SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Global Geophysical Services Inc – IPO: ‘S-1/A’ on 10/6/06

On:  Friday, 10/6/06, at 5:12pm ET   ·   Accession #:  1047469-6-12556   ·   File #:  333-136483

Previous ‘S-1’:  ‘S-1’ on 8/10/06   ·   Next:  ‘S-1/A’ on 11/13/06   ·   Latest:  ‘S-1/A’ on 4/21/10

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/06/06  Global Geophysical Services Inc   S-1/A                  6:1.2M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement   HTML    835K 
                          (General Form)                                         
 2: EX-4.2      Instrument Defining the Rights of Security Holders  HTML     72K 
 3: EX-4.3      Instrument Defining the Rights of Security Holders  HTML    114K 
 4: EX-5.1      Opinion re: Legality                                HTML     13K 
 5: EX-10.21    Material Contract                                   HTML    138K 
 6: EX-23.1     Consent of Experts or Counsel                       HTML      8K 

As filed with the Securities and Exchange Commission on October 6, 2006.

Registration No. 333-136483

UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549

Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

GLOBAL GEOPHYSICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)

3535 Briarpark Drive, Suite 200
Houston, Texas 77042
(713) 972-9200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Richard A. Degner
Chairman of the Board, President and Chief Executive Officer
3535 Briarpark Drive, Suite 200
Houston, Texas 77042
(713) 972-9200
(Name and address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale of securities to the public:
As soon as practical after the effective date of this Registration Statement.

        If any of the securities being registered on this form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        The Registrant hereby amends this Registration Statement on such date as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion, dated October 6, 2006

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and neither we nor the selling stockholders are soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

            Shares

Common Stock

        This is an initial public offering of shares of common stock of Global Geophysical Services, Inc. We are selling            shares of common stock, and the selling stockholders are selling            shares of common stock. Prior to this offering, there has been no public market for our common stock. We expect the initial offering price to be between $            and $            per share. We will not receive any of the proceeds from the shares of common stock sold by the selling stockholders. We have applied to list our common stock on the Nasdaq Global Market under the trading symbol "GGEO."

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 9.

        The underwriters may also purchase up to an additional            shares from us and            shares from the selling stockholders at the public offering price, less underwriting discounts and concessions, within 30 days from the date of this prospectus to cover over-allotments.

        Neither the Securities and Exchange Commission, nor any state securities commission or other regulatory body, has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

        Delivery of the shares will be made on or about                        , 2006.

Jefferies & Company

The date of this prospectus is                        , 2006.

TABLE OF CONTENTS

        You should rely only on the information contained in this prospectus. We have not, and the selling stockholders and underwriters have not, authorized any person to provide you with different information. This prospectus is not an offer to sell, nor is it an offer to buy, these securities in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is complete and accurate only as of the date of this prospectus regardless of the time of delivery of this prospectus or any sale of our common stock. Our business, financial condition, prospects and other information may have changed since this date.

        This prospectus includes industry data and forecasts that we obtained from internal company surveys, market research, consultant surveys, publicly available information and industry publications and surveys. We believe that the information included in this prospectus from industry surveys, publications, consultant surveys and forecasts is accurate and reliable.

        The body of accounting principles generally accepted in the United States is commonly referred to as "GAAP." A non-GAAP financial measure is generally defined by the Securities and Exchange Commission, or SEC, as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measures. In this prospectus, we disclose EBITDA, a non-GAAP financial measure. EBITDA is calculated as net income before interest expense, taxes, depreciation and amortization. EBITDA is not a substitute for GAAP measures of earnings and cash flow. EBITDA is included in this prospectus because our management considers it an important supplemental measure of our performance and believes that it is frequently used by security analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results.

i

SUMMARY

        This summary highlights selected information described in more detail later in this prospectus, but does not contain all of the information you should consider in making an investment decision. You should also read this entire prospectus, including the risks of investing in our common stock discussed in the section entitled "Risk Factors" and the financial statements and related notes appearing elsewhere in this prospectus before investing in our common stock. References in this prospectus to "Global," the "company," "us," "our" or "we" are to Global Geophysical Services, Inc. and its subsidiaries unless the context requires otherwise.

        If you are not familiar with some of the seismic industry terms used in this prospectus, please read our Glossary of Terms included as Appendix A to this prospectus.

GLOBAL GEOPHYSICAL SERVICES, INC.

Our Company

        We are a worldwide land, transition zone and shallow marine seismic data acquisition services provider focused on delivering innovative solutions, high quality work and superior client service. The seismic data we generate is used by oil and gas exploration and production companies to locate potential reservoirs of oil and gas and to gain a better understanding of known reserves. We were formed in 2003 by our management team to capture opportunities in the growing seismic industry and have experienced rapid growth since our inception. Our customers include major integrated oil companies, including BP and ConocoPhillips, independent oil and gas exploration and production companies, including Devon, Apache and EOG Resources, and seismic data library companies, including Seismic Exchange, Inc.

        We provide conventional 2D and 3D seismic acquisition services, as well as our higher resolution Reservoir Grade^SM 2D and 3D seismic solutions. Our Reservoir Grade^SM seismic solutions offer improved spatial resolution and signal-to-noise ratio, which enables a better interpretation of the geologic structure and porosity changes in the reservoir. In addition to being a critical exploration tool, seismic data allows exploration and production companies to better understand their producing reservoirs, thereby maximizing production and recoverability levels of oil and natural gas reserves. A series of 3D surveys conducted in time lapse fashion, commonly referred to as 4D seismic, can help our clients monitor the movement of oil and gas fluids through the reservoir.

        Our operating capabilities are global. Since we launched our first seismic crew in 2005, we have conducted or contracted for operations in North and South America, Asia and North Africa. Our management team has extensive experience operating in over 60 countries, long-term client relationships and an understanding of operating conditions and sociopolitical dynamics in the U.S. and abroad.

        We currently operate seven seismic data acquisition crews domestically and internationally, with over 36,000 recording channels combined. We intend to deploy three additional crews by December 31, 2006, one in the U.S. and two internationally. Two of these planned crews are under contract and are currently being equipped, and we are negotiating the contract with the prospective client for the other crew.

        We have the capability to operate in highly specialized and diverse environments, including desert, arctic, jungle, swamp, highland, shallow marine and transition zones. Transition zones are marine or fresh water coastal regions. Typical transition zones include beaches, swamps, and marshes. Shallow marine areas are those with water depths up to approximately 200 feet.

        Our founders and senior management team are drawn from industry leading competitors, average over 22 years of seismic industry experience, and have a proven track record in establishing and

1

managing global seismic businesses. We expect to continue to grow by leveraging our experience and expertise, continuing to provide high quality seismic data acquisition services, offering high-resolution products and using advanced technology and equipment.

Our Industry

        Our business and overall demand for seismic services depends on worldwide levels of exploration, development and production expenditures made by our clients, who include national oil companies, major integrated oil and gas companies, independent oil and gas exploration and production companies, and seismic data library companies.

        We believe that the following trends in our industry should benefit our operations:

•

Growing global demand for oil and gas. With emerging market economies, particularly those of China and India, experiencing strong economic growth, global demand for energy is increasing at historic rates. Strong demand for energy, coupled with tightening supply, has caused oil and gas exploration and production companies to increase their exploration and development activities, which in turn drives demand for our services.



