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IN THE MATTER OF AN ARBITRATION UNDER CHAPTER ELEVEN OF THE
NORTH AMERICAN FREE TRADE AGREEMENT AND THE UNCITRAL
ARBITRATION RULES (1976)

-between-

THEODORE DAVID EINARSSON, HAROLD PAUL EINARSSON,
RUSSELL JOHN EINARSSON, and GEOPHYSICAL SERVICE INCORPORATED

(“Claimants”)

-and-

THE GOVERNMENT OF CANADA

(“Respondent”)

ICSID CASE NO. UNCT/20/6

EXPERT REPORT OF PAUL SHARP
of PricewaterhouseCoopers LLP

CER-02

BORDEN LADNER GERVAIS LLP
1900, 520 - 3^rd Avenue SW
Calgary, AB T2P 0R3
Canada

Matti Lemmens
Counsel for Theodore David Einarsson,
Harold Paul Einarsson, Russell John
Einarsson and Geophysical Service
Incorporated

[Page 2]

Expert Report of Paul Sharp of PricewaterhouseCoopers LLP

CER-02

Please see the attached Appendix “A” of which includes my report in its entirety.

I make this witness statement and expert report in support of the Claimants’ claim in this proceeding and for no other purposes.

I swear this expert report in English.

[Publication]

PAUL SHARP
PRICEWATERHOUSECOOPERS LLP
111-5th Avenue SW
Suite 3100
Calgary AB T2P 5L3
Canada

[Page 3]

Appendix “A”

[Page 4]

Privileged
and confidential

September 26, 2022

Valuations

Einarsson et al. v. Canada,
ICSID CASE NO. UNCT/20/6

Fair Market Value of
Geophysical Service Inc. in a But-for Scenario
as of November 30, 2017 and June 30, 2022

[Page 5]

Ms. Matti Lemmens, Partner
Borden Ladner Gervais LLP
Centennial Place, East Tower
1900, 520 – 3rd Avenue SW
Calgary AB T2P 0R3

PricewaterhouseCoopers LLP
111-5th Avenue SW, Suite 3100
Calgary AB T2P 5L3
T: 403 509 7500
F: 403 781 1825

September 26, 2022

Dear Ms. Lemmens,

PricewaterhouseCoopers LLP (“PwC”, “we” or “us”) has been engaged by Borden Ladner Gervais LLP (“BLG” or “Counsel”) to provide an expert report that includes an estimate level valuation report (the "Report") with respect to the fair market value of Geophysical Service Incorporated (“GSI” or the "Company") assuming a scenario wherein certain actions on the part of the Government of Canada did not occur ("But-for Scenario”) as of November 30, 2017 and June 30, 2022 (the “Valuation Dates”) as well as certain other quantifications of loss as requested by you including a quantification of loss of employment earnings, a quantification of loss of certain amounts lent to GSI, and a quantification of interest accrued on the aforementioned losses up to June 30, 2022.

We prepared this Report in accordance with the engagement letter dated May 20, 2022, and the Report is subject to the terms, conditions, and the scope limitation (as described in this Report's Terms of Reference) included therein.

The Report is provided solely for your use for the purpose stated in the above-noted engagement letter and should not be used for any other purpose, or be provided to any third parties, except in connection with processes or proceedings as noted in our engagement letter. In the event that our Report is to be distributed to another party, a release letter must be received from that party prior to distribution.

This Report was prepared in the English language. I am available to testify in this proceeding in English. I affirm this Report is in English.

Should you have any questions regarding the Report, or if we may be of further assistance, please contact us.

Yours very truly,

PricewaterhouseCoopers LLP

Paul Sharp, CPA, CA, CBV
Partner, Deals

[Page 6]

[Page 7]

At a Glance – Approach and Conclusion

Valuation Methodology

1. An income approach was selected to value the shareholdings in GSI; more specifically, the capitalized cash flow (“CCF”) method¹.
2. In selecting this method, we considered a number of factors, including:
   1. Based on our analysis and the assumptions provided to us, in the But-for Scenario, GSI would have been a going concern; and
   2. The Company did not have multi-year forecasts that contemplated the But-for Scenario at the Valuation Dates which would be required to perform a discounted cash flow method.
3. As tests of reasonableness, we reviewed both somewhat comparable public company metrics and somewhat comparable transaction multiples. In particular, we reviewed the following metrics:
   1. Enterprise value (“EV”)/Maintainable EBITDA.
4. Our selected valuation methodology and tests of reasonableness are described in further detail in Section 3, Valuation Analysis.
5. We also considered an asset-based approach, which would consider, as part of it, a standalone value analysis for GSI's seismic data collection. Our research did not yield sufficient independent data points in order to facilitate a robust analysis and accordingly, this analysis has not been included in this Report.

Conclusion

6. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, the fair market values in a But-for Scenario of GSI at the Valuation Dates are summarized in the following table.
7. We note that a valuation is not a precise science and the conclusions arrived at, in many cases, will of necessity, be subjective and dependent on the exercise of individual judgement. For the purposes of the Report, we have expressed our conclusions of value as falling within a likely range.

¹ Please refer to Appendix 3 for a description of various valuation approaches and methods. ↩

[Page 8]

Summary of Value

(In $CAD 000's)

8. With respect to quantifications of loss requested by Counsel, a summary of the results of those calculations is also presented in the following paragraphs and tables.

Equity Value

9. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the lost equity value of the Company at the Valuation Dates, our conclusions are summarized in the following table.

Lost Equity Value

(In $CAD 000's)

Loss on Loan from Shareholder of Affiliate

10. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss on loan from shareholder of affiliate at the Valuation Dates, our conclusions are summarized in the following table.

Loss on Loan from Shareholder of Affiliate

(In $CAD 000's)

Loss of Shareholder's Loan – Mr. Davey Einarsson

11. With respect to the loss of Mr. Davey Einarsson's shareholder loan at the Valuation Dates, our conclusions are summarized in the following table.

[Page 9]

Loss of Shareholder's Loan - Mr. Davey Einarsson

(In $CAD 000's)

Loss of Shareholder's Loan – Mr. Paul Einarsson

12. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of Mr. Paul Einarsson's shareholder loan at the Valuation Dates, our conclusions are summarized in the following table.

Loss of Shareholder's Loan - Mr. Paul Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Davey Einarsson

13. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Davey Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Davey Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Paul Einarsson

14. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Paul Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Paul Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Russell Einarsson

15. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Russell Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Russell Einarsson

(In $CAD 000's)

[Page 10]

At a Glance – Terms of Reference

Terms of Reference

16. The Report is required in connection with an arbitration initiated by Mr. Theodore David Einarsson (“Mr. Davey Einarsson"), Mr. Harold Paul Einarsson (“Mr. Paul Einarsson"), and Mr. Russell John Einarsson (“Mr. Russell Einarsson") (collectively, “Messrs. Einarsson”) on their own behalf and on the behalf of GSI (collectively, the “Claimants") against the Government of Canada pursuant to Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law and Articles 1116, 1117, and 1120 of the North American Free Trade Agreement.

17. The Report is provided solely for your use for the foregoing stated purpose and should not be used for any other purpose, or be provided to any third parties. In the event that our Report is to be distributed to another party, other than in connection with the processes or proceedings as noted in our engagement letter, a release letter must be received from that party prior to distribution.

18. The Report is an Expert Report which also contains an Estimate Valuation Report. These terms are set out in the Practice Standards of the Canadian Institute of Chartered Business Valuators (“CBV Institute”).

19. All references to currency in the Report, including its Appendices and Schedules, are to Canadian dollars (“$”), unless otherwise stated.

20. Throughout the Report, we use various terms and abbreviations, which have been summarized in the Glossary, set out in Appendix 6.

21. The Scope of Our Work and the Restrictions & Qualifications are set out in Appendices 1 and 2, respectively. They are an integral part of the Report.

Scope Limitation

22. Due to the nature of this mandate, the sweeping and pervasive impact of Canadian Court decisions that deprived GSI the right to enforce intellectual property laws on its data (which had been disclosed by certain Canadian governmental organizations) and the passage of time between the occurrence of those disclosures and our Valuation Dates, the validity of the assumptions forming the basis of the But-for Scenario cannot be fully corroborated. We have relied on these assumptions which have been identified in this Report as assumptions taken from Mr. Paul Einarsson's witness statement (the "Witness Statement"), and for the purposes of this Report, treated them as facts.

[Page 11]

At a Glance – Value Definition

Definition of Fair Market Value

23. FMV is defined by the CBV Institute as “the highest price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm's length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.”

24. FMV represents the intrinsic value of an asset or share. Price reflects the final negotiated terms with respect to the purchase and sale of an asset or share. Price may differ from FMV arrived at in a notional context as a result of a variety of factors, including type of consideration paid (i.e. cash versus shares), timing of receipt of consideration (i.e. current versus deferred), different knowledge or information levels and unequal bargaining positions of the vendor and purchaser.

25. The actual market price achieved may be higher or lower than the FMV, depending upon the circumstances of the transaction (for example the competitive bidding environment) or the nature of the business (for example the purchaser's perception of potential synergies). The knowledge, negotiating ability and motivation of the buyers and sellers and the applicability of a discount or premium for control will also affect the actual market price achieved. Accordingly, FMV is not necessarily the price at which any transaction proceeds. The final transaction price is something on which the parties themselves have to agree.

Special Purchasers

26. In view of the nature of this assignment, we were not able to expose the shares of GSI to the marketplace to determine whether there are any potential special purchasers who, for their own unique reasons (e.g., specific perceived synergies), might be prepared to entertain a value other than that determined by us herein. We have not received any information that would allow us to quantify any potential synergies that may be realized from any potential special purchasers.

[Page 12]

Major assumptions

In preparing the Report, we made the following assumptions, in addition to those set out throughout the Report, including its Appendices and Schedules. Amendment of any of these assumptions could materially impact our conclusions reached herein.

