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, having also been a guarantor under a credit facility, is released from it guarantee obligations under a credit facility and does not guarantee any indebtedness of the Company or the Guarantor Subsidiaries.

The consolidating condensed financial statements are presented below and should be read in connection with the 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 December 31, 2016 and December 31, 2015, and the consolidating condensed statements of operations, statements of comprehensive income (loss) and statements of cash flows for the years ended December 31, 2016, 2015 and 2014 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 December 31, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	47,971		$	8,026		$	—		$	55,997
Receivables
Trade, net	—			14,819			9,662			—			24,481
Notes and other	—			412			24			—			436
Due from Seitel Holdings, Inc.	—			1,177			—			—			1,177
Intercompany receivables (payables)	(51,982		)	51,262			720			—			—
Investment in subsidiaries	420,308			420,456			630			(841,394		)	—
Net seismic data library	—			94,039			21,907			(24		)	115,922
Net property and equipment	—			611			1,098			—			1,709
Prepaid expenses, deferred charges and other	30			1,413			319			—			1,762
Intangible assets, net	900			402			116			—			1,418
Goodwill	—			107,688			74,324			—			182,012
Deferred income taxes	—			92			165			—			257
TOTAL ASSETS	$	369,256		$	740,342		$	116,991		$	(841,418	)	$	385,171
LIABILITIES AND STOCKHOLDER’S EQUITY
LIABILITIES
Accounts payable and accrued liabilities	$	5,007		$	8,559		$	3,441		$	—		$	17,007
Income taxes payable	—			24			596			—			620
Senior Notes	246,857			—			—			—			246,857
Obligations under capital leases	—			—			1,510			—			1,510
Deferred revenue	—			13,574			2,330			—			15,904
Deferred income taxes	—			—			2,214			—			2,214
TOTAL LIABILITIES	251,864			22,157			10,091			—			284,112
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	400,582			—			—			—			400,582
Parent investment	—			764,105			156,594			(920,699		)	—
Retained deficit	(283,190		)	(45,920		)	(33,120		)	79,040			(283,190		)
Accumulated other comprehensive loss	—			—			(16,574		)	241			(16,333		)
TOTAL STOCKHOLDER’S EQUITY	117,392			718,185			106,900			(841,418		)	101,059
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	369,256		$	740,342		$	116,991		$	(841,418	)	$	385,171

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2015

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	51,192		$	1,483		$	—		$	52,675
Receivables
Trade, net	—			12,459			2,371			—			14,830
Notes and other	—			3			1,315			—			1,318
Due from Seitel Holdings, Inc.	—			1,156			—			—			1,156
Intercompany receivables (payables)	(29,144		)	31,537			(2,393		)	—			—
Investment in subsidiaries	420,547			419,499			692			(840,738		)	—
Net seismic data library	—			125,253			36,180			(70		)	161,363
Net property and equipment	—			1,273			1,330			—			2,603
Prepaid expenses, deferred charges and other	139			1,737			307			—			2,183
Intangible assets, net	900			3,613			1,015			—			5,528
Goodwill	—			107,688			72,104			—			179,792
Deferred income taxes	—			39			—			—			39
TOTAL ASSETS	$	392,442		$	755,449		$	114,404		$	(840,808	)	$	421,487
LIABILITIES AND STOCKHOLDER’S EQUITY
LIABILITIES
Accounts payable and accrued liabilities	$	5,007		$	13,253		$	5,390		$	—		$	23,650
Senior Notes	245,696			—			—			—			245,696
Obligations under capital leases	—			—			1,661			—			1,661
Deferred revenue	—			23,525			2,378			—			25,903
Deferred income taxes	—			—			2,361			—			2,361
TOTAL LIABILITIES	250,703			36,778			11,790			—			299,271
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	400,505			—			—			—			400,505
Parent investment	—			764,105			156,395			(920,500		)	—
Retained deficit	(258,766		)	(45,434		)	(34,102		)	79,536			(258,766		)
Accumulated other comprehensive loss	—			—			(19,679		)	156			(19,523		)
TOTAL STOCKHOLDER’S EQUITY	141,739			718,671			102,614			(840,808		)	122,216
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	392,442		$	755,449		$	114,404		$	(840,808	)	$	421,487

