

Non-current debt

Guaranteed - - - -

Secured - - 35,000 35,000

Unguaranteed/unsecured 1,500 - - 1,500

Total non-current liabilities 1,500 - 35,000 36,500

Shareholders’ equity

Share capital 7,534 1,271 - 8,805

Legal reserves 29,838 39,395 - 69,233

Other reserves 134,622 - - 134,622

Total shareholders’ equity 171,994 40,666 - 212,660

Total capitalisation 239,809 40,666 74,781 355,256

The table below shows the Group’s unaudited net indebtedness as of 31 March 2015, and the

changes following the Share Issue and the bank loans.


(Unaudited)

01.01-31.03

2015

Changes

following the

Share Issue

Changes

following the

Bank Loan

Post the Share

Issue and the

Bank Loan

A: Cash 17,670 - - -

B: Cash equivalents - - - -

C: Trading securities -

D: Liquidity (A) + (B) + (C) 17,670 - - 17,670

E: Current financial receivables 65,118 - - 65,117

F: Current bank debt 0 - 39,781 39,781

G: Current portion of non-current debt 1,281 - - 1,281

H: Other current financial debt 65,034 - - 65,034

I: Current financial debt (F) + (G) + (H) 66,315 - 39,781 106,096

J: Net current financial indebtedness (I) – (E) – (D) (16,473) - 39,781 23,308

K: Non-current bank loans - - 35,000 35,000

L: Bonds issued - - - -

M: Other non-current loans 1,500 - - -

N: Non-current financial indebtedness (K) + (L) + (M) 1,500 - 35,000 35,000

O: Net financial indebtedness (J) + (N) (14,973) - 74,781 59,

Source: Company

Except for the Transaction, the Share Issue and the Loan Facilities, there have been no events

subsequent to 31 March 2015 that would in a material way influence the capitalisation and

indebtedness presented in this Prospectus.

15.2.1 Contingent liabilities

The company is not aware of any contingent liabilities that would in a material way influence the

capitalisation and indebtedness presented in this Prospectus.

See Section 5 (“Acquisition of multi-client seismic library from Fugro”) for more information

regarding the acquisition.

15.3 Borrowings

Analysis of current and non-current liabilities by payable date as of 31 March 2015:

Numbers in USD thousands (Unaudited) Due next 12 months Due 1 to 5 years

Interest bearing loans and borrowings 0 0

Finance lease liabilities 1,281 1,081

Tax and other public duties payable 9,829 0

Accounts payable 19,413 0

Total payables 30,523 1,081

Deferred income 608 0

Accrued expenses 3,165 0

Provision 11,012 0

Deferred tax liability 0 390

Revenue share 19,490 0

Other liabilities 1,517 29

Total other liabilities 35,792 419

Total liabilities 66,315 1,500

Source: Company

15.3.1 Mortgages and guarantees

In connection with the Transaction the Company has secured a new term loan facility with Danske

Bank. Total available amount under the facility is USD 50 million. Final maturity date for the

facility is 15 months from the date on which the utilisation is made (“Closing Date”).

In addition, the Company has restructured the NOK 60.0 million borrowing base facility and the

NOK 120.0 million revolving credit facility to a NOK 195.0 million revolving credit facility. In

total the Company has available bank facilities of approximately USD 75.0 million.

The table below shows the debt repayment schedule for the debt obtained in relation with the

Transaction, expressed in USD.

Due within Repayment Interest Total

3 months - - -

6 months 15,000,000 821,100 15,821,100

12 months 15,000,000 574,770 15,574,770

12-24 months* 44,780,785 2,042,604 46,823,389

*Numbers will change due to currency effects related to the NOK loan

Source: Company

The debt is secured in the Company’s multi client library. The Company plans to repay the debt

through cash from operations.

15.4 Investments

15.4.1 Historical investments

1 January 2015 – 31 March 2015

Investments in the period amount to USD 13.4 million, off which USD 13.2 million relate to

investments in the multi-client library:

The Company and CGG finished the acquisition of the 11,330 km² MC3D survey in Foz do

Amazonas Basin in Brazil in Q3 2014. The high-end BroadSeis™ data set will be processed in

CGG's Rio de Janeiro subsurface imaging center.

The Company commenced a phase 2 of the Multi-Client 2D seismic survey offshore Brazil in

the Sergipe and Alagoas basins along the Eastern Margin of Brazil in Q4. The phase 1 was a 10

000 km survey, and the phase 2 is an approximately 6,000 kilometer infill to provide 5 x 5 km

grid spacing over a subset of the area covered in phase 1.

The Company commenced a 4,200 km Multi-Client 2D seismic survey in the South Carnarvon

Basin and North Perth Basin, offshore Western Australia in Q1 2015. The new acquisition

program has been designed to complement the newly acquired Geoscience Australia research

survey in the Houtman Basin, and also ties the wells DSDP 0263, Herdsman 1 and Pendock 1.

The acquired data will be processed using broadband processing technologies.

The Company commenced in February 2015 a 12,000 kilometer Multi-Client 2D seismic survey

offshore the Pelotas Basin of Brazil. The new acquisition program will infill both the

Company’s new 7,500 kilometer survey acquired in 2014 and 12,000 kilometers of data

reprocessed in 2014, covering open acreage in the Pelotas basin and providing industry with

over 31,000 kilometers of new data over the area.

All the surveys on-going during the quarter were supported by industry funding.

2014

Total investments in 2014 amount to USD 117.1 million. The multi-client investments for the year

ended at USD 113.3 million.

Throughout 2014 new surveys were acquired in line with the company’s focus on organic growth.

These new surveys represent over 30,000 kilometres of 2D seismic data located in various

underexplored basins around the world, and an additional 11,330 square kilometres of 3D seismic

data in Brazil.

The completion of the acquisition of the Foz Amazonas MC3D survey, performed in a joint project

with CGG, alone contributed to 44 per cent of the MC investment in 2014. The most material MC

investments in 2014 are outlined in Section 9.7 (“Sale of multi-client seismic data”) divided by

geography.

The USD 3.9 million in investments in tangible assets relates to software and office equipment.

2013

Throughout 2014, the Company invested in new surveys representing over 50,000 kilometers of 2D

seismic data located in various underexplored basins around the world, and an additional 2,200

square kilometers of 3D seismic data in Lebanon. Investments in multi-client for the year equalled

USD 85.2 million.

Africa:

Building on the 2012 surveys in the Namibian Orange basin, a new survey was completed

during the first quarter of 2013 that extended coverage over the South African part of the

Orange basin. On the eastern coast of South Africa The Company participated in a BroadSeis™

2D Multi-Client survey carried out in cooperation with CGG. The first phase of the survey was

completed before the close of the season in June.

A survey was completed in Eastern Indonesia, where 3,500 kilometers of long offset data was

acquired spanning a highly underexplored region and covering various basins. This survey was

carried out in partnership with Nordic Geo Services.

Mediterranean:

Based on the findings of the 3D data that were acquired in 2012, the Company acquired a

second Multi-Client 3D survey in the Levantine basin offshore Lebanon. This survey extended

the existing 3D coverage by 2,300 square kilometres.

In July the Company signed a contract with the Ministry of Economy in Croatia for the rights to

acquire Multi-Client 2D seismic data offshore Croatia. The Company commenced the

acquisition of approximately 14,700 kilometers of long offset seismic data in the first half of

September. This survey covers both the northern and southern parts of the Croatian Adriatic Sea

and connects with The Company’s reprocessed seismic data covering the Italian Adriatic. The

acquisition was successfully completed in January 2014 and processed products available April

2014.

Northwest Europe

During the summer the Company completed acquisition of the first phase of a new 2D Multi-

Client seismic survey in the Hoop area of the Barents Sea. This survey included a large number

of blocks available for the 23rd licensing round in 2014. It focused on the Triassic plays with

lines tying existing and planned wells. The phase 1 program comprised 2,150 kilometers MC

seismic data.

Following the Hoop survey Spectrum commenced acquisition of a 2D Multi-Client survey in

the southern Gas Basin, UK. The survey area covered more than 15 blocks which is

predominately acreage available for the 28th UK licensing round which closes on 25 April

2014.

Late August, The Company reported mobilization for the acquisition of an airborne

gravity/magnetic/seep multi-client survey in the Barents Sea South East. The survey is to cover

the entire newly-opened area with approximately 29,280 kilometers to be acquired. This survey

had to be halted due to weather conditions.

Latin America:

In the beginning of February The Company commenced acquisition of a 7,500 kilometer 2D

Multi-Client seismic survey in the Pelotas basin offshore Brazil. This basin is a frontier area

with limited seismic coverage. The survey ties in to the extensive 2D seismic coverage in

neighbouring Uruguay that The Company markets to the industry.

The Company performed two additional 2D Multi-Client surveys in Uruguay. The first survey is

mainly covering block 6 whereas the second survey is over open acreage in deep water

Uruguay.

In March 2013 The Company and EMGS entered into a cooperation agreement in the Foz do

Amazonas basin in Brazil. The Company already had over 21,000 kilometers of MC2D seismic

data coverage of this highly prospective area of the equatorial margin. EMGS was given access

to this data for planning and improved imaging purposes and started the acquisition of MC3D

resistivity data in a regional, Multi-Client program covering approximately 8,000 square

kilometers of the Foz do Amazonas basin.

In December 2013 The Company and CGG jointly announced the launch of a large, high-end

BroadSeis™ 3D Multi-Client survey program offshore Brazil that focuses on a large proportion

of open acreage in the very promising Foz do Amazonas basin. The two companies were

working as equal partners on this project which received high early sales from a number of

major industry players. Covering 11,330 square kilometers, the Foz do Amazonas survey is

acquired by the Oceanic Endeavour deploying Sercel’s next-generation Sentinel RD solid

streamer. The survey commenced in January 2014 and the high-end BroadSeis™ dataset were

processed in CGG’s Rio de Janeiro subsurface imaging centre.

Acquisitions:

Carmot Seismic AS and Carmot Processing AS were acquired by The Company at 04 March 2013

effective from 01 January 2013. Considerations of cash for the acquisition of the companies were

USD 3.0m for Carmot Seismic AS and USD 0.8m for Carmot Processing AS including stay-on

bonus for key personnel deemed part of the consideration. The Company recorded goodwill related

to the acquisitions of Carmot Seismic AS and Carmot Processing AS of USD 0.7 million and USD

0.218 million 700 USD, respectively.

2012

Investments in multi-client of USD 76.2 million. The major part of the 2012 multi-client

investments were made in Brazil, South West Africa and in the Lebanese territorial waters.

Brazil:

The Company started with the acquisition of data over the Barreirinhas basin in November 2011

ahead of the anticipated 11th license round. At the start of 2012, a second vessel (Hawk

Explorer) was mobilized to commence a seismic survey over the neighboring Ceara basin. With

Brazil requiring more time to announce the round, Spectrum continued to apply for permits over

the Amazonas and Potiguar basins, areas that were likely to be included in the licensing round.

This strategy has resulted in a continuous campaign with coverage over all the relevant parts of

the Northern Equatorial Margin during 2012.

Realizing that further license rounds are imminent, Spectrum acquired a survey over the Santos

Campos basin in cooperation with Dolphin Geophysical. This area is included in the pre-salt

licensing round that is expected to take place near the end of 2013. A total of 13,650 km of

long-offset data has been acquired and processing is underway to provide a modern depth

migrated product ahead of the round.

South-West Africa

At the start of 2012 the Company had just commenced its Namibia survey over the Orange

Basin, in partnership with CGG. Recognizing further opportunities in Namibia, the vessel

continued to acquire exclusively for Spectrum with surveys over the Luderitz and the South

Walvis Bay basins. In total 16,000 km of new data has been acquired and processed in this

underexplored region. In addition, Spectrum is reprocessing parts of the 25,000 km vintage data

in Namibia to further enhance understanding of the area.

In December 2012 the Company commenced the acquisition of data over the Orange basin in

South Africa. This survey has a size of 10,000 km and ties into the Namibia Orange basin

survey to the North.

Lebanon

In August the Company commenced its first 3D Multi-Client survey in the south west EEZ

(Exclusive Economic Zone) offshore Lebanon with a 12-streamer long-offset configuration. The

survey was carried out under contract to the Ministry of Energy and Water (MEW) of Lebanon

and in cooperation with Dolphin Geophysical. A total of 2,320 sq.km. was acquired in an area

that is ranked as possessing “high prospectivity” by Beicip Franlab, following their study

conducted on behalf of the MEW in Lebanon.

A second phase survey of 750 sq.km. was carried out in November in cooperation with Fugro,

resulting in a continuous and high quality dataset of 3,070 sqkm that is available to industry for

the 1st licensing round offshore Lebanon, announced to open on 2 May 2013.

Indonesia

Two 2D Multi-Client surveys were completed in Indonesia during the year, both in cooperation

with CGG. The first survey consists of 1,325 km in the Savu Sea area whereas the second

survey consists of 3,340 km over the Timor trough in West Timor using CGG's BroadSeisTM

technology. The latter survey is over an area with a complex geology, making the combination

of BroadSeisTM acquisition and pre-stack depth migration (PSDM) the optimal technology

solution for the area.

The tables below summarises the Group’s historical investments for the period 2012 – 31 March

2015.

Amounts in USD thousands (unaudited)

01.01-31.03

Year ended

31 December

Year ended

31 December

Year ended

31 December

2015 2014 2013 2012

Acquisition of subsidiaries, cash acquired - - - -

Acquisition of seismic assets - - - -

Investment in multi-client libraries (13,164) (113,280) (85,200) (76,162)

Investments in goodwill - - (918) -

Investments in non-current tangible assets (277) (3,866) (3,420) (2,566)

Payments received from sale of tangible assets 4,507 (159) (34) -

Total investments (8,934) (117,305) (89,572) (78,728)

Goodwill in connection with the investments mentioned above is as follows:

Amounts in USD thousands (unaudited) Original balance recognised Balance remaining 31 March 2015

From transaction with GTB in 2008 13,534 9,374

From acquisition of ASB in 2010 2,189 2,189

From CGG acquisition in 2013 0 0

Acquisition of Carmot Seismic AS in 2013 700 700

Acquisition of Carmot Processing AS in 2013 218 218

Total 16,641 12,481

15.4.2 Investments in progress

On 1 June 2015, Spectrum entered into a transaction agreement (the “Transaction Agreement”)

with Fugro Norway AS, Fugro Holdings (Australia) Pty Ltd, Fugro Finance AG and Fugro Multi

Client Services Inc ( together referred to as “Fugro”), whereby the Company has agreed to acquire

all outstanding shares in Fugro Multi Client Services AS, Fugro Multi Client Services Pty Ltd and

Fugro Data Services GmbH holding the Fugro multi-client data library, including certain multi-

client data surveys owned by Fugro Mulit Client Services Inc in the United States (the

“Transaction”). The purchase price for the Library is USD 115,000,000 on a cash- and debt-free

basis, to be settled in cash at completion of the Transaction on 30 June 2015.