27. The Report is based on the most current financial and operational information to the Valuation Dates;

28. Business overview information relating to GSI is historically accurate and complete;

29. Historical financial statements accurately reflect the Company's historical operating results and financial positions;

30. Certain key valuation assumptions were obtained from the witness statement of Mr. Paul Einarsson. These assumptions, as well as the surrounding context, are described in detail throughout the Valuation Analysis section of this Report and are identified as such. For the purposes of this Report, we have assumed these assumptions to be reasonable;

31. The net book values (“NBV”) of cash, non-cash debt-free net working capital, property and equipment approximated their respective FMVs, unless otherwise noted herein;

32. The level of net working capital (excluding cash) in the But-for Scenario is the required amount to sustain ongoing operations;

33. Unless otherwise stated, there are no environmental obligations that would materially impact the value of the Company's operations;

34. In the But-for Scenario, unless otherwise stated, there are no lawsuits against the Company that would materially impact the value of the Company;

35. In the But-for Scenario, there are no material outstanding litigation matters or other contingencies, positive or negative, other than as disclosed herein;

36. In the But-for Scenario, the Company has valid title to all of its properties, the property rights are good and marketable, and there are no encumbrances that cannot be cleared through normal processes, unless otherwise stated in the Report;

37. In the But-for Scenario, there are no declared but unpaid dividends as at the Valuation Dates;

38. In the But-for Scenario, there are no material unrecorded assets or liabilities, unless otherwise stated;

39. In the But-for Scenario, there are no redundant assets or liabilities, unless otherwise stated;

40. Any leases are at market rates and are expected to be renewed at market terms in the future;

41. There are no special purchasers that would pay a premium to acquire the Company;

42. The combined federal and provincial corporate income tax rates of approximately 27.5% at November 30, 2017 and 25.5% at June 30, 2022 represent appropriate rates to apply to future earnings of the Company. Our calculation of these tax rates are summarized in Section 3;

43. GSI can obtain or renew all required licenses, or other legislative or administrative authorities from all applicable government or private organizations that are relevant for this analysis; and

44. The information contained in the Background section of this Report is accurate and complete.

45. Amendment of any of these assumptions could materially impact our conclusions reached herein.

[Page 13]

Our Analysis and Conclusion

Our Analysis and Conclusion ................................................................................ 13

1 Business Overview ....................................................................................................14

2 Selected Valuation Approach ...................................................................................17

3 Valuation Analysis....................................................................................................24

[Page 14]

1 Business Overview

Background

46. For the purposes of our Report, we have accepted the following background information as fact.

Geophysical Service Incorporated

47. GSI's predecessor was originally founded in the 1930s in the United States to offer the first ever reflection seismograph exploration services to the oil industry (“Original GSI" or the “Preceding Company”). Original GSI later expanded into electronics manufacturing and changed its name to Texas Instruments and the seismic business became a wholly-owned subsidiary. The seismic business was later bought by Halliburton in 1988.

48. In the early 1990s, Mr. Davey Einarsson, who had been an employee of Original GSI and managed the Preceding Company's Canadian offshore coverage, purchased the proprietary rights to Original GSI's speculative data in the Canadian offshore and formed GSI based in Calgary, AB.

49. GSI provides exclusive and non-exclusive 2D and 3D marine seismic data, gravity and magnetic data off the coasts of Nova Scotia, Newfoundland and Labrador, as well as the Arctic Islands, Beaufort Sea and offshore southern Atlantic.

50. Current management of GSI includes Mr. Davey Einarsson who serves as the President of GSI and Mr. Paul Einarsson who fulfils the role of Chairman (and until 2017, Chief Operating Officer). Mr. Russell Einarsson served as Vice President, Marketing until 2013. We understand that these two individuals left their roles because the Company was not able to pay them.

51. GSI is a private corporation and its executives are shareholders (or related to shareholders). We understand that Mr. Davey Einarsson, Mr. Paul Einarsson, and Mr. Russell Einarsson were paid amounts that often differed from a market rate of compensation (i.e., an amount that an unrelated, non-shareholder executive would command).

52. The seismic data provided to clients, generally oil and gas exploration and production (“E&P”) companies, by GSI can be generally categorized into two categories: exclusive data and non-exclusive data. Exclusive data is that which is specifically shot on a contract basis at the request of clients. Non-exclusive data is exploratory data shot by GSI and then licensed to (often multiple) clients in exchange for license fees. We understand that a majority of GSI's revenues over the years have come from non-exclusive data licensing.

53. License fees on non-exclusive data are charged to clients when they initially purchase access to the data. We understand that GSI's licensing contracts are structured in such a way that there are certain “trigger” points upon which further license fees are due. Those trigger points include:

1. When a client joins an industry exploratory group (these groups are common in the sphere of Canadian offshore oil and gas exploration), thus providing data access to other E&P companies in that group; and
2. Upon a merger or acquisition which would allow another E&P company access to the data.

54. We understand that GSI has data in all of Canada's prime offshore areas. As per discussion with GSI management, GSI pioneered the exploration for data in many of Canada's offshore production areas and its data was used by producers in many of Canada's largest offshore projects including Hibernia, Hebron, Terra Nova, White Rose, and Bay du Nord.

[Page 15]

Background

55. GSI's clients have included E&P companies in the Canadian offshore, including Statoil (now known as Equinor), Repsol, BG Group, British Petroleum, Canadian Superior, Hunt Oil, Encana (now known as Ovintiv),Cenovus, ConocoPhillips, Suncor/Petro-Canada, and Husky.

56. GSI's cost structure comprises direct costs, which include acquisition costs and other costs directly associated with the provision of marine seismic data to GSI's customers, and indirect costs (“G&A”), which are primarily fixed overhead costs.

57. Variable direct costs include mostly costs related to shooting new data; its previously shot data (i.e., “shelf" data) can be provided to customers at minimal cost.

Historical Operating Performance

58. GSI's revenues and expenses from 1994 to 2021 for the years ended December 31, as well as trailing-twelve-month (“TTM”) figures at November 30, 2017 and June 30, 2022 are summarized at Schedule D1.

59. Historically, revenues primarily consisted of licensing of data shot within the year and peaked between 2000 and 2008. During this period, revenues ranged [Redacted]

60. During this same period, gross margin (i.e., revenues minus direct expenses) ranged between [Redacted]

61. General and administrative expenses ranged during the 2000 to 2008 period from a low of [Redacted]

62. From 2000 to 2008, EBITDA ranged from $1.3 million to [Redacted] The following chart summarizes GSI's operating performance from 2000 to 2008.

[Redacted]

[Page 16]

Background

Historical Financial Position

63. GSI's assets and liabilities at December 31, 1994 to 2021 and at November 30, 2017 and June 30, 2022 are summarized at Schedule D2.

64. GSI's net tangible assets were primarily composed of [Redacted] Between 2000 and 2008, the net book value of capital assets [Redacted] from [Redacted] in 2000 to a [Redacted] of [Redacted] in 2006, declining to [Redacted] in 2008. From 2009 to 2012, capital assets [Redacted] to a net book value of approximately [Redacted] as we understand that the [Redacted]

65. GSI's [Redacted] debt [Redacted] in 2008 at [Redacted] We understand that GSI management used debt primarily [Redacted]

66. Shareholder loans totalled approximately [Redacted] at November 30, 2017 and [Redacted] at June 30, 2022. Advances from related parties (other than shareholders) were [Redacted]

Our Understanding of the Current Situation

67. We understand that GSI was required to submit all non-exclusive data that was shot within Canada to Canadian governmental agencies. We understand that certain of this data was then disclosed to and copied by third parties (the “Disclosures") and governmental agencies. GSI was then unable to enforce its intellectual property rights against those third parties as a result of certain Canadian Court decisions that became final on November 30, 2017.

68. Because the majority of GSI's business was from the licensing of non-exclusive data to third parties, we understand that its inability to enforce its intellectual property rights relating to its seismic data has materially reduced the demand of GSI to license its existing library of data. With this revenue stream in an impaired state, GSI had been forced to limit its shooting of new data, limit new investment, and reduce its staff count.

69. As well, as a result of the Disclosures, GSI's attempts to enforce its intellectual property rights related to its seismic data resulted in litigation against its historical clients who had accessed the disclosed data (“Disclosed Data”), thus negatively affecting GSI's client relationships resulting in further lost license fees from those existing clients.

70. Based on Mr. Paul Einarsson's Witness Statement, we understand that invoices dated between 2011 to 2016 (for contractual obligations arising between 2007 and 2016) totalling $474.7 million were not paid.

71. We understand that the Disclosures and the subsequent Canadian Court decisions have had the effect of decreasing the fair market value of GSI at the Valuation Dates to $nil.

[Page 17]

2 Selected Valuation Approach

Valuation Approach

72. In approaching a valuation, there are several generally accepted methods for determining the enterprise value or equity interests of a company. In general, valuations are based on one or more of the following major approaches:

1. The income approach;
2. The market approach; and
3. The asset approach.

73. A more detailed description of the various valuation approaches and methodologies is presented in Appendix 3.

74. An income approach was selected to value GSI in the But-for Scenario, more specifically, the capitalized cash flow method.

75. In selecting this method, we considered a number of factors, including:

1. Based on our analysis and the assumptions provided to us, in the But-for Scenario, GSI would have been a going concern at the Valuation Dates; and
2. The Company did not have multi-year forecasts that contemplated the But-for Scenario at the Valuation Dates which would be required to perform a discounted cash flow method.

76. As tests of reasonableness, we considered the market approach whereby we reviewed both somewhat comparable public company multiples and somewhat comparable transaction multiples. In particular, we reviewed the following metrics at both November 30, 2017 and June 30, 2022:

1. EV/Maintainable EBITDA.

77. We also considered an asset-based approach, which would consider, as part of it, a standalone value analysis for GSI's seismic data collection. Our research did not yield sufficient independent data points in order to facilitate a robust analysis and accordingly, this analysis has not been included in this Report.

[Page 18]

2 Selected Valuation Approach

An income approach, specifically the CCF method, was used to determine the FMV of GSI. The discussion below summarizes details on the application of the CCF method and the selection of maintainable revenue and derivation of maintainable EBITDA are presented below.

Income Approach – Capitalized Cash Flow

Overview and Approach

78. To determine the value of a business applying the CCF method, normally the reported earnings, usually for a representative period of preceding years (which should generally serve as a guide to future trends), and possible forecasted earnings, are adjusted in respect of:

1. Extraordinary, non-recurring and unusual items that would otherwise distort the estimate of future profits;
2. Non-arm's length transactions that may be of an uneconomic or discretionary nature;
3. Consistency with the operating conditions that are expected to prevail at and after the valuation date; and
4. Additions to, or reductions in, capital employed.

79. The maintainable earnings determined based on these results are then divided by a capitalization rate in order to arrive at the capitalized earnings value or going-concern value of the operations. To this amount, the net realizable value of any redundant assets or liabilities is added (or deducted) to arrive at the en bloc value of all its issued and outstanding shares (and other forms of equity capital, as appropriate).

80. In our But-for Scenario valuation, we normalized historical earnings by first normalizing revenues and selecting a maintainable level of revenues. Maintainable revenues were based on historical normalized revenues and a review of certain forecast industry indicators. Using our selected maintainable revenues, we determined maintainable EBITDA by deducting direct costs and G&A, both based on historical averages.

