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 on a senior basis 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 June 30, 2017 and December 31, 2016, the consolidating condensed statements of operations and statements of comprehensive income (loss) for the three and six months ended June 30, 2017 and June 30, 2016 and the consolidating condensed statements of cash flows for the six months ended June 30, 2017 and 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 June 30, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	43,601		$	17,242		$	—		$	60,843
Receivables
Trade, net	—			18,016			265			—			18,281
Notes and other	—			128			267			—			395
Due from Seitel Holdings, Inc.	—			1,185			—			—			1,185
Intercompany receivables (payables)	(63,688		)	61,392			2,296			—			—
Investment in subsidiaries	409,544			420,301			678			(830,523		)	—
Net seismic data library	—			72,201			19,085			—			91,286
Net property and equipment	—			522			1,100			—			1,622
Prepaid expenses, deferred charges and other	119			1,628			750			—			2,497
Intangible assets, net	900			—			—			—			900
Goodwill	—			107,688			76,680			—			184,368
Deferred income taxes	—			96			176			—			272
TOTAL ASSETS	$	346,875		$	726,758		$	118,539		$	(830,523	)	$	361,649
LIABILITIES AND STOCKHOLDER’S EQUITY
LIABILITIES
Accounts payable and accrued liabilities	$	5,008		$	8,258		$	2,889		$	—		$	16,155
Income taxes payable	—			25			507			—			532
Senior Notes	247,484			—			—			—			247,484
Obligations under capital leases	—			—			1,443			—			1,443
Deferred revenue	—			11,157			1,757			—			12,914
Deferred income taxes	—			—			1,680			—			1,680
TOTAL LIABILITIES	252,492			19,440			8,276			—			280,208
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	400,588			—			—			—			400,588
Parent investment	—			764,105			156,728			(920,833		)	—
Retained deficit	(306,205		)	(56,787		)	(33,171		)	89,958			(306,205		)
Accumulated other comprehensive loss	—			—			(13,294		)	352			(12,942		)
TOTAL STOCKHOLDER’S EQUITY	94,383			707,318			110,263			(830,523		)	81,441
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	346,875		$	726,758		$	118,539		$	(830,523	)	$	361,649

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 June 30, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	19,291		$	5,010		$	(601	)	$	23,700
EXPENSES:
Depreciation and amortization	—			18,366			3,615			(12		)	21,969
Cost of sales	—			317			(8		)	(276		)	33
Selling, general and administrative	137			4,010			1,183			(325		)	5,005
	137			22,693			4,790			(613		)	27,007
INCOME (LOSS) FROM OPERATIONS	(137		)	(3,402		)	220			12			(3,307		)
Interest expense, net	(6,039		)	(145		)	(3		)	—			(6,187		)
Foreign currency exchange gains (losses)	—			2			(36		)	—			(34		)
Other income	—			—			96			—			96
Income (loss) before income taxes and equity in income (loss) of subsidiaries	(6,176		)	(3,545		)	277			12			(9,432		)
Provision for income taxes	—			1			203			—			204
Equity in income (loss) of subsidiaries	(3,460		)	74			—			3,386			—
NET INCOME (LOSS)	$	(9,636	)	$	(3,472	)	$	74		$	3,398		$	(9,636	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended June 30, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Eliminations		Consolidated Total
Net income (loss)	$	(9,636	)	$	(3,472	)	$	74	$	3,398	$	(9,636	)
Foreign currency translation adjustments	—			—			2,569		—		2,569
Comprehensive income (loss)	$	(9,636	)	$	(3,472	)	$	2,643	$	3,398	$	(7,067	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	18,806		$	5,903		$	(369	)	$	24,340
EXPENSES:
Depreciation and amortization	—			20,256			4,561			(12		)	24,805
Cost of sales	—			62			5			(56		)	11
Selling, general and administrative	360			3,370			1,266			(328		)	4,668
	360			23,688			5,832			(396		)	29,484
INCOME (LOSS) FROM OPERATIONS	(360		)	(4,882		)	71			27			(5,144		)
Interest expense, net	(5,646		)	(599		)	(89		)	—			(6,334		)
Foreign currency exchange losses	—			—			(10		)	—			(10		)
Other income	—			3			1			—			4
Loss before income taxes and equity in income (loss) of subsidiaries	(6,006		)	(5,478		)	(27		)	27			(11,484		)
Provision (benefit) for income taxes	—			16			(2,265		)	—			(2,249		)
Equity in income (loss) of subsidiaries	(3,229		)	2,238			—			991			—
NET INCOME (LOSS)	$	(9,235	)	$	(3,256	)	$	2,238		$	1,018		$	(9,235	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended June 30, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net income (loss)	$	(9,235	)	$	(3,256	)	$	2,238		$	1,018	$	(9,235	)
Foreign currency translation adjustments	—			—			(308		)	—		(308		)
Comprehensive income (loss)	$	(9,235	)	$	(3,256	)	$	1,930		$	1,018	$	(9,543	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	33,093		$	12,144		$	(942	)	$	44,295
EXPENSES:
Depreciation and amortization	—			34,482			9,775			(25		)	44,232
Cost of sales	—			327			6			(290		)	43
Selling, general and administrative	260			8,637			2,406			(652		)	10,651
	260			43,446			12,187			(967		)	54,926
LOSS FROM OPERATIONS	(260		)	(10,353		)	(43		)	25			(10,631		)
Interest expense, net	(11,913		)	(466		)	(18		)	—			(12,397		)
Foreign currency exchange gains (losses)	—			2			(87		)	—			(85		)
Other income	—			—			96			—			96
Loss before income taxes and equity in loss of subsidiaries	(12,173		)	(10,817		)	(52		)	25			(23,017		)
Benefit for income taxes	—			(1		)	(1		)	—			(2		)
Equity in loss of subsidiaries	(10,842		)	(51		)	—			10,893			—
NET LOSS	$	(23,015	)	$	(10,867	)	$	(51	)	$	10,918		$	(23,015	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 30, 2017

