10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
	For the quarterly period ended March 31, 2001
	OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934

SEITEL, INC.
(Exact name of registrant as specified in charter)
Delaware	76-0025431
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification Number)
50 Briar Hollow Lane, 7th Floor West	77027
Houston, Texas	(Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:	(713) 881-8900
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $0.01	New York Stock Exchange;
	Toronto Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

As of May 11, 2001 there were 25,051,784 shares of the Company's common stock, par value $.01 per share outstanding.

INDEX

			Page
PART I.	FINANCIAL STATEMENTS
	Item 1.	Financial Statement
	Consolidated Balance Sheets as of
	March 31, 2001 (Unaudited) and December 31, 2000		3
	Consolidated Statements of Operations (Unaudited) for the
	Three Months Ended March 31, 2001 and 2000		4
	Consolidated Statements of Stockholders' Equity (Unaudited)
	for the Three Months Ended March 31, 2001		5
	Consolidated Statements of Consolidated Statements of Cash Flows (Unaudited )
	for the Three Months Ended March 31, 2001 and 2000		6
	Notes to Consolidated Interim Financial Statements		7
	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	9
	Item 3.	Quantitative and Qualitative Disclosures
		about Market Risk	12
PART II.	OTHER INFORMATION		13

 2

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

 
SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

				(Unaudited)
				March 31,			December 31,
				2001			2000
ASSETS
	Cash and equivalents		$	7,273		$	10,216
	Receivables
		Trade (net)		72,361			68,924
		Notes and other		689			816
	Net seismic data library			373,615			345,201
	Net oil and gas properties			143,277			141,658
	Net other property and equipment			4,423			3,997
	Investment in marketable securities			2,995			2,029
	Prepaid expenses, deferred charges and other assets			5,311			4,716
	TOTAL ASSETS		$	609,944		$	577,557
LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable and accrued liabilities		$	56,324		$	55,171
	Income taxes payable			1,955			6,075
	Debt
		Senior Notes		166,333			166,333
		Line of credit		63,000			40,000
	Obligations under capital leases			239			265
	Deferred income taxes			31,425			30,412
	Deferred revenue			1,883			2,975
TOTAL LIABILITIES				321,159			301,231
CONTINGENCIES AND COMMITMENTS
STOCKHOLDERS' EQUITY
	Preferred stock, par value $.01 per share; authorized
		5,000,000 shares; none issued		-			-
	Common stock, par value $.01 per share; authorized
		50,000,000 shares; issued and outstanding
		25,644,952 and 25,306,517 at March 31, 2001
		and December 31, 2000, respectively		256			253
	Additional paid-in capital			164,195			159,543
	Retained earnings			137,060			129,543
	Treasury stock 635,918 shares at cost at
		March 31, 2001 and December 31, 2000		(7,667	)		(7,667	)
	Notes receivable from officers and employees			(4,225	)		(4,965	)
	Accumulated other comprehensive loss			(834	)		(381	)
TOTAL STOCKHOLDERS' EQUITY				288,785			276,326
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	609,944		$	577,557

The accompanying notes are an integral part of these consolidated statements.

3

SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)

			Three Months Ended March 31,
			2001			2000
REVENUE		$	48,978		$	28,431
EXPENSES
	Depreciation, depletion and amortization		21,207			13,159
	Cost of sales		1,473			1,650
	Selling, general and administrative expenses		11,368			6,670
			34,048			21,479
INCOME FROM OPERATIONS			14,930			6,952
Interest expense, net			(3,015	)		(3,098	)
Income before provision for income taxes			11,915			3,854
Provision for income taxes			4,398			1,349
NET INCOME		$	7,517		$	2,505
Net income per share:
	Basic	$	.30		$	.11
	Diluted	$	.29		$	.11
Weighted average number of common and
	common equivalent shares:
	Basic		24,781			23,625
	Diluted		26,278			23,743

The accompanying notes are an integral part of these consolidated statements.