The Group has two on-going multi-client investments as of the date of this Prospectus:

A joint project with Schlumberger entered into on May 19th, to jointly acquire and process

Spectrum's offshore Mexico Campeche-Yucatan 2D regional Multi-Client program. The

cooperation agreement includes more than 44,000 km of regional 2D seismic data in the

new frontier Campeche/Yucatan area. Of the 44,000 km, the first phase, which is presently

ongoing include 12,000 km.

Rocket in Australia - about 2,000 km remaining. The project is starting up again in the

summer after a break.

All contracts with vessel providers is written as call-off agreements for the complete project, but

they can be terminated with 4 weeks’ notice. Commitments regarding such arrangements are hence

not material for the business as of the date of this Prospectus.

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In addition the Company has some reprocessing projects in progress. These projects are being

processed in-house within the Group’s data processing centres. Commitments regarding such

arrangements are hence not material for the business as of the date of this Prospectus.

All on-going project are funded through cash flow from the operation.

There are currently no other firm investment commitments.

Other than liabilities related to the Transaction as set forth in Section 5 (“Acquisition of the multi-

client seismic library from Furgo”) and liabilities related to the Private Placement as set forth in

section 6 (“The completed private placement”), the Company does not expect that current

committed investments is expected to materially impact the level of liabilities as set forth in the

balance sheet as of 31 March 2015.

15.4.3 Future investments

The Company has planned investments totalling approximately 3,000 km the next month. Going forward,

The Company will invest in new multi-client projects and through these investments increase the size of the

Group’s seismic library. The investments will primarily be financed through “early sales” and ordinary cash

flow generated from the operation. Early sales is funding provided by the customers in the early stage of the

multi-client project. Early sales levels could typically be in the range of 30-100% of estimated project cost.

The Company maintains sufficient liquidity in its regular bank accounts at all times to cover

expected payments relating to operational activities and investment activities in the short term. In

addition, short term and long term forecasts are prepared on a regular basis to plan the company’s

liquidity requirements. In addition the Company has various means available to it to handle

increased future capital requirements such as raising additional funds through debt, portfolio

adjustments or equity issues. In the opinion of the Company, it has access to funding sufficient to

cover future the Company's and the Group’s present requirements.

15.5 Restrictions on the use of capital

There are no restrictions on the use of capital for the Group.

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137

16. SHARES AND SHARE CAPITAL

16.1 Share Capital

The Company’s share capital is currently NOK 53,326,625 divided on 53,326,625 each with a par

value of NOK 1. Following the Subsequent Offering the Company will have a share capital of NOK

54,826,625 divided into 54,826,625 Shares each with a par value of NOK 1 (assuming full

subscription).

All shares in the company are issued pursuant to the Norwegian Public Limited Companies Act

(Norwegian: “Allmennaksjeloven”).

All Shares of the Company are of the same class and are equal in all respects, including the voting

rights. Each Share carries one vote. The Shares are authorised and fully paid. The rights connected

to the Shares are governed by the Norwegian Public Limited Companies Act.

The shares are registered with the VPS with ISIN NO0010429145, and the company’s registrar is

Danske Bank – Transaction Services, Søndre Gate 13-15, N-7466 Trondheim.

16.2 Authorisation to acquire own Shares

On 22 May 2015 the AGM of the Company authorised the Board to increase purchase up to

4,300,000 own shares with a total nominal value of NOK 4,300,000. The authorisation for the

Board to increase the Company’s share capital reads as follows:

“1.Pursuant to the Public Limited Companies act section 9-4, the Board of Directors is authorized

to purchase up to 4,300,000 own shares with a total nominal value of NOK 4,300,000

corresponding to approximately 10% of the Company’s share capital.

2. The amount paid per share shall be minimum NOK 1 and maximum NOK 150.

3. The Board of Directors is free to decide how the acquisition and disposal of shares takes place,

but shall ensure that general principles of equal treatment of shareholders shall be complied with.

Disposal of own shares acquired according to this authorization, shall primarily take place as part

of fulfillment of the Company’s obligation under option programs for senior executives.

4. This authorization will be effective from the time it is registered in the Norwegian Register of

Business Enterprises. The authorization is valid until the day of the annual general meeting in

2016, expiring at latest on 30 June 2016.

5.The authorization replaces the corresponding authorization granted at the annual general

meeting of the Company for 2014.”

As of the date of this Prospectus, no such purchases have been made, and the Company does not

hold any own Shares.

16.3 Authorisations to increase the Share Capital

On 23 June 2015 the EGM granted the Board the following two authorisations to increase the share

capital in the Company:

Authorisation in relation to the Subsequent Offering:

The EGM authorised the Board to increase the Company’s share capital with up to NOK 1,500,000

in the Subsequent Offering.

The authorisation for the Board to increase the Company’s share capital reads as follows:

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138

“ 1. The Board of Directors is authorized to increase the Company’s share capital with up to NOK

1,500,000 by issuing up to 1,500,000 new shares, each with a nominal value of NOK 1.00.

2. The power of attorney shall be utilized to issue shares in a subsequent repair offering in

connection with the Private Placement resoled by the general meeting under item 4 above.

3. Existing shareholders' preferential rights pursuant to Section 10-4, cf. Section 10-5, of the

Norwegian Public Limited Liability Companies Act may be waived.

4. The Board of Directors will set out the further subscription terms.

5. The power of attorney only allows a capital increase against payment in cash. The power of

attorney does not apply to mergers, cf. section 13-5 of the Norwegian Public Limited Liability

Companies Act.

6. The power of attorney expires at the annual general meeting in 2016, but in any event not later

than 30 June 2016.

7. The Board of Directors is authorized to amend the Company’s Articles of Association to reflect

the new number of shares and share capital upon use of the power of attorney.

8. The resolution is conditional upon the resolution proposed in item 4 above, and the power of

attorney can at the earliest be registered with the Register of Business Enterprises together with the

compilation of share capital increase as per item 4 above.”

Authorisation to increase the share capital – general purposes:

The EGM authorised the Board to increase the Company’s share capital with up to NOK 5,332,662

through one or more increases of the share capital. The authorisation and the authorisation granted

in the AGM on 22 May 2015 described in Section 16.4 (“Authorisation to issue convertible loan”)

are collectively limited, and the total use of such authorisation may not exceed 10% of the

Company’s share capital at the time of the registration.

The authorisation for the Board to increase the Company’s share capital reads as follows:

“1. The Board of Directors is granted a power of attorney pursuant to the Public Limited Liability

Companies act section 10-14 to increase the share capital in the Company with up to NOK

5,332,662 through one or more increases in the share capital, equal to approximately 10 % of the

total number of shares in the Company post the private placement described in section 4.

Consequently, the share capital can be increased by NOK 5,332,662. This power of attorney and

the power of attorney resolved in the Annual General Meeting on 22 May 2015 under item 13

(“Power of attorney to the Board to increase the share capital in the Company – issuance of

convertible loan”) are collectively limited, and the total use of such powers of attorneys may not

exceed 10% of the Company’s share capital at the time of the registration. The power of attorney

may be utilized in connection with issuance of shares as complete or partial settlement for or

financing of mergers or in connection with acquisition of companies, businesses or assets. The

power of attorney may also be used for the purpose of strengthening the financial ability of the

Company to accomplish such transactions, and for the purpose of investments in Multi Client

seismic studies.

2. When exercising the power of attorney, the Board of Directors may decide that the share capital

increase shall be settled by contribution in kind, by way of set-off, or that shares may be subscribed

for on other particular terms, cf. Public Limited Liability Companies act section 10-2.

3. The power of attorney may also be used in connection with mergers.

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139

4. Further, the Board of Directors may, when exercising the power of attorney, waive the

shareholders’ preferential rights pursuant to the Public Limited Liability Companies act § 10-5.

5. The Board of Directors is granted the power to determine the subscription rate and the

conditions for subscription, and to amend the articles of association section 4 according to the

increase in the share capital.

6. The Power of Attorney is valid until the annual General Meeting in 2016, expiring at latest on 30

June 2016.

7. The Power of Attorney replaces the corresponding power of attorney granted at the annual

general meeting on 22 May 2015 under item 11 (“Power of Attorney to the Board of Directors to

increase the share capital in the Company – general”).”

16.4 Authorisation to issue the Convertible Loan

On 22 May 2015 the AGM of the Company authorised the Board to issue loans in one or several

rounds with a maximum loan amount of NOK 400 million. The authorisation for the Board to issue

convertible loans reads as follows:

“1. The Board of Directors is granted a power of attorney pursuant to the Public Limited Liability

Companies act section 11-8 to issue convertible loans which will give lender right to have shares

issued against payment of money or by set-off against the receivable.

2. Loans may be issued in one or several rounds with a maximum loan amount of NOK 400 million.

3. The share capital of the company can in total be increased by up to NOK 4,300,000. This power

of attorney and the general power of attorney to increase the share capital (as set out in item share

increase) are collectively limited, and the total use of such power of attorneys may not exceed 10%

of the Company’s share capital at the time of the registration

4. The shareholders pre-emptive rights pursuant to the Public Limited Liability Companies Act

section 11-4 may be waived, ref the Public Limited Liability Companies Act section 10-5.

5. The Board of Directors is granted the power to amend the articles of association section 4 in the

event of conversion according to the power of attorney.

6. The Power of Attorney is valid until the Annual General Meeting in 2016, expiring at latest on 30

June 2016.

7. This Power of Attorney replaces the corresponding Power of Attorney granted at the Annual

General Meeting for 2014.

16.5 Warrants, Options and Convertible Securities

On 22 May 2015 the AGM of the Company authorised the Board to increase the share capital, in

connection with the share option scheme, with up to NOK 4,000,000 through one or more increases

in the share capital. The authorisation for the Board to increase the Company’s share capital reads

as follows:

1.The Board of Directors is granted a power of attorney pursuant to the Public Limited Liability

Companies act section 10-14 to increase the share capital in the Company with up to NOK

4,000,000 through one or more increases in the share capital. The power of attorney may be

utilised in connection with the share option scheme of the Company.

2. The power of attorney may not be used in connection with increase in the share capital with

settlement by contribution in kind, by way of set-off, or with conditions that shares may be

subscribed for on other particular terms, cf. Public Limited Liability Companies act section 10-2.

4. The power of attorney may not be used in connection with mergers.

5. The Board of Directors may, when exercising the power of attorney, waive the shareholders’

preferential rights pursuant to the Public Limited Liability Companies act § 10-5.

6. The Board of Directors is granted the power to determine the subscription rate and the

conditions for subscription, and to amend the articles of association section 4 according to the

increase in the share capital

7. The Power of Attorney is valid until the annual general meeting in 2016, expiring at the latest on

30 June 2016.

The following table illustrates the movements in share options the last three years:

2012 2013 2014

No WAEP, NOK No WAEP, NOK No WAEP, NOK

Outstanding at 1 January 4,850,000 1,027 5,546,500 1,508 4,807,750 1,765

Granted during the year 1,515,000 2,863 452,500 3,776 2,235,000 3,682

Forfeited during the year (235,000) 1,189 (106,500) 2,791 (299,024) 3,138

Exercised during the year (583,500) 980 (1,084,750) 1,109 (59,993) 1,678

Expired during the year - -

(2,500) 2,713

Outstanding at 31 December 5,546,500 1,508 4,807,750 1,765 6,681,233 2,326

16.6 Share Capital Development

The Company was incorporated on 25 March 2008 with a share capital of NOK 1,000,000 divided

into 1,000,000 shares each with a par value of NOK 1.00. The table below summarises the share

capital changes since incorporation in March 2008.

Year Type of change in share

capital

Change in issued

share capital

(NOK)

Change in

number of shares

Issue price

(NOK)

Par value

(NOK)

Total issued share

capital (NOK)

2008 Incorporation 1,000,000 1,000,000 n.a. 1.00 1,000,000

2008 Reduction of share capital* (946,315) (946,315) n.a. 1.00 53,685

2008 Share issue 8,052,767 8,052,767 18.63 1.00 8,106,452

2009 Share issue 10,000,000 10,000,000 5.00 1.00 18,106,452

2009 Share issue 982,027 982,017 5.00 1.00 19,088,479

2010 Share issue 6,000,000 6,000,000 13.50 1.00 25,088,479

2010 Share issue 1,500,000 1,500,000 13.50 1.00 26,588,479

2011 Shares issue 8,862,826 8,862,826 14.00 1.00 35,451,305

2011 Shares issue 1,977,355 1,977,355 14.00 1.00 37,428,660

2012 Share issue 5,000 5,000 14.00 1.00 37,433,660

2012 Share issue 595,356 595,356 14.00 1.00 38,029,016

2012 Share issue** 583,500 583,500 9.14 - 12.30 1.00 38,612,516

2012 Shares issue 392,857 392,857 14.00 1.00 39,005,373

2012 Shares issue 115,280 115,280 21.00 1.00 39,120,653

2012 Shares issue 2,000 2,000 14.00 1.00 39,122,653

2013 Shares issue*** 1,084,750 1,084,750 8.99 – 27.44 1.00 40,207,403

2013 Shares issue **** 1,901,632 1,901,632 13.62 1.00 42,109,035

2013 Shares issue 734 734 13.62 1.00 42,109,769

2014 Shares issue 3,671 3,671 13.62 1.00 42,113,440

2014 Shares issue 146,844 146,844 13.62 1.00 42,260,284

2014 Shares issue 36 36 13.89 1.00 42,260,320

2014 Shares issue 46,875 46,875 13.71 1.00 42,307,195

2014 Shares issue 522 522 13.41 1.00 42,307,717

2014 Shares issue 531,310 531,310 13.40 1.00 42,839,027

2014 Shares issue 21,098 21,098 13.41 1.00 42,860,125

2015 Shares issue***** 466,500 466,500 11.50 - 13.36 1.00 43,326,625

2015 Share issue 10,000,000 10,000,000 32 1 53,326,625

*The share reduction was done at par value prior to the IPO of the Company in 2008. The capital

reduction amount was distributed to GGS, the Company’s sole shareholder at that time.

** The Board of Directors has in board proceedings on 2 May 2012 approved a share issue of

583,500 shares, each with a face value of NOK 1.0 at the option price of NOK 12.01 per share for

132,000 of the new shares, NOK 12.30 for 1,500 of the new shares and NOK 9.14 for 450,000 of

the new shares. As a result, the share capital will be increased by NOK 583,500 from NOK

38,023,016 to NOK 38,612,516. The number of shares after the issue is 38,612,516.