•

Historical lack of exploration spending. According to the United States Energy Information Administration, in real dollar terms, geological and geophysical spending by major U.S. exploration and production companies in 2004 was only 29% of the amount spent in 1981 and exploration spending in 2004 was only 25% of comparable 1981 expenditures. The majority of recent increases in expenditures in response to higher oil and gas prices have been predominately development-based. As global demand for oil and gas continues to increase and declining production rates result in the further marginalization of mature fields, we believe that exploration and production companies will commit significant capital to explore for new oil and gas reserves.

Aggregate Capital Spending of Major U.S. Exploration and Production Companies⁽¹⁾

(1)

Source: United States Energy Information Administration. "Major U.S. Exploration and Production Companies" as defined by the United States Energy Information Administration consist of any U.S.-based company (or its parent company) that is publicly traded, and accounts for one percent or more of U.S. production or reserves of crude oil (including natural gas liquids) or natural gas, or one percent or more of U.S. refining capacity or refined product sales volume. Capital spending data has been converted to 2005 dollars using the Consumer Price Index published by the United States Bureau of Labor Statistics.

2

•

Recent technological advances in seismic data acquisition equipment and processing. In recent years, significant advances have been made in seismic data acquisition and processing capabilities. We believe that exploration and production companies will use this advanced technology, not only to acquire seismic data in previously unexplored regions, but also to continue "re-shooting" mature oil and gas basins to fully exploit known oil and gas reserves.



•

Improved drilling economics due to higher oil and gas prices. The high oil and gas prices of the past several years have made fields that were previously uneconomic or marginally economic increasingly attractive for oil and gas exploration and production companies to explore and develop. As a result, demand for seismic data acquisition has increased commensurately as operators are finding legacy fields and new fields that were previously uneconomic are now worthy of further analysis.



•

Trend towards drilling and developing non-conventional oil and gas resources. As a result of improvements in drilling and production-enhancement technologies, oil and gas companies are increasingly developing non-conventional oil and gas "resource plays". Successful and economic production of resource plays frequently requires significant seismic data acquisition activity to maximize the effectiveness of drilling and subsequent multi-stage fracturing operations.

Our Strategy

        Our strategy is to expand our seismic data acquisition business and maximize utilization of our equipment and services. Specifically, we intend to:

•

Deploy highly experienced seismic crews. We intend to grow our seismic crew count from its current level of seven crews by adding eight additional crews over the next 18 months. We intend to have ten crews deployed by the end of 2006 and 15 crews deployed by the end of 2007. We seek to leverage our employees' extensive experience operating in diverse environments throughout the world by mobilizing our crews to work in these challenging regions, where we believe we can earn higher margins for our products and services.



•

Continue to expand internationally. We have conducted or contracted to commence seismic data acquisition operations in North and South America, Asia and North Africa. By operating in multiple locations and markets, we create a dynamic geographic portfolio, thereby reducing our dependence on individual and isolated markets. We also believe that certain international markets offer the best opportunities to maximize our expertise and operating margins.



•

Utilize industry-leading technology. We use the latest generation seismic data acquisition equipment which provides our clients with high density data collection capabilities. We will continue to use the best available equipment to be a leader in providing seismic data acquisition solutions to our clients.



•

Purchase and deploy advanced technology and equipment at low costs. We have assembled an inventory of advanced land, transition zone and shallow marine seismic recording systems. We intend to continue to utilize new, advanced technology and equipment that, when coupled with our use of standardized equipment, will allow us to realize reduced operating and training costs and higher equipment utilization.



•

Maintain an owner-manager culture throughout the company. We have broad employee ownership of our equity securities. High morale is integral to developing and maintaining crew productivity, revenue generation, and cost control. We believe our culture enhances our crews' morale and is conducive to achieving these goals.



•

Leverage our strong relationships with oil and gas exploration and production companies. Our management team has an established track record with many large oil and gas companies that

3

utilize our services, and we intend to continue to leverage our reputation to drive utilization of our assets.

•

Operate with a low cost structure. Our standardized equipment, broad experience base, and centralized support structure allow us to maintain a low overhead rate, which we believe will provide a competitive advantage over our larger competitors.



•

Establish a strong industry brand. We plan to leverage the extensive experience of our personnel to continue building a strong industry brand as a global seismic data acquisition company that provides reliable, high quality services, advanced technologies, innovative seismic solutions, and client service. We believe that establishing a brand for excellence will afford us the opportunity to earn higher margins due to the superior level of service we provide.

Our Strengths

        We believe the following competitive strengths enable us to execute our strategy successfully.

•

Experienced employees with extensive client relationships. Our senior management team has a proven ability to attract high quality, experienced industry professionals to our company. We seek to employ highly motivated, entrepreneurial managers and seismic professionals with diverse skill sets and extensive client relationships with major integrated oil and gas companies, national oil companies, and independent oil and gas exploration and production companies. In addition to our experienced and highly qualified employees, we have the expertise and specialized equipment necessary to operate in diverse land, transition zone, and shallow marine environments.



•

New, technologically advanced equipment at "most favored customer" pricing. We built the company around new, technologically advanced recording equipment. We use standardized equipment designed with significant input from our management and purchased under a "most favored customer" pricing arrangement. By using standardized equipment, we are able to maximize productivity and utilization while minimizing operating and training costs.



•

Highly specialized marine vessels complementing high quality land, transition zone, and shallow marine assets. Our highly specialized vessels give us the capability to record seismic data sets contiguously from land, through the transition zone and out to water depths of approximately 200 feet. This provides our clients with a continuous data volume, enabling them to interpret oil and gas reservoirs extending across diverse surface environments.



•

High quality 3D survey design. We offer our Reservoir Grade^SM 3D product for use in a variety of environments. Compared to standard 3D, we believe this product offers resolution disproportionately greater than the incremental price. Our geophysicists have also developed a progressive approach to seismic data acquisition that allows our clients to acquire a coarse exploration grade 3D seismic data set and later refine specific areas with higher-resolution 3D that retains the value of the original 3D data.



•

Strong and diverse client base. We have long-standing relationships with many national oil companies, large integrated and independent oil and gas exploration and production companies and seismic data library companies.

4

Our Challenges

        We face a number of challenges in implementing our strategies, in addition to those set forth in the "Risk Factors" section of this prospectus. For example:

•

We derive almost all of our revenue from companies in the oil and gas exploration and production industry, a historically cyclical industry with levels of activity that are significantly affected by the level and volatility of oil and gas prices.



•

A material reduction in the levels of exploration and development activities in our market areas could affect our business.



•

We operate in a highly competitive industry with intense price competition.



•

Our business is capital intensive and requires management focus to exploit opportunities throughout the world.



•

Our future expansion depends upon our ability to attract and retain highly qualified professionals to staff seismic crews.

        For further discussion of these and other challenges we face, see "Risk Factors" beginning on page 9.

Corporate Information

        Our principal executive offices are located at 3535 Briarpark Dr., Suite 200, Houston, Texas 77042, and our telephone number is (713) 972-9200. Our website address is www.globalgeophysical.com. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.

5

The Offering

        The number of shares of our common stock that will be outstanding after this offering is            and excludes:

•

shares of our common stock issuable upon exercise of outstanding warrants with an exercise price of $            per share; and



•

3,000,000 shares of our common stock reserved for future issuance under our 2006 Incentive Plan.

        In addition, except as otherwise noted, all information in this prospectus assumes:

•

the conversion of all outstanding shares of our Class A and Class B common stock into            shares of our common stock;



•

the conversion of all outstanding shares of our Series A preferred stock into            shares of our common stock;



•

a            -for-            split of our common stock effective immediately prior to the closing of this offering;



•

the filing of our restated certificate of incorporation, which will occur immediately prior to the closing of this offering; and



•

no exercise of the underwriters' over-allotment option.