4

SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
																				Notes
																				Receivable			Accumulated
										Additional										from			Other
			Comprehensive			Common Stock				Paid-In		Retained		Treasury Stock						Officers &			Comprehensive
				Income		Shares		Amount		Capital		Earnings		Shares			Amount			Employees			Income (Loss)
Balance, December 31, 1999						24,285,795	$	243	$	147,549	$	110,117		(680,518	)	$	(6,279	)	$	(6,915	)	$	(1,691	)
	Net proceeds from issuance
		of common stock				1,020,722		10		10,180		-		-			-			-			-
	Tax reduction from exercise
		of stock options				-		-		1,814		-		-			-			-			-
	Treasury stock purchased					-		-		-		-		(330,400	)		(4,849	)		-			-
	Issuance of common stock
		in connection with
		restructuring				-		-		-		(991	)	375,000			3,461			-			-
	Payments received on
		notes receivable from
		officers and employees				-		-		-		-		-			-			1,950			-
	Net income		$	20,417		-		-		-		20,417		-			-			-			-
	Foreign currency translation
		adjustments		647		-		-		-		-		-			-			-			647
	Unrealized gain on
		marketable securities,
		net of income tax
		expense of $333		663		-		-		-		-		-			-			-			663
	Comprehensive income		$	21,727
Balance, December 31, 2000						25,306,517		253		159,543		129,543		(635,918	)		(7,667	)		(4,965	)		(381	)
	Net proceeds from issuance
		of common stock				338,435		3		4,329		-		-			-			-			-
	Tax reduction from exercise
		of stock options				-		-		323		-		-			-			-			-
	Payments received on
		notes receivable from
		officers and employees				-		-		-		-		-			-			740			-
	Net income		$	7,517		-		-		-		7,517		-			-			-			-
	Foreign currency translation
		adjustments		(294	)	-		-		-		-		-			-			-			(294	)
	Unrealized loss on
		marketable securities,
		net of income tax
		benefit of $135		(207	)	-		-		-		-		-			-			-			(207	)
	Changes in fair value of
		outstanding hedge
		positions, net of income
		tax expense of $39		48		-		-		-		-		-			-			-			48
	Comprehensive income		$	7,064
Balance, March 31, 2001
	(unaudited)					25,644,952	$	256	$	164,195	$	137,060		(635,918	)	$	(7,667	)	$	(4,225	)	$	(834	)

The accompanying notes are an integral part of these consolidated statements.

5

SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)
					Three Months Ended March 31,
					2001					2000
Cash flows from operating activities:
Reconciliation of net income to net cash provided by operating activities:
	Net income			$	7,517		$			2,505
	Depreciation, depletion and amortization				21,219					13,159
	Deferred income tax provision				1,419					900
	Non-cash sales				(7,824	)				-
	Decrease (increase) in receivables				(4,743	)				23,316
	Decrease (increase) in other assets				(584	)				289
	Decrease in accounts payable and other liabilities				(12,308	)				(10,497				)
			Net cash provided by operating activities		4,696					29,672
Cash flows from investing activities:
		Cash invested in seismic data			(29,052	)					(20,587			)
		Cash invested in oil and gas properties			(5,649	)					(5,639			)
		Cash paid to acquire property and equipment			(808	)					(186			)
		Net proceeds from sale of oil and gas properties			78						-
		Deferred offering costs			-						(759			)
			Net cash used in investing activities		(35,431	)					(27,171			)
Cash flows from financing activities:
	Borrowings under line of credit agreement				37,930						14,900
	Principal payments under line of credit				(14,930	)					(18,400			)
	Principal payments on term loans				-						(33			)
	Principal payments under capital lease obligations				(26	)					(12			)
	Proceeds from issuance of common stock				4,332						158
	Costs of debt and equity transactions				-						(2			)
	Payments on notes receivable from officers and employees				840						254
			Net cash provided by (used in) financing activities		28,146						(3,135			)
Effect of exchange rate changes					(354	)					173
Net decrease in cash and equivalents					(2,943	)					(461			)
Cash and cash equivalents at beginning of period					10,216						5,188
Cash and equivalents at end of period				$	7,273			$			4,727
Supplemental disclosure of cash flow information:
	Cash paid during the period for:
			Interest (net of amounts capitalized)	$	5,092				$			4,223
			Income taxes	$	6,825				$			659
Supplemental schedule of non-cash investing and
			financing activities:
	Additions to seismic data library			$	7,824			$					-
	Capital lease obligations incurred			$	-			$					22

The accompanying notes are an integral part of these consolidated statements.