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***Exercise of share options: Share issue of 1,084,750 shares, each with a face value of NOK 1.0

per share at the option price of NOK 8.99 for 600,000 of the new shares, NOK 11.81 per share for

404,500 of the new shares, NOK 23.59 per share for 45,000 of the new shares, NOK 23.72 for

25,000 of the new shares, NOK 17.35 for 4,500 of the new shares, NOK 27.44 for 3,750 of the new

shares and NOK 12.10 for 2,000 of the new shares. As a result, the share capital will be increased

by NOK 1,084,750 from NOK 39,122,653 to NOK 40,207,403 .

****Ferncliff DAI 1 AS, a company controlled by Øystein Stray Spetalen, (former) board member

of Spectrum, has on 27 September 2013 converted NOK 15,400,000 bond to 1,130,700 shares. The

bonds are converted to shares at NOK 13.6198 per share. Gross Management AS, a company

associated to Glen Ole Rødland, board member of Spectrum, has on 27 September 2013 converted

NOK 10,500,00 bond to 770 932 shares. The bonds are converted to shares at NOK 13.6198 per

share.

*****The Board of Directors has in board proceedings on 2 March 2015 approved a share issue of

466,500 shares, each with a face value of NOK 1.0 per share at the option price of NOK 11.50 for

462,000 of the new shares, and NOK 13.36 for 4,500 of the new shares. As a result, the share

capital will be increased by NOK 466,500 from NOK 42,860,125 to NOK 43,326,625. The number

of shares after the issue is 43,326,625.

16.7 Shareholder Structure

As registered in VPS on 8 June 2015 , the Company had a total of 384 shareholders. A summary of

the Company’s 20 largest shareholders as of 8 June 2015 is set out below. Please note that this

overview does not include the New Shares from the Share Issue. Please see Section 6.7

(“Allocation, Settlement and Delivery of the New Shares”) for an overview of shares allocated to

major shareholders in the Private Placement.

Name of shareholder Nr. of shares Percentage (%)

(Before Private Placement)

1 ALTOR INVEST 1 AS 6,500,000 15.00 %

2 ALTOR INVEST 2 AS 6,500,000 15.00 %

3 SPENCER TRADING INC 4,597,822 10.61 %

4 CORONA MARITIME HOLDING AS 2,059,106 4.75 %

5 FOLKETRYGDFONDET 1,988,042 4.59 %

7 J.P. MORGAN CHASE BANK N.A. LONDON 1,345,000 3.10 %

8 SKANDINAVISKA ENSKILDA BANKEN AB 1,213,753 2.80 %

9 EUROCLEAR BANK S.A./N.V. ('BA') 768,365 1.77 %

10 SWEDBANK GENERATOR 650,000 1.50 %

11 UBS AG, LONDON BRANCH 650,000 1.50 %

12 FIDELITY SELECT PORTFOLIOS: ENERGY 606,335 1.40 %

13 SPESIALF KLP ALFA GLOBAL ENERGI 600,000 1.38 %

14 PERSHING LLC 560,779 1.29 %

15 UBS (LUXEMBOURG) S.A. 536,760 1.24 %

16 Haakon Morten Sæter 535,347 1.24 %

17 SKANDINAVISKA ENSKILDA BANKEN AB 521,344 1.20 %

18 INVESCO PERP EUR SMALL COMP FD 505,052 1.17 %

19 DEUTSCHE BANK AG 491,000 1.13 %

20 STATE STREET BANK & TRUST COMPANY 465,482 1.07 %

Top 20 32,658,495 75.38 %

Other 10,668,130 24.62 %

Total 43,326,625 100.00 %

The total number of outstanding Shares in Spectrum is 53,326,625.

Shareholders owning 5 per cent or more of the Company have an interest in the Company’s share

capital which is notifiable to the market according to the Norwegian Securities Trading Act. The

following shareholders own more than 5 per cent of the issued share capital as of 8 June: Altor

Invest 1 AS (15.00%), Altor Invest 2 AS (15.00%) and Spencer Trading Inc (10.61%).

As far as the Company is aware of, there is no other natural or legal person other than the above

mentioned, which directly or indirectly has a shareholding in the Company above 5 per cent which

is notifiable under Norwegian Law.

With the exception of the Subscription and Underwriting Agreement described in Section 5.3 (“The

Subscription and Underwriting Agreements”), the Company has no information of the existence of

shareholders’ agreements, veto rights or other means of influence over the Company than the share

ownership. Since all Shares have the same rights, it is the Company’s view, that the control over the

Company is reflected in the share ownership as described above. The Company has not introduced

any specific measures to ensure that such control is not abused. Thus, the available protection is

vested in the minority protection provisions provided for in the Norwegian Public Limited

Companies Act, the Securities Trading Act, the Continuing Obligations for Oslo Børs and Oslo

Axess and other relevant regulation.

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17. LEGAL MATTERS

17.1 Material contracts outside the ordinary course of business

The Group has entered into the following material contracts outside the ordinary course of business

the two years preceding publication of this Prospectus.

On 1 June 2015, the Company entered into the Transaction Agreement with Fugro in

connection with the Transaction, as further described in Section 5 (“Acquisition of multi-

client seismic library from Fugro”).

On 19 May 2015, the Company entered into a cooperation agreement with Schlumberger, to

jointly acquire and process the Spectrum’s offshore Mexico Campeche-Yucatan 2D regional

multi-client program, as further described in Section 9.13 (“Significant changes in the

Group’s financial or trading position since 31 December 2014”).

On 24 April 2015, the Company entered into cooperation agreement with Schlumberger, to

acquire 50% ownership in Spectrum's Pelotas multi-client program. The cooperation

agreement includes more than 30,000 km of regional 2D seismic data in the new frontier

Pelotas Basin, offshore Brazil, as further described in Section 9.13 (“Significant changes in

the Group’s financial or trading position since 31 December 2014”).

17.2 Related party transactions

During the period covered by the historical financial information included in this Prospectus, and up

to the date of this Prospectus, the Group has entered into the related party transactions described

below.

The Company is of the opinion that all of the below mentioned transactions were entered into in the

ordinary course of business of the Company and at commercial market rates and terms.

2014 – and 2015 YTD

Unconditional guarantee - Spectrum Geo Pty Ltd and Spectrum Geo Pte Ltd

On 31 December 2014, the Company issued an unconditional guarantee over the debt of its

subsidiaries Spectrum Geo Pty Ltd and Spectrum Geo Pte Ltd. This guarantee confirms the

payment of all intercompany account balances, is subordinated to other creditors and is secured by

the assets of the subsidiaries Spectrum Geo Pty Ltd and Spectrum Geo Pte Ltd.

2013

Unconditional guarantee - Spectrum ASB Pty Ltd

On 31 December 2013, the Company issued an unconditional guarantee over the debts of its

subsidiary Spectrum ASB Pty Ltd. The guarantee is secured by the assets of Spectrum ASB Pty

Ltd.

2012

Unconditional guarantee - Spectrum ASB Pty Ltd

On 31 December 2012, the Company issued an unconditional guarantee over the debts of its

subsidiary Spectrum ASB Pty Ltd. The guarantee is secured by the assets of Spectrum ASB Pty

Ltd.

As for transactions and balances with subsidiaries and joint ventures; please see the table below:

Transactions and balances with subsidiaries and joint ventures 2014

Spectrum ASA 2014

(Numbers in USD

thousands)

Sales to

subsidiaries

Costs from

subsidiaries

Interest charges

to subsidiaries

Interest charges

from subsidiaries

Long-term

amounts owed by

(owed to)

subsidiaries

Short-term

amounts owed by

(owed to)

subsidiaries

Spectrum Geo Ltd 1,313 (3,119) 186 - - 10152)*

Spectrum Geo Inc 173 (2,589) 98 - - 9,951

Spectrum Geo Pty Ltd 5 (26) 101 - - 5,158

Spectrum Geo Pte Ltd 6 (601) 60 - - 1,732

Spectrum Geo do Brasil 3,093 - 941 - 18,200 1,641

Carmot Seismic AS - - - - - (450)

Carmot Processing AS - - - - - (4)

Capitalised group expenses - 1,782 - - - -

Total 4,591 (4,553) 1,385 - 18,200 7,876


Spectrum ASA 2013

(Numbers in USD

thousands)

Sales to

subsidiaries

Costs from

subsidiaries

Interest charges

to subsidiaries

Interest charges

from subsidiaries

Long-term

amounts owed by

(owed to)

subsidiaries

Short-term

amounts owed by

(owed to)

subsidiaries

Spectrum Geo Ltd 2,260 (3,536) 122 - - 10,124

Spectrum Geo Inc 239 (2,148) 27 (30) - 1,394

Spectrum Geo Pty Ltd 20 (236) 72 - - 3,657

Spectrum Geo Pte Ltd 71 (284) 69 - - 2,503

Spectrum Geo do Brasil 2,221 - - (57) - -

Carmot Seismic AS - (2,500) - - - (3,011)

Carmot Processing AS - (173) - - - (180)

Capitalised group expenses - 5,169 - - - -

Total 4,810 (3,708) 289 (87) - 14,487


Spectrum ASA 2012

(Numbers in USD thousands) Sales to subsidiaries

Costs from

subsidiaries

Interest charges

to subsidiaries

Interest charges

from subsidiaries

Amounts owed

by (owed to)

subsidiaries

Spectrum Geo Ltd 1,070 (2,870) 32 (11) 2,295

Spectrum Geo Inc 108 (4,626) 65 - 3,117

Spectrum Geo Pty Ltd 8 - 39 - 2,147

Spectrum Geo Pte Ltd 76 (343) 76 (4) 1,362

Spectrum Geo do Brasil - - 997 - 11,528

Capitalised group expenses - 2,364 - - -

Total 1,262 (5,475) 1,208 (14) 20,450

Spectrum Geopex

(Numbers in USD thousands) 2012 2013 2014

Sales to 180 122 78

Sales from 759 420 2,223

Amounts owed 145 10 15

* Joint intra-group Cash Pool facility. An intra-group claim arises between the owner of the Cash

Pool, Spectrum ASA, and the company participating in the Cash Pool, Spectrum Ltd. The net Cash

Pool balance (positive) is included in ASA`s cash flow.

In Spectrum ASA costs from subsidiaries are mainly data processing done in Spectrum Geo Ltd and

Spectrum Geo Inc for the multi-client library owned by Spectrum ASA, and commissions for sales

of multi-client data from the library owned by Spectrum ASA. Sales to subsidiaries are mainly

commissions for sales of multi-client data from libraries owned by subsidiaries made by Spectrum

ASA, and management fees charged for services provided.

17.3 Legal and arbitration proceedings

The Company is not aware of any governmental, legal or arbitration proceedings (including any

such proceedings which are pending or threatened of which the Company is aware), during the

previous 12 months which may have, or have had in the recent past, significant effects on the

Company’s and/or the Group's financial position or profitability.

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18. SHAREHOLDER MATTERS AND NORWEGIAN SECURITIES LAW

The following is a summary of certain information relating to the Shares and certain shareholder

matters, including the Articles of Association and a summary of applicable Norwegian law in effect

as at the date of this Prospectus, including the Norwegian Securities Act and the Norwegian Public

Limited Liability Companies Act. The summary does not purport to be complete and is qualified in

its entirety by the Company’s Articles of Association and Norwegian law.

Under Norwegian law, all shares are to provide equal rights in a company. However, Norwegian

law permits a company’s articles of association to provide for different types of shares (e.g., several

classes of shares). In such case, a company’s articles of association must specify the different rights,

preferences and privileges of the classes of shares and the total par value of each class of shares.

The Company’s Articles of Association provide for a single class of shares with equal rights.

There are no restrictions affecting the right of Norwegian or non-Norwegian residents or citizens to

own the Shares. The Company’s Articles of Association do not contain any provisions restricting

the transferability of Shares.

18.1 General meetings

Through the general meeting, the Company’s shareholders exercise the supreme authority in the

Company, subject to the limitations provided by Norwegian law.

All shareholders in the Company are entitled to attend and vote at general meetings, either in person

or by proxy. See Section 18.2 (“Voting rights”) with regard to certain restrictions on voting right

applying for nominee registered shares, etc.

In accordance with Norwegian law, the annual general meeting of the Company is required to be

held within six months from the end of each financial year (i.e. on or prior to 30 June). The

following business must be transacted and decided at the annual general meeting: (i) approval of the

annual accounts and annual report, including the distribution of any dividend, (ii) the Board of

Directors’ declaration concerning the determination of salaries and other remuneration to senior

executive officers, (iii) the declaration of regarding corporate governance in accordance with the

Norwegian Accounting Act section 3-3b and (vi) any other business to be transacted at the general

meeting by law or in accordance with the Company’s articles of association.

Norwegian law requires that written notice of general meetings are sent to all shareholders whose

addresses are known at least three weeks prior to the date of the meeting, unless a company’s

articles of association stipulate a longer period. The Company’s Articles of Association do not

include any such provision. The notice shall set forth the time and date of the meeting and specify

the agenda of the meeting.

A shareholder is entitled to have an issue discussed at a general meeting if such shareholder

provides the Board with notice of the issue within seven days before the three week notice period,

together with a proposal to a draft resolution or a basis for putting the matter on the agenda.

In addition to the Company’s annual general meeting, extraordinary general meeting of

shareholders may be held if deemed necessary by the Board of Directors. An extraordinary general

meeting must also be convened for the consideration of specific matters at the written request of the

Company’s auditor or shareholders representing a total of at least 5% of the share capital.

Spectrum ASA

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18.2 Voting Rights

Subject to the terms of a Company’s Articles of Association to the contrary, Norwegian law

provides that each outstanding share shall represent a right to one vote. All of the Company’s

Shares have an equal right to vote at general meetings. No voting rights can be exercised with

respect to treasury shares held by the Company.

As a general rule, resolutions that shareholders are entitled to make pursuant to the Norwegian

Public Limited Companies Act or the Company’s Articles of Association require a simple majority

of the votes cast. In the case of election of directors to the Board, the persons who obtain the most

votes cast are deemed elected to fill the positions up for election. However, certain decisions,

including, but not limited to, resolutions to:

increase or reduce the Company’s share capital;

waive preferential rights in connection with any share issue;

approve a merger or de-merger; and

amend the Company’s Articles of Association;

must receive the approval of at least two-thirds of the aggregate number of votes cast as well as at

least two-thirds of the share capital represented at a shareholders’ meeting.