6

Summary Financial and Operating Data

        The following table presents our summary historical financial data for the periods indicated. The data for the period from our inception until December 31, 2003 and for the years ended December 31, 2004 and 2005 has been derived from our audited financial statements included elsewhere in this prospectus. The data for the six months ended June 30, 2005 and 2006 has been derived from our unaudited financial statements included elsewhere in this prospectus. For further information that will help you better understand the summary data, you should read this financial data in conjunction with the "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of this prospectus and the financial statements and related notes and other financial information included elsewhere in this prospectus. These historical results are not necessarily indicative of results to be expected for any future periods.

(1)

Includes interest income, other income, and other expense.

7

(2)

EBITDA consists of net income before interest expense, taxes, depreciation and amortization. EBITDA is used as a supplemental financial measure by our management and by certain external users of our financial statements, such as investors and commercial banks, to assess:

•

the financial performance of our assets without regard to financing methods, capital structures or historical cost basis;

•

the ability of our assets to generate cash sufficient to pay interest on our indebtedness;

•

our operating performance and return on invested capital as compared to those of other companies in the seismic data acquisition industry, without regard to financing methods and capital structure; and

•

our compliance with certain financial covenants included in our term credit facility.

EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. generally accepted accounting principles ("GAAP"). EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using EBITDA as an analytical tool include:

•

EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;

•

EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments on, our debt;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

•

other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

The following table presents a reconciliation of the non-GAAP financial measure of EBITDA to the most directly comparable GAAP financial measures on a historical basis for each of the indicated periods.

8

RISK FACTORS

        An investment in our common stock offered by this prospectus involves a substantial risk of loss. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before you decide to purchase shares of our common stock. The occurrence of any of the following risks could materially harm our business, financial condition or results of operations. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business

If oil and gas prices or the level of capital expenditures by oil and gas companies were to decline, demand for our services could decline and our results of operations could be adversely affected.

        Demand for our services depends upon the level of spending by oil and gas companies for exploration, production and development activities, which activities depend in large part on oil and gas prices. Spending on services such as those we provide our clients are of a highly discretionary nature and subject to rapid and material change. Any significant decline in oil and gas related spending on behalf of our clients could cause us to alter our capital spending plans and could have a material adverse effect on our financial condition and results of operations. Additionally, increases in oil and gas prices may not increase demand for our services or otherwise have a positive effect on our financial condition or results of operations. Our clients' willingness to explore, develop, and produce depends largely upon prevailing industry conditions that are influenced by numerous factors over which our management has no control, such as:

•

the supply of and demand for oil and gas;



•

the level of prices, and expectations about future prices, of oil and gas;



•

the cost of exploring for, developing, producing and delivering oil and gas;



•

the expected rates of declining current production;



•

the discovery rates of new oil and gas reserves;



•

weather conditions, including hurricanes that can affect oil and gas operations over a wide area as well as less severe inclement weather that can preclude or delay seismic data acquisition;



•

domestic and worldwide economic conditions;



•

political instability in oil and gas producing countries;



•

technical advances affecting energy consumption;



•

government policies regarding the exploration, production and development of oil and gas reserves;



•

the ability of oil and gas producers to raise equity capital and debt financing; and



•

merger and divestiture activity among oil and gas producers.

        The level of oil and gas exploration and production activity in our markets is volatile. Expected trends in oil and gas production activities may not continue and demand for our services may not reflect the level of activity in the industry. Any prolonged substantial reduction in oil and gas prices would likely affect oil and gas production levels and therefore affect demand for the services we provide. A material decline in oil and gas prices or drilling activity levels could have a material adverse effect on our business, financial condition, results of operations and cash flows.

9

Our operations involve substantial capital requirements. If we are unable to finance these requirements, our ability to continue our expansion and maintain our profitability could be affected.

        Our sources of working capital are limited. We have historically funded our working capital and capital expenditure requirements with cash generated from operations, private equity offerings, cash reserves, and short term borrowings from commercial banks. Our capital requirements continue to increase, primarily due to the expansion of our crew counts, equipment levels and operating infrastructure. If we were to expand our operations at a rate exceeding operating cash flow, or if current demand or pricing of geophysical services were to decrease substantially, additional financing could be required. If we were not able to obtain such financing when needed, our ability to pursue our expansion and maintain our profitability would be negatively impacted.

Technological change in our business creates risks of technological obsolescence and requirements for future capital expenditures. If we are unable to keep up with these technological advances, we may not be able to compete effectively.

        The development of seismic data acquisition equipment has been characterized by rapid technological advancements in recent years and we expect this trend to continue. Manufacturers of seismic equipment may develop new systems that have competitive advantages relative to systems now in use that either render the equipment we currently use obsolete or require us to make substantial capital expenditures to maintain our competitive position. In addition, we acquire substantially all of our recording equipment from one supplier. If this supplier fails to maintain state of the art technology or experiences technological difficulties, we could be adversely impacted. We intend to upgrade our data acquisition systems as often as necessary to maintain our competitive position. However, to do so may require large expenditures of capital in addition to our budgeted capital expenditures. We may not have the capital necessary to upgrade our equipment to maintain our competitive position or to complete our presently planned capital expenditure program, or that the financing required to enable such upgrade will be available on favorable terms. If we are unable to raise the capital necessary for our capital expenditure program or otherwise unable to upgrade our data acquisition systems as needed, we may be unable to maintain our competitive position.

We may be unable to attract and retain skilled and technically knowledgeable employees, which could adversely affect our business.

        Our success depends upon attracting and retaining highly skilled professionals and other technical personnel. A number of our employees are highly skilled scientists and highly trained technicians, and our failure to continue to attract and retain such individuals could adversely affect our ability to compete in the seismic services industry. We may confront significant and potentially adverse competition for these skilled and technically knowledgeable personnel, particularly during periods of increased demand for seismic services. Additionally, there is a shortage of skilled and technical personnel available in the market, potentially compounding the difficulty of attracting and retaining these employees. As a result, our business, results of operations and financial condition may be materially adversely affected.

Our industry has recently experienced shortages in the availability of equipment. Any difficulty we experience replacing or adding equipment could adversely affect our business.

        We may not be able to acquire equipment to replace our existing equipment or add additional equipment. The high demand for the services that we provide has decreased the supply of geophysical equipment, resulting in extended delivery dates on orders of new equipment. Any delay in obtaining equipment could delay our implementation of additional crews and restrict the productivity of our existing crews. Our required equipment may not continue to be available to us at costs which allow us

10

to be profitable. A delay in obtaining equipment essential to our operations could have a material adverse effect on our financial condition and results of operations.

The high fixed costs of our operations could result in operating losses.

        We are subject to high fixed costs which primarily consist of depreciation, a non-cash item, maintenance expenses associated with their seismic data acquisition equipment and crew costs. Because substantially all of our equipment is new or nearly new, our depreciation expense relative to our revenue is higher than that of many of our competitors. In addition, ongoing maintenance capital expenditures, as well as new equipment investment, can be significant. As a result, any extended periods of significant downtime or low productivity caused by reduced demand, weather interruptions, equipment failures, permit delays or other causes could have a material adverse effect on our financial condition and results of operations.

Our operations are subject to delays related to obtaining land access rights of way from third parties which could affect our results of operations.

        Our seismic data acquisition operations could be adversely affected by our inability to obtain timely right of way usage from both public and private land and/or mineral owners. Delays associated with obtaining such rights of way could have a material adverse effect on our financial condition and results of operations.