6

SEITEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited)
March 31, 2001

NOTE A-BASIS OF PRESENTATION

             The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. For further information, refer to the financial statements and notes thereto for the year ended December 31, 2000 contained in the Company's Annual Report filed on Form 10-K with the Securities and Exchange Commission.

             The Company has changed its presentation of cash flows from operating activities from the direct method to the indirect method as allowed in Statement of Financial Accounting Standards 95.

NOTE B-EARNINGS PER SHARE

             In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share," basic earnings per share is computed based on the weighted average shares of common stock outstanding during the periods. Diluted earnings per share is computed based on the weighted average shares of common stock plus the assumed issuance of common stock for all potentially dilutive securities. The computations for basic and diluted net income per share for the three months ended March 31, 2001 and 2000 consist of the following (in thousands except per share amounts):

			Three Months Ended March 31,
			2001		2000
Net income		$	7,517	$	2,505
Basic weighted average shares			24,781		23,625
Effect of dilutive securities: (1)
	Options and warrants		1,497		118
Diluted weighted average shares			26,278		23,743
Per share income:
	Basic	$	.30	$	.11
	Diluted	$	.29	$	.11

(1) A weighted average quarter-to-date number of options and warrants to purchase 122,000 and 6,159,000 shares of common stock were outstanding during the first quarter of 2001 and 2000, respectively, but were not included in the computation of diluted per share income because their exercise prices were greater than the average market price of the common shares.

NOTE C-SEISMIC DATA LIBRARY

             Costs incurred in the creation of proprietary seismic data, including the direct and incremental costs of Company personnel engaged in project management and design, are capitalized. Substantially all (greater than 81%) of the costs incurred to develop the Company's seismic data library have been for programs created by the Company. The Company uses the income forecast method to amortize the costs of seismic data programs it creates. Under the income forecast method, seismic data costs are amortized in the proportion that revenue for a period relates to management's estimate of ultimate revenues. If anticipated sales fall below expectations, amortization is accelerated. The Company also purchases existing seismic data programs from other companies. The costs of purchased seismic data programs are generally amortized on a straight-line basis over ten years; however, the costs of a significant purchase (greater than 5% of the net book value of the data bank), are amortized using the greater of the income forecast method or ten-year straight-line method. As of March 31, 2001, almost all (95%) of the net costs of the Company's data bank are expected to be fully amortized within 10 years from when such data becomes available for resale.

7

             In certain transactions, the Company grants seismic licenses to third parties for data to be used in their operations (not for resale) in exchange for exclusive ownership of seismic data from the third party. The Company recognizes revenue for the licenses granted and records a data library asset for the seismic data acquired. These transactions are accounted for as non-monetary exchanges and are valued at the estimated fair value of such licenses based on values realized in cash transactions with other parties for similar seismic data, or at the estimated fair value of the seismic data libraries acquired.

NOTE D-OIL AND GAS PROPERTIES

             The Company accounts for its oil and gas exploration and production activities using the full-cost method of accounting. Under this method, all costs associated with acquisition, exploration and development of oil and gas reserves are capitalized, including salaries, benefits and other internal costs directly attributable to these activities. Costs associated with production and general corporate activities are expensed in the period incurred. For the three months ended March 31, 2001 and 2000, exploration and development related overhead costs of $569,000 and $478,000, respectively, have been capitalized to oil and gas properties. Interest costs related to unproved properties and certain properties under development are also capitalized to oil and gas properties. For the three months ended March 31, 2001 and 2000, interest costs of $579,000 and $745,000, respectively, have been capitalized to oil and gas properties.

