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 its 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 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 March 31, 2017 and December 31, 2016, and the consolidating condensed statements of operations, statements of comprehensive income (loss) and statements of cash flows for the three months ended March 31, 2017 and March 31, 2016 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 March 31, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	52,421		$	11,830		$	—		$	64,251
Receivables
Trade, net	—			14,975			9,171			—			24,146
Notes and other	—			38			53			—			91
Due from Seitel Holdings, Inc.	—			1,180			—			—			1,180
Intercompany receivables (payables)	(51,768		)	51,612			156			—			—
Investment in subsidiaries	412,923			420,031			870			(833,824		)	—
Net seismic data library	—			83,772			21,402			(12		)	105,162
Net property and equipment	—			579			1,080			—			1,659
Prepaid expenses, deferred charges and other	69			1,678			332			—			2,079
Intangible assets, net	900			—			—			—			900
Goodwill	—			107,688			74,911			—			182,599
Deferred income taxes	—			95			197			—			292
TOTAL ASSETS	$	362,124		$	734,069		$	120,002		$	(833,836	)	$	382,359
LIABILITIES AND STOCKHOLDER’S EQUITY
LIABILITIES
Accounts payable and accrued liabilities	$	10,946		$	7,679		$	6,161		$	—		$	24,786
Income taxes payable	—			24			690			—			714
Senior Notes	247,167			—			—			—			247,167
Obligations under capital leases	—			—			1,469			—			1,469
Deferred revenue	—			15,576			2,502			—			18,078
Deferred income taxes	—			—			1,645			—			1,645
TOTAL LIABILITIES	258,113			23,279			12,467			—			293,859
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	400,580			—			—			—			400,580
Parent investment	—			764,105			156,643			(920,748		)	—
Retained deficit	(296,569		)	(53,315		)	(33,245		)	86,560			(296,569		)
Accumulated other comprehensive loss	—			—			(15,863		)	352			(15,511		)
TOTAL STOCKHOLDER’S EQUITY	104,011			710,790			107,535			(833,836		)	88,500
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	362,124		$	734,069		$	120,002		$	(833,836	)	$	382,359

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 STATEMENT OF OPERATIONS

For the Three Months Ended March 31, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	13,802		$	7,134		$	(341	)	$	20,595
EXPENSES:
Depreciation and amortization	—			16,116			6,160			(13		)	22,263
Cost of sales	—			10			14			(14		)	10
Selling, general and administrative	123			4,627			1,223			(327		)	5,646
	123			20,753			7,397			(354		)	27,919
LOSS FROM OPERATIONS	(123		)	(6,951		)	(263		)	13			(7,324		)
Interest expense, net	(5,874		)	(321		)	(15		)	—			(6,210		)
Foreign currency exchange losses	—			—			(51		)	—			(51		)
Loss before income taxes and equity in loss of subsidiaries	(5,997		)	(7,272		)	(329		)	13			(13,585		)
Benefit for income taxes	—			(2		)	(204		)	—			(206		)
Equity in loss of subsidiaries	(7,382		)	(125		)	—			7,507			—
NET LOSS	$	(13,379	)	$	(7,395	)	$	(125	)	$	7,520		$	(13,379	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended March 31, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net loss	$	(13,379	)	$	(7,395	)	$	(125	)	$	7,520	$	(13,379	)
Foreign currency translation adjustments	—			—			711			111		822
Comprehensive income (loss)	$	(13,379	)	$	(7,395	)	$	586		$	7,631	$	(12,557	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Three Months Ended March 31, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	10,474		$	1,819		$	(343	)	$	11,950
EXPENSES:
Depreciation and amortization	—			8,910			6,204			(13		)	15,101
Cost of sales	—			15			7			—			22
Selling, general and administrative	213			4,087			1,987			(328		)	5,959
	213			13,012			8,198			(341		)	21,082
LOSS FROM OPERATIONS	(213		)	(2,538		)	(6,379		)	(2		)	(9,132		)
Interest expense, net	(5,656		)	(607		)	(93		)	—			(6,356		)
Foreign currency exchange gains	—			—			173			—			173
Other income	—			6			—			—			6
Loss before income taxes and equity in loss of subsidiaries	(5,869		)	(3,139		)	(6,299		)	(2		)	(15,309		)
Benefit for income taxes	—			(27		)	(1,418		)	—			(1,445		)
Equity in loss of subsidiaries	(7,995		)	(4,881		)	—			12,876			—
NET LOSS	$	(13,864	)	$	(7,993	)	$	(4,881	)	$	12,874		$	(13,864	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended March 31, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net loss	$	(13,864	)	$	(7,993	)	$	(4,881	)	$	12,874	$	(13,864	)
Foreign currency translation adjustments	—			—			6,661			83		6,744
Comprehensive income (loss)	$	(13,864	)	$	(7,993	)	$	1,780		$	12,957	$	(7,120	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Three Months Ended March 31, 2017

(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	$	(215	)	$	8,513		$	5,836		$	—	$	14,134
Cash flows from investing activities:
Cash invested in seismic data	—			(3,747		)	(2,001		)	—		(5,748		)
Cash paid to acquire property and equipment	—			(98		)	(38		)	—		(136		)
Advances to Seitel Holdings, Inc.	—			(3		)	—			—		(3		)
Net cash used in investing activities	—			(3,848		)	(2,039		)	—		(5,887		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			—			(53		)	—		(53		)
Intercompany transfers	215			(215		)	—			—		—
Net cash provided by (used in) financing activities	215			(215		)	(53		)	—		(53		)
Effect of exchange rate changes	—			—			60			—		60
Net increase in cash and cash equivalents	—			4,450			3,804			—		8,254
Cash and cash equivalents at beginning of period	—			47,971			8,026			—		55,997
Cash and cash equivalents at end of period	$	—		$	52,421		$	11,830		$	—	$	64,251

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Three Months Ended March 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	$	(194	)	$	10,195		$	703		$	(15	)	$	10,689
Cash flows from investing activities:
Cash invested in seismic data	—			(5,915		)	(486		)	15			(6,386		)
Cash paid to acquire property and equipment	—			(75		)	—			—			(75		)
Cash from sale of property and equipment	—			14			—			—			14
Advances to Seitel Holdings, Inc.	—			(11		)	—			—			(11		)
Net cash used in investing activities	—			(5,987		)	(486		)	15			(6,458		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			—			(48		)	—			(48		)
Intercompany transfers	194			(194		)	—			—			—
Net cash provided by (used in) financing activities	194			(194		)	(48		)	—			(48		)
Effect of exchange rate changes	—			—			177			—			177
Net increase in cash and cash equivalents	—			4,014			346			—			4,360
Cash and cash equivalents at beginning of period	—			51,192			1,483			—			52,675
Cash and cash equivalents at end of period	$	—		$	55,206		$	1,829		$	—		$	57,035