SUPPLEMENTAL GUARANTORS CONSOLIDATING CONDENSED FINANCIAL INFORMATION

On March 20, 2013, the Company completed a private placement of 9½% Senior Notes in the aggregate principal amount of $250.0 million. The Company’s payment obligations under the 9½% Senior Notes are jointly and severally guaranteed by substantially all of the Company's significant 100% owned U.S. subsidiaries (“Guarantor Subsidiaries”). All subsidiaries of the Company that do not guarantee the 9½% Senior Notes are referred to as Non-Guarantor Subsidiaries.

The indenture governing the 9½% Senior Notes provides that the guarantees by the Guarantor Subsidiaries will be released in the following customary circumstances: (i) upon a sale or other disposition, whether by merger, consolidation or otherwise, of the equity interests of that guarantor to a person that is not the Company or a restricted subsidiary of the Company; (ii) the guarantor sells all or substantially all of its assets to a person that is not the Company or a restricted subsidiary of the Company; (iii) the guarantor is properly designated as an unrestricted subsidiary or ceases to be a restricted subsidiary; (iv) upon legal defeasance of the 9½% Senior Notes or satisfaction and discharge of the indenture governing the 9½% Senior Notes; (v) the guarantor becomes an immaterial subsidiary or (vi) the guarantor is released from its guarantee obligations under the Credit Facility.

The consolidating condensed financial statements are presented below and should be read in connection with the Condensed Consolidated Financial Statements of the Company. Separate financial statements of the Guarantor Subsidiaries are not presented because (i) the Guarantor Subsidiaries are wholly-owned and have fully and unconditionally guaranteed the 9½% Senior Notes on a joint and several basis and (ii) the Company’s management has determined such separate financial statements are not material to investors.

The following consolidating condensed financial information presents the consolidating condensed balance sheets as of September 30, 2013 and December 31, 2012, and the consolidating condensed statements of income, statements of comprehensive income (loss) and statements of cash flows for the nine months ended September 30, 2013 and September 30, 2012 of (a) the Company; (b) the Guarantor Subsidiaries; (c) the Non-Guarantor Subsidiaries; (d) elimination entries; and (e) the Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for under the equity method. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, intercompany transactions and intercompany sales.

CONSOLIDATING CONDENSED BALANCE SHEET

As of September 30, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	21,381		$	6,659		$	—		$	28,040
Receivables
Trade, net	—			33,006			7,888			—			40,894
Notes and other, net	—			8			1,998			—			2,006
Due from Seitel Holdings, Inc.	—			1,127			—			—			1,127
Intercompany receivables (payables)	28,201			295			(28,496		)	—			—
Investment in subsidiaries	362,124			432,614			1,591			(796,329		)	—
Net seismic data library	—			118,231			75,906			—			194,137
Net property and equipment	—			1,627			2,445			—			4,072
Prepaid expenses, deferred charges and other	7,143			2,315			2,936			—			12,394
Intangible assets, net	900			10,841			4,581			—			16,322
Goodwill	—			107,688			97,052			—			204,740
Deferred income taxes	—			84			—			—			84
TOTAL ASSETS	$	398,368		$	729,217		$	172,560		$	(796,329	)	$	503,816
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	12,595		$	23,606		$	6,753		$	—		$	42,954
Income taxes payable	110			502			—			—			612
Senior Notes	250,000			—			—			—			250,000
Obligations under capital leases	—			58			2,771			—			2,829
Deferred revenue	—			44,010			6,667			—			50,677
Deferred income taxes	—			—			2,367			—			2,367
TOTAL LIABILITIES	262,705			68,176			18,558			—			349,439
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	399,455			—			—			—			399,455
Parent investment	—			764,752			156,924			(921,676		)	—
Retained deficit	(263,792		)	(103,711		)	(21,636		)	125,347			(263,792		)
Accumulated other comprehensive income	—			—			18,714			—			18,714
TOTAL STOCKHOLDER’S EQUITY	135,663			661,041			154,002			(796,329		)	154,377
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	398,368		$	729,217		$	172,560		$	(796,329	)	$	503,816