Normalized Revenues

81. GSI management provided certain assumptions associated with the Disclosed Data as well as unpaid revenues from clients under contract. Normalized historical revenues from 2000 to 2012 were calculated based on these assumptions. Refer to Schedules B2.1 and C2.1 for our normalized revenue calculations at November 30, 2017 and June 30, 2022, respectively.

Lost Revenues from Access of Disclosed Data

82. We understand that information about the Disclosures was provided by the National Energy Board (“NEB”, now known as the Canadian Energy Regulator), the Canada-Newfoundland and Labrador Offshore Petroleum Board (“CNLOPB”) and the Canada-Nova Scotia Offshore Petroleum Board (“CNSOPB"). This information provided instances of Disclosures from 1987 to 2012 and is hereinafter referred to as the “Board Data". The Board Data was prepared based on Access to Information Act responses and may not be exhaustive. We understand that there may be additional Disclosures that are not included in the Board Data.

83. The Board Data information included the date of access and the name of the party requesting access. The parties requesting access could be broadly categorized into three buckets:

1. E&P companies;
2. Seismic data contractors and copy/scanning companies; and
3. Government/non-profit institutions.

[Page 19]

2 Selected Valuation Approach

An income approach, specifically the CCF method, was used to determine the FMV of GSI. The discussion below summarizes details on the application of the CCF method and the selection of maintainable revenue and derivation of maintainable EBITDA are presented below.

Income Approach – Capitalized Cash Flow

84. In addition to the information provided by regulators in the Board Data, for each instance of Disclosed Data, GSI management provided GSI's listed price (in U.S. dollars) for a single licence pertaining to such data.

85. Furthermore, we were instructed by GSI management and Counsel to apply certain multipliers to those listed prices, which are based on Mr. Paul Einarsson's Witness Statement:

1. E&P companies – 2.0x;
2. Seismic data contractors – 3.0x; and
3. Government/non-profit institutions – 0.0x.

86. We understand that the multiplier for E&P companies is intended to capture the fact that the same data is often licensed more than once to the same client as a client's admission into an industry exploration group or a merger/takeover would trigger another license fee.

87. We understand that in instances where seismic data contractors accessed the data, a multiple of 3.0x is intended to capture the fact that these parties likely intended to repackage and sell the data to their own customers. Given that these competing seismic data contractors did not incur the significant costs of shooting and processing the data, they would have the ability to capture and sell the data to their own customers for a much lower price.

88. Finally, we understand that government and non-profit institutions such as post-secondary institutions that have accessed the data were likely not doing so for commercial purposes and would not have actually licensed the data at market value (or would have potentially had free access anyway). Accordingly, we have been instructed to use a multiple of zero.

89. We have been instructed by Counsel to assume that each instance of access would have resulted in license fees (i.e., the accessing parties would have paid for the data in the normal course of business) except for instances where the Disclosed Data was accessed by the government/non-profit institutions.

90. The multiplied market value of licensing revenues for each instance of Disclosed Data was then spread evenly over three years, as instructed by Counsel based on information provided in Mr. Paul Einarsson's Witness Statement. This is to account for the fact that multiple instances of license fees would likely have been received over a multi-year period.

91. The normalization adjustment is the sum of the amounts allocated to each year, converted from U.S. dollars to Canadian dollars. The abbreviated results from 2000 to 2012 are set out in the table below and detailed at Schedules B2.1 and C2.1.

[Page 20]

2 Selected Valuation Approach

Annual Normalization Adjustment
for Improperly Access Data

($CAD 000's)

[Redacted]

[Page 21]

2 Selected Valuation Approach

An income approach, specifically the CCF method, was used to determine the FMV of GSI. The discussion below summarizes details on the application of the CCF method and the selection of maintainable revenue and derivation of maintainable EBITDA are presented below.

Income Approach – Capitalized Cash Flow

Unpaid Revenues

92. Unpaid revenues from clients under contract consist of license fees owed to GSI from existing clients. We understand that as GSI became embroiled in disputes related to and stemming from the Disclosures, many of GSI's customers ceased paying for services and license fees that GSI would have been entitled to. GSI management has provided us with a listing of such invoices from 2011 to 2016 (“Unpaid Invoice Listing”).

93. We understand based on Mr. Paul Einarsson's Witness Statement these amounts were not already included in GSI's historical revenues.

94. We understand that the invoice date does not necessarily correspond to the date that the services were provided or that the license fees would have become due. We understand that fees on these invoices generally spanned a multi-year period and we have been instructed by Counsel based on information in Mr. Paul Einarsson's Witness Statement to split the amounts evenly between the year of the invoice and the four preceding years.

95. We also understand that the invoiced amounts as noted in the Unpaid Invoice Listing were denoted in U.S. dollars; accordingly, for the purposes of calculating the annual normalization to revenues, we converted the annual amounts to Canadian dollars.

96. The following table summarizes the annual normalization adjustment associated with unpaid revenues from clients under contract from 2000 to 2012 as detailed at Schedules B2.1 and C2.1.

Unpaid Revenues from Clients
Under Contract

($CAD 000's)

[Redacted]

Normalized Revenues

97. From 2000 to 2012, total normalization adjustments averaged [Redacted] per year.

98. The chart below compares actual revenues to normalized revenues from 2000 to 2012.

[Page 22]

2 Selected Valuation Approach

An income approach, specifically the CCF method, was used to determine the FMV of GSI. The discussion below summarizes details on the application of the CCF method and the selection of maintainable revenue and derivation of maintainable EBITDA are presented below.

Income Approach – Capitalized Cash Flow

[Redacted]

Maintainable Revenues

99. For the purposes of selecting maintainable revenues at our Valuation Dates, we considered the historical years 2000 to 2012 as the Board Data is limited after 2012.

100. As our Valuation Dates are after the period of normalization (2000 to 2012), we extrapolated normalized revenues in order to understand how revenues may have moved between the end of 2012 and our Valuation Dates.

101. In order to perform this extrapolation, we examined several industry activity indicators in order to understand which metric had the strongest relationship with normalized revenues over the 2000 to 2012 period.

102. We reviewed a number of potential quantitative indicators, including the West Texas Intermediate spot price, aggregate capital spending across the North American oil and gas industry², and global offshore rig count data. In total we looked at eight metrics and we compared them to both normalized revenues in Canadian dollars and normalized revenues in U.S. dollars.

103. We note that GSI revenues may not coincide with a particular indicator (e.g., the purchase of seismic data may precede an increase in rig count or conversely, an increase in spot price may precede the purchase of seismic data). For such metrics, we have judgmentally shifted the metric by one year. For example, for global offshore rig count, we compared the change from 2007 to 2008 normalized revenues to the change in 2008 to 2009 rig count in order to reflect the passage of time between the purchase and use of seismic data by E&P companies and their decision to ultimately proceed with drilling and to obtain the necessary regulatory approvals/licenses to do so.

104. The following table summarizes the metrics we examined and the judgmentally-selected shift that we applied.

² Total North American capital expenditures based on a screening in S&P Capital IQ for North American E&P companies. Companies that only operated for part of the 2000 to 2012 period were removed.

[Page 23]

2 Selected Valuation Approach

105. In order to evaluate the potential relationship between normalized revenues and the shifted metrics, we calculated the R-squared value³ looking at normalized revenues and each of the shifted metrics between 2000 and 2012, the last year for which we have the Board Data.

106. The observed R-squared for each of the eight shifted indicators compared to both normalized revenues in Canadian dollars and normalized revenues in U.S. dollars is presented in the following table:

107. We noted that the statistically strongest predictor of normalized revenues in a given year was the following year's annual global offshore rig count when compared to normalized U.S. dollar revenues; here, we noted an R-squared value of 0.5. We performed our illustrative extension of normalized revenues by applying the annual change in offshore rig count to U.S. dollar normalized revenues, beginning with normalized revenues in 2012 and extending to our Valuation Dates. We then converted each year's extended normalized revenues to Canadian dollars. This illustrative extension provided additional data points that we considered in our selection of maintainable revenues.

108. For our June 30, 2022 analysis, we also reviewed forward-looking data as of 2022. We noted generally an increase in expected activity in the near-term which may eventually level off by the mid-2020s and decline by the end of the decade.

109. For our November 30, 2017 analysis, we considered the global industry outlook, which considered various factors such as the supply of rigs, movement of commodity pricing in the months leading up to the Valuation Date, and E&P companies' capital deployment trends as well as total industry growth expectations.

³ R-squared measures the proportion of variation of a dependent variable (in this case, normalized revenues) that is explained by an independent variable (in this case, the shifted metrics) in a regression model. R-squared values fall between 0 and 1; the closer the value is to 1, the stronger the statistical fit. In other words, an R-squared value of 0.9 indicates that a dependent variable is 90% explained by the independent variable. An R-squared of 0.3 indicates that a dependent variable is 30% explained by the independent variable.

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Income Approach – Capitalized Cash Flow

110. Considering normalized revenues, illustrated extended revenues, and the forward-looking data points at the Valuation Dates, we selected maintainable revenues ranging as follows:

1. At November 30, 2017, we selected maintainable revenues of [Redacted] to [Redacted] as detailed at Schedule B2.1; and
2. At June 30, 2022, we selected maintainable revenues ranging from [Redacted] to [Redacted] as detailed at Schedule C2.1.

Direct Expenses

111. We calculated a normalized level of direct expenses as a percentage of revenues utilizing the average of actual direct expenses as a percentage of normalized revenues from 2000 to 2008, based on information from Mr. Paul Einarsson's Witness Statement.

112. Our two normalization adjustments relate to data that had already been shot and acquired by GSI. We understand from Mr. Paul Einarsson's Witness Statement that had the aforementioned revenue normalizations occurred in GSI's normal course of business, it would not have incurred additional costs. Put another way, had GSI received license fees for the Disclosed Data in the normal course of business, as contemplated in our revenue normalization, and had it been able to successfully bill and collect unpaid revenues from clients under contract, it would not have incurred any additional expense.

113. We also understand from Mr. Paul Einarsson's Witness Statement that after 2008, GSI's actual activities were significantly reduced, decreasing the relevance of figures after this year; accordingly, we did not consider the ratio of actual expenses to normalized revenues after 2008 as representative of a reasonable level of expense in the But-for Scenario.

114. We calculated average actual direct expenses as a percentage of normalized revenues of [Redacted] as set out in Schedules B2.2 and C2.2.

G&A

115. Next, we determined an appropriate level of G&A to reflect the corporate overhead structure required to support maintainable revenues. We understand based on Mr. Paul Einarsson's Witness Statement that the 2006 to 2008 period, which represented GSI's highest years of G&A expenses, is an appropriate starting point to determine a normalized level of G&A.