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	73,667		$	22,261		$	(1,382	)	$	94,546
EXPENSES:
Depreciation and amortization	—			55,934			19,194			(50		)	75,078
Cost of sales	—			112			14			(50		)	76
Selling, general and administrative	1,078			17,590			6,783			(1,332		)	24,119
	1,078			73,636			25,991			(1,432		)	99,273
INCOME (LOSS) FROM OPERATIONS	(1,078		)	31			(3,730		)	50			(4,727		)
Interest expense, net	(22,910		)	(2,043		)	(14		)	—			(24,967		)
Foreign currency exchange gains	—			—			109			—			109
Other income	—			587			1,178			—			1,765
Loss before income taxes and equity in income (loss) of subsidiaries	(23,988		)	(1,425		)	(2,457		)	50			(27,820		)
Provision (benefit) for income taxes	—			43			(3,439		)	—			(3,396		)
Equity in income (loss) of subsidiaries	(436		)	982			—			(546		)	—
NET INCOME (LOSS)	$	(24,424	)	$	(486	)	$	982		$	(496	)	$	(24,424	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended December 31, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Eliminations			Consolidated Total
Net income (loss)	$	(24,424	)	$	(486	)	$	982	$	(496	)	$	(24,424	)
Foreign currency translation adjustments	—			—			3,105		85			3,190
Comprehensive income (loss)	$	(24,424	)	$	(486	)	$	4,087	$	(411	)	$	(21,234	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2015

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	72,593		$	28,978		$	(1,319	)	$	100,252
EXPENSES:
Depreciation and amortization	—			51,455			29,517			(49		)	80,923
Cost of sales	—			123			72			—			195
Selling, general and administrative	1,016			15,362			7,125			(1,319		)	22,184
	1,016			66,940			36,714			(1,368		)	103,302
INCOME (LOSS) FROM OPERATIONS	(1,016		)	5,653			(7,736		)	49			(3,050		)
Interest expense, net	(22,845		)	(2,146		)	(399		)	—			(25,390		)
Foreign currency exchange gains (losses)	—			(3		)	(1,647		)	—			(1,650		)
Other income	—			5			—			—			5
Income (loss) before income taxes and equity in loss of subsidiaries	(23,861		)	3,509			(9,782		)	49			(30,085		)
Provision (benefit) for income taxes	9,270			72,563			(1,928		)	—			79,905
Equity in loss of subsidiaries	(76,859		)	(7,854		)	—			84,713			—
NET LOSS	$	(109,990	)	$	(76,908	)	$	(7,854	)	$	84,762		$	(109,990	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE LOSS

For the Year Ended December 31, 2015

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net loss	$	(109,990	)	$	(76,908	)	$	(7,854	)	$	84,762	$	(109,990	)
Foreign currency translation adjustments	—			—			(21,349		)	138		(21,211		)
Comprehensive loss	$	(109,990	)	$	(76,908	)	$	(29,203	)	$	84,900	$	(131,201	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	153,125		$	46,287		$	(1,375	)	$	198,037
EXPENSES:
Depreciation and amortization	—			80,835			40,246			(58		)	121,023
Cost of sales	—			284			20			—			304
Selling, general and administrative	2,130			19,304			9,740			(1,375		)	29,799
	2,130			100,423			50,006			(1,433		)	151,126
INCOME (LOSS) FROM OPERATIONS	(2,130		)	52,702			(3,719		)	58			46,911
Interest expense, net	(21,407		)	(2,360		)	(1,262		)	—			(25,029		)
Foreign currency exchange gains (losses)	—			3			(1,977		)	—			(1,974		)
Other income (loss)	(14		)	71			6			—			63
Income (loss) before income taxes and equity in income (loss) of subsidiaries	(23,551		)	50,416			(6,952		)	58			19,971
Provision (benefit) for income taxes	(9,270		)	21,063			(1,500		)	—			10,293
Equity in income (loss) of subsidiaries	23,959			(5,452		)	—			(18,507		)	—
NET INCOME (LOSS)	$	9,678		$	23,901		$	(5,452	)	$	(18,449	)	$	9,678

