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 June 30, 2014 and December 31, 2013, and the consolidating condensed statements of income (loss), statements of comprehensive income (loss) and statements of cash flows for the six months ended June 30, 2014 and June 30, 2013 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 June 30, 2014

(In thousands)



	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	39,103	$	3,914		$	—		$	43,017
Receivables
Trade, net	—			29,914		9,011			—			38,925
Notes and other, net	—			11		1,851			—			1,862
Due from Seitel Holdings, Inc.	—			1,137		—			—			1,137
Income tax refund	—			—		1,337			—			1,337
Intercompany receivables (payables)	9,645			5,823		(15,468		)	—			—
Investment in subsidiaries	484,408			431,185		656			(916,249		)	—
Net seismic data library	—			114,160		64,773			(182		)	178,751
Net property and equipment	—			1,804		2,233			—			4,037
Prepaid expenses, deferred charges and other	6,355			2,780		530			—			9,665
Intangible assets, net	900			8,432		3,070			—			12,402
Goodwill	—			107,688		93,495			—			201,183
Deferred income taxes	—			88,655		—			—			88,655
TOTAL ASSETS	$	501,308		$	830,692	$	165,402		$	(916,431	)	$	580,971
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	5,008		$	23,704	$	7,345		$	—		$	36,057
Income taxes payable	342			53		389			—			784
Senior Notes	250,000			—		—			—			250,000
Obligations under capital leases	—			34		2,506			—			2,540
Deferred revenue	—			24,031		1,804			—			25,835
Deferred income taxes	—			—		6,604			—			6,604
TOTAL LIABILITIES	255,350			47,822		18,648			—			321,820
STOCKHOLDER’S EQUITY
Common stock	—			—		—			—			—
Additional paid-in capital	399,945			—		—			—			399,945
Parent investment	—			764,110		156,152			(920,262		)	—
Retained earnings (deficit)	(153,987		)	18,760		(22,587		)	3,827			(153,987		)
Accumulated other comprehensive income	—			—		13,189			4			13,193
TOTAL STOCKHOLDER’S EQUITY	245,958			782,870		146,754			(916,431		)	259,151
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	501,308		$	830,692	$	165,402		$	(916,431	)	$	580,971

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2013

(In thousands)



	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	24,859	$	6,494		$	—		$	31,353
Receivables
Trade, net	—			22,711		11,905			—			34,616
Notes and other, net	—			4		1,928			—			1,932
Due from Seitel Holdings, Inc.	—			1,130		—			—			1,130
Income tax refund	—			—		7,441			—			7,441
Intercompany receivables (payables)	15,416			14,719		(30,135		)	—			—
Investment in subsidiaries	473,191			433,709		1,335			(908,235		)	—
Net seismic data library	—			116,199		79,794			(215		)	195,778
Net property and equipment	—			2,244		2,367			—			4,611
Prepaid expenses, deferred charges and other	6,841			2,581		422			—			9,844
Intangible assets, net	900			10,038		3,824			—			14,762
Goodwill	—			107,688		93,847			—			201,535
Deferred income taxes	—			92,511		—			—			92,511
TOTAL ASSETS	$	496,348		$	828,393	$	179,222		$	(908,450	)	$	595,513
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	5,008		$	16,636	$	16,133		$	—		$	37,777
Income taxes payable	153			634		—			—			787
Senior Notes	250,000			—		—			—			250,000
Obligations under capital leases	—			50		2,626			—			2,676
Deferred revenue	—			38,748		2,991			—			41,739
Deferred income taxes	—			—		7,578			—			7,578
TOTAL LIABILITIES	255,161			56,068		29,328			—			340,557
STOCKHOLDER’S EQUITY
Common stock	—			—		—			—			—
Additional paid-in capital	399,641			—		—			—			399,641
Parent investment	—			764,752		156,924			(921,676		)	—
Retained earnings (deficit)	(158,454		)	7,573		(20,796		)	13,223			(158,454		)
Accumulated other comprehensive income	—			—		13,766			3			13,769
TOTAL STOCKHOLDER’S EQUITY	241,187			772,325		149,894			(908,450		)	254,956
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	496,348		$	828,393	$	179,222		$	(908,450	)	$	595,513

CONSOLIDATING CONDENSED STATEMENT OF INCOME (LOSS)