116. We understand that as GSI is a private corporation and its executives are shareholders (or related to shareholders), Mr. Davey Einarsson, Mr. Paul Einarsson, and Mr. Russell Einarsson were paid amounts that often differed from a market rate of compensation (i.e., an amount that an unrelated, non-shareholder executive would command). Accordingly, we adjusted historical G&A over the 2006 to 2008 period to reflect a market level of compensation for the roles fulfilled by these three individuals. We note that Mr. Paul Einarsson is the Company's Chairman and had fulfilled the role of Chief Operating Officer until 2017 and Mr. Russell Einarsson was Vice President, Marketing until 2013; we understand from his Witness Statement and from the Witness Statement of Mr. Russell Einarsson that these two individuals left their roles

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because the Company was not able to pay them and in the But-for Scenario, they would have remained in their respective roles. Actual compensation amounts included in G&A were obtained from Mr. Paul Einarsson's Witness Statement.

117. See Schedules B2.3 and C2.3 for details.

Maintainable EBITDA

118. As set out in Schedules B2 and C2, we applied the normalized level of direct expenses and normalized G&A to derive a maintainable EBITDA range.

119. We compared GSI's maintainable EBITDA margins [Redacted] to those of guideline public companies and noted that although they fell within the range, they were higher than all but one company, Pulse Seismic, at the Valuation Dates after normalizing those companies' trailing-twelve-month EBITDA in cases where data-shooting costs were capitalized (GSI expenses its costs). We understand based on Mr. Paul Einarsson's Witness Statement that there are multiple reasons why GSI would have been able to earn higher margins in the But-for Scenario, specifically:

1. GSI's business model was generally focussed on the acquisition and licensing of non-exclusive data to multiple clients, allowing them to obtain license fees from multiple customers.
2. We understand that Pulse Seismic, which had normalized EBITDA margins of 85.1% and 84.0% at November 30, 2017 and June 30, 2022, respectively, is the most similar company to GSI in terms of its operating model. We understand that both Pulse Seismic and GSI are primarily providers of non-exclusive data to multiple customers.
3. GSI had structured its client contracts such that there were multiple “trigger points” upon which additional license fees would become due to GSI, including upon a client's new membership in exploration groups. We understand membership in an exploration group as a trigger point for additional license fees was unique in the industry.
4. As a private company, GSI has a generally has a lower overhead burden than the guideline public companies.

Capitalized Cash Flow

120. To arrive at estimated maintainable discretionary cash flow, we deducted income taxes as well as sustaining capital expenditures, net of the present value of the tax shield.

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Income Approach – Capitalized Cash Flow

121. Sustaining capital expenditures were assumed to be equal to [Redacted] of revenues based on Mr. Paul Einarsson's Witness Statement.

122. The combined federal and provincial income tax rate was calculated by giving consideration to the tax rates enacted at each of the two Valuation Dates with provincial weighting derived from GSI's corporate income tax returns for the years ended 2006 to 2008.

Capitalization Rate

123. Our selection of appropriate capitalization rates to apply to maintainable discretionary cash flow was dependent upon a number of factors, as set out below:

1. The selected level of maintainable discretionary cash flow;
2. General economic, industry condition at or around the Valuation Dates; and
3. Future potential sources of growth in the market.

124. At November 30, 2017, we selected discount rates ranging from [Redacted] and at June 30, 2022, we selected discount rates ranging from [Redacted]. Further details on our selected discount rates are summarized in Appendix 4 and detailed in Schedules B3 and C3.

125. A long-term terminal growth rate of 2.0%⁴ was subtracted to conclude on a range of capitalization rates.

Enterprise Value

126. Using the CCF method, we concluded that GSI's enterprise value was in the following range:

1. [Redacted] at November 30, 2017 as detailed in Schedule B1; and
2. [Redacted] at June 30, 2022 as detailed in Schedule C1.

Tests of Reasonableness

127. As a test of reasonableness of our Enterprise Value conclusion, we employed the market approach, comparing certain implied valuation metrics to public data. We have utilized our own analysis in selecting somewhat comparable companies and somewhat comparable transactions, as well as certain companies and transactions that were provided by GSI management and Counsel. The metrics we observed at November 30, 2017 and June 30, 2022 are as follows:

1. EV/Normalized TTM EBITDA; and
2. EV/forward EBITDA.

128. As per discussions with GSI management, we understand that industry standard is to capitalize certain expenses related to the retrieval of seismic data. Furthermore, we understand that GSI does not employ this policy and instead expenses these costs through the income statement.

⁴ Consistent with the Bank of Canada's target inflation rate.

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Income Approach – Capitalized Cash Flow

129. In order to observe our selected somewhat comparable companies on the same basis as GSI, we have made adjustments to the EBITDA figures of our selected somewhat comparable companies in which we have subtracted capitalized costs related to the retrieval of new seismic data.

130. First, we identified capital expenditures relating to seismic data retrieval on a TTM basis, at or closely preceding the Valuation Dates, for each of our selected somewhat comparable public companies. We then subtracted these values from TTM EBITDA to arrive at a “Normalized TTM EBITDA” figure.

131. Our calculated Normalized TTM EBITDA is utilized in our calculation of “EV/Normalized EBITDA” on Schedules B4 and C4.

132. We note that we have not made this adjustment for our selected precedent transactions. The majority of the target companies were private at the respective acquisition dates and as such, the required data was not available to make the appropriate adjustment. As such, the EV/TTM EBITDA multiples may be slightly understated in relation to GSI's multiple.

EBITDA Multiples

November 30, 2017

133. At November 30, 2017, based on the conclusion of the CCF method we noted an implied EBITDA multiple on the basis of maintainable EBITDA ranging [Redacted] for GSI. Multiples of somewhat comparable public companies ranged between [Redacted] on the basis of normalized EBITDA. GSI's implied EBITDA multiple range falls between the [Redacted] of the observed multiples. Given GSI's operational focus, we consider a [Redacted]

134. The EBITDA multiples of the somewhat comparable transactions ranged from [Redacted] with a median of [Redacted] GSI's implied EBITDA multiples straddled [Redacted] of the observed transaction multiples; however, we noted that many of the transactions [Redacted] We view these transactions to be somewhat less comparable.

June 30, 2022

135. At June 30, 2022, based on the conclusion of the CCF method we noted an implied EBITDA multiple on the basis of maintainable EBITDA ranging from [Redacted] Multiples of somewhat comparable public companies ranged [Redacted] on the basis of normalized EBITDA. GSI's implied multiple range falls between [Redacted] of the observed multiples. Since the COVID-19 pandemic in 2020, multiples within the oil and gas industry, more specifically, the geophysical, mapping and surveying industry have generally decreased. We consider GSI's multiple [Redacted] in relation to the observed multiples and [Redacted] GSI's implied multiples are [Redacted] with market movement.

136. The EBITDA multiples of the somewhat comparable transactions ranged [Redacted] Given the limited number of data points and the fact that there were [Redacted] post-2020 (i.e., the beginning of the global COVID-19 pandemic), we place limited emphasis on these multiples.

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Summary of Value

FMV to Messrs. Einarsson

137. FMV to Messrs. Einarsson represents the value of GSI that would be attributed to Mr. Paul Einarsson and Mr. Davey Einarsson as shareholders of the Company as well as the value of any related party debt owed to Messrs. Einarsson. To arrive at the FMV to Messrs. Einarsson, we deducted an assumed level of [Redacted] based on Mr. Paul Einarsson's Witness Statement as well as related-party debt from individuals other than Mr. Paul Einarsson, Mr. Davey Einarsson, and Mr. Russell Einarsson. At November 30, 2017, we concluded on a FMV to Messrs. Einarsson ranging [Redacted] and at June 30, 2022, we concluded on a range of [Redacted] See Schedule A1 for details.

FMV to Shareholders

138. FMV to shareholders is equal to FMV to Messrs. Einarsson minus the amount owed by GSI to Mr. Russell Einarsson, who is not a shareholder of the Company. After deducting the loan due to a shareholder of an affiliate, we concluded that FMV to shareholders (Mr. Paul Einarsson and Mr. Davey Einarsson) ranged between [Redacted] at November 30, 2017 and between [Redacted] at June 30, 2022. See Schedule A1 for details.

FMV of Equity

139. Finally, after deducting amounts due to the shareholders, we concluded on an equity value of GSI of [Redacted] at November 30, 2017 and an equity value of [Redacted] at June 30, 2022. See Schedule A1 for details.

Conclusion

140. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, the fair market values in a But-for Scenario of GSI at the Valuation Dates are summarized in the table below.

141. We note that a valuation is not a precise science and the conclusions arrived at, in many cases, will of necessity, be subjective and dependent on the exercise of individual judgement. For purposes of the Report, we have expressed our conclusions of value as falling within a likely range.

Summary of Value

(In $CAD 000's)

[Redacted]

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Summary of Losses

Loss of Value

142. We understand that GSI has [Redacted] at both Valuation Dates and accordingly, we have been instructed to assume that GSI's actual values (i.e., not contemplating a But-for Scenario) were [Redacted] at both Valuation Dates. Accordingly, the entirety of GSI's value in a But-for Scenario is equal to the loss suffered by GSI's shareholders related to its value.

Loss of Amounts Lent to GSI

143. These losses reflect related party or shareholder loans made by Mr. Paul Einarsson, Mr. Davey Einarsson, and Mr. Russell Einarsson that are not recoverable. These losses are not included in FMV of equity and should only be examined in conjunction with FMV of equity; they are already included in FMV to Messrs. Einarsson and enterprise value and the majority of these amounts is included in FMV to shareholders.

144. Based on our instruction that GSI has a value of $nil at the two Valuation Dates and was not actively engaged in income-earning activities, we understand that the full balance of the loans from Messrs. Einarsson are not recoverable.

145. The amounts due to each individual are based on information provided by Mr. Paul Einarsson from GSI's accounting records. We have been instructed by Counsel to assume that the loss at June 30, 2022 would be equal to the lost loan at November 30, 2017 plus accrued judgment interest (as calculated as Schedules A1.5, A1.6, and A1.7).

Loss on Loan from Shareholder of Affiliate

(In $CAD 000's)

Loss of Shareholder's Loan - Mr. Davey Einarsson

(In $CAD 000's)

Loss of Shareholder's Loan - Mr. Paul Einarsson

(In $CAD 000's)

Loss of Employment Earnings

146. We have been instructed to calculate the present value of the lost future employment earnings for Messrs. Einarsson as at April 18, 2016.