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended December 31, 2014

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income (loss)	$	9,678	$	23,901	$	(5,452	)	$	(18,449	)	$	9,678
Foreign currency translation adjustments	—		—		(12,096		)	15			(12,081		)
Comprehensive income (loss)	$	9,678	$	23,901	$	(17,548	)	$	(18,434	)	$	(2,403	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2016

(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	$	(24,625	)	$	44,564		$	10,604		$	—	$	30,543
Cash flows from investing activities:
Cash invested in seismic data	—			(24,581		)	(2,081		)	—		(26,662		)
Cash paid to acquire property and equipment	—			(274		)	(30		)	—		(304		)
Cash from sale of property and equipment	—			17			1			—		18
Advances to Seitel Holdings, Inc.	—			(21		)	—			—		(21		)
Net cash used in investing activities	—			(24,859		)	(2,110		)	—		(26,969		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			—			(205		)	—		(205		)
Intercompany transfers	24,625			(22,926		)	(1,699		)	—		—
Net cash provided by (used in) financing activities	24,625			(22,926		)	(1,904		)	—		(205		)
Effect of exchange rate changes	—			—			(47		)	—		(47		)
Net increase (decrease) in cash and cash equivalents	—			(3,221		)	6,543			—		3,322
Cash and cash equivalents at beginning of period	—			51,192			1,483			—		52,675
Cash and cash equivalents at end of period	$	—		$	47,971		$	8,026		$	—	$	55,997

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2015

(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	$	(24,717	)	$	80,698		$	16,655		$	—	$	72,636
Cash flows from investing activities:
Cash invested in seismic data	—			(63,858		)	(13,423		)	—		(77,281		)
Cash paid to acquire property and equipment	—			(422		)	(10		)	—		(432		)
Advances to Seitel Holdings, Inc.	—			(13		)	—			—		(13		)
Net cash used in investing activities	—			(64,293		)	(13,433		)	—		(77,726		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			(18		)	(200		)	—		(218		)
Intercompany transfers	24,717			(13,717		)	(11,000		)	—		—
Net cash provided by (used in) financing activities	24,717			(13,735		)	(11,200		)	—		(218		)
Effect of exchange rate changes	—			(3		)	(1,189		)	—		(1,192		)
Net increase (decrease) in cash and cash equivalents	—			2,667			(9,167		)	—		(6,500		)
Cash and cash equivalents at beginning of period	—			48,525			10,650			—		59,175
Cash and cash equivalents at end of period	$	—		$	51,192		$	1,483		$	—	$	52,675

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 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	$	(25,125	)	$	103,252		$	46,218		$	—	$	124,345
Cash flows from investing activities:
Cash invested in seismic data	—			(68,714		)	(24,968		)	—		(93,682		)
Cash paid to acquire property and equipment	—			(1,705		)	(256		)	—		(1,961		)
Advances to Seitel Holdings, Inc.	—			(13		)	—			—		(13		)
Net cash used in investing activities	—			(70,432		)	(25,224		)	—		(95,656		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			(32		)	(217		)	—		(249		)
Intercompany transfers	25,125			(9,125		)	(16,000		)	—		—
Net cash provided by (used in) financing activities	25,125			(9,157		)	(16,217		)	—		(249		)
Effect of exchange rate changes	—			3			(621		)	—		(618		)
Net increase in cash and cash equivalents	—			23,666			4,156			—		27,822
Cash and cash equivalents at beginning of period	—			24,859			6,494			—		31,353
Cash and cash equivalents at end of period	$	—		$	48,525		$	10,650		$	—	$	59,175