Our revenue is subject to fluctuations that are beyond our control, which could adversely affect our results of operations in any financial period.

        Our operating results vary in material respects from quarter to quarter and will continue to do so in the future. Factors that cause variations include the timing of the receipt and commencement of contracts for seismic data acquisition and clients' budgetary cycles, both of which may be beyond our control. Combined with our high fixed costs, these revenue fluctuations could have a material adverse effect on our results of operations in any fiscal period.

We face intense competition in our business that could result in downward pricing pressure and the loss of market share.

        Competition among seismic contractors historically has been, and likely will continue to be, intense. Competitive factors have in recent years included price, crew experience, equipment availability, technological expertise and reputation for quality and dependability. We also face increasing competition from nationally-owned companies in various international jurisdictions that operate under less significant financial constraints than those we experience. Many of our competitors have greater financial and other resources, more clients, greater market recognition and more established relationships and alliances in the industry than we do. Additionally, the seismic data acquisition business is extremely price competitive and has a history of protracted periods of months or years where seismic contractors under financial duress bid jobs below cost and therefore adversely impact industry pricing. Competition from these and other competitors could result in downward pricing pressure and the loss of market share.

If we do not manage our recent growth and expansion effectively, our results of operations could be affected.

        We have experienced substantial growth to date, adding seven seismic data acquisition crews since inception. This growth has presented a challenge to our systems, processes, resources, personnel, management and other infrastructure and support mechanisms. The following factors could present difficulties to us:

•

lack of sufficient executive-level and crew personnel;

11

•

increased administrative burden; and



•

increased logistical problems common to large, expansive operations.

        If we do not manage these growth challenges effectively, our profitability and results of operations could be adversely affected, our management resources may be diverted and our future growth impeded.

Our business is subject to domestic governmental regulation which may adversely affect our future operations.

        Our operations are subject to a variety of federal, state and local laws and regulations, including laws and regulations relating to the protection of the environment and archeological sites. In particular, the United States Environmental Protection Agency, the United States Coast Guard, the United States Bureau of Land Management and various state agencies may directly determine whether and when seismic surveys are permitted in certain areas of the United States and the Gulf of Mexico. We are required to expend financial and managerial resources to comply with such laws and related permit requirements for our operations, and we anticipate that we will continue to be required to do so in the future. The fact that such laws or regulations change frequently makes it impossible for us to predict the cost or impact of such laws and regulations on our future operations. The adoption of laws and regulations that have the effect of reducing or curtailing exploration and production activities by energy companies could have a material adverse effect on our results of operations by reducing demand for our services.

International operations subject us to foreign regulations and risks, including changes in social, political and economic conditions.

        We conduct operations on a global scale. In fiscal year 2005, approximately 12% of our property, plant and equipment was located outside the United States, and approximately 15% of our revenue was attributable to operations in foreign countries. We expect our exposure to foreign markets to increase as we expand our operations internationally. As is the case for most companies with foreign operations and sales, we are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates. We are also exposed to risks associated with changes in the laws and policies governing foreign investments and, to a lesser extent, changes in United States laws and regulations relating to foreign trade and investment. Changes in laws, regulations and conditions could have a material adverse effect on our business or financial condition.

We have supply agreements with a limited number of key suppliers, the loss of any one of which could have a material adverse effect on our financial condition and results of operations.

        We have negotiated substantial volume discounts with certain of our key suppliers upon whom we rely for the recording equipment we use in our operations. For example, we purchase substantially all of our seismic data acquisition equipment from two key suppliers. If either of our key suppliers or any other supplier discontinues operations or otherwise refuses to honor its supply agreement with us, we may be required to enter into agreements with alternative suppliers on terms less favorable to us, including increased product costs and longer delivery lead times. The loss of any of our key suppliers could have a material adverse effect on our financial condition and results of operations.

We operate in remote environments under hazardous conditions that subject us and our employees to risk of damage to property or personal injury.

        Our business is subject to the general risks inherent in land and marine-based seismic data acquisition activities. Our activities are often conducted in remote areas under dangerous conditions, including the detonation of dynamite. Operating in hazardous environments carries with it inherent risks, such as loss of human life or equipment, as well as the risk of downtime or reduced productivity

12

caused by weather interruptions, or equipment failures caused by an adverse operating environment. These risks could cause us to experience equipment losses, injuries to our personnel and interruptions in our business. In addition, we could be subject to personal injury or real property damage claims in the normal operation of our business. For example, our crews are mobile and equipment and personnel are subject to vehicular accidents. Such claims may not be covered under the indemnification provisions in our general service agreements to the extent that the damage is due to our negligence, gross negligence or intentional misconduct. In some cases, we may not be able to obtain insurance against certain risks or for certain equipment located from time to time in certain parts of the world.

Weather may adversely affect our ability to conduct business.

        Our seismic data acquisition operations could be adversely affected by inclement weather conditions. Delays associated with weather conditions could have a material adverse effect on our financial condition and results of operations. For example, weather delays focused on a particular project or region could lengthen the time to complete the project, resulting in decreased margins to us. In addition, our operations in or near the Gulf of Mexico may be subject to stoppages for hurricanes, particularly during the period ranging from June to November. Accordingly, the results of any one quarter are not necessarily indicative of annual results or continuing trends.

We are subject to compliance with stringent environmental laws and regulations that may expose us to significant costs and liabilities.

        Our operations are subject to stringent federal, provincial, state and local environmental laws and regulations in the United States and foreign jurisdictions governing the discharge of materials into the environment or otherwise to environmental protection. These laws and regulations may impose numerous obligations that are applicable to our operations including the acquisition of permits before commencing regulated activities, the limitation or prohibition of seismic activities in environmentally sensitive or protected areas such as wetlands or wilderness areas, the incurrence of capital expenditures to limit or prevent releases of materials from our operating areas and the imposition of substantial liabilities for pollution resulting from our operations. Numerous governmental authorities, such as the federal Environmental Protection Agency and analogous state agencies in the United States and governmental bodies with control over environmental matters in foreign jurisdictions, have the power to enforce compliance with these laws and regulations and any permits issued under them, oftentimes requiring difficult and costly actions. Failure to comply with these laws, regulations, and permits may result in the assessment of administrative, civil, and criminal penalties, the imposition of remedial obligations, and the issuance of injunctions limiting or preventing some or all of our operations.

        There is inherent risk of incurring significant environmental costs and liabilities in our operations due to our handling of explosives and use of materials that have the potential to adversely affect the environment. Joint and several, strict liability may be incurred under these environmental laws and regulations in connection with discharges or releases of materials used in or resulting from our operations. Private parties may also have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. In addition, changes in environmental laws and regulations occur frequently, and any such changes that result in more stringent and costly waste handling, storage, transport, disposal, or remediation requirements could have a material adverse effect on our operations or financial position. We may not be able to recover some or any of these costs from insurance.

We are dependent upon a small number of significant clients.

        We derive a significant amount of our revenue from a small number of oil and gas exploration and development companies. During 2005, our three largest clients accounted for approximately 37%, 21%, and 16% of revenue, respectively. While our revenue is derived from a concentrated client base, our

13

significant clients may vary between years. If we lose one or more major clients in the future, or if one or more clients encounter financial difficulties, our business, financial condition and results of operations could be materially and adversely affected.

Our success depends on key members of our management, the loss of any of whom could disrupt our business operations.