Norwegian law further requires that certain decisions which have the effect of substantially altering

the rights and preferences of any Shares or class of Shares receive the approval of the holders of

such Shares or class of shares as well as the majority required for amendments to the Company’s

Articles of Association. Decisions that (i) would reduce any shareholder’s right in respect of

dividend payments or other rights to the assets of the Company or (ii) restrict the transferability of

the shares require a majority vote of at least 90 per cent of the share capital represented at the

general meeting in question as well as the majority required for amendments to the Company’s

Articles of Association. Certain types of changes in the rights of shareholders require the consent of

all shareholders affected thereby as well as the majority required for amendments to the Company’s

Articles of Association. There are no quorum requirements for general meetings.

In general, in order to be entitled to vote, a shareholder must be registered as the beneficial owner of

Shares in the share register kept by the VPS. Beneficial owners of Shares that are registered in the

name of a nominee are generally not entitled to vote under Norwegian law, nor are any persons who

are designated in the register as holding such Shares as nominees. Investors should note that there

are varying opinions as to the interpretation of Norwegian law in respect of the right to vote

nominee-registered Shares. For example, the Oslo Stock Exchange has held that in its opinion

“nominee-shareholders” may vote in general meetings if they actually prove their shareholding

prior to the general meeting.

18.3 Additional issuances and preferred rights

If the Company issues any new Shares, including bonus shares (i.e. new Shares issued by a transfer

from funds that the Company is allowed to use to distribute dividend to share capital), the

Company’s Articles of Association must be amended, which requires a two-thirds majority of the

votes cast as well as at least two-thirds of the share capital represented at a general meeting.

In addition, under Norwegian law, the Company’s shareholders have a preferential right to

subscribe for the new Shares on a pro rata basis in accordance with their then-current shareholdings

in the Company. Preferential rights may be derogated from by resolution in a general meeting of

shareholders passed by the same vote required to approve amendment of the articles of association.

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The general meeting may, in a resolution supported by at least two-thirds of the votes cast and share

capital represented, authorize the Board to issue new Shares. Such authorisation may be effective

for a maximum of two years, and the nominal value of the Shares to be issued may not exceed 50%

of the nominal share capital as at the time the authorization is registered with the Norwegian

Company Register. The shareholders’ preferential right to subscribe for Shares issued against

consideration in cash may be set aside by the Board only if the authorization includes such

possibility for the Board of Directors.

Any issue of Shares to shareholders who are citizens or residents of the United States upon the

exercise of preferential rights may require the Company to file a registration statement in the United

Stated under U.S. securities law. If the Company decides not to file a registration statement, these

shareholders may not be able to exercise their preferential rights.

Under Norwegian law, bonus shares may be issued, subject to shareholder approval and provided,

amongst other requirements, that the transfer is made from funds that the Company is allowed to

use to distribute dividend. Any bonus issues may be effectuated either by issuing Shares or by

increasing the nominal value of the Shares outstanding. If the increase in share capital is to take

place by new Shares being issued, these new Shares must be allocated to the shareholders of the

Company in proportion to their current shareholdings in the Company.

18.4 Minority rights

Norwegian law contains a number of protections for minority shareholders against oppression by

the majority, including but not limited to those described in this and preceding and following

paragraphs. Any shareholder may petition the courts to have a decision of the Board or general

meeting declared invalid on the grounds that it unreasonably favours certain shareholders or third

parties to the detriment of other shareholders or the Company itself. In certain grave circumstances,

shareholders may require the courts to dissolve the Company as a result of such decisions.

Shareholders holding in the aggregate 5% or more of the Company’s share capital have a right to

demand that the Company holds an extraordinary general meeting to discuss or resolve specific

matters. In addition, any shareholder may demand that the Company places an item on the agenda

for any general meeting as further described in Section 18.1 (“General Meetings”) above.

18.5 Dividends

The Norwegian Public Limited Liability Companies Act provides several constraints on the

distribution of dividends:

Pursuant to section 8-1 of the Norwegian Public Limited Liability Companies Act the Company

may only distribute dividend to the extent that the Company's net assets following the

distribution covers (i) the Company's share capital, (ii) the reserve for valuation differences and

(iii) the reserve for unrealized gains. In the amount that may be distributed, a deduction shall be

made for the aggregate nominal value of treasury shares that the Company has acquired security

in before the balance day. It shall also be made a deduction for credit and collateral etc.

according to sections 8-7 to 8-10 from before the balance day which after these provisions shall

lay within the scope of the funds the Company may distribute as dividend. It shall however not

be made a deduction for credit and collateral etc. that is reimbursed or settled before the time of

decision, or credit to a shareholder to the extent that the credit is settled by a netting in the

dividend.

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The calculation of the distributable equity shall be made on the basis of the balance sheet in the

last approved annual accounts, but so that the registered share capital as of the date of the

resolution to distribute dividend shall apply. Following the approval of the annual accounts for

the last financial year, the general meeting may also authorise the Board to declare dividend on

the basis of the Company's annual accounts.

Dividend may also be distributed by the general meeting based on an interim balance sheet

which has been prepared and audited in accordance with the provisions applying to the annual

accounts and with a balance sheet date not further into the past than six months before the date

of the general meeting's resolution.

Dividend may only be distributed to the extent that the Company after the distribution has a

sound equity and liquidity.

The amount of distributable dividends is calculated on the basis of the Company’s separate

financial statements and not on the basis of the consolidated financial statements of the

Company and its subsidiaries.

Distribution of dividends is resolved by a majority vote at the general meeting, and on the basis

of a proposal from the Board of Directors. The general meeting cannot distribute a larger

amount than what is proposed or accepted by the Board of Directors.

Dividends may be paid in cash or in some instances in kind. The Norwegian Public Limited

Liability Companies Act does not provide for any time limit after which entitlement to dividends

lapses. Subject to various exceptions, Norwegian law provides a limitation period of three years

from the date on which an obligation is due.

There are no dividend restrictions or specific procedures for non-Norwegian resident shareholders

to claim dividends. For a description of withholding tax on dividends applicable to non-Norwegian

residents, see Section 19 “Norwegian Tax Consideration”.

Any further payments of dividends on the Shares will be denominated in NOK, and will be paid to

the Company’s shareholders through the VPS. Shareholders registered in the VPS whose address is

outside Norway and who have not supplied the VPS with details of any NOK account, will,

however, receive dividends by check in their local currency, as exchanged from the NOK amount

distributed through the VPS. If it is not practical in the sole opinion of Danske Bank, being the

Company’s VPS registrar, to issue a check in a local currency, a check will be issued in USD. The

issuing and mailing of checks will be executed in accordance with the standard procedures of

Danske Bank. The exchange rate(s) that is applied will be Danske Banks’ rate on the date of

issuance. Dividends will be credited automatically to the VPS registered shareholders’ NOK

accounts, or in lieu of such registered NOK account, by check, without the need for shareholders to

present documentation proving their ownership of the Shares.

18.6 The VPS and transfer of Shares

The Company’s principal share register is operated through the VPS under the securities

identification code ISIN NO0010429145. The Company’s registrar is Danske Bank –Transaction

Services, Søndre Gate 13-14, N-7466 Trondheim, Norway.

The VPS is the Norwegian paperless centralized securities register. It is an electronic book-keeping

system in which the ownership of, and all transactions relating to, Norwegian listed shares must be

recorded. The VPS and Oslo Børs are both wholly-owned by Oslo Børs VPS Holding ASA.

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All transactions relating to securities registered with the VPS are made through computerized book

entries. No physical share certificates are, or may be, issued. The VPS confirms each entry by

sending a transcript to the registered shareholder irrespective of any beneficial ownership. To give

effect to such entries, the individual shareholder must establish a share account with a Norwegian

account agent. Norwegian banks, Norges Bank (being, Norway’s central bank), authorized

securities brokers in Norway and Norwegian branches of credit institutions established within the

EEA are allowed to act as account agents.

As a matter of Norwegian law, the entry of a transaction in the VPS is prima facie evidence in

determining the legal rights of parties as against the issuing company or any third party claiming an

interest in the given security. A transferee or assignee of shares may not exercise the rights of a

shareholder with respect to such shares unless such transferee or assignee has registered such

shareholding or has reported and shown evidence of such share acquisition, and the acquisition is

not prevented by law, the relevant company’s articles of association or otherwise.

The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or

deletion of, rights in respect of registered securities unless the error is caused by matters outside the

VPS’ control which the VPS could not reasonably be expected to avoid or overcome the

consequences of. Damages payable by the VPS may, however, be reduced in the event of

contributory negligence by the aggrieved party.

The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any

information that the Norwegian FSA requests. Further, Norwegian tax authorities may require

certain information from the VPS regarding any individual’s holdings of securities, including

information about dividends and interest payments.

18.7 Shareholder register – Norwegian law

Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. As a

general rule, there are no arrangements for nominee registration and Norwegian shareholders are

not allowed to register their shares in the VPS through a nominee. However, foreign shareholder

may register their shares in the VPS in the name of a nominee (bank or other nominee) approved by

the Norwegian FSA. An approved and register nominee has a duty to provide information on

demand about beneficial shareholders to the company and to the Norwegian authorities. In case of

registration by nominees, the registration in the VPS must show that the registered owner is a

nominee. A registered nominee has the right to receive dividends and other distributions, but cannot

vote in general meeting on behalf of the beneficial owners.

18.8 Foreign investment in share listed in Norway

Foreign investor may trade shares listed on Oslo Børs through any broker that is a member of Oslo

Børs, whether Norwegian or foreign.

18.9 Disclosure requirements

If a person’s, entity’s or consolidated group’s proportion of the total issued shares and/or rights to

shares in a company listed on a regulated market in Norway (with Norway as its home state, which

will be the case for the Company) reaches, exceeds or falls below the respective thresholds of 5%,

10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or the voting rights of that

company, the person, entity or group in question has an obligation under the Norwegian Securities

Trading Act to notify Oslo Børs and the issuer immediately. The same applies if the disclosure

thresholds are passed due to other circumstances, such as changes in the Company’s share capital.

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18.10 Insider trading

According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments

that are listed, or subject to application for listing, on a Norwegian regulated market, or incitement

to such dispositions, must not be undertaken by anyone who has inside information, as defined in

Section 3-2 of the Norwegian Securities Trading Act.

The same applies to the entry into, purchase, sale or exchange of options or futures/forward

contracts or equivalent rights whose value is connected to such financial instruments, or incitement

to such dispositions.

18.11 Mandatory offer requirement

The Norwegian Securities Trading Act requires any person, entity or consolidated group that

becomes the owner of shares representing more than 1/3 of the voting rights of a Norwegian

company listed on a Norwegian regulated market to, within four weeks, make an unconditional

general offer for the purchase of the remaining shares in that company. A mandatory offer

obligation may also be triggered where a party acquires the right to become the owner of shares

that, together with the party’s own shareholding, represent more than 1/3 of the voting rights in the

company and Oslo Børs decides that this is regarded as an effective acquisition of the shares in

question. The mandatory offer obligation ceases to apply if the person, entity or consolidated group

sells the portion of the shares that exceeds the relevant threshold within four weeks of the date in

which the mandatory offer obligation was triggered.

When a mandatory offer obligation is triggered, the person subject to the obligation is required to

immediately notify Oslo Børs and the company in question accordingly. The notification is

required to state whether an offer will be made to acquire the remaining shares in the company or

whether a sale will take place. As a rule, a notification to the effect that an offer will be made

cannot be retracted. The offer and the offer document required are subject to approval by Oslo Børs

before the offer is submitted to the shareholders or made public.

The offer price per share must be at least as high as the highest price paid or agreed by the offeror

for the shares in the six-month period prior to the date the threshold was exceeded. However, if it

clear that the market price was higher when the mandatory offer obligation was triggered, the offer

price shall be at least as high as the market price. If the acquirer acquires or agrees to acquire

additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer

is obliged to restate its offer at such higher price. A mandatory offer must be in cash or contain a

cash alternative at least equivalent to any other consideration offered.

In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the

relevant threshold within four weeks, Oslo Børs may force the acquirer to sell the shares exceeding

the threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as

long as the mandatory offer obligation remains in force, exercise rights in the company, such as

voting in a general meeting, without the consent of a majority of the remaining shareholders. The

shareholder may, however, exercise his/her/its rights to dividends and pre-emption rights in the

event of a share capital increase. If the shareholder neglects his/her/its duty to make a mandatory

offer, Oslo Børs may impose a cumulative daily fine that runs until the circumstance has been

rectified.

Any person, entity or consolidated group that owns shares representing more than one-third of the

votes in a Norwegian company listed on a Norwegian regulated market is obliged to make an offer

to purchase the remaining shares of the company (repeated offer obligation) if the person, entity or

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consolidated group through acquisition becomes the owner of shares representing 40%, or more of

the votes in the company. The same applies correspondingly if the person, entity or consolidated

group through acquisition becomes the owner of shares representing 50% or more of the votes in

the company. The mandatory offer obligation ceases to apply if the person, entity or consolidated

group sells the portion of the shares which exceeds the relevant threshold within four weeks of the

date on which the mandatory offer obligation was triggered.

Any person, entity or consolidated group that has passed any of the above mentioned thresholds in

such a way as not to trigger the mandatory bid obligation, and has therefore not previously made an

offer for the remaining shares in the company in accordance with the mandatory offer rules is, as a

main rule, obliged to make a mandatory offer in the event of a subsequent acquisition of shares in

the company.

18.12 Compulsory acquisition

Pursuant to the Norwegian Public Limited Companies Act and the Norwegian Securities Trading

Act, a shareholder who, directly or through subsidiaries, acquires shares representing 90% or more

of the total number of issued shares in a Norwegian public limited liability company, as well as

90% or more of the total voting rights, has a right, and each remaining minority shareholder of the

company has a right to require such majority shareholder, to effect a compulsory acquisition for

cash of the shares not already owned by such majority shareholder. Through such compulsory

acquisition the majority shareholder becomes the owner of the remaining shares with immediate

effect.

If a shareholder acquires shares representing more than 90% of the total number of issued shares, as

well as more than 90% of the total voting rights, through a voluntary offer in accordance with the

Securities Trading Act, a compulsory acquisition can, subject to the following conditions, be carried

out without such shareholder being obliged to make a mandatory offer: (i) the compulsory

acquisition is commenced no later than four weeks after the acquisition of shares through the

voluntary offer, (ii) the price offered per share is equal to or higher than what the offer price would

have been in a mandatory offer, and (iii) the settlement is guaranteed by a financial institution

authorized to provide such guarantees in Norway.

