HOUSTON, March 11, 2008 - Seitel, Inc., a leading provider of seismic data to the oil and gas industry, today reported results for the fourth quarter ended December 31, 2007. Because the company was acquired by ValueAct Capital on February 14, 2007, the fourth quarter financial statements include purchase accounting adjustments that resulted in significantly higher non-cash expenses. Since our fourth quarter results are not fully comparable to the pre-merger fourth quarter of 2006, the impact from the purchase accounting adjustments on our financial results are highlighted in the discussion below.

Revenue for the fourth quarter of $53.8 million included a $6.7 million reduction related to purchase accounting adjustments to our deferred revenue balance. Without this adjustment, total revenue for the quarter would have attained $60.5 million, as compared to revenue of $52.8 million in the fourth quarter of 2006. Cash resales for the quarter reached $43.1 million, compared to $29.2 million for the third quarter and to $38.1 million for the fourth quarter of last year. The $7.7 million year-on-year growth in fourth quarter adjusted revenue reflected a $6.8 million increase in selections revenue before purchase accounting adjustments, as well as $5 million increases in both cash resales and non-monetary exchanges. Acquisition revenue increased by $2.2 million on completion of weather delayed projects in Texas. An $11.7 million increase in deferrals partially offset the above improvements.

For the year, revenue of $148.8 million included an $18.3 million reduction related to purchase accounting adjustments. Without these adjustments, total revenue for 2007 would have reached $167.1 million as compared to revenue of $191.9 million in 2006. The $24.8 million reduction in adjusted revenue reflected primarily an $18.4 million increase in deferrals, partially from higher library cards. Acquisition revenue decreased $4.2 million mainly due to our decision to reduce shooting in Canada, and to a lower acquisition underwriting percentage than in 2006. Cash resales were $3.2 million lower due to weak marine sales which was partially offset by increased licensing on land in both the US and Canada. Non-monetary exchanges of $8.0 million increased by $2.1 million.

For the fourth quarter of 2007, the company reported a net loss of $14.8 million that included $28.1 million from purchase accounting adjustments to the value of assets and liabilities, as well as $0.6 million of merger related expenses. Excluding the above items, net income for the fourth quarter was $13.9 million, compared to net income of $13.9 million for the 2006 quarter. The additional margin on the $7.7 million adjusted revenue increase was mostly offset by a $5.1 million increase in net interest expense.

The net loss for the year was $93.4 million that included $88.8 million from purchase accounting adjustments and $24.1 million of merger related expenses. Part of merger expenses was a $4.0 million fee for bridge financing reported as interest expense. Excluding the above items, 2007 net income was $19.5 million compared to net income of $47.2 million in 2006. The $27.7 million adjusted net income reduction was mainly the result of lower revenue and a $17.6 million increase in net interest expense excluding bridge financing fees.

Cash EBITDA, defined as cash revenue less cash operating expenses, was $37.7 million for the fourth quarter of 2007, an increase of 24% from $30.4 million in 2006. This increase was primarily driven by a $5.4 million increase in cash revenue and a $1.9 million reduction in cash operating expenses essentially from lower compensation expense. For the year, cash EBITDA was $100.2 million as compared to $99.2 million in 2006, as a $5.2 million reduction in cash revenue was offset by a $6.2 million improvement in cash operating expenses.

"2007 closed with a quarterly record for cash resales," commented Rob Monson, president and chief executive officer. "Our onshore data licensing was strong during the full year. Both the U.S. and Canada grew year on year partially offsetting lagging sales from our marine library. Despite lower drilling activity in Canada and some concerns about the royalty situation in Alberta, our Canadian library continued to perform, with robust resales in the fourth quarter and full year growth.

"In 2007, we continued to add significant amounts of data to our onshore library," said Monson. "One of our key objectives is to grow our onshore library by 10% per year and we were close to our target. Our onshore 3D square miles grew by 9% during 2007 at a lower cost per square mile than we had anticipated. As a result, our cash capex spend on seismic data was lower than we had forecast.