NOTE E-DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

             The Company enters into foreign exchange contracts to hedge a portion of its foreign currency exchange risk related to its Canadian activities. On January 1, 2001, the Company adopted SFAS No. 133, as amended, "Accounting for Derivative Instruments and Hedging Activities." Effective with the adoption of SFAS No. 133, all derivatives are recognized on the balance sheet and measured at fair value. If the derivative does not qualify as a hedge or is not designated as a hedge, the gain or loss on the derivative is recognized currently in earnings. If the derivative qualifies for hedge accounting, the gain or loss on the derivative is either recognized in income along with an offsetting adjustment to the basis of the item being hedged or deferred in other comprehensive income to the extent the hedge is effective. The adoption of SFAS No. 133 did not have a material impact on the Company's financial position or results of operations. As of March 31, 2001, the Company had forward exchange contracts totaling $1 million (Canadian dollars) at an exchange rate into U.S. dollars of .6925 maturing in April 2001.

8

NOTE F-INDUSTRY SEGMENTS

             Segment information has been prepared in accordance with SFAS NO. 131, "Disclosures About Segments of an Enterprise and Related Information." Selected financial information as of and for the three months ended March 31, 2001 and 2000 is as follows (in thousands):

				Exploration
				and		Total
		Seismic		Production		Segments
As of and for the three months ended March 31, 2001
Revenue from external purchasers	$	40,901	$	8,077	$	48,978
Depreciation, depletion and amortization		18,155		2,640		20,795
Cost of sales		171		1,302		1,473
Segment operating income		22,575		4,135		26,710
Capital expenditures (a)		46,700		4,524		51,224
Assets		449,258		151,613		600,871
As of and for the three months ended March 31, 2000
Revenue from external purchasers	$	23,019	$	5,412	$	28,431
Depreciation, depletion and amortization		10,288		2,572		12,860
Cost of sales		77		1,573		1,650
Segment operating income		12,654		1,267		13,921
Capital expenditures (a)		19,758		3,809		23,567
Assets		380,574		156,913		537,487

(a) Includes other ancillary equipment.

			Three months ended March 31,
			2001			2000
Income before income taxes:
	Total reportable segment operating income	$	26,710		$	13,921
	Selling general and administrative expense		(11,368	)		(6,670	)
	Interest expense, net		(3,015	)		(3,098	)
	Eliminations and other		(412	)		(299	)
	Income before income taxes	$	11,915		$	3,854

Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
	AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

             Total revenue was $48,978,000 and $28,431,000 in the first quarters of 2001 and 2000, respectively. Revenue primarily consists of revenue generated from the marketing of seismic data and oil and gas production.

             Revenue from the marketing of seismic data was $40,901,000 in the first quarter of 2001 compared to $23,019,000 in the first quarter of 2000. The increase in revenue was primarily due to a 163% increase in licensing of existing data from the Company's data library. Since June 2000, the Company has experienced strong demand for its seismic library data as a result of increased capital expenditures by oil and gas companies for seismic library data.

9

            Net volume and price information for the Company's oil and gas production for the first quarters of 2001 and 2000 is summarized in the following table:

		Quarter Ended
		March 31,
		2001		2000
Natural gas volumes (mmcf)		762		1,305
Average natural gas price ($/mcf)	$	8.01	$	2.75
Crude oil/condensate volumes (mbbl)		70		70
Average crude oil/condensate price ($/bbl)	$	27.45	$	25.27

             Oil and gas revenue was $8,077,000 in the first quarter of 2001 compared to $5,412,000 in the first quarter of 2000. The increase in oil and gas revenue was attributable to higher market prices in the 2001 quarter offset by lower gas production volumes as compared to the first quarter of 2000. The decline in gas production was primarily due to normal production declines experienced on several of the Company's older wells as well as the effect of the sale of a group of wells in August 2000. These declines were partially offset by production from newer wells.

