NOTE N-SUPPLEMENTAL GUARANTORS CONSOLIDATING CONDENSED FINANCIAL INFORMATION

On February 14, 2007, the Company completed a private placement of 9.75% Senior Notes in the aggregate principal amount of $400.0 million. As of December 31, 2011, $275.0 million aggregate principal amount remains outstanding. The Company's payment obligations under the 9.75% Senior Notes are jointly and severally guaranteed by certain of its 100% owned U.S. subsidiaries ("Guarantor Subsidiaries"). All subsidiaries of the Company that do not guarantee the 9.75% Senior Notes are referred to as Non-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 9.75% 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, 2011 and 2010 and the consolidating condensed statements of operations and statements of cash flows for the years ended December 31, 2011, 2010 and 2009 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 on 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, 2011

(In thousands)


							Non-
				Guarantor			Guarantor			Consolidating			Consolidated
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
Cash and cash equivalents	$	—		$	61,612		$	13,282		$	—		$	74,894
Receivables
Trade, net		—			32,129			19,177			—			51,306
Notes and other, net		520			1,606			2,196			—			4,322
Due from Seitel Holdings, Inc.		—			861			—			—			861
Intercompany receivables (payables)		95,955			(78,614	)		(17,341	)		—			—
Investment in subsidiaries		272,268			416,322			1,448			(690,038	)		—
Net seismic data library		—			63,259			57,435			—			120,694
Net property and equipment		—			1,897			3,142			—			5,039
Investment in marketable securities		—			262			—			—			262
Prepaid expenses, deferred charges and other		4,409			5,078			757			—			10,244
Intangible assets, net		900			16,462			9,452			—			26,814
Goodwill		—			107,688			98,150			—			205,838
Deferred income taxes		—			56			—			—			56

TOTAL ASSETS	$	374,052		$	628,618		$	187,698		$	(690,038	)	$	500,330

LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued liabilities	$	10,050		$	23,563		$	26,937		$	—		$	60,550
Income taxes payable		81			—			1,383			—			1,464
Senior Notes		275,000			—			—			—			275,000
Notes payable		95			—			—			—			95
Obligations under capital leases		—			—			3,161			—			3,161
Deferred revenue		—			33,340			15,505			—			48,845
Deferred income taxes		—			—			1,375			—			1,375

TOTAL LIABILITIES		285,226			56,903			48,361			—			390,490

STOCKHOLDER'S EQUITY
Common stock		—			—			—			—			—
Additional paid-in capital		398,011			—			—			—			398,011
Parent investment		—			764,752			156,913			(921,665	)		—
Retained deficit		(309,185	)		(193,299	)		(38,328	)		231,627			(309,185	)
Accumulated other comprehensive income		—			262			20,752			—			21,014

TOTAL STOCKHOLDER'S EQUITY		88,826			571,715			139,337			(690,038	)		109,840

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	374,052		$	628,618		$	187,698		$	(690,038	)	$	500,330

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2010

(In thousands)


	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	75,068		$	14,903		$	—		$	89,971
Receivables
Trade, net		—			23,269			11,135			—			34,404
Notes and other		—			70			14			—			84
Due from Seitel Holdings, Inc.		—			156			—			—			156
Intercompany receivables (payables)		128,299			(124,507	)		(3,792	)		—			—
Investment in subsidiaries		246,883			414,476			1,262			(662,621	)		—
Net seismic data library		—			74,719			31,385			—			106,104
Net property and equipment		—			1,402			4,044			—			5,446
Investment in marketable securities		—			3,102			—			—			3,102
Prepaid expenses, deferred charges and other		6,948			2,912			389			—			10,249
Intangible assets, net		900			19,674			12,543			—			33,117
Goodwill		—			107,688			100,362			—			208,050
Deferred income taxes		—			326			—			—			326

TOTAL ASSETS	$	383,030		$	598,355		$	172,245		$	(662,621	)	$	491,009

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Accounts payable and accrued liabilities	$	14,731		$	18,410		$	20,029		$	—		$	53,170
Income taxes payable		2			—			6			—			8
Senior Notes		402,056			—			—			—			402,056
Notes payable		154			—			—			—			154
Obligations under capital leases		—			—			3,394			—			3,394
Deferred revenue		—			31,140			5,981			—			37,121
Deferred income taxes		—			—			2,128			—			2,128