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net loss	$	(23,015	)	$	(10,867	)	$	(51	)	$	10,918	$	(23,015	)
Foreign currency translation adjustments	—			—			3,280			111		3,391
Comprehensive income (loss)	$	(23,015	)	$	(10,867	)	$	3,229		$	11,029	$	(19,624	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	29,280		$	7,722		$	(712	)	$	36,290
EXPENSES:
Depreciation and amortization	—			29,166			10,765			(25		)	39,906
Cost of sales	—			77			12			(56		)	33
Selling, general and administrative	573			7,457			3,253			(656		)	10,627
	573			36,700			14,030			(737		)	50,566
LOSS FROM OPERATIONS	(573		)	(7,420		)	(6,308		)	25			(14,276		)
Interest expense, net	(11,302		)	(1,206		)	(182		)	—			(12,690		)
Foreign currency exchange gains	—			—			163			—			163
Other income	—			9			1			—			10
Loss before income taxes and equity in loss of subsidiaries	(11,875		)	(8,617		)	(6,326		)	25			(26,793		)
Benefit for income taxes	—			(11		)	(3,683		)	—			(3,694		)
Equity in loss of subsidiaries	(11,224		)	(2,643		)	—			13,867			—
NET LOSS	$	(23,099	)	$	(11,249	)	$	(2,643	)	$	13,892		$	(23,099	)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended June 30, 2016

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Net loss	$	(23,099	)	$	(11,249	)	$	(2,643	)	$	13,892	$	(23,099	)
Foreign currency translation adjustments	—			—			6,353			83		6,436
Comprehensive income (loss)	$	(23,099	)	$	(11,249	)	$	3,710		$	13,975	$	(16,663	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 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	$	(12,220	)	$	17,498		$	15,576		$	—	$	20,854
Cash flows from investing activities:
Cash invested in seismic data	—			(9,491		)	(6,610		)	—		(16,101		)
Cash paid to acquire property and equipment	—			(149		)	(101		)	—		(250		)
Cash from sale of property and equipment	—			—			3			—		3
Advances to Seitel Holdings, Inc.	—			(8		)	—			—		(8		)
Net cash used in investing activities	—			(9,648		)	(6,708		)	—		(16,356		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			—			(112		)	—		(112		)
Intercompany transfers	12,220			(12,220		)	—			—		—
Net cash provided by (used in) financing activities	12,220			(12,220		)	(112		)	—		(112		)
Effect of exchange rate changes	—			—			460			—		460
Net increase (decrease) in cash and cash equivalents	—			(4,370		)	9,216			—		4,846
Cash and cash equivalents at beginning of period	—			47,971			8,026			—		55,997
Cash and cash equivalents at end of period	$	—		$	43,601		$	17,242		$	—	$	60,843

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 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	$	(12,262	)	$	15,018		$	1,998		$	—	$	4,754
Cash flows from investing activities:
Cash invested in seismic data	—			(11,947		)	(922		)	—		(12,869		)
Cash paid to acquire property and equipment	—			(145		)	—			—		(145		)
Cash from sale of property and equipment	—			17			1			—		18
Advances to Seitel Holdings, Inc.	—			(16		)	—			—		(16		)
Net cash used in investing activities	—			(12,091		)	(921		)	—		(13,012		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			—			(100		)	—		(100		)
Intercompany transfers	12,262			(12,063		)	(199		)	—		—
Net cash provided by (used in) financing activities	12,262			(12,063		)	(299		)	—		(100		)
Effect of exchange rate changes	—			—			156			—		156
Net increase (decrease) in cash and cash equivalents	—			(9,136		)	934			—		(8,202		)
Cash and cash equivalents at beginning of period	—			51,192			1,483			—		52,675
Cash and cash equivalents at end of period	$	—		$	42,056		$	2,417		$	—	$	44,473