             Depreciation, depletion and amortization consists primarily of data bank amortization and depletion of oil and gas properties. Data bank amortization was $18,155,000 in the first quarter of 2001 compared to $10,288,000 in the first quarter of 2000. The amount of seismic data amortization fluctuates based on the level of seismic marketing revenue. As a percentage of revenue from licensing seismic data, data bank amortization was 45% and 46% for the first quarters of 2001 and 2000, respectively. See Note C for a discussion of the Company's seismic data amortization policy.

             Depletion of oil and gas properties was $2,640,000 in the first quarter of 2001 compared to $2,572,000 in the first quarter of 2000, which amounted to $2.23 and $1.49, respectively, per mcfe of gas produced during such periods. The rate per mcfe varies with the estimate of proved oil and gas reserves of the Company at each quarter end, as well as evaluated property costs. The increase in the rate was primarily due to lower proved reserves at March 31, 2001 than at March 31, 2000.

             Cost of sales primarily consists of expenses associated with oil and gas production and seismic resale support services. Oil and gas production costs amounted to $1,302,000 or $1.10 per mcfe of gas produced in the first quarter of 2001 compared to $1,573,000, or $.91 per mcfe of gas produced in the first quarter of 2000. The increase in this rate was primarily due to higher production taxes in 2001 due to higher oil and gas prices.

             The Company's selling, general and administrative expenses were $11,368,000 in the first quarter of 2001 compared to $6,670,000 in the first quarter of 2000. This increase was primarily due to an increase in fixed costs due to the growth of the Company, as well as an increase in variable expenses related to increased revenue.

             The Company's effective income tax rate was 37% for the first quarter of 2001 compared to 35% for the first quarter of 2000. The increase in the effective income tax rate is primarily due to the mix of estimated earnings for 2001 between U.S. and foreign locations.

Liquidity and Capital Resources

             The Company's cash flow from operations was $4,696,000 and $29,672,000 for the three months ended March 31, 2001 and 2000, respectively. The decrease from 2000 to 2001 was primarily attributable to (i) higher collection of accounts receivable in the first quarter of 2000 as compared to 2001, (ii) an increase in cash paid to suppliers and employees and (iii) an increase in income taxes paid.

             The Company has a $75 million unsecured revolving line of credit facility whose maturity was extended to July 15, 2001. Under the terms of the extension, the facility bears interest at a rate of LIBOR plus 1.25%, the bank's prevailing prime rate, or the sum of the Federal Funds effective rate for such day plus 1/2%. The balance outstanding on this revolving line of credit as of May 11, 2001 was $66 million. The Company is currently in negotiations to establish a new line of credit facility upon expiration of the current facility. The Company's current bank, which has proposed to act as lead bank in the Company's new syndicated facility, expects, although there can be no assurance, that the Company will successfully close a three year, $100 million facility by approximately June 15, 2001. The new facility is also expected to provide the Company with the ability to increase the amount of the facility to $150 million.

10

             The Company's wholly-owned subsidiary, Olympic Seismic Ltd. ("Olympic"), has a revolving credit facility which allows it to borrow up to $5 million (Canadian dollars) by way of prime based loans, bankers' acceptances, or letters of credit. Prime based loans and bankers' acceptances bear interest at the rate of the bank's prime rate plus 0.35% per annum and 0.50% per annum, respectively. Letter of credit fees are based on scheduled rates in effect at the time of issuance. The facility is secured by Olympic's assets, but is not guaranteed by Seitel, Inc. or any of its other subsidiaries. Borrowings under the facility are limited to 75% of trade receivables less than 90 days old. The facility is subject to repayment upon demand and is available from time to time at the Bank's sole discretion. As of May 11, 2001, no amounts were outstanding on this revolving line of credit. Olympic is not a party to any of the debt issued by Seitel, Inc.