TOTAL LIABILITIES		416,943			49,550			31,538			—			498,031

STOCKHOLDER'S EQUITY (DEFICIT)
Common stock		—			—			—			—			—
Additional paid-in capital		277,488			—			—			—			277,488
Parent investment		—			764,752			156,908			(921,660	)		—
Retained deficit		(311,401	)		(219,050	)		(39,989	)		259,039			(311,401	)
Accumulated other comprehensive income		—			3,103			23,788			—			26,891

TOTAL STOCKHOLDER'S EQUITY (DEFICIT)		(33,913	)		548,805			140,707			(662,621	)		(7,022	)

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)	$	383,030		$	598,355		$	172,245		$	(662,621	)	$	491,009

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2011

(In thousands)


	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	152,759		$	66,644		$	(1,395	)	$	218,008

EXPENSES:
Depreciation and amortization		—			92,106			50,857			—			142,963
Cost of sales		—			88			12			—			100
Selling, general and administrative		1,503			19,626			11,915			(1,395	)		31,649

		1,503			111,820			62,784			(1,395	)		174,712

INCOME (LOSS) FROM OPERATIONS		(1,503	)		40,939			3,860			—			43,296

Interest expense, net		(14,124	)		(19,805	)		(838	)		—			(34,767	)
Foreign currency exchange gains (losses)		—			4			(730	)		—			(726	)
Loss on early extinguishment of debt		(7,912	)		—			—			—			(7,912	)
Gain on sale of marketable securities		—			2,467			—			—			2,467
Other income		4			67			179			—			250

Income (loss) before income taxes and equity in income of subsidiaries		(23,535	)		23,672			2,471			—			2,608
Provision (benefit) for income taxes		—			(418	)		810			—			392
Equity in income of subsidiaries		25,751			1,661			—			(27,412	)		—

NET INCOME	$	2,216		$	25,751		$	1,661		$	(27,412	)	$	2,216

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2010

(In thousands)


	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	131,417		$	47,892		$	(3,753	)	$	175,556

EXPENSES:
Depreciation and amortization		—			126,593			48,999			—			175,592
Cost of sales		—			87			10			—			97
Selling, general and administrative		3,219			19,612			12,753			(3,753	)		31,831

		3,219			146,292			61,762			(3,753	)		207,520

LOSS FROM OPERATIONS		(3,219	)		(14,875	)		(13,870	)		—			(31,964	)
Interest expense, net		(20,115	)		(20,173	)		(248	)		—			(40,536	)
Foreign currency exchange gains		—			24			417			—			441
Gain on sale of marketable securities		—			4,188			—			—			4,188
Other income		2			319			125			—			446

Loss before income taxes and equity in loss of subsidiaries		(23,332	)		(30,517	)		(13,576	)		—			(67,425	)
Benefit for income taxes		—			(328	)		(3,680	)		—			(4,008	)
Equity in loss of subsidiaries		(40,085	)		(9,896	)		—			49,981			—

NET LOSS	$	(63,417	)	$	(40,085	)	$	(9,896	)	$	49,981		$	(63,417	)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2009

(In thousands)


	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	80,400		$	38,090		$	(3,145	)	$	115,345

EXPENSES:
Depreciation and amortization		—			111,476			38,723			—			150,199
Cost of sales		—			282			8			—			290
Selling, general and administrative		3,051			14,343			10,841			(3,145	)		25,090

		3,051			126,101			49,572			(3,145	)		175,579

LOSS FROM OPERATIONS		(3,051	)		(45,701	)		(11,482	)		—			(60,234	)
Interest expense, net		(17,139	)		(23,403	)		(154	)		—			(40,696	)
Foreign currency exchange gains		—			2			1,006			—			1,008
Other income (loss)		1			168			(18	)		—			151

Loss before income taxes and equity in loss of subsidiaries		(20,189	)		(68,934	)		(10,648	)		—			(99,771	)
Benefit for income taxes		—			(73	)		(2,901	)		—			(2,974	)
Equity in loss of subsidiaries		(76,608	)		(7,747	)		—			84,355			—

NET LOSS	$	(96,797	)	$	(76,608	)	$	(7,747	)	$	84,355		$	(96,797	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2011

(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	$	(39,324	)	$	120,408		$	45,013		$	—	$	126,097


Cash flows from investing activities:
Cash invested in seismic data		—			(68,145	)		(58,834	)		—		(126,979	)
Cash paid to acquire property, equipment and other		—			(1,856	)		(265	)		—		(2,121	)
Net proceeds from sale of marketable securities		—			2,467			—			—		2,467
Cash from sale of property, equipment and other		—			121			1			—		122
Advances to Seitel Holdings, Inc.		—			(755	)					—		(755	)
Repayment from Seitel Holdings, Inc.		—			50			—			—		50

