CGG Withdraws Offer for Petroleum Geo-Services Geophysical Business

Petroleum Geo-Services ASA announced today that on October 5, 2004 Compagnie Générale de Géophysique (CGG) withdrew its prior proposal to acquire PGS' geophysical business.

Petroleum Geo-Services ASA announced today that on October 5, 2004 Compagnie Générale de Géophysique (CGG) withdrew its prior proposal to acquire PGS' geophysical business.

As previously disclosed by the Company on September 1, 2004, CGG made a conditional proposal to acquire PGS' geophysical business for USD 900 million, consisting of USD 800 million in cash and USD 100 million in newly issued shares of CGG common stock. The CGG proposal was subject to fulfillment of various conditions including, among other things, satisfactory completion of due diligence and financing arrangements.

Based on evaluations performed by PGS management and financial advisors, PGS' Board of Directors and management rejected the CGG proposal as inadequate in terms of price and other conditions. CGG did not revise its offer prior to withdrawing it.

PGS continues to believe in the potential benefits of seismic industry restructuring and will continue to pursue solutions to enhance profitability and value to PGS shareholders.

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