             On February 12, 1999, the Company completed a private placement of three series of unsecured Senior Notes totaling $138 million. The Series D Notes total $20 million, bear interest at a fixed rate of 7.03% and mature on February 15, 2004, with no principal payments due until maturity. The Series E Notes total $75 million, bear interest at a fixed rate of 7.28% and mature on February 15, 2009, with annual principal payments of $12.5 million beginning February 15, 2004. The Series F Notes total $43 million, bear interest at a fixed rate of 7.43% and mature on February 15, 2009, with no principal payments due until maturity. Interest on the Series D, E and F Notes is payable semi-annually on February 15 and August 15. As of May 11, 2001, the balance outstanding on the Series D, E and F Notes was $138 million.

             On December 28, 1995, the Company completed a private placement of three series of unsecured Senior Notes totaling $75 million. The Company contemporaneously issued its Series A Notes and Series B Notes, which total $52.5 million and bear interest at a fixed rate of 7.17%. On April 9, 1996, the Company issued its Series C Notes, which total $22.5 million and bear interest at a fixed rate of 7.48%. The Series A Notes mature on December 30, 2001, and require annual principal payments of $8.3 million which began on December 30, 1999. The Series B and Series C Notes mature on December 30, 2002, and require combined annual principal payments of $10 million, which began on December 30, 1998. Interest on the Series A, B and C Notes is payable semi-annually on June 30 and December 30. As of May 11, 2001, the balance outstanding on the Series A, B, and C Notes was $28,333,000.

             The Company may offer from time to time in one or more series (i) unsecured debt securities, which may be senior or subordinated, (ii) preferred stock and (iii) common stock, or any combination of the foregoing, up to an aggregate of $41,041,600 pursuant to an effective "shelf" registration statement filed with the SEC. In addition, under another effective "shelf" registration statement filed with the SEC, the Company may offer up to an aggregate of $200,000,000 of the following securities, in any combination, from time to time in one or more series: (i) unsecured debt securities, which may be senior or unsubordinated; (ii) preferred stock; (iii) common stock, and (iv) trust preferred securities.

             From January 1, 2001, through May 11, 2001, the Company received $4,920,000 from the exercise of common stock purchase warrants and options. In connection with these exercises, the Company will also realize approximately $370,000 in tax savings.

             The Company's Board of Directors approved a stock repurchase program in 1997 of up to $25 million. As of May 11, 2001, the Company has repurchased a total of 1,010,100 shares of its common stock at a cost of $11,124,000 since 1997 under this plan.

             During the first three months of 2001, gross seismic data library additions and capitalized oil and gas exploration and development costs amounted to $46,496,000 and $4,334,000, respectively. These capital expenditures, as well as taxes, interest expenses, cost of sales and general and administrative expenses, were funded by operations, proceeds from the exercise of common stock purchase warrants and options and borrowings under the Company's revolving line of credit.

             Currently, the Company anticipates capital expenditures for the remainder of 2001 to total approximately $89 million, of which approximately $69 million will be for seismic data bank additions, approximately $3 million will be for computer equipment purchases and approximately $17 million will be for oil and gas exploration and development efforts. The Company believes its current cash balances, revenues from operating sources, and proceeds from the exercise of common stock purchase warrants and options, combined with its available revolving line of credit, should be sufficient to fund the currently anticipated 2001 capital expenditures, along with expenditures for operating and general and administrative expenses and debt repayments. If these sources are not sufficient to cover the Company's anticipated expenditures or if the Company were to increase its planned capital expenditures for 2001, the Company could arrange for additional debt or equity financing during 2001; however, there can be no assurance that the Company would be able to accomplish any such debt or equity financing on satisfactory terms. If such debt or equity financing is not available on satisfactory terms, the Company could reduce its current capital budget or any proposed increases to its capital budget, and fund expenditures with cash flow generated from operating sources.

11

Information Regarding Forward Looking Statements

             This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include, but are not limited to, changes in the exploration budgets of the Company's seismic data and related services customers, actual customer demand for the Company's seismic data and related services, the extent of the Company's success in acquiring oil and gas properties and in discovering, developing and producing reserves, the timing and extent of changes in commodity prices for natural gas, crude oil and condensate and natural gas liquids and conditions in the capital markets and equity markets during the periods covered by the forward looking statements. The foregoing and other risk factors are identified in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2000.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

             The Company is exposed to market risk, including adverse changes in commodity prices, interest rates and foreign currency exchange rates. Refer to the Company's Form 10-K for the year ended December 31, 2000 for a detailed discussion of these risks. The following information discusses changes in the Company's market risk exposures since December 31, 2000.