147. The market-based compensation data we used for our G&A normalization was used as the basis for this calculation. We understand from Mr. Paul Einarsson's Witness Statement that in the But-for Scenario, he would have remained as GSI's Chief Operating Officer and Mr. Russell Einarsson would have remained in his role as Vice President, Marketing. We have included compensation for these roles accordingly. These

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3 Valuation Analysis

figures were escalated at an inflationary rate; between 2016 and 2022, we used actual historical inflation for Alberta. After 2022, an inflation rate of 2.0% was utilized.

148. We have been instructed by Counsel to make the following assumptions:

1. Mr. Davey Einarsson would have retired in 2019;
2. Mr. Paul Einarsson and Mr. Russell Einarsson will retire at the age of 75, which translates to retirement dates in 2039 and 2040, respectively.

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Summary of Losses

149. The stream of employment earnings was then discounted back to April 18, 2016 at the applicable risk-free rate and a judgmentally selected discount rate of 5%.

150. The present value of lost employment earnings is summarized in the following table. Refer to Schedule A1.8 for our calculations.

Lost Employment Earnings

(In $CAD 000's)

Accrued Interest

151. We were also instructed to calculate accrued interest up to June 30, 2022 on all categories of loss occurring prior to June 30, 2022.

152. Losses on which we have calculated accrued interest include the following categories:

1. Equity value (midpoint) under the But-for Scenario;
2. Lost employment earnings for Messrs. Einarsson;
3. Lost related party loan from Mr. Russell Einarsson; and
4. Lost shareholder loans.

153. Interest was calculated on a compounding basis. Two interest rates were considered:

1. An assumed cost of borrowing, which was based on the average daily 20-year BBB Canadian corporate bond yield in each year; and
2. A risk-free rate, based on the average daily 20-year Canada Sovereign Strip yield in each year.

154. Our quantification of accrued interest is summarized in the following table and calculated at Schedules A1.1 to A1.7.

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Accrued Interest

(In $CAD 000's)

Summary of Losses

155. With respect to quantifications of loss requested by Counsel, a summary of the results of those calculations is also presented in the following paragraphs and tables.

Equity Value

156. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the lost equity value of the Company at the Valuation Dates, our conclusions are summarized in the following table.

Lost Equity Value

(In $CAD 000's)

Loss on Loan from Shareholder of Affiliate

157. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss on loan from shareholder of affiliate at the Valuation Dates, our conclusions are summarized in the following table.

Loss on Loan from Shareholder of Affiliate

(In $CAD 000's)

Loss of Shareholder's Loan – Mr. Davey Einarsson

158. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of Mr. Davey Einarsson's shareholder loan at the Valuation Dates, our conclusions are summarized in the following table.

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Loss of Shareholder's Loan - Mr. Davey Einarsson

(In $CAD 000's)

Loss of Shareholder's Loan – Mr. Paul Einarsson

159. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of Mr. Paul Einarsson's shareholder loan at the Valuation Dates, our conclusions are summarized in the following table.

Loss of Shareholder's Loan - Mr. Paul Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Davey Einarsson

160. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Davey Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Davey Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Paul Einarsson

161. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Paul Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Paul Einarsson

(In $CAD 000's)

Loss of Employment Earnings – Mr. Russell Einarsson

162. Based on the scope of our work, major assumptions, and the restrictions and qualifications set out in the balance of the Report, with respect to the loss of employment earnings for Mr. Russell Einarsson from April 18, 2016, our conclusions are summarized in the following table.

Loss of Employment Earnings - Mr. Russell Einarsson

(In $CAD 000's)

[Page 34]

Appendices

Appendices.............................................................................................................. 34

1 Scope of Our Work...................................................................................................35

2 Restrictions and Qualifications ................................................................................37

3 Valuation Approaches ..............................................................................................40

4 Weighted Average Cost of Capital...........................................................................42

5 Economic & Industry Overview ...............................................................................45

6 Glossary....................................................................................................................56

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1 Scope of Our Work

Scope of our work

1. In the course of our valuation analysis, we relied upon financial and other information, including prospective financial information, obtained from GSI management, Counsel, and from various public, financial, and industry sources. Our conclusion is dependent on such information being complete and accurate in all material respects.

2. In preparing the Report, we relied on the following principal sources of information:

1. The Notice of Arbitration, filed April 18, 2019, and the Government of Canada's corresponding Statement of Defence, dated June 9, 2022;
2. Mr. Paul Einarsson's Witness Statement (CWS-06) as well as the witness statement of Mr. Russell Einarsson dated August 4, 2022 (CWS-05);
3. GSI's various audited and unaudited financial statements for the years ended December 31, 1994 to 2021, for the 11 months ended November 30, 2017, and for the six months ended June 30, 2022 (C-109);
4. GSI's corporate tax returns for the years ended December 31, 2006 to 2008 (C-110);
5. The Board Data (C-111);
6. The Unpaid Invoice Listing (C-112);
7. Outstanding loan balances at November 30, 2017 and at June 30, 2022 for certain related party and shareholder loans (C-113);
8. Research related to historical foreign exchange rates (C-114), interest rates (C-115), and inflation (C-116);
9. Research on historical industry growth indicators including historical rig count data, historical oil spot price data, information on Newfoundland offshore oil and gas activity, and information on E&P capital expenditures (C-117);
10. Research on forward-looking industry growth indicators and metrics (C-118);
11. Certain publicly available information regarding guideline public companies (Schedules B3, B4, B5, C3, C4, C5, and Exhibit C-119) and precedent transactions (Schedules B6, B7, C6, C7, and Exhibit C-120);
12. Market executive compensation data from ERI's Salary Assessor (C-121);
13. Research on the geophysical, mapping and surveying industry (C-122);
14. Research on general economic conditions at the Valuation Dates (C-123);
15. Publicly available information regarding the Company and its history; and
16. Discussions with Mr. Paul Einarsson and instructions from Counsel.

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2 Restrictions and Qualifications

Scope Limitation

3. Due to the nature of this mandate, the sweeping and pervasive impact of the alleged wrongful actions of the Government of Canada on GSI's business, and the passage of time between the occurrence of these alleged wrongful actions and our Valuation Dates, the validity of the assumptions forming the basis of the But-for Scenario cannot be fully corroborated. We have relied on these assumptions, which have been identified in this Report as assumptions taken from Mr. Paul Einarsson's witness statement, and for the purposes of this Report, treated them as facts.

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2 Restrictions and Qualifications

Restrictions and Qualifications

4. The Report is not to be used for any purpose other than that stated and it is not intended for general circulation, nor is it to be published in whole or in part, without our prior written consent. We do not accept responsibility for any losses arising from unauthorized or improper use of the Report.

5. Under the Practice Standards of the CBV Institute, there are three types of valuation reports that can be issued by a Chartered Business Valuator (“CBV”), being a Comprehensive Valuation Report, an Estimate Valuation Report or a Calculation Valuation Report. The conclusions reported therein differ by the level of assurance provided and the extent of analysis, investigation and corroboration performed by the CBV.

6. The valuation conclusion contained within this Report is an Estimate Valuation Report. As such, the scope of review is inherently limited by the nature of the valuation report provided and the conclusions expressed may be different than the conclusions resulting under the scope of work in support of a Comprehensive or a Calculation Valuation Report.

7. We reserve the right (but will be under no obligation) to make revisions to the Report should we be made aware of facts existing at the Valuation Dates, which were not known to us when we prepared the Report.

8. We accept no responsibility or liability for any losses occasioned by any party as a result of our reliance on the financial and non-financial information that was provided to us or found in the public domain.

9. We relied upon the completeness, accuracy and fair presentation of all the financial information, data, advice, opinion or representations obtained from public sources and GSI management, which is detailed under the Scope of our Work section (collectively, the “Information”). We have not conducted any audit or review of the financial affairs of GSI, nor have we sought external verification of the information provided to us by the aforementioned sources or that which was extracted from public sources. We accept no responsibility or liability for any losses occasioned by any party as a result of our reliance on the financial and non-financial information that was provided to us or found in the public domain.

10. We relied, in part, upon representations made by GSI management which, among other things, provide that:

1. The Information does not omit any material fact in respect of GSI; and
2. GSI management is are not aware of any material changes in the Information or GSI, which would have, or which would reasonably be expected to have, a material effect on our conclusions.

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2 Restrictions and Qualifications

Restrictions and Qualifications

11. In accordance with the terms of our engagement, the Report is at two specific points in time, the Valuation Dates. It must be recognized that FMV and fair value changes from time to time, not only as a result of internal factors, but also because of external factors such as changes in the economy, competition and changes in interest rates.

12. The Report must be considered in its entirety by the reader, as selecting and relying on only specific portions of the analyses or factors considered by us, without considering all factors and analyses together, could create a misleading view of the processes underlying this valuation and the conclusions there from. The preparation of a valuation is a complex process and it is not appropriate to extract partial analyses or make summary descriptions. Any attempt to do so could lead to undue emphasis on a particular factor or analysis.

13. The Report is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer or to support the promotion or marketing of any transactions or the matters addressed in the Report.

14. Nothing contained herein is to be construed as a legal interpretation, an opinion on any contract or document, or a recommendation to invest or divest.

15. This Report was prepared in conformity with the Practice Standards of the CBV Institute.

16. The individuals that prepared the Report did so to the best of their knowledge, acting independently and objectively.

17. Our compensation is not contingent on any action or event resulting from the use of the Report.

18. Any person who is not an addressee of this Report, or has not been acknowledged as a recipient of this Report in the engagement letter, or requires this Report in connection with court processes or proceedings as agreed to in our engagement letter, or who has not signed and returned to PwC a Release Letter, is not authorized to have access to this Report. Should any unauthorized person obtain access to and read this Report, by reading this Report such person accepts and agrees to the following terms:

1. The reader of this Report understands that the work performed by PwC was performed in accordance with instructions provided by BLG and was performed exclusively for the purpose stated in our May 20, 2022 engagement letter.
2. The reader of this Report acknowledges that this Report was prepared at the direction of BLG and may not include all procedures deemed necessary for the purposes of the reader.

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2 Restrictions and Qualifications

Restrictions and Qualifications

18. The reader agrees that PricewaterhouseCoopers LLP, its partners, principals, employees and agents neither owe nor accept any duty or responsibility to it, whether in contract or in tort (including without limitation, negligence and breach of statutory duty), and shall not be liable in respect of any loss, damage or expense of whatsoever nature which is caused by any use the reader may choose to make of this Report, or which is otherwise consequent upon the gaining of access to the Report by the reader. Further, the reader agrees that this Report is not to be referred to or quoted, in whole or in part, in any prospectus, registration statement, offering circular, public filing, loan, other agreement or document and not to distribute the report without PwC's prior written consent.
19. The reader agrees and acknowledges that the information contained within this Report is strictly confidential and that disclosure of this information may cause irreparable harm.