A majority shareholder who effects a compulsory acquisition is required to offer the minority

shareholders a specific price per share, the determination of which is at the discretion of the

majority shareholder. However, where the offeror, after making a mandatory or voluntary offer, has

acquired more than 90% of the voting shares of a company and a corresponding proportion of the

votes that can be cast at the general meeting, and the offeror pursuant to Section 4-25 of the Public

Limited Companies Act completes a compulsory acquisition of the remaining shares within three

months after the expiry of the offer period, it follows from the Norwegian Securities Trading Act

that the redemption price shall be determined on the basis of the offer price for the

mandatory/voluntary offer unless specific reasons indicate another price.

Should any minority shareholder not accept the offered price, such minority shareholder must,

within a specified deadline of not less than two months, raise objections to request the price offered,

in which case the redemption price will be set by a Norwegian court. The cost of such court

procedure will, as a general rule, be the responsibility of the majority shareholder, and the relevant

court will have full discretion in determining the consideration to be paid to the minority

shareholder as a result of the compulsory acquisition.

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Absent a request for a Norwegian court to set the price or any other objection to the price being

offered, the minority shareholders would be deemed to have accepted the offered price after the

expiry of the specified deadline.

18.13 Foreign exchange controls

There are currently no foreign exchange control restrictions in Norway that would potentially

restrict the payment of dividends to a shareholder outside Norway, and there are currently no

restrictions that would affect the right of shareholders of a company that has its shares registered

with the VPS who are not residents in Norway to dispose of their shares and receive the proceeds

from a disposal outside Norway.

There is no maximum transferable amount either to or from Norway, although transferring banks

are required to submit reports on foreign currency exchange transactions into and out of Norway

into a central data register maintained by the Norwegian customs and excise authorities. The

Norwegian police, tax authorities, customs and excise authorities, the National Insurance

Administration and the Norwegian FSA have electronic access to the data in this register.

18.14 Shareholder vote on certain reorganisation

A decision to merge with another company or to demerge requires a resolution of the Company’s

shareholders at a general meeting passed by at least two-thirds of the votes cast and share capital

represented. A merger plan or demerger plan signed by the Board along with certain other required

documentation must be sent to all shareholders and registered with the Norwegian Company

Register at least one month prior to the general meeting.

18.15 Rights on liquidation

Under Norwegian law, the Company may be liquidated by a resolution in a general meeting of the

Company passed by a two-thirds majority of the aggregate votes cast as well as two thirds of the

aggregate share capital represented at such meeting. The Shares rank pari passu in the event of a

return on capital by the Company upon a liquidation or otherwise.

18.16 Articles of Association

The following is a summary of provisions of the Company’s Articles of Association, some of which

have not been addressed in the preceding presentation. The Company’s Articles of Association is

included as Appendix B to this Prospectus

As set forth in §3 of the Articles of Associations, the Company’s objectives are: “to offer services

related to collecting, processing and marketing of geophysical and magnetic data and gravitation

data, thereto related services, and participation in companies with similar and thereto related

business”.

According to the Articles of Associations, the Board shall have no less than three and no more than

seven members. The signatory powers of the Company vests with the chairman of the Board alone,

the CEO alone or with two board members acting jointly.

The Company shall have a Nomination Committee consisting of one to three members, elected by

the general meeting for a period of two years at a time.

According to the Articles of Associations Section 9, the annual general meeting of shareholders the

following matters shall be dealt with;

Approval of the annual accounts and report, including payment of dividends

Election of directors of the Board and auditor (if up for election)

Other matters that pursuant to law of regulations vests with the general meeting

There are no conditions imposed by the Articles, the Company’s memorandum of incorporation,

statutes, charter or bylaws governing changes in the capital or changes to the rights of the

shareholders being more stringent or significant than is required by law.

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19. NORWEGIAN TAX CONSIDERATIONS

19.1 Introduction

The summary is based on applicable Norwegian laws, rules and regulations as of the date of this

Prospectus. Such laws, rules and regulations may be subject to changes after this date, possibly on

a retroactive basis for the same tax year.

The summary is of a general nature and does not purport to be a comprehensive description of all

Norwegian tax considerations that may be relevant to a decision to acquire, own or dispose of the

shares in the Company. Shareholders who wish to clarify their own tax situation should consult

with and reley upon their own tax advisors.

Please note that for the purpose of the summary below, a reference to a Norwegian or foreign

shareholder refers to the tax residency rather than the nationality of the shareholder.

19.2 Taxation of Dividends

Norwegian resident personal Shareholders

Dividend distributed to personal shareholders (i.e. shareholders who are individuals) resident in

Norway for tax purposes, are taxed as ordinary income at a flat rate of 27 % to the extent the

dividends exceed a statutory tax-free allowance (Nw: Skjermingsfradrag). The allowance is

calculated on a share-by-share basis, and the allowance for each share is equal to the cost price of

the share multiplied by a determined risk-free interest rate based on the effective rate after tax of

interest on treasury bills (Nw: "Statskasseveksler") with three months maturity. The Directorate of

Taxes announces the risk free-interest rate in January the year after the income. The risk-free

interest rate for 2014, announced in January 2015, was 0.9%.

Any part of the calculated allowance one year exceeding dividend distributed on the same share

("excess allowance") can be carried forward and set off against future dividends received on, or

capital gains upon realisation of the same share. Furthermore, excess allowance can be added to the

cost price of the share and included in basis for calculating the allowance on the same share the

following year.

Norwegian resident corporate Shareholders

Norwegian corporate shareholders (i.e. limited liability companies and similar entities resident in

Norway for tax purposes) are generally exempt from tax on dividends received on shares in

Norwegian limited liability companies and similar entities, pursuant to the participation exemption

(Nw: Fritaksmetoden). However, 3% of dividend income is deemed taxable as general income at a

flat rate of 27%, implying that dividends distributed from the Company to resident corporate

Shareholders are effectively taxed at a rate of 0.81%.

Non-resident Shareholders

Dividends distributed to Shareholders not resident in Norway for tax purposes are in general subject

to withholding tax at a rate of 25%, unless otherwise provided for in an applicable tax treaty or the

recipient is covered by the specific regulations for corporate shareholders tax-resident within the

European Economic Area (the “EEA”) (ref. the section below for more information on the EEA

exemption). The Company distributing the dividend is responsible for the withholding of tax.

Norway has entered into tax treaties with approximate 80 countries. In most tax treaties the

withholding tax rate is reduced to 15%.

In accordance with the present administrative system in Norway, the Norwegian distributing

company will normally withhold tax at the regular rate or reduced rate according to an applicable

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tax treaty, based on the information registered with the VPS with regard to the tax residence of the

Foreign Shareholder. Dividends paid to Foreign Shareholders in respect of nominee- registered

shares will be subject to withholding tax at the general rate of 25% unless the nominee has obtained

approval for a reduced or zero rate from the Central Office for Foreign Tax Affairs (Nw:

Sentralskattekontoret for utenlandssaker).

Non-resident Shareholders who are exempt from withholding tax and Shareholders who have been

subject to a higher withholding tax than applicable in the relevant tax treaty, may apply to the

Norwegian tax authorities for a refund of the excess withholding tax. The application is to be filed

with the Central Office for Foreign Tax Affairs.

If a Foreign Shareholder is engaged in business activities in Norway, and the shares are effectively

connected with such business activities, dividends distributed to such shareholder will generally be

subject to the same taxation as that of Norwegian Shareholders, cf. the description of tax issues

related to Norwegian Shareholders above.

Foreign Shareholders should consult with their own advisers regarding the availability of treaty

benefits in respect of dividend payments, including the ability to effectively claim refunds of

withholding tax.

Foreign Shareholders tax-resident within the EEA

Foreign Shareholders who are individuals tax-resident within the EEA (“Foreign EEA Personal

Shareholders”) are upon request entitled to a deductible allowance. The shareholder shall pay the

lesser amount of (i) withholding tax according to the rate in an applicable tax treaty or (ii)

withholding tax at 25% of taxable dividends after allowance. Foreign EEA Personal Shareholders

may carry forward any unused allowance, if the allowance exceeds the dividends.

Foreign Shareholders that are corporations tax-resident within the EEA for tax purposes (“Foreign

EEA Corporate Shareholders”) are exempt from Norwegian tax on dividends distributed from

Norwegian limited liability companies, provided that the Foreign EEA Corporate Shareholder in

fact is the beneficial owner of the shares. Is the Foreign EEA Corporate Shareholder tax resident in

a low tax jurisdaiction within the EEA, it must also be genuinely established within the EEA and

performs genuine economic business activities within the EEA.

19.3 Taxation upon realisation of shares

Norwegian Resident personal Shareholders

Norwegian individual shareholders are taxable in Norway for capital gains upon the realisation of

shares, and have a corresponding right to deduct losses that arise upon such realisation. The tax

liability applies irrespective of time of ownership and the number of shares realised. Gains are

taxable as general income in the year of realisation, and losses can be deducted from general

income in the year of realisation. The tax rate for general income is currently 27%.

The taxable gain or loss is calculated per share as the difference between the consideration received

and the cost price of the share, including any costs incurred in relation to the acquisition or

realisation of the share. Any unused allowance on a share (see above) may be set off against capital

gains related to the realisation of the same share, but may not lead to or increase a deductible loss

i.e. any unused allowance exceeding the capital gain upon the realisation of the share will be

annulled. Furthermore, unused allowance may not be set of against gains from realisation of other

shares.

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If a Shareholder disposes of shares acquired at different times, the shares that were first acquired

will be deemed as first sold (the FIFO-principle) when calculating a taxable gain or loss.

Costs incurred in connection with the purchase and sale of shares may be deducted in the year of

sale.

A Norwegian personal shareholder, who moves abroad and ceases to be tax resident in Norway,

will be deemed taxable in Norway for any potential gain of NOK 500,000 or more, on shares held at

the time the tax residency ceased, as if the shares were realized at that time. Gains of NOK 500,000

or less are though not taxable. The tax payment may be postponed if adequate security is provided.

If the personal shareholder moves to a jurisdiction within the EEA, a deferral of the payment of the

taxes is granted without such guarantee, provided that Norway, pursuant to a treaty, can request

information from the other jurisdiction regarding the person’s income and wealth, and assistance in

relation to the collection of taxes. Losses on shares held at the time tax residency ceases will be tax

deductible to the same extent as a gain would be taxable, if the personal shareholder moves to a

jurisdiction within the EEA. In such case the loss is determined in the year of the emigration, but

the taxation (loss deduction) will occur at the time the shares are actually sold or otherwise disposed

of. The tax liability calculated under these provisions may be reduced if the value of the shares at

the time of the realisation is less than the value at the time of the emigration, or if the gain is

regarded taxable in another jurisdiction. If the shares are not realized within five years after the

shareholder ceased to be resident in Norway for tax purposes, the tax liability described above will

not apply. Any tax treaty in force between Norway and the state to which the shareholder has

moved may influence the application of these rules.

Norwegian Resident Corporate Shareholders

Norwegian corporate Shareholders are generally exempt from tax on capital gains upon the

realisation of shares in Norwegian limited liability companies and similar entities. Losses upon the

realisation and costs incurred in connection with the purchase and realisation of such shares are not

deductible for tax purposes.

Special rules apply for Norwegian corporate Shareholders that cease to be tax-resident in Norway.

Non-resident Shareholders

Gains from the sale or other disposition of shares by a non-resident Shareholder will not be subject

to taxation in Norway unless (i) the shares are effectively connected with business activities carried

out or managed in Norway, or (ii) the shares are held by an individual who has been a resident of

Norway for tax purposes with unsettled/postponed exit tax calculated on the shares at the time of

cessation as Norwegian tax resident.

Non-resident corporate shareholders are not subject to taxation in Norway on realisation of Shares

in a Norwegian Limited Company.

19.4 Net wealth tax

A resident Shareholder that is a joint stock company or a similar entity is exempted from net wealth

tax. For other resident Shareholders (personal Shareholders), the shares will form part of the basis

for the calculation of net wealth tax. The marginal net wealth tax rate is 0.85% of taxable values.

Listed shares are valued at 100% of their quoted value on 1 January in the assessment year, i.e. the

year following the income year.

A non-resident Shareholder is not subject to Norwegian net wealth tax with respect to the shares,

unless his shareholding is effectively connected with a business carried out by the Shareholder in

Norway.

19.5 Stamp duty

There is currently no Norwegian stamp duty or transfer tax on the transfer or issuance of shares.

19.6 Inheritance Tax

As of 1 January 2014 the Norwegian Inheritance Tax was abolished.

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20. DOCUMENTS ON DISPLAY

20.1 Documents on display

Copies of the following documents will be available for inspection at the Company’s registered

office during normal business hours every Monday to Friday each week (except public holidays) for

a period of 12 months from the date of this Prospectus:

The Articles of Spectrum ASA;

Memorandum of incorporation;

The audited financial statements of the Company and its subsidiaries for the three years

ended 31 December 2014, 2013 and 2012;

The unaudited Q1 2015 and Q1 2014 interim condensed financial statements

The Prospectus will be made publicly available at the Company’s business address and at

www.danskebank.no as at the date of this Prospectus.

The documents listed above may be obtained from the Company at the following address:

Spectrum ASA, Sjølyst Plass 2, 0278 Oslo, Norway

Tel: +47 23 01 49 60, Fax: +47 23 01 49 61

www.spectrumgeo.com

20.2 Incorporation by reference

The information incorporated by reference in this Prospectus shall be read in connection with the

cross-reference list set out in the table below.

All the relevant information can be found on the Company’s webpage: www.spectrumgeo.com

Incorporated by reference Reference document and link

Consolidated financial figures for the 3

months ended 31 March 2015

for Spectrum

http://www.spectrumgeo.com/wp-content/uploads/Q1-Report-2015-

final.pdf

Consolidated financial figures for the 3

months ended 31 March 2014

for Spectrum

http://www.spectrumgeo.com/wp-content/uploads/Q4-Report-2014-

final.pdf

Consolidated annual report, accounting

principles, notes and auditor’s report for the

financial year 2014 for Spectrum

http://www.spectrumgeo.com/wp-content/uploads/Spectrum-Annual-

Report-2014.pdf




http://www.spectrumgeo.com/wp-

content/uploads/Spectrum_Annual_Report_2013_FINAL.pdf




http://www.spectrumgeo.com/wp-content/uploads/Spectrum-Annual-

Report-2012.pdf



financial year 2014 for Fugro N.V.

http://www.fugro.com/docs/default-source/investor-

publications/2014/annual-report-2014.pdf?sfvrsn=10



http://www.spectrumgeo.com/wp-content/uploads/Q1-Report-2015-final.pdf






http://www.spectrumgeo.com/wp-content/uploads/Spectrum_Annual_Report_2013_FINAL.pdf

http://www.spectrumgeo.com/wp-content/uploads/Spectrum_Annual_Report_2013_FINAL.pdf



http://www.fugro.com/docs/default-source/investor-publications/2014/annual-report-2014.pdf?sfvrsn=10

http://www.fugro.com/docs/default-source/investor-publications/2014/annual-report-2014.pdf?sfvrsn=10

Spectrum ASA

161

21. SELLING AND TRANSFER RESTRICTIONS

21.1 General

The Subscription Rights are non-transferable entitlements granted to Eligible Sharesholders to

subscribe for Offer Shares in the Subsequent Offering. The grant of Subscription Rights and/or

issue of Offer Shares, upon exercise of Subscription Rights or subscription without Subscription

Rights, to persons resident in, or who are citizens of countries other than Norway, may be affected

by the laws of the relevant jurisdiction. Eligible Shareholders should consult their professional

advisers as to whether they require any governmental or other consent or need to observe any other

formalities to enable them to exercise Subscription Rights or purchase or subscribe for Offer

Shares.