        We depend to a large extent on the services of some of our executive officers and directors. The loss of the services of Richard A. Degner, our Chairman of the Board, President and Chief Executive Officer, Craig Lindberg, our Senior Vice President and Chief Financial Officer, Thomas J. Fleure, our Vice President, Geophysical Technology, Craig M. Murrin, our Vice President, Secretary and General Counsel, or other key personnel could disrupt our operations. We have entered into employment agreements with Messrs. Degner, Lindberg, Fleure and Murrin that, among other provisions, contain non-competition agreements. Notwithstanding these agreements, we may not be able to retain our executive officers and may not be able to enforce the non-compete provisions in the employment agreements. Please see "Management—Employment Agreements."

Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.

        On August 22, 2006, we entered into a revolving line of credit agreement with Amegy Bank National Association under which we have the ability to borrow, repay, and reborrow, from time to time, until August 21, 2007, up to the lesser of $7,500,000 or 75% of eligible accounts receivable. Borrowings under this facility bear interest at the prime rate less 0.5%. Interest is paid monthly. No interest is charged on funds securing letters of credit. As of August 31, 2006, the revolving line of credit served as collateral for letters of credit totaling $853,000, and there were no borrowed amounts outstanding. The revolving line of credit is collateralized by a first priority security interest in all of our accounts, accounts receivable and all cash arising therefrom, certain of our deposits with Amegy Bank National Association and all proceeds thereof. The agreement also includes certain limitations on liens, distributions, investments and other limitations customary for this type of agreement.

        On May 18, 2006, we entered into a term loan agreement with Guggenheim Corporate Funding LLC under which Guggenheim has agreed to extend us $60 million of financing for the purchase of seismic equipment and as working capital. As of August 31, 2006, we have borrowed approximately $52.7 million under this facility. Our indebtedness under this facility bears interest at LIBOR plus 5.75% or the prime rate plus 3.00%, and is collateralized by a first priority security interest on substantially all of our assets, excluding our accounts receivable and certain equipment financed through capital leases. All indebtedness is due and payable 36 months from the date of the term loan agreement. During the first 12 months of the term loan agreement, we pay interest only. We must pay interest plus $5.0 million of principal per quarter over the last 24 months of the term loan agreement. This facility requires that we pay off all outstanding indebtedness thereunder with the proceeds from this offering.

        The revolving line of credit and term loan agreements contain financial covenants, including those that require us to maintain certain financial ratios as well as a certain level of tangible net worth.

        Our current and future indebtedness could have important consequences to you. For example, it could:

•

impair our ability to make investments and obtain additional financing for working capital, capital expenditures, acquisitions or other general corporate purposes;



•

limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to make principal and interest payments on our indebtedness;

14

•

limit our ability to borrow funds that may be necessary to operate or expand our business;



•

put us at a competitive disadvantage to competitors that have less debt;



•

increase our vulnerability to interest rate increases; and



•

hinder our ability to adjust to rapidly changing economic and industry conditions.

        Our ability to meet our debt service and other obligations may depend in significant part on the extent to which we can successfully implement our business strategy. We may not be able to implement or realize the benefits of our business strategy.

Our existing credit facilities impose restrictions on us that may affect our ability to successfully operate our business.

        Our term credit facility limits our ability to take various actions, such as:

•

incurring additional indebtedness;



•

incurring certain liens;



•

entering into sale and leaseback transactions;



•

paying dividends;



•

making investments;



•

entering into transactions with affiliates;



•

purchasing or acquiring property or assets;



•

merging or consolidating with other entities; and



•

selling all or substantially all of our assets.

        In addition, our term credit facility requires us to maintain certain financial ratios and to satisfy certain financial conditions, several of which become more restrictive over time and may require us to reduce our debt or take some other action in order to comply with them.

        Our revolving line of credit facility includes certain limitations on liens, distributions, investments and other limitations customary for this type of agreement. In addition, this facility contains customary financial and negative covenants for agreements of this type.

        These restrictions could also limit our ability to obtain future financings, make needed capital expenditures, withstand a downturn in our business or the economy in general, or otherwise conduct necessary corporate activities. For example, during our fiscal years ended December 31, 2006, 2007, 2008, and 2009, our senior credit facility restricts us from incurring capital expenditures, other than in the ordinary course of business, in excess of $80 million, $10 million, $5 million and $5 million, respectively. We also may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by the restrictive covenants under our senior credit facility.

        We intend to use a portion of the proceeds from this offering to repay this facility in full. See "Use of Proceeds" for more information regarding this risk.

15

We could incur a substantial amount of debt in the future, which could prevent us from fulfilling our debt obligations and make us more vulnerable to adverse economic conditions.

        We are permitted to incur additional debt, subject to certain limitations under our term credit facility. If we incur additional debt in the future, our increased leverage could, for example:

•

make it more difficult for us to satisfy our obligations under our indebtedness and, if we fail to comply with the requirements of our indebtedness, could result in an event of default under such indebtedness;



•

require us to dedicate a substantial portion of our cash flow from operations to required payments on indebtedness, thereby reducing the availability of cash flow from working capital, capital expenditures and other general corporate activities;



•

limit our ability to obtain additional financing in the future for working capital, capital expenditures and other general corporate activities;



•

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;



•

detract from our ability to successfully withstand a downturn in our business or the economy generally; and



•

place us at a competitive disadvantage against less leveraged competitors.

A terrorist attack or armed conflict could harm our business.

        Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States or other countries may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for oil and gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenue. Oil and gas related facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if infrastructure integral to our clients' operations is destroyed or damaged. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

Revenue derived from our contracts may not be sufficient to cover our costs of completing those contracts. As a result, our results of operations may be negatively impacted.

        The revenue we receive from a contracted project is determined, in part, by the price we receive for our services and the productivity of our crew. Our crew's productivity is partly a function of external factors, such as weather and third party delays, over which we have no control. If we under-price our services or our crew encounters operational difficulties or delays, our revenue will decrease and we may incur a loss under the contract.

Risks Related to this Offering and Our Common Stock

There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity. If our stock price fluctuates after this offering, you could lose a significant part or all of your investment.

        Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the Nasdaq Global Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock

16

that you buy. The initial public offering price for the shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering. The market price of our common stock may be influenced by many factors, some of which are beyond our control, including:

•

general economic and stock market conditions;



•

risks relating to our business and our industry, including those discussed above;



•

strategic actions by us or our competitors;



•

announcements by us or our competitors of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments;



•

the failure of securities analysts to cover our common stock after this offering or changes in financial estimates by analysts;



•

variations in our quarterly results of operations;



•

future sales of our common stock; and



•

investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives.

        A decrease in the market price of our common stock could cause you to lose some or all of your investment.

The market price of our common stock could be adversely affected by sales of substantial amounts of our common stock in the public markets and the issuance of additional shares of common stock in future acquisitions.

        Sales of a substantial number of shares of our common stock in the public market after this offering or the perception that these sales may occur could cause the market price of our common stock to decline. In addition, the sale of these shares in the public market could impair our ability to raise capital through the sale of additional common or preferred stock. After this offering, we will have            shares of common stock outstanding. Of these shares, all shares sold in the offering, other than shares, if any, purchased by our affiliates, will be freely tradable. See "Shares Eligible for Future Sale" for more information regarding this risk.

        In addition, in the future, we may issue shares of our common stock in connection with acquisitions of assets or businesses. If we use our shares for this purpose, the issuances could have a dilutive effect on the value of your shares, depending on market conditions at the time of an acquisition, the price we pay, the value of the business or assets acquired, and our success in exploiting the properties or integrating the businesses we acquire and other factors.