Commodity Price Risk

             The Company may enter into various derivative instruments, principally natural gas swaps, to manage commodity price fluctuations. Currently, the Company has no open commodity price hedges.

Interest Rate Risk

             The Company may enter into various financial instruments, such as interest rate swaps, to manage the impact of changes in interest rates. Currently, the Company has no open interest rate swap or interest rate lock agreements. Therefore, the Company's exposure to changes in interest rates primarily results from its short-term and long-term debt with both fixed and floating interest rates.

Foreign Currency Exchange Rate Risk

             The Company conducts business in the Canadian dollar and pounds sterling and is therefore subject to foreign currency exchange rate risk on cash flows related to sales, expenses, financing and investing transactions. As of March 31, 2001, the Company had open forward exchange contracts totaling $1 million (Canadian dollars) at an exchange rate into U.S. dollars of .6925 maturing in April 2001 to hedge a portion of its foreign currency exchange risk related to its Canadian activities. Exposure from market rate fluctuations related to activities in the Cayman Islands, where the Company's functional currency is pounds sterling, is not material at this time.

12

PART II - OTHER INFORMATION

Items 1., 2., 3., 4., and 5.  Not applicable.

Item 6.  Exhibits and Report on Form 8-K
	(a)	Exhibits
		10.1	Amendment No. 6, dated as of May 11, 2001, among Seitel, Inc. a Delaware corporation the
			Lenders executing this Agreement and Bank One, NA.

13

SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
			SEITEL, INC.
Dated:    May	14,	2001	/s/	Paul A. Frame
				Paul A. Frame
				President
Dated:    May	14,	2001	/s/	Debra D. Valice
				Debra D. Valice
				Chief Financial Officer
Dated:    May	14,	2001	/s/	Marcia H. Kendrick
				Marcia H. Kendrick
				Chief Accounting Officer

14

	EXHIBIT INDEX
Exhibit	Title	Page Number
10.1	Amendment No. 6, dated as of May 11, 2001, among Seitel, Inc., a Delaware	16
	Corporation, the Lenders executing this Agreement and Bank One, NA

15

EX-10.1

EXHIBIT 10.1

SIXTH AMENDMENT
to Seitel, Inc. Revolving Credit Agreement

       This Sixth Amendment dated as of May 11, 2001 (this "Sixth Amendment") is among Seitel, Inc., a Delaware corporation (the "Borrower"), the lenders set forth on the signature pages hereto (the "Lenders") and Bank One, NA, formerly known as The First National Bank of Chicago, individually and as agent for the Lenders (in such capacity, the "Agent").

       FOR VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

       1.  Definitions.  Unless amended pursuant hereto or unless the context otherwise requires, all terms used herein which are defined in the Revolving Credit Agreement dated as of July 22, 1996 (as amended pursuant to a First Amendment to Seitel, Inc. Revolving Credit Agreement dated as of August 30, 1996, a Second Amendment to Seitel, Inc. Revolving Credit Agreement dated as of May 1, 1997, a Third Amendment to Seitel, Inc. Revolving Credit Agreement dated as of March 16, 1998, Amendment No. 4 dated as of August 10, 1999, a Fifth Amendment to Seitel, Inc. Revolving Credit Agreement dated as of March 16, 2001, and as it may have been further amended, supplemented or otherwise modified from time to time through the date hereof, the "Credit Agreement") among the Borrower, the Agent and the Lenders, shall have the meanings assigned to them in the Credit Agreement.

       2.  Amendments.  Upon the satisfaction of the conditions precedent set forth in Section 4 of this Sixth Amendment and effective as of the date hereof, the definition of "Facility Termination Date" set forth in Article I of the Credit Agreement is hereby amended to read in its entirety as follows:

       "'Facility Termination Date' means July 15, 2001 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof."