The Company does not intend to take any action to permit a public offering of the Shares in any

jurisdiction other than Norway. Receipt of this Prospectus will not constitute an offer in those

jurisdictions in which it would be illegal to make an offer and, in those circumstances, this

Prospectus is for information only and should not be copied or redistributed. Except as otherwise

disclosed in this Prospectus, if an Eligible Shareholder receives a copy of this Prospectus in any

territory other than Norway, the Eligible Shareholder may not treat this Prospectus as constituting

an invitation or offer to it. Accordingly, if an Eligible Shareholder receives a copy of this

Prospectus, the Eligible Shareholder should not distribute or send the same to any person or in or

into any jurisdiction where to do so would or might contravene local securities laws or regulations.

If the Eligible Shareholder forwards this Prospectus into any such territories (whether under a

contractual or legal obligation or otherwise), the Eligible Shareholder should direct the recipient’s

attention to the contents of this Section in the Prospectus.

Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Subscription

Rights and Offer Shares being granted or offered, may not be offered, sold, resold, transferred or

delivered, directly or indirectly, in or into, Member States of the EEA that have not implemented

the Prospectus Directive, Australia, Canada, Hong Kong, Japan, the United States, Switzerland or

any other jurisdiction in which it would not be permissible to offer the Subscription Rights and/or

the Offer Shares (the “Ineligible Jurisdictions”); (ii) this Prospectus may not be sent to any person

in any Ineligible Jurisdiction; and (iii) the crediting of Subscription Rights to an account of an

Ineligible Shareholder or other person in an Ineligible Jurisdiction or a citizen of an Ineligible

Jurisdiction (referred to as “Ineligible Persons”) does not constitute an offer to such persons of the

Subscription Rights or the Offer Shares. Ineligible Persons may not exercise Subscription Rights.

If an Eligible Shareholder exercises Subscription Rights to obtain Offer Shares that Eligible

Shareholder will be deemed to have made or, in some cases, be required to make, the following

representations and warranties to the Company and any person acting on the Company’s or its

behalf:

(i) the Eligible Shareholder is not located in an Ineligible Jurisdiction;

(ii) the Eligible Shareholder is not an Ineligible Person;

(iii) the Eligible Shareholder is not acting, and has not acted, for the account or benefit of an

Ineligible Person;

(iv) unless the Eligible Shareholder is a “qualified institutional buyer” as defined in Rule 144A

under the U.S. Securities Act, the Eligible Shareholder is located outside the United States

and any person for whose account or benefit it is acting on a non-discretionary basis is

located outside the United States and, upon acquiring Offer Shares, the Eligible

Shareholder and any such person will be located outside the United States;

(v) the Eligible Shareholder understands that neither the Subscription Rights nor the Shares

are or will be registered under the U.S. Securities Act and may not be offered, sold,

pledged, resold, granted, delivered, allocated, taken up or otherwise transferred within the

United States except pursuant to an exemption from, or in a transaction not subject to,

registration under the U.S. Securities Act; and

(vi) the Eligible Shareholder may lawfully be offered, take up, subscribe for and receive

Subscription Rights and Offer Shares in the jurisdiction in which it resides or is currently

located.

The Company and any persons acting on behalf of the Company, including the Managers, will rely

upon the Eligible Shareholder’s representations and warranties. Any provision of false information

or subsequent breach of these representations and warranties may subject the Eligible Shareholder

to liability.

If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a

nominee, custodian or trustee), that person will be required to provide the foregoing representations

and warranties to the Company with respect to the exercise of Subscription Rights on behalf of the

holder. If such person cannot or is unable to provide the foregoing representations and warranties,

the Company will not be bound to authorize the allocation of any of the Subscription Rights and

Offer Shares to that person or the person on whose behalf the other is acting. Subject to the specific

restrictions described below, if an Eligible Shareholder (including, without limitation, its nominees

and trustees) is outside Norway and wishes to exercise Subscription Rights and subscribe Offer

Shares, the Eligible Shareholder must satisfy itself as to full observance of the applicable laws of

any relevant territory including obtaining any requisite governmental or other consents, observing

any other requisite formalities and paying any issue, transfer or other taxes due in such territories.

The information set out in this Section 16 is intended as a general overview only. If the

Eligible Shareholder is in any doubt as to whether it is eligible to subscribe for the Offer

Shares, that Eligible Shareholder should consult its professional adviser without delay.

Subscription Rights will initially be credited to financial intermediaries for the accounts of all

shareholders who hold the Company’s shares registered through a financial intermediary on the

Record Date. Subject to certain exceptions, financial intermediaries, which include brokers,

custodians and nominees, may not exercise any Subscription Rights on behalf of any person in the

Spectrum ASA

163

Ineligible Jurisdictions or any Ineligible Persons and may be required in connection with any

exercise of Subscription Rights to provide certifications to that effect.

Subject to certain exceptions, financial intermediaries are not permitted to send this Prospectus or

any other information about the Offering in or into any Ineligible Jurisdiction or to any Ineligible

Persons. Subject to certain exceptions, exercise instructions or certifications sent from or

postmarked in any Ineligible Jurisdiction will be deemed to be invalid and Offer Shares will not be

delivered to an addressee in any Ineligible Jurisdiction. The Company reserves the right to reject

any exercise (or revocation of such exercise) in the name of any person who provides an address in

an Ineligible Jurisdiction for acceptance, revocation of exercise or delivery of such Subscription

Rights and Offer Shares, who is unable to represent or warrant that such person is not in an

Ineligible Jurisdiction and is not an Ineligible Person, who is acting on a non-discretionary basis for

such persons, or who appears to the Company or its agents to have executed its exercise instructions

or certifications in, or dispatched them from, an Ineligible Jurisdiction. Furthermore, the Company

reserves the right, with sole and absolute discretion, to treat as invalid any exercise or purported

exercise of Subscription Rights which appears to have been executed, effected or dispatched in a

manner that may involve a breach or violation of the laws or regulations of any jurisdiction.

Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a

holder to exercise its Subscription Rights if the Company, at its absolute discretion, is satisfied that

the transaction in question is exempt from or not subject to the laws or regulations giving rise to the

restrictions in question. Applicable exemptions in certain jurisdictions are described further below.

In any such case, the Company does not accept any liability for any actions that a holder takes or for

any consequences that it may suffer as a result of the Company accepting the holder’s exercise of

Subscription Rights.

No action has been or will be taken by the Managers to permit the possession of this Prospectus (or

any other offering or publicity materials or application or subscription form(s) relating to the

Offering) in any jurisdiction where such distribution may lead to a breach of any law or regulatory

requirement.

Neither the Company nor the Managers, nor any of their respective affiliates, representatives,

advisers or selling agents, is making any representation to any offeree, subscriber or purchaser of

Offer Shares regarding the legality of an investment in the Offer Shares by such offeree, subscriber

or purchaser under the laws applicable to such offeree, subscriber or purchaser. Each Eligible

Shareholder should consult its own advisers before subscribing for Offer Shares. Eligible

Shareholders are required to make their independent assessment of the legal, tax, business, financial

and other consequences of a subscription for Offer Shares.

A further description of certain restrictions in relation to the Subscription Rights and the Shares in

certain jurisdictions is set out below.

21.2 United States

Neither the Subscription Rights nor the Shares have not been and will not be registered under the

U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of

the United States and may not be offered, sold, taken up, exercised, resold, transferred or delivered,

directly or indirectly, within the United States except pursuant to an applicable exemption from the

registration requirements of the U.S. Securities Act and in compliance with the securities laws of

any state or other jurisdiction of the United States. There will be no public offer of the Subscription

Rights and the Offer Shares in the United States. A notification of exercise of Subscription Rights

and subscription of Offer Shares in contravention of the above may be deemed to be invalid.

Spectrum ASA

164

The Offer Shares are being offered and sold outside the United States in reliance on Regulation S

under the U.S. Securities Act. Any offering of the Offer Shares by the Company to be made in the

United States will be made only to a limited number of “qualified institutional buyers” (as defined

in Rule 144A under the U.S. Securities Act) pursuant to an exemption from registration under the

U.S. Securities Act who have executed and returned an Eligible Shareholder/QIB letter to the

Company prior to allocation of Offer Shares in the Subsequent Offering.

Accordingly, subject to certain limited exceptions, this document will not be sent to any shareholder

with a registered address in the United States. In addition, the Company and the Managers reserve

the right to reject any instruction sent by or on behalf of any account holder with a registered

address in the United States in respect of the Subscription Rights and/or the Offer Shares.

Any recipient of this document in the United States is hereby notified that this document has been

furnished to it on a confidential basis and is not to be reproduced, retransmitted or otherwise

redistributed, in whole or in part, under any circumstances. Furthermore, recipients are authorized

to use it solely for the purpose of considering an investment in the Subsequent Offering and may

not disclose any of the contents of this document or use any information herein for any other

purpose. This document is personal to each offeree and does not constitute an offer to any other

person or to the public generally to subscribe for Offer Shares. Any recipient of this document

agrees to the foregoing by accepting delivery of this document.

Until 40 days after the commencement of the Offering, any offer or sale of the Offer Shares within

the United States by any dealer (whether or not participating in the Offering) may violate the

registration requirements of the U.S. Securities Act.

The Subscription Rights and the Shares have not been approved or disapproved by the United States

Securities and Exchange Commission, any state securities commission in the United States or any

other United States regulatory authority nor have any of the foregoing authorities passed upon or

endorsed the merits of the Offering or the accuracy or adequacy of this document. Any

representation to the contrary is a criminal offense in the United States.

Each person to which Subscription Rights and/or Offer Shares are distributed, offered or sold in the

United States, by accepting delivery of this Prospectus or by its subscription for Offer Shares, will

be deemed to have represented and agreed (in addition to such additional representations and

warranties set out in the applicable Eligible Shareholder/QIB letter), on its behalf and on behalf of

any Eligible Shareholder accounts for which it is subscribing for Offer Shares, as the case may be,

that:

(i) it is a “qualified institutional buyer” as defined in Rule 144A under the U.S. Securities

Act, and that it has executed and returned an Eligible Shareholder/QIB letter to the

Company and

(ii) the Subscription Rights and Offer Shares have not been offered to it by the Company by

means of any form of “general solicitation” or “general advertising” (within the meaning

of Regulation D under the U.S. Securities Act).

Each person to which Subscription Rights and/or Offer Shares are distributed, offered or sold

outside the United States will be deemed, by its subscription or purchase of Offer Shares, to have

represented and agreed, on its behalf and on behalf of any Eligible Shareholder accounts for which

it is subscribing for or purchasing Offer Shares, as the case may be, that:

(i) it is acquiring the Offer Shares from the Company or the Managers in an "offshore

transaction" as defined in Regulation S under the U.S. Securities Act; and

Spectrum ASA

165

(ii) the Subscription Rights and/or the Offer Shares have not been offered to it by the

Company or the Underwriters by means of any “directed selling efforts” as defined in

Regulation S under the U.S. Securities Act.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR

A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE

REVISED STATUTES (THE “RSA”) WITH THE STATE OF NEW HAMPSHIRE NOR THE

FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED

IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY

OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS

TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT

THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A

TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY

UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN

APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO

MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR

CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS

PARAGRAPH.

21.3 EEA Selling Restrictions

In relation to each Member State of the EEA other than Norway, which has implemented the

Prospectus Directive (each a “Relevant Member State”) an offer of Offer Shares which are the

subject of the Subsequent Offering contemplated by this Prospectus may not be made to the public

in that Relevant Member State except that an offer to the public in that Relevant Member State of

any Shares may be made at any time under the following exemptions under the Prospectus

Directive, provided such exceptions have been implemented in that Relevant Member State:

(i) to qualified investors as defined in the Prospectus Directive;

(ii) to fewer than 150 natural or legal persons (other than qualified investors as defined in the

Prospectus Directive) subject to obtaining the prior consent of the Managers for any such

offer; or

(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Offer Shares shall result in a requirement for the

publication by the Company of a Prospectus pursuant to Article 3 of the Prospectus

Directive.

In the case of any Offer Shares acquired by any financial intermediary, as that term is used in

Article 3(2) of the EU Prospectus Directive, such will be deemed to have represented, warranted

and agreed with the Company and the Managers that (i) the Offer Shares acquired by it in the offer

have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale

to, persons in any Relevant Member State other than qualified investors, as that term is defined in

the Prospectus Directive, or in circumstances in which the prior consent of the Managers has been

given to the offer or resale; or (ii) where Offer Shares have been acquired by it on behalf of persons

in any Relevant Member State other than qualified investors, the offer of those Shares to it is not

treated under the Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an “offer to the public” in relation to any Shares

in any Relevant Member State means the communication in any form and by any means of

sufficient information on the terms of the offer and any Shares to be offered so as to enable an

Eligible Shareholder to decide to purchase or subscribe for any Shares, as the same may be varied in

that Relevant Member State by any measure implementing the Prospectus Directive in that Member

State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any

relevant implementing measure in each Relevant Member State.

21.4 Notice to Australian Eligible Shareholders

This Prospectus is not a disclosure document under Chapter 6D of the Corporations Act 2001 (Cth)

(the “Australian Corporations Act”), has not been lodged with the Australian Securities and

Investments Commission and does not purport to include the information required of a disclosure

document under Chapter 6D of the Australian Corporations Act. Accordingly:

Spectrum ASA

167

(i) The offer of the Offer Shares in Australia may only be made to persons who are

“sophisticated Eligible Shareholders” (within the meaning of section 708(8) of the Australian

Corporations Act) or to “professional Eligible Shareholders” (within the meaning of section

708(11) of the Australian Corporations Act) or otherwise pursuant to one or more exemptions

contained in section 708(8) of the Australian Corporations Act, so that it is lawful to offer, or

invite applications for, the Subscription Rights and Offer Shares without disclosure to persons

under Chapter 6D of the Australian Corporations Act; and

(ii) this Prospectus may only be made available in Australia to persons as set forth in clause (a)

above.