The equity trading markets may be volatile, which could result in losses for our stockholders.

        In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to the operating performance of these companies. The market price of our common stock could similarly be subject to wide fluctuations in response to a number of factors, most of which we cannot control, including:

•

changes in securities analysts' recommendations and their estimates of our financial performance;

17

•

the public's reaction to our press releases, announcements and our filings with the Securities and Exchange Commission and those of our competitors;



•

fluctuations in broader stock market prices and volumes, particularly among securities of seismic data acquisition companies;



•

changes in market valuations of similar companies;



•

investor perception of our industry or our prospects;



•

additions or departures of key personnel;



•

commencement of or involvement in litigation;



•

changes in environmental and other governmental regulations;



•

announcements by us or our competitors of strategic alliances, significant contracts, new technologies, acquisitions, commercial relationships, joint ventures or capital commitments;



•

variations in our quarterly results of operations or cash flows or those of other seismic data acquisition companies;



•

revenue and operating results failing to meet the expectations of securities analysts or investors in a particular quarter;



•

changes in our pricing policies or pricing policies of our competitors;



•

future issuances and sales of our common stock;



•

demand for and trading volume of our common stock;



•

domestic and worldwide supplies and prices of and demand for gas and oil; and



•

changes in general conditions in the United States economy, financial markets or the oil and gas industry.

        The realization of any of these risks and other factors beyond our control could cause the market price of our common stock to decline significantly.

Being a public company will increase our expenses and administrative workload.

        As a public company with listed equity securities, we will need to comply with new laws, regulations and requirements, certain provisions of the Sarbanes-Oxley Act of 2002, related regulations of the Securities and Exchange Commission, or SEC, and requirements of the Nasdaq Global Market with which we are not required to comply as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of the time of our board of directors and management and will increase our costs and expenses. We will need to:

•

institute a more comprehensive compliance function;



•

design, establish, evaluate and maintain a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;



•

prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;



•

establish new internal policies, such as those relating to disclosure controls and procedures and insider trading;

18

•

involve and retain to a greater degree outside counsel and accountants in the above activities; and



•

enhance our investor relations function.

        In addition, we also expect that being a public company subject to these rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit and compensation committees, and qualified executive officers.

We will be exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act of 2002.

        We are in the process of evaluating our internal controls systems to allow management to report on, and our independent auditors to audit, our internal controls over financial reporting. We will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We are required to comply with Section 404 by no later than December 31, 2007. However, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations. Furthermore, upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC and Public Company Accounting Oversight Board rules and regulations that remain unremediated. As a public company, we will be required to report, among other things, control deficiencies that constitute a "material weakness" or changes in internal controls that, or are reasonably likely to, materially affect internal controls over financial reporting. A "material weakness" is a significant deficiency, or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. If we fail to implement the requirements of Section 404 in a timely manner, we might be subject to sanctions or investigation by regulatory authorities such as the SEC or the Nasdaq Global Market. Additionally, failure to comply with Section 404 or the report by us of a material weakness may cause investors to lose confidence in our financial statements and our stock price may be adversely affected. If we fail to remedy any material weakness, our financial statements may be inaccurate, we may face restricted access to the capital markets, and our stock price may be adversely affected.

We are not obligated to pay dividends on our common stock and various factors may hinder the declaration and payment of dividends in the future.

        We are not obligated to pay any dividends and our stockholders are not guaranteed to receive dividends. The payment of dividends is subject to the discretion of our board of directors, and the board may decide at any time to decrease the amount and/or frequency of dividend payments or even discontinue dividend payments entirely. Various factors may cause the board to determine not to pay dividends, including our profitability, capital requirements, financial condition, growth, business opportunities, earnings and cash flows, contractual and legal restrictions, the tax treatment of dividends, and such other factors as our board of directors may consider relevant.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

        As of the date of this prospectus, we cannot specify with certainty the particular uses for the net proceeds we will receive from this offering. We currently intend to use the net proceeds from this offering as described under "Use of Proceeds" on page 22 in this prospectus, which indicates that our management will have broad discretion in the use of the net proceeds. If our management fails to

19

apply these funds effectively, we may not be successful in implementing our business strategy of generating a high return on equity. Further, we may not be able to find a productive use for all or part of the net proceeds from this offering.

Purchasers in this offering will suffer immediate and substantial dilution.

        If you purchase common stock in this offering, you will experience immediate and substantial dilution of $            per share, based upon an assumed initial public offering price of $            per share, because the price you pay will be substantially greater than the adjusted net tangible book value per share of $            for the shares you acquire. This dilution is due in large part to the fact that prior investors paid an average price of $            per share when they purchased their shares of common stock, which is substantially less than the anticipated initial public offering price. See "Dilution" beginning at page 25 for a more detailed discussion of dilution.

Delaware law and our organization documents may impede or discourage a takeover, which could adversely affect the value of our common stock.

        Provisions of Delaware law and, upon adoption, our certificate of incorporation and bylaws may have the effect of discouraging a change of control of our company or deterring tender offers for our common stock. The anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders. We are currently subject to Delaware anti-takeover provisions. Additionally, provisions of our certificate of incorporation and bylaws will impose various procedural and other requirements, which could make it more difficult for stockholders to effect some corporate actions. For example, our certificate of incorporation will authorize our board to determine the rights, preferences and privileges and restrictions of unissued shares of preferred stock without any vote or action by our stockholders. Thus, our board will be able to authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our common stock. Our certificate of incorporation and bylaws will require advance notice for stockholders to nominate director candidates for election or to bring business before an annual meeting of stockholders. These rights and provisions may have the effect of delaying or deterring a change of control of our company and may limit the price that investors might be willing to pay in the future for shares of our common stock. See "Description of Capital Stock" for more information regarding this risk.

Our management and directors will beneficially own, control or have substantial influence over a significant amount of our common stock, giving them a controlling influence over corporate transactions and other matters. Their interests may conflict with yours, and the concentration of ownership of our common stock by such stockholders will limit the influence of public stockholders.

        Upon completion of this offer, our directors, officers and their affiliates will beneficially own, control or have substantial influence over approximately             % of our outstanding common stock, and approximately            % if the underwriters exercise their over-allotment option in full. In addition, Mr. Degner and members of his family will beneficially own, control or have substantial influence over approximately            % of our outstanding common stock, and approximately            % if the underwriters exercise their over-allotment option in full. If all of these stockholders voted together as a group, they would have the ability to exert significant influence over our board of directors and its policies. These stockholders would, acting together, be able to control or substantially influence the outcome of stockholder votes, including votes concerning the election of directors, the adoption or amendment of provisions in our certificate of incorporation or bylaws and possible mergers, corporate control contests and other significant corporate transactions. This concentration of ownership may have the effect of delaying, deferring or preventing a change in control, a merger, consolidation, takeover or other business combination. This concentration of ownership could also discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which could in turn have an adverse effect on the market price of our common stock.

20

FORWARD-LOOKING STATEMENTS

        Some of the information in this prospectus may contain forward looking statements. We have based these forward looking statements on our current expectations and projections about us and our industry. These forward looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, included in this prospectus that address activities, events or developments that we expect or anticipate may occur in the future, including such things as future capital expenditures, business strategy, competitive strengths, goals, growth of our business and operations, plans and references to future successes may be considered forward looking statements. When we use words such as "anticipate," "believe," "estimate," "intend," "plan," "project," "forecast," "may," "should," "expect," "probably" or similar expressions, we are making forward looking statements. Our forward looking statements speak only as of the date made and we will not update forward looking statements unless the securities laws require us to do so.