For the Six Months Ended June 30, 2014

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	76,872		$	28,205		$	(690	)	$	104,387
EXPENSES:
Depreciation and amortization	—			43,560			24,099			(30		)	67,629
Cost of sales	—			240			13			—			253
Selling, general and administrative	607			9,289			5,112			(690		)	14,318
	607			53,089			29,224			(720		)	82,200
INCOME (LOSS) FROM OPERATIONS	(607		)	23,783			(1,019		)	30			22,187
Interest expense, net	(10,589		)	(1,040		)	(789		)	—			(12,418		)
Foreign currency exchange gains (losses)	—			3			(446		)	—			(443		)
Other income (loss)	(14		)	73			—			—			59
Income (loss) before income taxes and equity in income (loss) of subsidiaries	(11,210		)	22,819			(2,254		)	30			9,385
Provision (benefit) for income taxes	(4,460		)	9,841			(463		)	—			4,918
Equity in income (loss) of subsidiaries	11,217			(1,791		)	—			(9,426		)	—
NET INCOME (LOSS)	$	4,467		$	11,187		$	(1,791	)	$	(9,396	)	$	4,467

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 30, 2014

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income (loss)	$	4,467	$	11,187	$	(1,791	)	$	(9,396	)	$	4,467
Foreign currency translation adjustments	—		—		(577		)	1			(576		)
Comprehensive income (loss)	$	4,467	$	11,187	$	(2,368	)	$	(9,395	)	$	3,891

CONSOLIDATING CONDENSED STATEMENT OF INCOME (LOSS)

For the Six Months Ended June 30, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	76,424		$	23,124		$	(653	)	$	98,895
EXPENSES:
Depreciation and amortization	—			41,352			15,815			—			57,167
Cost of sales	—			100			2			—			102
Selling, general and administrative	714			8,660			4,920			(653		)	13,641
	714			50,112			20,737			(653		)	70,910
INCOME (LOSS) FROM OPERATIONS	(714		)	26,312			2,387			—			27,985
Interest expense, net	(12,889		)	(1,714		)	(850		)	—			(15,453		)
Foreign currency exchange gains (losses)	—			1			(1,819		)	—			(1,818		)
Loss on early extinguishment of debt	(1,504		)	—			—			—			(1,504		)
Other income	—			1			—			—			1
Income (loss) before income taxes and equity in income (loss) of subsidiaries	(15,107		)	24,600			(282		)	—			9,211
Provision for income taxes	—			952			153			—			1,105
Equity in income (loss) of subsidiaries	23,213			(435		)	—			(22,778		)	—
NET INCOME (LOSS)	$	8,106		$	23,213		$	(435	)	$	(22,778	)	$	8,106

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 30, 2013

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income (loss)	$	8,106	$	23,213	$	(435	)	$	(22,778	)	$	8,106
Foreign currency translation adjustments	—		—		(8,152		)	—			(8,152		)
Comprehensive income (loss)	$	8,106	$	23,213	$	(8,587	)	$	(22,778	)	$	(46	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2014

(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	$	(12,268	)	$	43,860		$	30,843		$	—	$	62,435
Cash flows from investing activities:
Cash invested in seismic data	—			(32,263		)	(17,343		)	—		(49,606		)
Cash paid to acquire property, equipment and other	—			(1,065		)	(92		)	—		(1,157		)
Advances to Seitel Holdings, Inc.	—			(7		)	—			—		(7		)
Net cash used in investing activities	—			(33,335		)	(17,435		)	—		(50,770		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			(16		)	(107		)	—		(123		)
Intercompany transfers	12,268			3,732			(16,000		)	—		—
Net cash provided by (used in) financing activities	12,268			3,716			(16,107		)	—		(123		)
Effect of exchange rate changes	—			3			119			—		122
Net increase (decrease) in cash and cash equivalents	—			14,244			(2,580		)	—		11,664
Cash and cash equivalents at beginning of period	—			24,859			6,494			—		31,353
Cash and cash equivalents at end of period	$	—		$	39,103		$	3,914		$	—	$	43,017

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Six Months Ended June 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	$	(18,349	)	$	71,943		$	20,680		$	—	$	74,274
Cash flows from investing activities:
Cash invested in seismic data	—			(57,916		)	(20,015		)	—		(77,931		)
Cash paid to acquire property, equipment and other	—			(383		)	(219		)	—		(602		)
Cash from sale of property, equipment and other	—			59			—			—		59
Advances to Seitel Holdings, Inc.	—			(251		)	—			—		(251		)
Net cash used in investing activities	—			(58,491		)	(20,234		)	—		(78,725		)
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	—			(15		)	(109		)	—		(124		)
Costs of debt transactions	(6,842		)	—			—			—		(6,842		)
Intercompany transfers	50,220			(51,070		)	850			—		—
Net cash provided by (used in) financing activities	18,349			(51,085		)	741			—		(31,995		)
Effect of exchange rate changes	—			1			(263		)	—		(262		)
Net increase (decrease) in cash and cash equivalents	—			(37,632		)	924			—		(36,708		)
Cash and cash equivalents at beginning of period	—			60,533			1,358			—		61,891
Cash and cash equivalents at end of period	$	—		$	22,901		$	2,282		$	—	$	25,183