19. Capital IQ Disclaimer Notice: This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

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3 Valuation Approaches

There are three generally-accepted approaches for valuing a business, business ownership interest or security: Income Approach, Asset Approach, and Market Approach. In certain cases, a combination of two or three of the foregoing approaches may be appropriate.

Valuation Approaches

Income Approach

20. The Income Approach is a general way of determining a value indication of a business (or its underlying assets), using one or more methods wherein a value is determined by capitalizing or discounting anticipated future benefits. This approach contemplates the continuation of the business operations, if the business is a "going concern”.

21. The Income Approach is adopted where the business being valued is earning a fair return on its capital employed and the notional purchaser wishes to acquire the future indicated earnings/cash flow stream generated by the enterprise. That is, the earnings value of a going concern is based upon the yield to an investor, at the desired rate of return on the investment, having regard to a number of “internal” and “external” factors relating to the future prospects of the business, the rates of return on alternative investments, the degree of risk involved, the liquidity of the investment, etc.

22. Anticipated benefits are converted to value using procedures that consider the expected growth and timing, the risk profile of the benefits stream and the time value of money. The conversion of the benefits stream to value normally requires the determination of a capitalization rate or discount rate (rate of return). In determining the appropriate rate, consideration is given to such factors as interest rates, rates of return anticipated by investors on alternative investments, the risk characteristics of the anticipated benefits of the subject entity, etc. Typically, the rate of return or discount rate used is consistent with the anticipated benefits.

23. The more common methodologies, or techniques, applied under the Income Approach are:

1. Discounting the future stream of cash flows, applying the Discounted Cash Flow (“DCF”) Method; and
2. Capitalizing operating cash flow or earnings, applying either the Capitalized Earnings Method or the Capitalized Cash Flow Method respectively or variations thereof such as capitalized EBITDA or other earn approaches.

Market Approach

24. The Market Approach to valuation is a general way of determining a value indication of a business or an equity interest therein using one or more methods that compare the subject entity to similar businesses, business ownership interests and securities (investments) that have been sold. Examples of methods applied under this approach include, as appropriate:

1. The "Guideline Public Company Method",
2. The "Precedent Transaction Method"; and
3. Analyses of prior transactions of ownership interests in the subject entity.

[Page 41]

Valuation Approaches

There are three generally-accepted approaches for valuing a business, business ownership interest or security: Income Approach, Asset Approach, and Market Approach. In certain cases, a combination of two or three of the foregoing approaches may be appropriate.

Asset Approach

25. The Asset Approach is adopted where either:

1. 25.1. Liquidation is contemplated because the business is not viable as an ongoing operation;
2. 25.2. The nature of the business is such that asset values constitute the prime determinant of corporate worth (e.g., vacant land, a portfolio of real estate, marketable securities or investment holding company, etc.); or
3. 25.3. There are no indicated earnings/cash flows to be capitalized.

26. If consideration of all relevant facts establishes that the Asset Approach is applicable, the method to be employed will be either a going-concern scenario (“Adjusted Net Asset Method”) or a liquidation scenario (on either a forced or an orderly basis), depending on the facts.

27. In applying the Adjusted Net Asset Method, each asset and liability appearing on the balance sheet is adjusted to its respective FMV as of the valuation date, on a going-concern (as opposed to a liquidation) basis.

[Page 42]

Weighted Average Cost of Capital

The WACC is an overall required rate of return, which takes into account the required rate of return on all forms of invested capital (i.e. debt and equity capital). It is the rate of return indicative of the investment risk inherent in the ownership of the entire business enterprise. The following is a general discussion of the approach used in our derivation of the WACC.

General formula for calculating WACC:

Debt/Equity Mix

28. In arriving at an appropriate debt/equity mix to use in our WACC calculations, we considered a variety of factors, which include:

1. 28.1. The observed debt/ equity ratios of guideline public companies, as appropriate; and
2. 28.2. A high level consideration of GSI and assets available for security purposes, as well as earnings levels available to support indicated debt levels.

29. Based on the above noted factors, we have selected a debt to total capital ratio of 40.24% at November 30, 2017 and 34.34% at June 30, 2022 as being appropriate for GSI.

Rate of Return on Debt Capital (K_d)

30. The rate of return on debt capital is the rate a prudent investor would require on interest-bearing debt. We utilized the yields based on 20-year Canada corporate bonds with a minimum credit rating of BBB. This rating was selected as being investment grade and in the range of ratings for those companies considered in our comparables analysis.

31. Since the interest on debt capital is deductible for income tax purposes, we used the after-tax interest rate in our calculation. The effective income tax rate used in this analysis was 27.5% at November 30, 2017 and 25.5% at June 30, 2022, which is the weighted average tax rates for GSI.

[Page 43]

Weighted Average Cost of Capital

The WACC is an overall required rate of return, which takes into account the required rate of return on all forms of invested capital (i.e. debt and equity capital). It is the rate of return indicative of the investment risk inherent in the ownership of the entire business enterprise. The following is a general discussion of the approach used in our derivation of the WACC.

Rate of Return on Equity (K_e)

32. We used the Capital Asset Pricing Model (“CAPM”) to determine the required return on equity for GSI. The CAPM estimates the rate of return on common equity as the risk-free rate of return on Canadian government bonds, as at the Valuation Date, plus a market risk premium expected over the risk-free rate of return, multiplied by the “beta” for the stock. This estimate is, adjusted with a premium and, where appropriate, a company-specific risk premium.

33. Beta reflects the sensitivity of the return on a security to the return on the market index. This sensitivity is referred to as systematic risk.

Risk-free Rate (Rf)

34. In our analysis, we have utilized the 20-year Canada government bond yield as an indicator of the risk-free rate of return.

Beta (β)

35. The selected beta was calculated in reference to the observed betas for those companies listed in Schedules B3 and C3. We note that the observed betas were un-levered and then re-levered based on the selected debt/total capital ratios discussed above.

Equity Risk Premium (Rp)

36. Quantification of the market risk premium has been the subject of significant research by security analysts. Based upon our research and analysis as well as publicly available data regarding equity risk premiums in Canada and the U.S., we consider the average market premium for equity to be approximately 5.00% at November 30, 2017 and 5.50% at June 30, 2022.

Size Premium (Rs)

37. The size premium was selected to be the tenth decile size premium noted in the Size Premium Study from the Duff & Phelps Risk Premium Report for 2017 and 2022.

[Page 44]

Weighted Average Cost of Capital

The WACC is an overall required rate of return, which takes into account the required rate of return on all forms of invested capital (i.e. debt and equity capital). It is the rate of return indicative of the investment risk inherent in the ownership of the entire business enterprise. The following is a general discussion of the approach used in our derivation of the WACC.

Company-Specific Premium

38. Other risk adjustments may be appropriate to consider, including whether the subject company’s risk characteristics are greater or smaller than the typical risk characteristics of the comparable companies. Adjustments may be based on an analysis of factors such as:

1. 38.1. Industry risk;
2. 38.2. Volatility of returns;
3. 38.3. Leverage;
4. 38.4. Other company-specific factors, including risks associated with achieving forecast operating results.

39. We considered the following specific risk factors, which impact GSI:

1. 39.1. GSI’s collection of shelf data and its data shooting activities have been primarily conducted off the coast of Canada. To the extent that GSI would have to change its focus to other areas of the global offshore oil and gas exploration market in order to maintain revenues, there is uncertainty. We understand that prior to the sell off its assets, GSI had begun doing more international exploration;
2. 39.2. In the But-for Scenario, it is our understanding that GSI would continue to maintain a strong reputation with industry players as well as its library of Canadian offshore seismic data;
3. 39.3. Risks and uncertainty associated with the achievability of maintainable revenues, gross margins, the level of G&A incurred by the Company, and capital expenditures.

40. Based upon a review of these factors, we believe that a company-specific risk premium adjustment is appropriate in calculating the return on equity.

Discount Rate Conclusion

41. Based on the results of the foregoing analysis, we have selected the discount rate to range from [Redacted] at November 30, 2017 and range from [Redacted] at June 30, 2022.

[Page 45]

Economic Outlook on or around November 30, 2017

42. The Canadian economy advanced by 3.7% on an annual basis in Q2 2017 with total annualized growth in 2017 expected to be 2.8%. Real GDP is expected to slow to 2.0% in 2018 and 1.5% in 2019 due to the effects of tighter monetary policy.

43. Consumer spending continues to surge across Canada with retail sales rising more than 5% in the Maritimes, Central Canada as well as BC and Alberta.

44. Job creation is beginning to pick up in the Western Provinces as well as Ontario, however, employment remains weak in Newfoundland and Labrador as major resource projects are completed. The rebound in employment is driven by technology-driven occupations while Alberta is experiencing a rebound in its oil and gas sector.

45. Although energy products dominate the gain in exports, other strengths include mining and machinery shipments from Quebec and Western Canada.

46. A number of cities such as Halifax, Winnipeg and Ottawa are experiencing moderate home prices gains of 3-6% to date in 2017. Housing starts continue to surprise on the upside as historically low interest rates have emboldened consumer expenditures in recent years. However, the withdrawal of monetary stimulus, combined with other regulatory tightening is expected to instill increasing consumer caution through 2019.

47. Alberta and British Columbia are forecast to lead the nation in economic growth in 2017. In 2018 and 2019, as consumption and housing cool, projected provincial growth is more balanced, with a greater reliance on exports and business investment.

48. The table below highlights key Canadian economic indicators on or about November 30, 2017:

[Page 46]

Economic Outlook on or around November 30, 2017

49. Gross Domestic Product (“GDP”): The Canadian economy advanced by 3.7% on an annual basis in Q2 2022, consistent with prior quarter growth of 3.7% in Q1. The gains reflected supportive financial conditions, rebuilding from last year’s wildfires, improved global demand, confidence and job markets, as well as recovery in the energy industry. The economy was expected to continue to strengthen, with GDP growth forecast to rise by 2.8% in 2017 before easing to 2.0% in 2018 and 1.5% in 2019.

50. Inflation: Consumer prices rose by 0.2% in July and the year-over-year rate was up by 0.2% to 1.2%, one of the lowest inflation rates in the world despite robust economic growth, and also below the Bank of Canada’s 2.0% inflation target. The central bank believes that the recent inflationary weakness is temporary, with recent economic strength likely to translate into higher inflation next year.