        Some of the key factors which could cause our future financial results and performance to vary from those expected include:

•

the timing and extent of changes in the price of oil and gas;



•

a decline in capital expenditures by oil and gas exploration and production companies;



•

our future capital requirements and availability of financing on satisfactory terms;



•

market developments affecting, and other changes in, the demand for seismic data and related services;



•

availability or increases in the price of seismic equipment;



•

availability of crew personnel and technical personnel;



•

competition;



•

technological obsolescence of our seismic data acquisition equipment;



•

the condition of the capital markets generally, which will be affected by interest rates, foreign currency fluctuations and general economic conditions;



•

the effects of weather on our operations;



•

cost and other effects of legal proceedings, settlements, investigations and claims, including liabilities which may not be covered by indemnity or insurance;



•

governmental regulation; and



•

the political and economic climate in the foreign or domestic jurisdictions in which we conduct business.

        The information contained in this prospectus, including the information set forth under the heading "Risk Factors," identifies additional factors that could cause our results or performance to differ materially from those we express or imply in our forward looking statements. Although we believe that the assumptions underlying our forward looking statements are reasonable, any of these assumptions and, therefore, the forward looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward looking statements which are included in this prospectus, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved.

21

USE OF PROCEEDS

        We estimate that the net proceeds from the sale of the            shares of our common stock we are selling in this offering will be approximately $            million, based on an offering price of $            per share, after deducting underwriting discounts and concessions and estimated offering expenses. If the underwriters' over-allotment option offered by us of            shares is exercised in full, we estimate that we will receive net proceeds of approximately $             million.

        A portion of the net proceeds we expect to receive from this offering will be used to repay all outstanding indebtedness under our existing term credit facility with Guggenheim Corporate Funding, LLC. As of August 31, 2006, approximately $52.7 million was outstanding under this facility. The balance of net proceeds, along with our operating cash flow, will be used to fund the acquisition of new equipment and technology and the expansion of our crew count, and for working capital and general corporate purposes. We used certain borrowings under our term credit facility to fund the acquisition of seismic equipment over the prior 12 months. On May 18, 2006, we entered into a $60 million term credit facility with Guggenheim Corporate Funding, LLC. The terms of the credit facility allow us to draw all or part of the facility from time to time up through December 31, 2006. Borrowings under this facility bear interest at a rate of LIBOR plus 5.75% or the prime rate plus 3.00%. After December 31, 2006, borrowings under the Guggenheim loan facility bear interest at a rate that declines according to a pre-set scale as leverage decreases to a minimum level of LIBOR plus 2.75% or the prime rate. The facility includes customary financial and negative covenants for credit facilities of this type, including covenants requiring the maintenance of, a specified current ratio, a specified leverage ratio, a specified debt coverage ratio, a minimum tangible net worth, and certain limits on other indebtedness. As of August 31, 2006, we were in compliance with these covenants. The facility stipulates monthly interest payments. Beginning with the quarter ended September 30, 2007, quarterly principal payments of one-twelfth the outstanding principal balance on December 29, 2006 are due, with the remaining balance due at maturity on May 18, 2009.

        The amount and timing of our expenditures will depend on a variety of factors, including the amount of cash generated by our operations and the nature and timing of competitive developments. Our management will have broad discretion in the application of the net proceeds we receive from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds of this offering. Pending these uses, we plan to invest the net proceeds of this offering in short-term, interest bearing obligations, investment grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government. Our investment objective regarding these net proceeds is capital preservation and liquidity such that the proceeds are readily available to fund our operations as needed.

        We will not receive any of the proceeds from the sale of shares by the selling stockholders.

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) the net proceeds from this offering by approximately $            , assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

DIVIDEND POLICY

        We have not declared or paid any cash dividends on our common stock, and we do not currently anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings to fund the development and growth of our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on our results of operations, financial condition, capital requirements and other factors deemed relevant by our board. For so long as borrowings remain outstanding under our term credit facility, we may not declare or pay any dividends on our common stock.

22

CAPITALIZATION

Corporate Recapitalization

        We were formed as a Delaware corporation in March 2003. Prior to this offering, we had issued three different classes of equity to our stockholders including Series A preferred stock, Class A common stock and Class B common stock. Immediately prior to this offering, we will complete a recapitalization transaction pursuant to which all of our outstanding shares of Class A and Class B common stock and all of our outstanding shares of Series A preferred stock will be converted into one class of common stock. As part of our recapitalization, we also will complete a            -for-            split of our common stock. Following the recapitalization, we will have             shares of common stock outstanding.

Capitalization

        The following table sets forth (1) our actual capitalization as of June 30, 2006; (2) our capitalization on a pro forma basis to give effect to our recapitalization; and (3) our capitalization on a pro forma "as adjusted" basis to give effect to the aforementioned adjustments and the sale of            shares of our common stock in this offering at an initial public offering price of $            per share, which is the midpoint of the range set forth on the front cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The actual price at which shares will be sold pursuant to this offering may be more or less than $             per share, and such variation would affect portions of the "as adjusted" column in the following table. Depending on the extent of such variation, the effect on the "as adjusted" column could be material.

        This table should be read together with the sections of this prospectus entitled "Use of Proceeds," "Selected Historical Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and with our financial statements and related notes included elsewhere in this prospectus.

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders' equity and total capitalization by $            , assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

23

(2)

As of August 31, 2006, we had approximately $52.7 million outstanding under our term loan, leaving approximately $7.3 million available for additional borrowing under our credit facility, and we had $853,000 outstanding in letters of credit secured by our revolving credit facility, leaving approximately $6.6 million available for additional borrowing under our revolver. As of August 31, 2006, our cash and cash equivalents balance was $2.4 million.

        The number of shares of our common stock that will be outstanding after this offering is            and excludes:

•

shares of our common stock issuable upon exercise of outstanding warrants with an exercise price of $            per share; and



•

3,000,000 shares of our common stock reserved for future issuance under our 2006 Incentive Plan.

24

DILUTION

        Purchasers of common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of common stock for accounting purposes. Net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the total number of shares of common stock outstanding, on a fully diluted basis, giving effect to the assumed conversion of our outstanding preferred stock to common stock and recapitalization. At June 30, 2006, we had a net tangible book value of $             million, or $            per share. After giving effect to the sale of            shares of common stock in this offering at an assumed initial public offering price of $            per share and after the deduction of underwriting discounts and commissions and estimated offering expenses, the "as adjusted" net tangible book value at June 30, 2006 would have been $             million or $            per share. This represents an immediate increase in such net tangible book value of $            per share to existing stockholders and an immediate and substantial dilution of $            per share to new investors purchasing common stock in this offering. The following table illustrates this per share dilution:

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) our net tangible book value by $             million, the net tangible book value per share, after giving effect to this offering, by $            per share and the dilution in net tangible book value per share to new investors in this offering by $            per share, assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        The following table summarizes, on an "as adjusted" basis set forth above as of            , 2006, the total number of shares of common stock owned by existing stockholders and to be owned by new investors, the total consideration paid, and the average price per share paid by our existing stockholders and to be paid by new investors in this offering at $            , the mid-point of the initial public offering price range set forth on the cover page of this prospectus, calculated before deduction of estimated underwriting discounts and commissions.

(1)

The number of shares disclosed for the existing stockholders includes            shares being sold by the selling stockholders in this offering. The number of shares disclosed for the new investors does not include the shares being purchased by the new investors from the selling stockholders in this offering.