If you acquire Offer Shares, then you (i) represent and warrant that you are a person to whom an

offer of securities can be made without a disclosure document in accordance with subsections

708(8) or (11) of the Australian Corporations Act and (ii) agree not to sell or offer for sale any

Subscription Rights and Offer Shares in Australia within 12 months after their issue to the offeree

or invitee under this Prospectus, except in circumstances where disclosure to Eligible Shareholders

under Chapter 6D would not be required under the Australian Corporations Act.

No person receiving a copy of this Prospectus and/or receiving a credit of Subscription Rights to an

account in VPS with a bank or financial institution in Australia may treat the same as constituting

an invitation or offer to such person nor should such person in any event deal in Subscription Rights

in VPS unless such an invitation or offer could lawfully be made to such person without

contravention of any registration or other legal requirements. In such circumstances, this document

is to be treated as received for information only and should not be copied or redistributed.

21.5 Notice to Swiss Eligible Shareholders

This Prospectus is not being publicly distributed in Switzerland. Each copy of this document is

addressed to a specifically named recipient and may not be passed on to third parties. The

Subscription Rights or Shares are not being offered to the public in or from Switzerland, and neither

this document, nor any other offering material in relation to the Subscription Rights or Shares may

be distributed in connection with any such public offering.

Spectrum ASA

168

ANNEX A – DEFINITIONS

AGM Any annual general meeting of the Company

Allmennaksjeloven The Norwegian Public Limited Companies Act

Anti-Money Laundering

Legislation

The Norwegian Money Laundering Act No. 11 of March 6, 2009 and the

Norwegian Money Laundering Regulations No. 302 of March 13, 2009

Articles The articles of association of Spectrum ASA

Board or Board of Directors The board of directors of the Company

Board Meeting Meeting by the Board of Directors

Carmot Processing Carmot Processing AS

Carmot Seismic Carmot Seismic AS

CEO The Company’s chief executive officer

CFO The Company’s chief financial officer

CGGV Compagnie Générale de Géophysique – Veritas SA and CGG Veritas Services

(UK) Limited

CGGVeritas Compagnie Générale de Géophysique – Veritas SA

Code of Practice Norwegian Code of Practice for Corporate Governance dated 21 October 2010,

revised in October 2011, 2012, 2013 and 2014

Company or Spectrum Spectrum ASA (registration no. 992 470 763)

Danske Bank Danske Bank, Norwegian Branch

EEA European Economic Area

EGM The extraordinary general meeting of the Company held on 23 June 2015

Eligible Shareholders Shareholders in the Company as of 1 June 2015 as documented in the VPS on 3

June (Record Date), who were not given the opportunity to subscribe for shares in

the Private Placement and who are not resident in a jurisdiction where such

offering would be unlawful or (other than Norway) would require any filing,

registration or similar action

Early Sales Early Sales, also referred to as “Industry pre-funding” is funding provided by the

customers in the early stage of the multi-client project. Pre-funding levels could

typically be in the range of 30-100% of estimated project cost.

EUR Euro, the single currency of the European Union member states participating in

the European monetary Union

Exchange Act The U.S. Exchange Act of 1934, as amended

FDS GmbH Fugro Data Services GmbH

FMCS AS Fugro Multi Client Services AS

FMCS Pty Ltd Fugro Multi Client Services Pty Ltd

Foreign EEA Corporate

Shareholders

Foreign Shareholders that are corporations tax-resident within the EEA for tax

purposes

Foreign EEA Personal

Shareholders

Foreign Shareholders who are individuals tax-resident within the EEA

Forced amortisation Spectrum is amortising 40% of sales over the first 12 months of any finished

survey regardless of when during the year it was started. Thereafter the project is

amortised on a linear basis over the next 3 years, effectively reducing book value

to zero 4 years after project completion. A forced amortization policy is applied if

sales do not match expectations in order for each project to be fully amortized 4

years after project completion

Forward-looking statements Statements made that are not historic and thereby predictive as defined in Section

4 (“Cautionary note regarding forward-looking statements”)

Fugro Fugro N.V. and its subsidiaries Fugro Multi Client Services AS, Fugro Multi

Client Services Inc, Fugro Multi Client Services Pty LTD and Fugro Data

Services GmbH holding the Library.

GBP Great Britain Pounds

Group Spectrum ASA and its subsidiaries and affiliated companies

GTB Global Tender Barges ASA, formerly Global Geo Services ASA

Haavind Advokatfirmaet Haavind AS

Spectrum ASA

169

IFRS International Financial Reporting Standards

Ineligible Shareholders Subscription Rights of Eligible Shareholders resident in jurisdictions where the

Prospectus may not be distributed and/or with legislation that, according to the

Company’s assessment, prohibits or otherwise restricts subscription for

Subsequent Offering Shares

ISIN Securities number in the Norwegian Central Securities Depository (VPS)

Library The worldwide multi-client marine 3D (“MC3D”) and 2D (“MC2D”) seismic

data library of Fugro, with the exemption of certain non-transferable items,

among them multi-client surveys in Russia or with Russian partner

Listing The Listing of the New Shares and up to 1,500,000 Offer Shares on the Oslo Børs

Loan Agreement The loan agreement between Spectrum and Danske Banks regulating the terms

and conditions of the Loan

Managers ABG Sundal Collier ASA and Danske Bank

2D multi-client or MC2D Worldwide Multi-Client marine 2D

3D multi-client or MC3D Worldwide Multi-Client marine 3D

New Shares The 10,000,000 new shares of the Company issued in the Private Placement and

subsequently listed on Oslo Børs

NOK Norwegian Kroner, the lawful currency of Norway

Norwegian Anti-Money

Laundering Legislation

Norwegian Money Laundering Act No. 11 of March 6, 2009 and the Norwegian

Money Laundering Regulations No. 302 of March 13, 2009 Norwegian Company Register The Norwegian Register of Business Enterprises (Nw “Brønnøysund)

Norwegian FSA Financial Supervisory Authority of Norway (Nw Finanstilsynet)

Norwegian Public Limited

Companies Act

The Norwegian Public Limited Liability Companies Act of 19 June 1997 no. 45

Norwegian Securities Trading

Act

The Norwegian Securities Trading Act of 29 June 2007 no. 75

Offer Shares Up to 1,500,000 new shares in the Company to be issued in connection with the

Subsequent Offering and subsequently listed on Oslo Børs

Options The options to subscribe for Shares in the Company, which have been granted

based upon the share option program in the Company

Oslo Børs Oslo Børs ASA (the Oslo Stock Exchange)

Payment Advancing Person The Company reserves the right to make arrangements for advances of payment

on behalf of subscribers who have not made payment of the Offer Shares by the

Payment Date by a person other than the subscriber

Payment Date The date payment for Offer Shares allocated to a subscriber falls due

Private Placement The private placement of 1,000,000 New Shares completed on 1 June 2015

Prospective Directive Secondary legislation and regulations including the EC Commission Regulation

EC/809/2004 implementing the Directive 2003/71/EC regarding information

contained in prospectuses

Prospectus This prospectus, dated 3 July 2015, concerning the listing of the New Shares and

the Subsequent Offering

Prospectus Directive Directive 2003/71/EC and includes any relevant implementing measure in each

Relevant Member State.

PSTM Pre-Stack Time Migration

PSDM Pre-Stack Depth Migration

Register of Business Enterprises The Norwegian Register of Business Enterprises (Nw “Foretaksregisteret”)

Record Date 3 June 2015

Regulations National and supra-national, environmental, health and safety laws, regulations,

treaties and conventions

Relevant Member State Each Member State of the EEA other than Norway, which has implemented the

Prospectus Directive

SeaBird SeaBird Exploration FZ LLC

Securities Act The United States Securities Act of 1933

Share Capital The total amount of registered and outstanding Shares in the Company

Share Issue The issues of New Shares related to the Transaction

Spectrum ASA

170

Share (-s) Ordinary shares in the Company, each share having a nominal value of NOK

1.00, and “Share” means any of them

Spectrum Australia Spectrum Geo Pty Ltd

Spectrum Brazil Spectrum Geo do Brazil Services Geofisicos Ltda

Spectrum-Geopex Egypt Spectrum-Geopex Egypt Limited

Spectrum UK Spectrum Geo Ltd (GTB-Spectrum Ltd)

Spectrum US Spectrum Geo Inc

Subscription The submission of the Subscription Form to the Managers

Subscription Form The subscription form for the Offer Shares, attached as Annex E to this

Prospectus

Subscription Offices Offices of the Managers

Subsequent Offering The subsequent offering of up to 1,500,000 Offer Shares in the Company at a

Subscription Price of NOK 32 per Offer Share with non-transferable

Subscription Rights to Eligible Shareholders

Subscription Period The subscription period in the Subsequent Offering commencing on 9 July2015 at

09:00 (CET) and expires on 23 July 2015 at 16:30 (CET)

Subscription Price NOK 32 per new share in the Company (the subscription price for the New

Shares in the Private Placement and the Offer Shares in the Subsequent Offering)

Subscription Rights The non-transferable subscription rights granted to the Eligible Shareholders

providing rights to subscribe for, and be allocated, Offer Shares in the Subsequent

Offering

Supporting Shareholders Altor Invest 1 AS, Altor Invest 2 AS, Spencer Trading Inc, Corona Maritime

Holding AS, Nordea Fondene Norge AS, Folketrygdfondet, in their capacities as

parties to the Subscription and Underwriting Agreement.

Subscription and Underwriting

Agreement

The subscription and underwriting agreement entered into between the Company

and Altor Invest 1 AS, Altor Invest 2 AS, Spencer Trading Inc, Corona Maritime

Holding AS, Nordea Fondene Norge AS and Folketrygdfondet

Transaction The Company’s acquisition of the Library from Fugro as reflected in the

Transaction Agreement.

Transaction Agreement or TA The share and asset purchase agreement between the Company and Fugro

Norway AS, Fugro Holding (Australia) Pty Ltd, Furgo Finace AG and Fugro

Muliti Client Services Inc entered into on 1 June 2015 whereby the Company has

acquired the shares in Fugro Multi Client Services AS, Fugro Multi Client

Services Pty Ltd and Fugro Data Services GmbH, including certain multi-client

library assets from Fugro Muliti Client Services Inc

Underwriters ABG Sundal Collier ASA and Danske Bank

Underwriting Agreement The underwriting agreement entered into between the Company and ABG Sundal

Collier ASA and Danske Bank

VPS The Norwegian Central Securities Depository (Nw: Verdipapirsentralen).

ANNEX B – ARTICLES OF ASSOCIATION (NORWEGIAN)

VEDTEKTER FOR SPECTRUM ASA

(sist endret 23. juni 2015)

§ 1 Selskapets firma

Selskapets navn er Spectrum ASA. Selskapet er et allmennaksjeselskap.

§ 2 Selskapets forretningssted

Selskapets forretningssted er i Oslo kommune.

§ 3 Formål

Selskapets virksomhet består i å tilby tjenester knyttet til innsamling, prosessering og markedsføring av geofysiske og

flymagnetiske data og gravitasjonsdata, samt andre tjenester knyttet til denne virksomhet, og å delta i selskaper med

lignende og tilknyttet virksomhet.

§ 4 Aksjekapital

Selskapets aksjekapital er NOK 53 326 625 fordelt på 53 326 625 aksjer, hver pålydende NOK 1. Selskapets aksjer skal

registreres i Verdipapirsentralen.

§ 5 Styret

Selskapets styre skal ha fra tre til syv medlemmer.

§ 6 Signatur

Selskapets firma tegnes av styrets leder alene, daglig leder alene eller to styremedlemmer i fellesskap.

§ 7 Valgkomité

Selskapet skal ha en valgkomité bestående av 1 til 3 medlemmer. Medlemmene skal velges for en periode på to år.

§ 8 Dokumenter på Selskapets internettsider

Dokumenter fremlagt til behandling på generalforsamlingen kan legges ut på selskapets internettsider. Tilsvarende

gjelder for dokumenter som etter lov skal inntas i eller vedlegges innkallingen til generalforsamlingen. Hvis

dokumentene er gjort tilgjengelig for aksjeeierne som nevnt foran, erstatter dette de lovmessige krav til utsendelse. En

aksjeeier kan likevel kreve å få tilsendt dokumenter som gjelder saker som skal behandles på generalforsamlingen.

§ 9 Generalforsamling

På den ordinære generalforsamling skal følgende spørsmål behandles og avgjøres:

1. Godkjennelse av årsregnskap og årsberetning, herunder utdeling av utbytte.

2. Valg av styremedlemmer og revisor (hvis de er på valg).

3. Andre saker som etter lov eller vedtekter hører under generalforsamlingen.

ARTICLES OF ASSOCIATION

FOR

SPECTRUM ASA

(as of 23 June 2015)

§ 1 Name

The name of the company is Spectrum ASA. The company is a public limited company.

§ 2 Registered address

The registered address of the company shall be located in the municipality of Oslo.

§ 3 Purpose

The company shall be engaged in the business of offering services related to the acquisition, processing and marketing of

geophysical, aeromagnetic and gravity data, and other services related to such business, including the participation in other

companies engaged in similar and related business.

§ 4 Share capital

The company's share capital is NOK 53 326 625 divided into 53 326 625 shares, each with a par value of NOK 1. The

company's shares shall be registered in the Norwegian securities depository (VPS).

§ 5 The Board of Directors

The Board of Directors shall comprise no less than three and no more than seven members.

§ 6 Authority to sign on behalf of the company

The Chairperson of the Board of Directors alone, the company's CEO alone, or two board members acting jointly, shall be

authorised to sign on behalf of the company.

§ 7 Nomination Committee

The company shall have a nomination committee consisting of between one and three members. The members shall be

elected for a period of two years.

§ 8 Documents on the Company’s web page

Documents to be presented for discussion on the General Meeting can be made available on the company’s web page.

The same applies for documents which according to law shall be enclosed to the notice of the General Meeting.

Provided that the documents are made available for the shareholders as mentioned, this will compensate for the legal

requirements of physical distribution to the shareholders. However, a shareholder may require that such documents to

be discussed on the General Meeting shall be distributed to such shareholder anyway.