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	60,533		$	1,358		$	—		$	61,891
Receivables
Trade, net	—			43,806			17,389			—			61,195
Notes and other, net	—			9			2,134			—			2,143
Due from Seitel Holdings, Inc.	—			874			—			—			874
Intercompany receivables (payables)	75,688			(49,827		)	(25,861		)	—			—
Investment in subsidiaries	332,819			432,870			1,590			(767,279		)	—
Net seismic data library	—			100,087			80,030			—			180,117
Net property and equipment	—			2,125			2,693			—			4,818
Prepaid expenses, deferred charges and other	2,644			5,122			3,008			—			10,774
Intangible assets, net	900			13,250			6,678			—			20,828
Goodwill	—			107,688			100,332			—			208,020
Deferred income taxes	—			84			—			—			84
TOTAL ASSETS	$	412,051		$	716,621		$	189,351		$	(767,279	)	$	550,744
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	10,049		$	38,179		$	14,555		$	—		$	62,783
Income taxes payable	336			900			2,898			—			4,134
Senior Notes	275,000			—			—			—			275,000
Notes payable	29			—			—			—			29
Obligations under capital leases	—			81			3,032			—			3,113
Deferred revenue	—			45,320			7,537			—			52,857
Deferred income taxes	—			—			2,470			—			2,470
TOTAL LIABILITIES	285,414			84,480			30,492			—			400,386
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	398,772			—			—			—			398,772
Parent investment	—			764,752			156,918			(921,670		)	—
Retained deficit	(272,135		)	(132,611		)	(21,780		)	154,391			(272,135		)
Accumulated other comprehensive income	—			—			23,721			—			23,721
TOTAL STOCKHOLDER’S EQUITY	126,637			632,141			158,859			(767,279		)	150,358
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	412,051		$	716,621		$	189,351		$	(767,279	)	$	550,744

CONSOLIDATING CONDENSED STATEMENT OF INCOME

For the Nine Months Ended September 30, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	112,387		$	31,893		$	(975	)	$	143,305
EXPENSES:
Depreciation and amortization	—			66,904			22,348			—			89,252
Cost of sales	—			287			3			—			290
Selling, general and administrative	1,086			12,584			6,858			(975		)	19,553
	1,086			79,775			29,209			(975		)	109,095
INCOME (LOSS) FROM OPERATIONS	(1,086		)	32,612			2,684			—			34,210
Interest expense, net	(17,967		)	(2,401		)	(1,287		)	—			(21,655		)
Foreign currency exchange losses	—			—			(1,104		)	—			(1,104		)
Loss on early extinguishment of debt	(1,504		)	—			—			—			(1,504		)
Other income	—			17			—			—			17
Income (loss) before income taxes and equity in income of subsidiaries	(20,557		)	30,228			293			—			9,964
Provision for income taxes	—			1,472			149			—			1,621
Equity in income of subsidiaries	28,900			144			—			(29,044		)	—
NET INCOME	$	8,343		$	28,900		$	144		$	(29,044	)	$	8,343

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2013

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income	$	8,343	$	28,900	$	144		$	(29,044	)	$	8,343
Foreign currency translation adjustments	—		—		(5,007		)	—			(5,007		)
Comprehensive income (loss)	$	8,343	$	28,900	$	(4,863	)	$	(29,044	)	$	3,336