"2008 has started with some uncertainty in the macro environment, but the oil and gas industry continues to benefit from strong demand for hydrocarbons and a favorable price environment for both commodities. Natural gas storage remains at reasonable levels with falling imports of Canadian natural gas and LNG. I believe most of the ingredients are in place for another solid year for the seismic industry in North America."

The company narrowed its operating loss to $6.4 million in the fourth quarter from an operating loss of $18.4 million in the third quarter of 2007. Excluding the impact from purchase accounting adjustments and merger costs, operating income for the fourth quarter would have been $25.1 million compared to operating income of $20.9 million in the fourth quarter of 2006. The current quarter's operating losses included $24.3 million in increased depreciation and amortization resulting from the purchase accounting adjustments to assets and liabilities, as well as merger related costs of $0.6 million and a $6.7 million reduction to selections revenue from the deferred revenue write-off. For the full year, the operating loss closed at $65.9 million compared to operating income of $65.9 million in 2006. Excluding purchase accounting impact and merger costs, 2007 operating income would have been $56.1 million.

Depreciation and amortization expense for the fourth quarter of 2007 was $49.9 million compared to $20.8 million for the same period in 2006 and to $36.0 million in the third quarter of this year. The 2007 fourth quarter included $23.7 million in incremental amortization from the step up in value of the data library, and a combined $1.7 million increase in depreciation and amortization of stepped up equipment and intangible assets.

Selling, general and administrative expenses were $9.6 million for the fourth quarter of 2007, compared to $9.6 million in the fourth quarter of last year and $9.9 million in the third quarter of 2007. The current quarter included $2.4 million in equity compensation expense, flat with the third quarter, but significantly higher than the $0.7 million in the fourth quarter of 2006. For the full year, selling, general and administrative expenses were $37.0 million compared to $35.9 million for the prior year. Equity compensation expense increased by $6.0 million year on year.

Net interest expense was $9.8 million for the fourth quarter, slightly lower than the $9.9 million for the third quarter of this year, but higher than the $4.8 million for the fourth quarter of 2006, reflecting the increased debt level.

Cash generated during the third quarter was $10.1 million with net cash capital expenditures at $16.8 million. Our cash balances at the end of the quarter increased to $43.4 million.

Gross capital expenditures for 2007 were $85.1 million, as compared to $98.4 million for the prior year. Non-monetary exchanges were $9.4 million lower than in 2006. Acquisition capital expenditures were $2.3 million lower reflecting our decision to reduce the size of our Canadian program. On a net cash basis, capital expenditures for the year were $36.7 million as compared to $39.5 million in 2006. Our forecasted net cash capital expenditures for the year 2008 are $54 million.

For the full year 2007, we added approximately 2,400 square miles of seismic data to our library. During the full year 2008, we expect to increase the size of our onshore 3D library by approximately 10% or 3,000 square miles, as compared to the 9% increment in 2007.

Seitel will hold its quarterly conference call to discuss fourth quarter results for 2007 on Wednesday, March 12, 2008 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time. The dial-in number for the call is 866.761.0749, passcode Seitel. A replay of the call will be available until March 19, 2008 by dialing 888-286-8010, passcode 60789101, and will be available following the conference call at the Investor Relations section of the company's Website at http://www.seitel-inc.com.

Seitel is a leading provider of seismic data to the oil and gas industry in North America. Seitel's data products and services are critical for the exploration for, and development and management of, oil and gas reserves by oil and gas companies. Seitel has ownership in an extensive library of proprietary onshore and offshore seismic data that it has accumulated since 1982 and that it licenses to a wide range of oil and gas companies. Seitel believes that its library of onshore seismic data is one of the largest available for licensing in the United States and Canada. Seitel's seismic data library includes both onshore and offshore 3D and 2D data. Seitel has ownership in over 40,000 square miles of 3D and approximately 1.1 million linear miles of 2D seismic data concentrated in the major active North American oil and gas producing regions. Seitel serves a market which includes over 1,600 companies in the oil and gas industry.