51. Bank Rate: On July 12, 2017, the Bank of Canada raised the overnight rate to 0.75%, up from 0.5%, which had been held steady since July 2015. The Bank of Canada acknowledged “recent softness in inflation but judges this to be temporary.” Economists expected the Bank of Canada to raise the overnight rate to 0.95% by the end of 2017, and to 1.5% by the end of 2018.

52. Employment: The Canadian economy generated 10,900 jobs in July, with full-time jobs up 35,100, and part-time jobs down 24,300. Unemployment eased from 6.5% in June to 6.3% in July, the lowest level since 2008. The unemployment rate was expected to continue to ease from 7.0% in 2016 to 6.5% and 6.4% in 2017 and 2018, respectively.

53. Consumer Confidence: The Conference Board of Canada’s Index of Consumer Confidence rose 8.1 points to 121.7 in August. The increase reflected improved optimism about future finances and employment prospects. Confidence in Alberta had been trending upward over the past year, but remained below the levels reached when oil prices were higher.

54. Business Confidence: The Canadian Federation of Independent Business’ Business Barometer Index decreased by 0.9 points to 59.8 in August, the third consecutive monthly decline from 66.0 in May. (On a scale between 0 and 100, an index above 50.0 indicates owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance). Although confidence improved in the oil-producing provinces (Newfoundland & Labrador, Saskatchewan, and Alberta), confidence remained the lowest in these provinces. In terms of hiring plans, 16.0% of businesses planned to add full-time staff and 13.0% planned to cut staff in the short-term.

55. Exchange Rates: The Canadian dollar was up 7.0% in 2017, rising to over US$0.79 US, reflecting higher oil prices and market response to the central bank’s rate increase, as well as a weakening in the U.S. dollar in response to lower expectations relating to the achievement of U.S. fiscal stimulus and further tightening by the Federal Reserve.

[Page 47]

Economic Outlook on or around November 30, 2017

56. Housing: The Canadian housing industry remained robust despite substantial changes in provincial and federal government housing policy since the autumn of 2016. Housing starts rose to 4.4% on a monthly basis to 222,300 annualized units in July, the second strongest gain in the last twelve months. However, existing home sales declined 2.1% in July, the fourth consecutive monthly decline, bringing sales to 15.3% below the peak reached in March 2017. Looking ahead, economists anticipate a slowing pace of construction in response to weaker existing house sales and higher mortgage rates. Housing starts were forecast to rise to 205,000 in 2017 and ease to 185,000 units in 2018.

Sources

• Bloomberg
• BMO Capital Markets
• CIBC Capital Markets
• Scotiabank Economics
• TD Economics
• The Conference Board of Canada
• Canadian Federation of Independent Business
• EUI Viewswire

[Page 48]

Economic Outlook on or around June 30, 2022

57. The Canadian economy is expected to grow at 3.7% in 2022 after growing by 4.5% in 2021, as interest rates and inflation increase and momentum in the U.S. slows.

58. The British Columbia economy is expected to slowdown in 2022 and 2023 due mostly to decreasing demand in the housing market as a result of higher interest rates. Furthermore, demand for lumber products is expected to decrease as a direct result of a slowing U.S. economy.

59. Alberta’s economy growth rate is estimated to improve in 2022 due to strong commodity prices in the energy and agriculture sectors. In 2023, economic growth in Alberta is expected to slow due to a softening of global demand for energy and agriculture products.

60. Economic growth in Quebec saw a strong start to the year as GDP figures exceeded estimates during Q1 2022. However, the Quebec economy is estimated to experience a significant slowdown in the second half of 2022 as rising interest rates and elevated inflation is expected to negatively affect household and business spending.

61. 2022 started off slow for the Ontario economy as it was one of the provinces that was most severely affected by the COVID-19 Omicron variant. However, the opening of the economy in the second quarter resulted in employment growth that outpaced the nation. In the second half of 2022, household spending as well as the housing market are expected to be negatively effected by higher interest rates and declining asset values.

62. Economies in the Maritimes are expected to be most effected by rising interest rates and elevated inflation. This is due to an above average portion of household spending allocated to food and energy.

63. The table below highlights key Canadian economic indicators on or about June 30, 2022:

[Page 49]

Economic Outlook on or around June 30, 2022

64. Gross Domestic Product (“GDP”): In Q2 2022, Canadian GDP expanded at an annualized rate of 4.4%, primarily due to increased business investment in inventories, non-residential structures, machinery and equipment, and household spending on services and semi-durable goods. The Bank of Canada had predicted a GDP growth rate of 4.0% for the second quarter of 2022.

65. Inflation: Statistics Canada’s annual inflation rate for June rose to 8.1% per cent in June from 7.7% in May 2022, majorly driven by higher prices of gasoline. Per Statistics Canada, excluding gas prices, June’s annual inflation number was 6.5%. Price increases remained broad-based with seven of eight major components rising by 3% or more.

66. Bank Rate: On June 1, 2022, The Bank of Canada increased its target for the overnight rate to 1.5%, with the Bank Rate at 1.75% and the deposit rate at 1.5%. The Bank plans to continue its policy of quantitative tightening. In this environment of rising inflation, the Bank plans to utilize aggressive monetary policy in order to return inflation to its target of 2%.

67. Employment: In June, the unemployment rate fell by 0.2 % to 4.9% as the number of people looking for work decreased. Compared with April, full-time employment was up by 0.8% while part-time employment was down by 3.6%. In June, total hours worked increased by 1.3%. Average hourly wages rose 5.2% on a year-over-year basis in June, up from 3.9% in May and 3.3% in April.

68. Consumer Confidence: The Bloomberg Nanos Canadian Confidence Index - a composite indicator derived from weekly surveys of Canadian households reached 48.3 in the mid week of June 2022, the lowest since July 2020. The decrease in consumer confidence is driven by rising cost of living.

69. Business Confidence: The Conference Board of Canada’s Index of consumer confidence fell 4.5 points to 98.7 in June from 103.2 in May 2022. Consumers grew more pessimistic about the short-term outlook of business conditions, the labour market and financial prospects.

70. Exchange Rates: The USD/CAD rate on June 30, 2022 was 1.288, reflecting a decline of around 0.10% from the previous trading day. The Canadian currency is estimated to strengthen 0.4% to 1.26 per U.S. dollar over the next quarter and further to 1.23 over the next twelve months.

[Page 50]

Economic Outlook on or around June 30, 2022

71. Housing: After reaching 277,000 in 2021, housing starts are forecast to decrease to 245,000 in 2022 with a further decrease in 2023 to 230,000. A slowing economy due to higher interest rates and elevated inflation is expected to negatively effect the housing market across Canada.

Sources

• Statistics Canada
• Canada Mortgage and Housing Corporation
• Conference Board of Canada
• Bank of Canada
• Bloomberg
• Reuters
• TD Economics
• Focus Economics

[Page 51]

Industry Outlook – Geophysical Services Industry

Overview

72. The geophysical services industry gathers, interprets and maps geophysical data. Companies often specialize in locating and measuring subsurface resources such as oil, natural gas and minerals, but they may also conduct surveys for engineering purposes.

73. As a result, the industry’s performance is dependent on demand for resource exploration from oil, natural gas and mining industries, which are largely dependent on movements in commodity prices.

74. Oil and gas companies make up the principal markets for geophysical industry services, accounting for an estimated 60.9% of industry revenue in 2017 and 48.5% in 2022.

75. The industry’s dependence on volatile global energy markets is evident in its demonstrated swift growth in demand for geophysical services during post-recessionary periods. As commodity prices rose, so did demand for industry services.

Industry Terminology

76. Geophysical survey – A combination of the principles of geology and physics that are used to study the substrata of the Earth and its oceans. Used extensively in oil and gas exploration, mineral deposits and in archaeology.

77. Seismic survey – A form of geophysical survey that measures the properties of the Earth by seismic waves using magnetic, electric gravitational, thermal and elastic theories.

Marine Seismic Survey

78. Marine seismic surveys use sound energy to map geological structures under the seabed. Towed devices use compressed air to produce pulses of high-energy, low-frequency sound waves that travel through the water and can penetrate more than 6,000 meters into rock layers below the sea floor. These sound waves bounce back to the ocean surface where receivers, called hydrophones, record the strength and return time of each sound wave.

79. From this data, maps of the geology below the seabed are developed. Users of the retrieved marine seismic data are primarily oil and gas exploration and production companies who explore and extract resources in the offshore.

80. Various types of marine seismic surveys include:

1. 80.1. Two Dimensional (“2D”) – Utilizes one sound source and one set of receivers to provide a general picture of the geological characteristics over a wide area;
2. 80.2. Three Dimensional (“3D”) – A 3D survey is used to provide more detailed information about a smaller area. These surveys deploy multiple synchronized sound sources and hydrophones.
3. 80.3. Four Dimensional (“4D”) – Similar to a 3D survey, with the added dimension of time.

[Page 52]

Industry Outlook – Geophysical Services Industry

Outlook on or around November 30, 2017

81. The geophysical services industry is expected to substantially expand over the next 5 years due to rising demand for exploratory surveying as world energy prices rebound from the collapse in 2015 and 2016.

82. Since demand for industry services is largely predicated on demand from downstream oil, natural gas and mining industries, rising commodity prices will drive new exploration activity, especially in previously unexplored offshore areas.

83. Over the next 5 years, it is forecast that industry revenue will climb at an annualized rate of 5.0% to $1.5 billion, including growth of 7.0% in 2017.

84. It is noted that certain recent developments could have a potential impact on the outlook of the geophysical services industry. This includes the following:

1. 84.1. Demand growth driven by China and India;
2. 84.2. A fall in international rig count; and
3. 84.3. Downward pressure on global energy supplies.

85. The expected continuation of rapid growth among the world’s developing economies, particularly China and India, will only further raise commodity prices and drive demand for industry services.

86. Furthermore, according to Baker Hughes’ report of international oil and gas rig counts, total rig count has decreased 4 out of the last 10 prior months in 2017. The average year-to-date increase in monthly rig count amounts to a relatively flat 0.9%. This implies that oil and gas companies are cutting down on their capital spending which could have an impact on demand for geophysical services.

87. Lastly, downward pressure on global energy supplies is pushing the price of crude oil higher as evident in the rally in prices in September 2017 and October 2017.

88. The U.S. Energy Department has been sharply drawing down inventory since March 2017 with the U.S. Strategic Petroleum Reserve shrinking in 24 of the last 30 weeks preceding November 2017.

89. Additionally, there is expectations that the Organization of the Petroleum Exporting Countries (“OPEC”) will expand their output-cut deal beyond March 2018. This is significant, in that supply from OPEC accounts for approximately 40% of global crude oil supply.

