Arrow Prospectus - PGS

ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING
The seismic vessels – both currently owned and to be delivered in 2008 and 2009, are likely to operate
worldwide, and as such on various continental shelves. Depending upon the contract structure and duration of
operation, there is a risk that these operations in foreign waters could be subject to taxation if there is activity on
a country’s territory more than 30 days. This will depend on the local countries tax treaty with the UK. Tax paid
abroad should be available to credit against UK tax payable for the UK subsidiaries of Arrow Seismic ASA in
accordance with the UK tax credit rules. However, credit in UK tax will only be granted if the UK subsidiary in
question is in a UK tax paying position in the same tax year and therefore any UK credit for tax payable in other
jurisdictions may be limited. In addition, income from vessels operating on the UK shelf for periods exceeding
30 days is likely to fall outside tonnage tax and be subject to standard UK corporation tax. There are no
contractual agreements which have been entered into to avoid such risk.
2.2.17 Geopolitical risks
Changes in the legislative and fiscal framework governing the activities of the oil companies could have material
impact on exploration, production and development activity or affect the Company’s operations directly or
indirectly. In particular, changes in political regimes will constitute a material risk factor for the Company’s
operations in foreign countries.
2.2.18 Risk of war, other armed conflicts and terrorist attacks
War, military tension and terrorist attacks have among other things caused instability in the world’s financial and
commercial markets. This has in turn significantly increased political and economic instability in some of the
geographic areas in which Arrow operates and has contributed to high levels of volatility in prices for among
other things oil and gas. Continuing instability may cause further disruption to financial and commercial markets
and contribute to even higher levels of volatility in prices. In addition, acts of terrorism and threats of armed
conflicts in or around various areas in which Arrow operates could limit or disrupt Arrow’s markets and
operations, including disruptions from evacuation of personnel, cancellation of contracts or the loss of personnel
or assets. Armed conflicts, terrorism and their effects on Arrow or its markets may significantly affect Arrow’s
business and results of operations in the future.
2.2.19 Adequate insurance protection
The operation of any vessel represents a potential risk of loss of or damage to the vessel, as well as third party
liability arising out of, personal injury or, death, pollution and property damage caused by adverse weather
conditions, mechanical failures, human error, war, terrorism, and other circumstances or events. An accident
involving any of the Company’s vessels could result in loss of revenue, fines or penalties, higher insurance costs
and damage to the Company’s reputation. The Company may not have sufficient insurance coverage for the
entire range of risks to which it is exposed and any particular claim may not be paid. Any significant loss or
liability for which the Company is not insured could have a material adverse effect on its business, financial
condition and results of operations. In addition, the loss, or prolonged unavailability, of a vessel could have an
adverse effect on the Company’s business, financial condition and results of operations even if insurance
solutions were effective.
2.3 RISK FACTORS RELATING TO THE SHARES
2.3.1 Price Volatility of Publicly traded Securities
The trading price of the Shares could fluctuate significantly in response to quarterly variations in operating
results, adverse business developments, interest rate, changes in financial estimates by securities analysts,
matters announced in respect of major customers or competitors, or changes to the regulatory environment in
which the Company operates.
The market price of the Shares could decline due to sales of a large number of the Shares in the market or the
perception that such sales could occur. Such sales could also make it more difficult for the Company to offer
equity securities in the future at a time and at a price that are deemed appropriate.
2.3.2 Change of Control
After the completion of the Offering, GC Rieber Shipping is expected to hold more than 40% of the Shares in the
Company, in compliance with financial covenants in the Company’s loan agreements under which GC Rieber
Shipping is required to maintain a minimum ownership of 33.4% when Listed. Accordingly, GC Rieber
Shipping will have the ability to influence matters submitted for a vote of shareholders, including electing the
Board of Directors, approval of the annual financial statements, declarations of dividends and capital increases in
connection with acquisitions, investments or otherwise. As long as GC Rieber Shipping holds more than 1/3 of
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