The Press Release contains "forward-looking statements" within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," "projects," or "anticipates" or similar expressions that concern the strategy, plans or intentions of the Company. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, actual results may differ materially from management expectations reflected in our forward-looking statements. These risks and uncertainties are described in the Company's annual financial statements. Management undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

The press release also includes certain non-GAAP financial measurers as defined under the SEC rules. The non-GAAP financial measures include cash resales, for which the most comparable GAAP measure is total revenue, and also include cash EBITDA or cash margin, for which the most comparable GAAP measure is operating income.

		SUCCESSOR			PREDECESSOR
		PERIOD			PERIOD
		December 31,
		2007			2006
		(unaudited)

ASSETS


Cash and equivalents	$	43,333		$	107,390
Restricted cash		110			105
Receivables:
Trade, net		51,915			52,144
Notes and other, net		2,190			895
Net seismic data library		349,039			123,123
Net property and equipment		7,392			7,628
Investment in marketable securities		4,224			-
Prepaid expenses, deferred charges and other		22,263			9,169
Intangible assets, net		52,512			-
Goodwill		209,409			-
Deferred income taxes		-			4,981


TOTAL ASSETS	$	742,387		$	305,435


LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued liabilities	$	49,325		$	30,837
Income taxes payable		948			659
Debt:
Senior Notes		402,333			185,788
Notes payable		300			337
Obligations under capital leases		3,848			2,913
Deferred revenue		48,151			47,410
Deferred income taxes		16,493			-
TOTAL LIABILITIES		521,398			267,944


COMMITMENTS AND CONTINGENCIES


STOCKHOLDER'S EQUITY


Preferred stock, par value $.01 per share; authorized 5,000,000
shares; none issued (Predecessor)		-			-
Common stock, par value $.01 per share; authorized 400,000,000
shares; issued and outstanding 155,184,084 at
December 31, 2006 (Predecessor)		-			1,552
Common stock, par value $.001 per share; 100 shares authorized,
issued and outstanding at December 31, 2007 (Successor)		-			-
Additional paid-in capital		264,805			240,431
Retained deficit		(77,091	)		(209,539	)
Accumulated other comprehensive income		33,275			5,047
TOTAL STOCKHOLDER'S EQUITY		220,989			37,491


TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	742,387		$	305,435

		SUCCESSOR			PREDECESSOR
		PERIOD			PERIOD
		Quarter Ended December 31,
		2007			2006


REVENUE	$	53,777		$	52,802


EXPENSES:
Depreciation and amortization		49,905			20,823
Cost of sales		105			31
Selling, general and administrative		9,568			9,621
Merger		570			1,449
		60,148			31,924


INCOME (LOSS) FROM OPERATIONS		(6,371	)		20,878
Interest expense, net		(9,826	)		(4,750	)
Foreign currency exchange gains (losses)		156			(866	)
Gain on sale of marketable securities		-			28


Income (loss) before income taxes		(16,041	)		15,290
Provision (benefit) for income taxes		(1,252	)		1,364
NET INCOME (LOSS)	$	(14,789	)	$	13,926

		Combined ⁽¹⁾			SUCESSOR			PREDECESSOR PERIOD
		Year Ended			PERIOD						Year Ended
		December 31,			February 14, 2007 -			January 1, 2007 -			December 31,
		2007			December 31, 2007			February 13, 2007			2006
		(unaudited)

REVENUE	$	148,812		$	129,802		$	19,010		$	191,919


EXPENSES:
Depreciation and amortization		157,398			145,913			11,485			88,662
Gain on sale of seismic data		-			-			-			(231	)
Cost of sales		226			218			8			234
Selling, general
and administrative		36,970			33,393			3,577			35,930
Merger		20,114			2,657			17,457			1,449
		214,708			182,181			32,527			126,044