90. Overall, sentiment surrounding global energy prices is relatively bullish, which in turn, would increase demand for geophysical services. However, there is some uncertainty in the outlook of the geophysical services industry relating to tighter capital spending of oil and gas companies.

91. The following slide summarizes forward-looking industry data pertaining to the geophysical services industry.

[Page 53]

Industry Outlook – Geophysical Services Industry

Outlook on or around November 30, 2017 (cont’d)

Product and services segmentation

• Geophysical data collection: 63.4%
• Integrated geophysical services: 7.2%
• Geophysical data sales: 7.8%
• Other specialized services: 21.6%

Revenue estimate (in $ millions)

• 2017: ~1,300
• 2018: ~1,350
• 2019: ~1,425
• 2020: ~1,500
• 2021: ~1,575
• 2022: ~1,650

MAJOR MARKET SEGMENTATION

• Oil and gas industries: 61%
• Mineral mining industries: 18%
• Government and public institutions: 11%
• Other: 10%

(1) Geophysical data collection: The surveying and mapping of subsurface terrain and formations. Includes techniques such as 2D, 3D and 4D seismic surveys, magnetic surveys, gravity surveys and electrical and electromagnetic surveys.
(2) Geophysical data sales: The sale of seismic data to third-party exploration operators.
(3) Integrated geophysical services: Third-party data that is used to incorporate multiple surveys into a single data set.
(4) Other specialized services: Refers to the acquisition and processing of geophysical data as well as borehole logging surveys.

[Page 54]

Industry Outlook – Geophysical Services Industry

Outlook on or around June 30, 2022

92. The size of the geophysical services industry, as measured by total revenue, has contracted considerably since 2017 due to the COVID-19 pandemic. During 2020, oil and gas drilling saw a sharp decrease in activity, which in turn, directly effected demand for geophysical and seismic surveying.

93. Total industry revenue is expected to reach approximately $867 million in 2022 compared with total revenue of approximately $1.3 billion in 2017. Industry revenue is forecast to climb at an annualized rate of 1.9% to $952 million over the next five years.

94. It is noted that certain recent developments could have a potential impact on the outlook of the geophysical services industry. This includes the following:

1. 94.1. The ongoing Russia-Ukraine conflict;
2. 94.2. Rising global interest rates; and
3. 94.3. A shift in the capital spending habits of oil and gas companies post-COVID-19.

95. Since the Russia-Ukraine conflict began in February 2022, foreign policy has generally shifted to restrict energy imports from Russia. With Russia being the third largest global producer of crude oil, this puts downward pressure on the global energy supply.

96. Furthermore, the U.S. Energy Department has since resorted to releasing approximately 180 million barrels from the U.S. Strategic Petroleum Reserve, putting the overall reserve at its lowest level since 1984.

97. Expectations on global energy prices are generally bullish given the discussed supply pressures coupled with a sharp return in demand, post-COVID-19.

98. Another recent development is the continued increase in global interest rates. Rising interest rates can cause dramatic shifts in consumer confidence, therefore negatively affecting aggregate demand.

99. Additionally, an increase in interest rates directly effects the overall level of capital spending. Capital-intensive industries, such as the oil and gas industry, typically rely on borrowing to fund capital projects. As such, the increased cost of borrowing may put downward pressure on the level of oil and gas projects and therefore the demand for geophysical services.

100. Lastly, since the rebound in global energy prices post-COVID-19, oil and gas companies have made a dramatic shift in their capital spending habits. Generally, oil and gas companies have shifted their focus away from growth-oriented capital projects to debt-reduction and returning value to shareholders in the form of share buybacks and dividend increases.

101. This trend of a more conservative approach to capital spending is likely to have an impact on the demand for geophysical services.

102. The following slide summarizes forward-looking industry data pertaining to the geophysical services industry.

[Page 55]

Industry Outlook – Geophysical Services Industry

Outlook on or around June 30, 2022 (cont’d)

Product and services segmentation

• Geophysical data collection: 50.2%
• Integrated geophysical services: 16.1%
• Geophysical data sales: 12.5%
• Other specialized services: 21.2%

Revenue estimate (in $ millions)

• 2022: ~865
• 2023: ~885
• 2024: ~905
• 2025: ~925
• 2026: ~945
• 2027: ~970

MAJOR MARKET SEGMENTATION

• Oil and gas industries: 48%
• Mineral mining industries: 21%
• Government and public institutions: 14%
• Other: 17%

(1) Geophysical data collection: The surveying and mapping of subsurface terrain and formations. Includes techniques such as 2D, 3D and 4D seismic surveys, magnetic surveys, gravity surveys and electrical and electromagnetic surveys.
(2) Geophysical data sales: The sale of seismic data to third-party exploration operators.
(3) Integrated geophysical services: Third-party data that is used to incorporate multiple surveys into a single data set.
(4) Other specialized services: Refers to the acquisition and processing of geophysical data as well as borehole logging surveys.

[Page 56]

Glossary

[Page 57]

Glossary

[Page 58]

Schedules

[Page 59]

Geophysical Service Inc.

Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022

Index

[Redacted]

[Redacted]

[Redacted]

[Redacted]

Schedule A1.5 Accrued Interest on 2017 Losses - Lost Loan Due to Shareholder of Affiliate

Schedule A1.6 Accrued Interest on 2017 Losses - Lost Shareholder Loan Due to Mr. Davey Einarsson

Schedule A1.7 Accrued Interest on 2017 Losses - Lost Shareholder Loan Due to Mr. Paul Einarsson

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]

Schedule B3 Weighted Average Cost of Capital - November 30, 2017

Schedule B4 Guideline Public Companies - November 30, 2017

Schedule B5 Guideline Public Company Descriptions - November 30, 2017

Schedule B6 Precedent Transactions - November 30, 2017

[Redacted]

[Redacted]

[Redacted]

[Redacted]

Schedule C3 Weighted Average Cost of Capital - June 30, 2022

Schedule C4 Guideline Public Companies - June 30, 2022

Schedule C5 Guideline Public Company Descriptions - June 30, 2022

Schedule C6 Precedent Transactions - June 30, 2022

[Redacted]

[Redacted]

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[Redacted]

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Schedule A1.5

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Accrued Interest on 2017 Losses - Lost Loan Due to Shareholder of Affiliate
in $CAD, except as otherwise indicated

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Cost of borrowing is based on the average daily 20-year BBB Canadian corporate bond yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.
(3) Risk-free rate is based on the average daily 20-year Canada Soverign Strip yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.

[Page 67]

Schedule A1.6

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Accrued Interest on 2017 Losses - Lost Shareholder Loan Due to Mr. Davey Einarsson
in $CAD, except as otherwise indicated

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Cost of borrowing is based on the average daily 20-year BBB Canadian corporate bond yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.
(3) Risk-free rate is based on the average daily 20-year Canada Soverign Strip yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.

[Page 68]

Schedule A1.7

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Accrued Interest on 2017 Losses - Lost Shareholder Loan Due to Mr. Paul Einarsson
in $CAD, except as otherwise indicated

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Cost of borrowing is based on the average daily 20-year BBB Canadian corporate bond yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.
(3) Risk-free rate is based on the average daily 20-year Canada Soverign Strip yield in each year. The average daily rate for 2017 only considers December 2017 and the average daily rate for 2022 only considers January to June 2022.

[Page 69]

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Schedule B3

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Weighted Average Cost of Capital - November 30, 2017

[Page 78]

Schedule B3

Sources: Capital IQ*, Bloomberg, Duff & Phelps Cost of Capital Navigator - Guide to Cost of Capital, PwC Tax Summaries

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) See company descriptions on Schedule 4.
(3) Unlevering and relevering of beta computed using the Harris-Pringle formula.
Betas computed on weekly basis over 5 year period prior to valuation date, benchmarked against the S&P 500.
(4) Median debt to market capitalization, based on available annual observations from Capital IQ, for the five-year period prior to the valuation date.
(5) Comparable companies denoted with a “0” as opposed to a “1” in the table above, have been excluded from the CAPM analysis given observations of low average trading volume and/or correlation to systematic risk (i.e. market risk), relative to that of the other somewhat comparable companies.

* CIQ Disclaimer Notice: This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor’s. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

[Page 79]

Schedule B4

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Companies - November 30, 2017

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.

Sources: Capital IQ*, Company Filings
Mean excludes high and low.

CIQ Disclaimer Notice: This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor’s. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.”

[Page 80]

Schedule B5

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Company Descriptions - November 30, 2017

[Page 81]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Company Descriptions - November 30, 2017

Schedule B5

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Source: Capital IQ

[Page 82]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Precedent Transactions - November 30, 2017
CAD in millions, except as otherwise indicated

Schedule B6

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Source: Capital IQ

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[Page 90]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Weighted Average Cost of Capital - June 30, 2022

Schedule C3

[Page 91]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Weighted Average Cost of Capital - June 30, 2022

Schedule C3

Sources: Capital IQ*, Bloomberg, Duff & Phelps Cost of Capital Navigator - Guide to Cost of Capital, PwC Tax Summaries

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) See company descriptions on Schedule 9.
(3) Unlevering and relevering of beta computed using the Harris-Pringle formula.
Betas computed on weekly basis over 5 year period prior to valuation date, benchmarked against the S&P 500.
(4) Median debt to market capitalization, based on available annual observations from Capital IQ, for the five-year period prior to the valuation date.
(5) Comparable companies denoted with a "0" as opposed to a "1" in the table above, have been excluded from the CAPM analysis given observations of low average trading volume and/or correlation to systematic risk
(i.e. market risk), relative to that of the other somewhat comparable companies.

* CIQ Disclaimer Notice: This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the
related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from
the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH
ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for

[Page 92]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Companies - June 30, 2022

Schedule C4

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.

Sources: Capital IQ*, Company Filings
Mean excludes high and low.

CIQ Disclaimer Notice: This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness
or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING
LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or
the suitability of securities for investment purposes, and should not be relied on as investment advice."

[Page 93]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Company Descriptions - June 30, 2022

Schedule C5

[Page 94]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Guideline Public Company Descriptions - June 30, 2022

Schedule C5

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Source: Capital IQ

[Page 95]

Geophysical Service Inc.
Estimate of Fair Market Value of GSI at November 30, 2017 and June 30, 2022
Precedent Transactions - June 30, 2022
CAD, in millions unless otherwise indicated

Schedule C6

Notes
(1) This schedule was prepared without audit, forms part of, and should be read in conjunction with our Report.
(2) Source: CapitalIQ

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