CONSOLIDATING CONDENSED STATEMENT OF INCOME

For the Nine Months Ended September 30, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	106,372		$	64,730		$	(971	)	$	170,131
EXPENSES:
Depreciation and amortization	—			64,927			41,997			—			106,924
Cost of sales	—			335			17			—			352
Selling, general and administrative	1,601			12,313			7,699			(971		)	20,642
	1,601			77,575			49,713			(971		)	127,918
INCOME (LOSS) FROM OPERATIONS	(1,601		)	28,797			15,017			—			42,213
Interest expense, net	(9,690		)	(10,995		)	(1,053		)	—			(21,738		)
Foreign currency exchange gains (losses)	—			(4		)	1,040			—			1,036
Gain on sale of marketable securities	—			230			—			—			230
Other income	20			690			—			—			710
Income (loss) before income taxes and equity in income of subsidiaries	(11,271		)	18,718			15,004			—			22,451
Provision for income taxes	—			1,420			3,926			—			5,346
Equity in income of subsidiaries	28,376			11,078			—			(39,454		)	—
NET INCOME	$	17,105		$	28,376		$	11,078		$	(39,454	)	$	17,105

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2012

(In thousands)



	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Eliminations			Consolidated Total
Net income	$	17,105	$	28,376		$	11,078	$	(39,454	)	$	17,105
Unrealized losses on securities held as available for sale, net of tax:
Unrealized net holding losses arising during the period	—		(32		)	—		—			(32		)
Less: Reclassification adjustment for realized gains included in earnings	—		(230		)	—		—			(230		)
Foreign currency translation adjustments	—		—			4,762		—			4,762
Comprehensive income	$	17,105	$	28,114		$	15,840	$	(39,454	)	$	21,605

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(18,542	)	$	102,136		$	27,572		$	—	$	111,166
Cash flows from investing activities:
Cash invested in seismic data	—			(89,278		)	(22,534		)	—		(111,812		)
Cash paid to acquire property, equipment and other	—			(457		)	(238		)	—		(695		)
Cash from sale of property, equipment and other	—			59			—			—		59
Advances to Seitel Holdings, Inc.	—			(253		)	—			—		(253		)
Net cash used in investing activities	—			(89,929		)	(22,772		)	—		(112,701		)
Cash flows from financing activities:
Issuance of 9½% Senior Notes	250,000			—			—			—		250,000
Repayment of 9.75% Senior Notes	(275,000		)	—			—			—		(275,000		)
Principal payments on notes payable	(29		)	—			—			—		(29		)
Principal payments on capital lease obligations	—			(23		)	(163		)	—		(186		)
Costs of debt transactions	(6,915		)	—			—			—		(6,915		)
Intercompany transfers	50,486			(51,336		)	850			—		—
Net cash provided by (used in) financing activities	18,542			(51,359		)	687			—		(32,130		)
Effect of exchange rate changes	—			—			(186		)	—		(186		)
Net increase (decrease) in cash and cash equivalents	—			(39,152		)	5,301			—		(33,851		)
Cash and cash equivalents at beginning of period	—			60,533			1,358			—		61,891
Cash and cash equivalents at end of period	$	—		$	21,381		$	6,659		$	—	$	28,040

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(26,451	)	$	88,019		$	56,198		$	—	$	117,766
Cash flows from investing activities:
Cash invested in seismic data	—			(75,100		)	(73,754		)	—		(148,854		)
Cash paid to acquire property, equipment and other	—			(1,194		)	(82		)	—		(1,276		)
Net proceeds from sale of marketable securities	—			230			—			—		230
Cash from sale of property, equipment and other	—			90			—			—		90
Advances to Seitel Holdings, Inc.	—			(11		)	—			—		(11		)
Net cash used in investing activities	—			(75,985		)	(73,836		)	—		(149,821		)
Cash flows from financing activities:
Principal payments on notes payable	(49		)	—			—			—		(49		)
Principal payments on capital lease obligations	—			(6		)	(144		)	—		(150		)
Intercompany transfers	26,500			(32,650		)	6,150			—		—
Net cash provided by (used in) financing activities	26,451			(32,656		)	6,006			—		(199		)
Effect of exchange rate changes	—			(4		)	183			—		179
Net decrease in cash and cash equivalents	—			(20,626		)	(11,449		)	—		(32,075		)
Cash and cash equivalents at beginning of period	—			61,612			13,282			—		74,894
Cash and cash equivalents at end of period	$	—		$	40,986		$	1,833		$	—	$	42,819