INCOME (LOSS) FROM OPERATIONS		(65,896	)		(52,379	)		(13,517	)		65,875
Interest expense, net		(41,128	)		(38,844	)		(2,284	)		(19,520	)
Foreign currency
exchange gains (losses)		3,071			3,173			(102	)		259
Gain on sale of marketable securities		-			-			-			27
Other income		51			39			12			-
Income (loss) from continuing
operations before income taxes		(103,902	)		(88,011	)		(15,891	)		46,641
Provision (benefit) for income taxes		(10,468	)		(10,920	)		452			(715	)
Income (loss) from
continuing operations		(93,434	)		(77,091	)		(16,343	)		47,356
Income (loss) from
discontinued operations		-			-			-			(142	)
NET INCOME (LOSS)	$	(93,434	)	$	(77,091	)	$	(16,343	)	$	47,214

(1) Our combined results for the year ended December 31, 2007 represent the addition of the Predecessor Period from January 1, 2007 through February 13, 2007 and the Successor Period from February 14, 2007 to December 31, 2007. This combination does not comply with GAAP or with the rules for pro forma presentation, but is presented because we believe it provides a meaningful comparison of our results.

The following tables summarize the components of Seitel's revenue for the quarters and years ended December 31, 2007 and 2006 (in thousands):

		SUCCESSOR			PREDECESSOR			SUCCESSOR
		PERIOD			PERIOD			PERIOD
		Quarter Ended
		December 31,						September 30,
		2007			2006			2007
Acquisition revenue:
Cash underwriting	$	12,181		$	9,061		$	7,865
Underwriting from non-
monetary exchanges		673			1,567			646
Total acquisition revenue		12,854			10,628			8,511


Licensing revenue:
New resales for cash		43,138			38,124			29,162
Non-monetary exchanges		5,108			120			135
Revenue deferred		(26,948	)		(15,269	)		(15,984	)
Recognition of revenue
previously deferred		18,116			18,003			5,327
Total resale revenue		39,414			40,978			18,640


Total seismic revenue		52,268			51,606			27,151


Solutions and other		1,509			1,196			1,205
Total revenue	$	53,777		$	52,802		$	28,356

											PREDECESSOR
		SUCCESSOR			PREDECESSOR						PERIOD
		PERIOD			PERIOD			COMBINED ⁽¹⁾			Year Ended
		February 14, 2007 -			January 1, 2007 -			Year Ended			December 31,
		December 31, 2007			February 13, 2007			December 31, 2007			2006

Acquisition revenue:
Cash underwriting	$	35,215		$	6,087		$	41,302		$	42,327
Underwriting from non-
monetary exchanges		1,346			11			1,357			4,494
Total acquisition revenue		36,561			6,098			42,659			46,821


Licensing revenue:
New resales for cash		115,821			5,985			121,806			124,988
Non-monetary exchanges		7,981			(7	)		7,974			5,838
Revenue deferred		(64,250	)		(2,636	)		(66,886	)		(48,471	)
Recognition of revenue
previously deferred		28,956			8,946			37,902			55,344
Total resale revenue		88,508			12,288			100,796			137,699


Total seismic revenue		125,069			18,386			143,455			184,520


Solutions and other		4,733			624			5,357			7,399
Total revenue	$	129,802		$	19,010		$	148,812		$	191,919

Cash EBITDA includes cash resales plus all other cash revenues other than from data acquisitions, plus gain on seismic data, less cash selling, general and administrative expenses (excluding merger expenses and merger and acquisition transaction costs) and cost of goods sold. We believe this measure is helpful in determining the level of cash from operations we have available for debt service and funding of capital expenditures (net of the portion funded or underwritten by our customers). The following is a quantitative reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, operating income (in thousands):