§ 9 General Meeting

The annual general meeting shall deliberate and resolve whether to approve the following Matters:

1. Approval of the annual accounts and the annual report, hereunder the distribution of dividends,

2. Election of board members and auditor (if up for election), and

3. Other matters assigned to the Shareholders' Meeting by statute or the Articles of Association.

ANNEX C – INDEPENDENT ASSURANCE REPORT ON THE PRO FORMA FINANCIALINFORMATION

ANNEX D – ANNUAL REPORT FMCS AS

ANNEX E – SUBSCRIPTION FORM

SPECTRUM ASA

SUBSEQUENT OFFERING JULY 2015

In order for investors to be certain to participate in the Subsequent Offering,

Subscription Forms must be received no later than 23 July 2015 at 16:30

(CET). The Subscriber bears the risk of any delay in the postal communication, busy facsimiles and data problems preventing orders from being received by the

Managers.

SUBSCRIPTION FORM

Properly completed Subscription Forms must be submitted to the Managers as set

out below:

ABG Sundal Collier ASA

Munkedamsveien 45,

PO Box 1444 Vika

NO-0115, Oslo

E-mail: [email protected]

Danske Bank Bryggetorget 4

PO Box 1170 Sentrum

N-0250, Oslo, Norway E-mail:

[email protected]

Norwegian subscribers domiciled in Norway can in addition

subscribe for shares at www. danskebank.no and www.abgsc.no

General information: The terms and conditions for the subsequent offering (the “Subsequent Offering”) in Spectrum ASA (“Spectrum” or the “Company”) of up to

1,500,000 offer shares (the “Offer Shares”) pursuant to a resolution by the Company’s board of directors on 2 July 2015, based on an authorisation to increase the share capital by the Company’s extraordinary general meeting on 23 June 2015 (the “EGM”) are set out in the prospectus dated 3 July 2015 (the “Prospectus”).

Terms defined in the Prospectus shall have the same meaning in this Subscription Form. The notice of, and the minutes from, the EGM minutes (with appendices), the

minutes of the Company’s Board meeting, the Articles of Association and the annual accounts for the last three years, are available at the Company’s registered office. All announcements referred to in this Subscription Form will be made through Oslo Børs’ information system under the Company’s ticker “SPU”. This

Subscription Form may only be distributed together with this Prospectus. In case of any discrepancies between the Subscription Form and the Prospectus, the

Prospectus shall prevail. Offer Shares and Subscription Rights: The Subsequent Offering comprises 1,500,000 non-tradable subscription rights (the “Subscription Rights”), where each

Subscription Right, subject to applicable securities law, give the right to subscribe for and be allocated one (1) Offer Share. Over- subscription is allowed. No

fractional Offer Shares will be issued. Subscription Period: The subscription period is from and including 9 July 2015 to 16:30 (CET) on 23 July 2015 (the “Subscription Period”). Neither the Company

nor the Managers may be held responsible for delays in the mail system or for Subscription Forms forwarded by facsimile that are not received in time by the

Managers. It is not sufficient for the Subscription Form to be postmarked within the deadline. The Managers have discretion to refuse any improperly completed, delivered or executed Subscription Forms or any subscription which may be unlawful. Subscription Forms that are received too late or are incomplete or erroneous are

therefore likely to be rejected without any notice to the subscriber. The subscription for Offer Shares is irrevocable and may not be withdrawn, cancelled or modified

once it has been received by the Managers. Multiple subscriptions are allowed. Subscription without Subscription Rights is permitted. Subscription price: The subscription price for one (1) Offer Share is NOK 32.

Right to subscribe: The Subscription Rights will be issued to the Company’s shareholders as of close of trading on 1 June 2015, as appeared in VPS on 3 June 2015

(the “Record Date”), who were not invited to participate in the private placement completed 1 June 2015 (“Eligible Shareholders”). Each Eligible Shareholder will be granted 1 Subscription Rights for every 8 Share owned as of the Record Date. Subscription Rights not used to subscribe for the Offer Shares will lapse without any

compensation upon expiry of the Subscription Period and will consequently be of no value. The number of Subscription Rights allocated to each Eligible Shareholder

will be rounded down to the nearest whole Subscription Right.

Allocation: The allocation criteria are set out in the Prospectus. All Subscribers being allotted Offer Shares will receive a letter from the Managers confirming the

number of Offer Shares allotted to the Subscriber. This letter is expected to be mailed on or about 24 July 2015.

Payment: The payment for the Offer Shares falls due on 27 July 2015 (the “Payment Date”). By signing the Subscription Form, each Subscriber having a Norwegian bank account authorises Danske Bank, Norwegian branch (“Danske Bank”) (on behalf of the Managers) to debit the bank account specified by the Subscriber below

for payment of the allotted Offer Shares for transfer to Danske Bank. Danske Bank reserves the right to make up to three attempts to debit the Subscribers’ accounts if

there are insufficient funds on the account on previous debit dates. Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares allocated to them is made on or before the Payment Date and should contact Danske Bank in this respect for further details and instructions.

DETAILS OF THE SUBSCRIPTION

Subscriber’s VPS account Number of Subscription Rights

Number of Offer Shares subscribed for (incl. over-

subscription)

(For broker: Consecutive no.)

ONE (1) SUBSCRIPTION RIGHTS GIVE THE RIGHT TO BE ALLOCATED

ONE (1) OFFER SHARE

SUBSCRIPTION RIGHT’S SECURITIES NUMBER ISIN NO0010741523

Subscription price per Offer Share

1 NOK 32.00

Total Subscription amount to

be paid

NOK

IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED)

My Norwegian bank account to be debited for the consideration for Offer Shares

allotted (number of Offer Shares allotted x subscription price)

(Norwegian bank account no. 11 digits) In accordance with the terms and conditions set out in the Prospectus and this Subscription Form, I/we hereby irrevocably (i) confirm my/our request to subscribe for the

number of Offer Shares specified above and authorise each of the Managers, and anyone appointed by any of them, to subscribe in my/our name and/or on my/our behalf

for such Offer Shares (for my/our account and risk) and to take all and any action to effectuate the same, (ii) and grant the Managers, or any one of them, authorisation to

debit (by direct or manual debiting as described above) the specified bank account for the payment of the Offer Shares allotted to me/us, and (iii) confirm and warrant to

have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms and conditions set out in the Prospectus..

Place and date

Must be dated in the Subscription Period

Binding signature. The Subscriber must have legal capacity.

When signed on behalf of a company or pursuant to an

authorisation, documentation in the form of a company certificate or power of attorney should be attached.

Spectrum ASA

176

INFORMATION ON THE SUBSCRIBER (MUST BE COMPLETED)

Subscriber’s VPS account number In the case of

changes in registered

information, the

account operator

must be contacted.

Your account

operator is:

Forename

Surname/company

Street address (for private: home address):

Post code/district/ Country

Personal ID number / Organisation number

Norwegian Bank Account for dividends

Nationality

Daytime telephone number

E-mail address:

ADDITIONAL GUIDLINES FOR THE SUBSCRIBERS

Regulatory matters: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian securities law

imposes requirements in relation to business investments. In this respect, the Managers must categorize all new clients in one of three categories:

eligible counterparties, professional and non-professional clients. All subscribers in the Subsequent Offering who/which are not existing clients of one

of the Managers will be categorized as Non-professional clients. Subscribers can, by written request to the Managers, ask to be categorized as a

professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the

categorization, the subscriber may contact the Managers. The subscriber represents that he/she/it is capable of evaluating the merits and risks of

an investment decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a

complete loss, of an investment in the Offer Shares.

Selling restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 21 “Selling and Transfer Restrictions” of the Prospectus. The making or acceptance of the Subsequent Offering to or by persons who have registered addresses outside Norway or who are resident

in, or citizens of, countries outside Norway, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional

advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person outside Norway wishing to subscribe for Offer Shares under the Subsequent Offering to satisfy

himself/herself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or

other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The Subscription Rights and Offer Shares have not been registered and will not be registered under the United States Securities Act of

1933, as amended (the “U.S. Securities Act”) or under the securities law of any state or other jurisdiction of the United States and may not be offered,

sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, within the United States. There will be no public offer of the Subscription Rights and Offer Shares in the United States. The Subscription Rights and Offer Shares have not been and will not be registered under

the applicable securities laws of Australia or Switzerland and may not be offered, sold, resold or delivered, directly or indirectly, in or into Australia

or Switzerland except pursuant to an applicable exemption from applicable securities laws. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. Subject to certain exceptions, the

Prospectus will not be distributed in the United States, Australia or Switzerland. Except as otherwise provided in the Prospectus, the Subscription

Rights and the Offer Shares may not be transferred, sold or delivered in the United States, Australia or Switzerland. Exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions and those set out in the Prospectus may be deemed to be invalid.

Execution only: The Managers will treat the Subscription Form as an execution-only instruction. The Managers are not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the

relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act

and foreign legislation applicable to the Managers there is a duty of secrecy between the different units of the Managers as well as between the

Managers and the other entities in the Managers’ group. This may entail that other employees of the Managers or the Managers’ group may have

information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Managers will not have access to in their

capacity as managers for the Subsequent Offering.

Information barriers: The Managers are investments firms that offer a broad range of investment services. In order to ensure that assignments

undertaken in the Managers’ corporate finance department are kept confidential, the Managers’ other activities, including analysis and stock broking,

are separated from the Managers’ corporate finance department by information walls. Consequently, the subscriber acknowledges that the Managers’ analysis and stock broking activity may act in conflict with the subscriber’s interests with regard to transactions of the Shares, including the Offer

Shares or the Subscription Rights, as a consequence of such information walls.

VPS account and mandatory anti-money laundering procedures: The Subsequent Offering is subject to the Norwegian Money Laundering Act

No. 11 of March 6, 2009 and the Norwegian Money Laundering Regulations No. 302 of March 13, 2009 (collectively the “Anti-Money Laundering

Legislation”). Subscribers who are not registered as existing customers with the Managers must verify their identity in accordance with the requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian

bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Managers. The

verification of identity must be completed prior to the end of the Subscription Period. Subscribers that have not completed the required verification of identity may not be allocated Offer Shares. Further, in participating in the Subsequent Offering, each subscriber must have a VPS account. The VPS

Spectrum ASA

177

account number must be stated on the Subscription Form. VPS accounts can be established with authorised VPS registrars, which can be Norwegian

banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS

account requires verification of identity before the VPS registrar in accordance with the Anti-Money Laundering Legislation. Non-Norwegian

investors may, however, use nominee VPS accounts registered in the name of a nominee. The nominee must be authorized by the Financial

Supervisory Authority of Norway.

Terms and conditions for payment by direct debiting – securities trading: Payment by direct debiting is a service provided by the banks in

Norway in cooperation. In the relationship between the payer and the payer’s bank, the following applies as standard conditions:

1. The service “payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s

bank, ref. in particular Section C of the account agreement, General terms and conditions for deposits and payment instructions.

2. Costs related to payment based on “payment by direct debiting – securities trading” are found in the bank’s prevailing price list, account information and/or are provided in other suitable manner. The bank will charge the incurred costs on the designated account.

3. The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to

its bank who in turn will charge the payer’s bank.

4. In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the

Norwegian Financial Contracts Act, the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed.

Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

5. The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The

payer’s bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged

with an amount higher than the funds available, the difference shall immediately be covered by the payer.

6. The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization

for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The

charge will not, however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

7. If the payer’s account is wrongfully charged after direct debiting, the payer’s right repayment of the charged amount will be governed by

the account agreement and the Norwegian Financial Agreement Act.

Overdue and missing payments: Overdue and late payments will be charged with interest at the applicable rate from time to time under the

Norwegian Act on Interest on Overdue Payment of 17 December 1976 no. 100, currently 9.25% per annum. If a subscriber fails to comply with the

terms of payment, the Offer Shares will, subject to the restrictions in the Norwegian Public Limited Companies Act and at the discretion of the Managers, not be delivered to the subscriber. In order to enable timely registration of the share capital increase relating to the Subsequent Offering

with the Norwegian Company Register, the Company reserves the right to make arrangements for advances of payment on behalf of subscribers who

have not made payment of the Offer Shares by the Payment Date by a person other than the subscriber (a "Payment Advancing Person") pursuant to Section 10-12 of the Norwegian Public Limited Companies Act. To the extent such payment advance is made on behalf of a non-paying subscriber,

the Offer Shares subscribed by the non-paying subscriber shall be provisionally registered in a separate account with the VPS, in anticipation of

settlement by the non-paying subscriber. If the non-paying subscriber has not made payment within three days after the Payment Date, the Payment Advancing Person may from and including the fourth day after the Payment Due Date either assume ownership of the Offer Shares subscribed by the

non-paying subscriber by notifying the Company, or sell such Offer Shares for the non-paying subscriber's account and risk without further notice to

the subscriber in question in accordance with Section 10-12, fourth paragraph of the Norwegian Public Limited Companies Act. The non-paying

subscriber will be liable for any loss, cost and expenses suffered or incurred by the Company and/or a Payment Advancing Persons as a result of or in

connection with such disposals. The non-paying subscriber shall remain liable for payment of the entire amount due; interest, costs, charges and

expenses accrued (and will not be entitled to profits, if any), and the Company and/or the Payment Advancing Person may enforce payment for any such amount outstanding.

Selling and transfer restrictions: Please refer to Section 21 ("Selling and Transfer Restrictions") of the Prospectus. Please note that certain persons

that are resident in, or who are citizens of countries other than Norway, may be required to give certain representations and warranties and to execute additional documents or letters to confirm their eligibility to participate in the Subsequent Offering.

[THIS PAGE IS INTENTIONALLY LEFT BLANK]

REGISTRERED OFFICE AND ADVISORS

Spectrum ASA

Sjølyst plass 2

0278 Oslo, Norway

Telephone:+47 23 01 49 60

Fax:+47 23 01 49 61

Joint Lead Managers and Joint Bookrunners

ABG Sundal Collier ASA

Munkedamsveien 45 E, 7th floor

P.O Box 1444 - Vika

0250 Oslo, Norway

Tel +47 22 01 60 00

Fax +47 22 01 60 60

Danske Bank, Norwegian Branch

Bryggetorget 4

P.O. Box 1170 Sentrum

0170 Oslo, Norway

Tel +47 85 40 57 51

Fax +47 85 40 79 89

Legal Advisor to the Company

Advokatfirmaet Haavind AS

Bygdøy allé 2

P.O. 359 Sentrum

0101 Oslo, Norway

Tel +47 22 43 30 00

Fax +47 22 43 30 01

Auditor

Ernst & Young AS

Dronning Eufemias Gate 6

P.O. Box 20, 0051 Oslo

0191 Oslo, Norway

Tel +47 24 00 24 00

Fax 24 00 24 01

Legal Advisor to the Managers

Advokatfirmaet Grette DA

Filipstad Brygge 2

P.O. 1397 Vika

0114 Oslo

Tel +47 22 34 00 00

Fax +47 22 34 00 01

tel:+4722433000

tel:+4722433001