Net cash used in investing activities		—			(68,118	)		(59,098	)		—		(127,216	)


Cash flows from financing activities:
Contributed capital		125,000			—			—			—		125,000
Repayment of 9.75% Senior Notes		(131,094	)		—			—			—		(131,094	)
Repayment of 11.75% Senior Notes		(2,000	)		—			—			—		(2,000	)
Principal payments on notes payable		(59	)		—			—			—		(59	)
Principal payments on capital lease obligations		—			—			(164	)		—		(164	)
Borrowings on line of credit		—			—			737			—		737
Payments on line of credit		—			—			(737	)		—		(737	)
Costs of debt and equity transactions		(6,268	)		—			(70	)		—		(6,338	)
Intercompany transfers		53,745			(65,745	)		12,000			—		—

Net cash provided by (used in) financing activities		39,324			(65,745	)		11,766			—		(14,655	)

Effect of exchange rate changes		—			(1	)		698			—		697

Net decrease in cash and cash equivalents		—			(13,456	)		(1,621	)		—		(15,077	)
Cash and cash equivalents at beginning of period		—			75,068			14,903			—		89,971

Cash and cash equivalents at end of period	$	—		$	61,612		$	13,282		$	—	$	74,894

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2010

(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	$	(39,719	)	$	115,585		$	33,455		$	—	$	109,321


Cash flows from investing activities:
Cash invested in seismic data		—			(33,287	)		(16,178	)		—		(49,465	)
Cash paid to acquire property, equipment and other		—			(380	)		(147	)		—		(527	)
Net proceeds from sale of marketable securities		—			4,188			—			—		4,188
Cash from sale of property, equipment and other		—			86			—			—		86
Advances to Seitel Holdings, Inc.		—			(9	)					—		(9	)
Return of capital from subsidiary		—			4,501			(4,501	)		—		—

Net cash used in investing activities		—			(24,901	)		(20,826	)		—		(45,727	)


Cash flows from financing activities:
Principal payments on notes payable		(54	)		—			—			—		(54	)
Principal payments on capital lease obligations		—			—			(146	)		—		(146	)
Borrowings on line of credit		—			—			10			—		10
Payments on line of credit		—			—			(10	)		—		(10	)
Costs of debt and equity transactions		(65	)		—			—			—		(65	)
Intercompany transfers		39,838			(39,838	)		—			—		—

Net cash provided by (used in) financing activities		39,719			(39,838	)		(146	)		—		(265	)

Effect of exchange rate changes		—			1			371			—		372

Net increase in cash and cash equivalents		—			50,847			12,854			—		63,701
Cash and cash equivalents at beginning of period		—			24,221			2,049			—		26,270

Cash and cash equivalents at end of period	$	—		$	75,068		$	14,903		$	—	$	89,971

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2009

(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	$	(38,969	)	$	51,051		$	28,772		$	—	$	40,854


Cash flows from investing activities:
Cash invested in seismic data		—			(45,972	)		(9,893	)		—		(55,865	)
Cash paid to acquire property, equipment and other		—			(284	)		(116	)		—		(400	)
Cash transferred upon sale of subsidiary		—			—			(22	)		—		(22	)
Cash from disposal of property and equipment		—			15			—			—		15
Advances to Seitel Holdings, Inc.		—			(11	)		—			—		(11	)
Return of capital from subsidiary		—			11,150			(11,150	)		—		—

Net cash used in investing activities		—			(35,102	)		(21,181	)		—		(56,283	)


Cash flows from financing activities:
Principal payments on notes payable		(48	)		—			—			—		(48	)
Principal payments on capital lease obligations		—			—			(124	)		—		(124	)
Borrowings on line of credit		—			—			401			—		401
Payments on line of credit		—			—			(401	)		—		(401	)
Intercompany transfers		39,017			(24,762	)		(14,255	)		—		—

Net cash provided by (used in) financing activities		38,969			(24,762	)		(14,379	)		—		(172	)


Effect of exchange rate changes		—			—			(807	)		—		(807	)

Net decrease in cash and cash equivalents		—			(8,813	)		(7,595	)		—		(16,408	)
Cash and cash equivalents at beginning of period		—			33,034			9,644			—		42,678

Cash and cash equivalents at end of period	$	—		$	24,221		$	2,049		$	—	$	26,270