		SUCCESSOR			PREDECESSOR												PREDECESSOR
		PERIOD			PERIOD			SUCCESSOR			PREDECESSOR						PERIOD
		Quarter Ended						PERIOD			PERIOD			COMBINED⁽¹⁾			Year Ended
		December 31,						February 14, 2007 -			January 1, 2007 -			Year Ended			December 31,
		2007			2006			December 31, 2007			February 13, 2007			December 31, 2007			2006


Cash EBITDA	$	37,705		$	30,373		$	96,741		$	3,430		$	100,171		$	99,155
Add (subtract) other
revenue components
not included in
cash margin:
Acquisition revenue		12,854			10,628			36,561			6,098			42,659			46,821
Non-monetary
exchanges		5,108			120			7,981			(7	)		7,974			5,838
Licensing revenue
deferred		(26,948	)		(15,269	)		(64,250	)		(2,636	)		(66,886	)		(48,471	)
Recognition of
licensing revenue
previously deferred		18,116			18,003			28,956			8,946			37,902			55,344
Solutions revenue
deferred		(50	)		-			(50	)		-			(50	)		-
Recognition of
Solutions revenue
previously deferred		6			13			6			6			12			33
Less:
Depreciation and
amortization		(49,905	)		(20,823	)		(145,913	)		(11,485	)		(157,398	)		(88,662	)
Merger expenses		(570	)		(1,449	)		(2,657	)		(17,457	)		(20,114	)		(1,449	)
Merger and acquisition
transaction costs		(197	)		-			(1,145	)		-			(1,145	)		-
Non-cash operating
expenses		(2,490	)		(718	)		(8,609	)		(412	)		(9,021	)		(2,734	)
Operating income (loss),
as reported	$	(6,371	)	$	20,878		$	(52,379	)	$	(13,517	)	$	(65,896	)	$	65,875

		SUCCESSOR		PREDECESSOR								PREDECESSOR
		PERIOD		PERIOD		SUCCESSOR		PREDECESSOR				PERIOD
		Quarter Ended				PERIOD		PERIOD		COMBINED⁽¹⁾		Year Ended,
		December 31,				February 14, 2007 -		January 1, 2007 -		Year Ended		December 31
		2007		2006		December 31, 2007		February 13, 2007		December 31, 2007		2006


Cash SG&A expenses	$	7,078	$	8,903	$	24,784	$	3,165	$	27,949	$	33,196
Non-cash equity
compensation expense		2,417		718		8,371		412		8,783		2,734
Non-cash rent expense		73		-		238		-		238		-
Total	$	9,568	$	9,621	$	33,393	$	3,577	$	36,970	$	35,930

The following table presents a reconciliation of net loss and loss from operations to net income without the impact of merger related items and income from operations without the impact of merger related items. Merger related items include the adjustments resulting from purchase accounting as well as the one-time merger related expenses.

		Quarter			Year
		Ended			Ended
		December 31, 2007			December 31, 2007
		(000's)

Net loss, as reported	$	(14,789	)	$	(93,434	)


Adjust for merger related items:
Merger expenses		570			20,114
Bridge acquisition financing fee		-			4,000
Eliminated selection revenue		6,682			18,329
Amortization of data library on:
Eliminated selection revenue		(1,263	)		(3,598	)
Step up in data library value		23,724			81,118
Amortization of acquired intangibles		1,531			5,173
Depreciation on step-up of fixed assets		188			627
Amortization of favorable facility lease		73			238
Tax impact of adjustments		(2,807	)		(13,064	)


Net income without impact of merger related items	$	13,909		$	19,503


Loss from operations, as reported	$	(6,371	)	$	(65,896	)


Adjust for merger related items:
Merger expenses		570			20,114
Eliminated selection revenue		6,682			18,329
Amortization of data library on:
Elimination of selection revenue		(1,263	)		(3,598	)
Step up in data library value		23,724			81,118
Amortization of acquired intangibles		1,531			5,173
Depreciation on step-up of fixed assets		188			627
Amortization of favorable facility lease		73			238


Income from operations without impact of merger related items	$	25,134		$	56,105