       3.  Representations and Warranties.  The Borrower hereby confirms, reaffirms and restates as of the date hereof the representations and warranties set forth in Article V of the Credit Agreement, provided that, with respect to the representations and warranties set forth in Section 5.6, the reference to "March 31, 1996" therein shall be deemed to read "December 31, 2000," and with respect to the representations and warranties set forth in Section 5.15, the references to "May 1, 1997" therein shall be deemed to be a reference to the date of this Sixth Amendment."

       4.  Conditions Precedent.  This Sixth Amendment and the amendments to the Credit Agreement provided for in Section 2 hereof shall become effective as of the date hereof when all of the following conditions precedent shall have been satisfied:

       (a)  The Agent shall have received counterparts of this Sixth Amendment duly executed and delivered by the Borrower and by all of the Lenders and consented to by all of the Subsidiary Guarantors.

       (b)  No Default or Unmatured Default shall have occurred and be continuing.

       5.  Effect on the Credit Agreement.  Except to the extent of the amendments expressly provided for herein, all of the representations, warranties, terms, covenants and conditions of the Loan Documents (a) shall remain unaltered, (b) shall continue to be, and shall remain, in full force and effect in accordance with their respective terms, and (c) are hereby ratified and confirmed in all respects.  Upon the effectiveness of this Sixth Amendment, all references in the Credit Agreement (including references in the Credit Agreement as amended by this Sixth Amendment) to "this Agreement" (and all indirect references such as "hereby", "herein", "hereof" and "hereunder") shall be deemed to be references to the Credit Agreement as amended by this Sixth Amendment.

       6.  Entire Agreement.  This Sixth Amendment, the Credit Agreement as amended by this Sixth Amendment and the other Loan Documents embody the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings between the parties hereto relating to the subject matter hereof.

       7.  APPLICABLE LAW.  THIS SIXTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

       8.  Headings.  The headings, captions and recitals used in this Sixth Amendment are for convenience only and shall not affect the interpretation of this Sixth Amendment.

       9.  Counterparts.  This Sixth Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

       IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to be duly executed as of the date first above written.

SEITEL, INC.
By:	/s/ Debra D. Valice
	Debra D. Valice Executive Vice President - - Chief Financial Officer

BANK ONE, NA, f/k/a The First National Bank of Chicago and successor by merger to Bank One, Texas, N.A., individually and as Agent
By:	/s/ Helen A. Carr
	First Vice President

ACKNOWLEDGMENT AND CONSENT BY SUBSIDIARY GUARANTORS

       Each of the undersigned Subsidiary Guarantors (i) acknowledges its receipt of a copy of and hereby consents to all of the terms and conditions of the foregoing Fifth Amendment, and (ii) reaffirms its obligations under the Subsidiary Guaranty dated as of July 22, 1996 in favor of Bank One, NA, formerly known as The First National Bank of Chicago, as agent.

SEITEL DELAWARE, INC.
SEITEL GEOPHYSICAL, INC.
DDD ENERGY, INC.
SEITEL GAS & ENERGY CORP.
SEITEL POWER CORP.
SEITEL NATURAL GAS, INC.
MATRIX GEOPHYSICAL, INC.
EXSOL, INC.
DATATEL, INC.
SEITEL OFFSHORE CORP.
GEO-BANK, INC.
ALTERNATIVE COMMUNICATIONS ENTERPRISES, INC.
SEITEL INTERNATIONAL, INC.
AFRICAN GEOPHYSICAL, INC.

By:	/s/ Debra D. Valice
	Debra D. Valice Vice President

SEITEL DATA CORP.

By:	/s/ Lisa Oakes
	Lisa Oakes Vice President

SEITEL MANAGEMENT, INC.

By:	/s/ Debra D. Valice
	Debra D. Valice President

SEITEL DATA LTD.

By:	Seitel Delaware, Inc., its general partner
	By:	/s/ Debra D. Valice
		Debra D. Valice Vice President