25

(2)

With respect to our executive officers, directors and holders of more than 10% of our common stock, and assuming the exercise of all of their outstanding stock options, the number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share paid by all of those affiliated persons, are as follows:

        As of            , 2006, there were            shares of our common stock outstanding, held by            stockholders. Sales by the selling stockholders in this offering will reduce the number of shares of common stock held by existing stockholders to            shares or approximately            % of the total number of shares of common stock outstanding after this offering and will increase the number of shares of common stock held by new investors to            shares or approximately            % of the total number of shares of common stock outstanding after this offering.

26

SELECTED HISTORICAL FINANCIAL DATA

        The following table shows selected historical financial data for the period from our inception through December 31, 2003 and for the years ended December 31, 2005 and 2004 and for the six months ended June 30, 2006 and 2005. The financial data for each annual period has been derived from our audited financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of results to be expected for any future period. You should read this financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements, including the notes thereto, included elsewhere in this prospectus.

(1)

Includes interest income, other income, and other expense.

(2)

EBITDA consists of net income before interest expense, taxes, depreciation and amortization. EBITDA is used as a supplemental financial measure by our management and by certain external users of our financial statements, such as investors and commercial banks, to assess:

•

the financial performance of our assets without regard to financing methods, capital structures or historical cost basis;

•

the ability of our assets to generate cash sufficient to pay interest on our indebtedness;

27

•

our operating performance and return on invested capital as compared to those of other companies in the seismic data acquisition industry, without regard to financing methods and capital structure; and



•

our compliance with certain financial covenants included in our term credit facility.

EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. generally accepted accounting principles ("GAAP"). EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using EBITDA as an analytical tool include:

•

EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;



•

EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments on, our debt;



•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and



•

other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

The following table presents a reconciliation of the non-GAAP financial measure of EBITDA to the most directly comparable GAAP financial measures on a historical basis for each of the indicated periods.

28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the "Selected Financial Data" section of this prospectus and our financial statements and the related notes and other financial information included elsewhere in this prospectus. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" and elsewhere in this prospectus.

        This discussion summarizes our operating results, financial condition and liquidity during the three-years ended December 31, 2003, 2004 and 2005 and the six months ended June 30, 2005 and 2006, respectively. You should read the following discussion and analysis in conjunction with "Selected Financial Data," our financial statements, and the related notes thereto included elsewhere in this prospectus.

Company Overview

        We provide land, transition zone and shallow marine seismic data acquisition services both in the United States and internationally. Our services enable our clients to locate potential reservoirs of oil and gas and to gain a better understanding of known reservoirs. We are focused on growing our business and the profitability of our crews. Since launching our first seismic data acquisition crew in May 2005, we have launched an additional six seismic crews and are planning to launch three more crews before the end of 2006. Substantially all of our revenue is derived from the seismic data acquisition services we provide to our clients, who are primarily national oil companies, major integrated oil and gas companies, independent oil and gas exploration and production companies, and seismic data library companies.

        Our revenues are primarily affected by our clients' demand for our services, the prices we negotiate for our services and the productivity of our seismic crews. Crew productivity depends largely on crew operating efficiency and external factors such as weather and third party delays. As such, we seek to take advantage of strong demand to negotiate favorable contract terms that afford us protection from these risks. We believe we currently have sufficient contracts and liquidity sources to sustain our operations through the first quarter of 2007.

        Our operating costs are primarily a function of our seismic data recording crew count, crew make-up and crew utilization levels. While most of our expenses vary with utilization, some expenses, including equipment rentals and leases, depreciation (a non-cash expense), certain labor, some repair and maintenance, and interest payments, are fixed and will be incurred regardless of utilization.

        Our seismic data acquisition crew counts by type at December 31, 2005 and June 30, 2006 were as follows:

Company Highlights

        We were incorporated in Delaware in 2003 and are based in Houston, Texas. We began raising equity capital in January 2005 and commenced commercial seismic data recording operations in

29

May 2005. We provide land, transition zone and shallow marine seismic data acquisition services, targeting the higher density and higher value end of the data acquisition services segment. Recent strong demand for seismic data acquisition services due to increased exploration and development activity by domestic and international oil and gas companies has contributed to our rapid growth. As of August 31, 2006, we had approximately 376 employees.

        Some of our significant milestones are listed below:

•

We launched four seismic data recording crews in 2005.



•

We launched our seventh crew and were equipping our eighth and ninth crews in the second quarter of 2006.



•

We were profitable and had positive cash flow from operations in 2005, our first year of commercial operation, and in the six months ended June 30, 2006.



•

We successfully completed several rounds of private placements of our Series A preferred stock in 2005 and the first quarter of 2006 raising approximately $25 million, the net proceeds of which were used to fund, in part, our initial four crews and our expansion.



•

We entered into a $60 million credit facility in May 2006, the net proceeds of which have been used primarily to refinance existing capital leases and to provide capital for expansion crews.

Market Conditions in Our Industry

        The global seismic data acquisition industry is cyclical. Volatility in oil and gas prices can produce significant changes in the demand for seismic data acquisition activity and the prices we can negotiate for our services. Spending on seismic data acquisition by oil and gas companies can be impacted by the change in commodity prices for oil and gas.

How We Generate Our Revenue

        We generally conduct geophysical surveys for our clients on a contractual basis. Losses on contract revenue are recognized in full when they arise. Most of our business is obtained through competitive bidding. Our clients specify the location of a survey and may propose the layout and design of the survey including the distance between receiving sensors and the direction in which lines of receivers are deployed. Our clients usually ask us to quote a "turnkey" rate for each completed point of recorded data, or they may ask for a "term rate" bid under which our seismic crew is hired for a fixed fee per day. Our clients may undertake to obtain seismic survey permits from the owners of mineral and surface rights, or they may require us to do so. Our clients generally acquire all rights to the completed geophysical survey, including all interpretive manipulations of such data. We generally enter into master service agreements with our clients which specify payment terms, establish standards of performance, and allocate certain operational risks through indemnity and related provisions. We seek to manage our risks in these contracts through the use of warranty disclaimers, and, in turnkey contracts, "standby rate" provisions that enable us to be paid a reduced amount for a limited time if we are unable to record data because of weather or certain other factors beyond our control.

How We Evaluate Our Operations

        We evaluate our land, transition zone and shallow marine crews using the same performance metrics. Our management utilizes a variety of financial and productivity metrics to analyze and monitor the performance of our services. These metrics include, but are not limited to, the following:

•

project time and motion analysis;



•

project efficiency (i.e., productive time/total time);

30

•

safety performance rates;



•

revenue and costs per operations phase (e.g., positioning, shot hole drilling, data acquisition);



•

revenue and cost per acquisition unit (i.e., cost/mile, cost/shotpoint);



•

actual versus budgeted results (both on a per crew and per project basis);



•

selling, general and administrative expenses as a percentage of revenue;



•

local spending, by crew, in operations outside the U.S.;



•

company EBIT and EBITDA;



•

EBIT and EBITDA per crew; and



•

crew utilization.

        The data generated using the foregoing metrics is an important part of our operational analysis. We apply these metrics to monitor operations separately for each of our crews and analyze trends to determine the relative performance of each.

Critical Accounting Policies and Estimates

        Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of the financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our judgments and estimates in determining our financial condition and operating results. Estimates are based upon information available as of the date of the financial statements and, accordingly, actual results could differ from these estimates, sometimes materially. Critical accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and operating results and require management's most subjective judgments. The most critical accounting policies and estimates are described below.

        Revenue Recognition.    Our services are provided under cancelable service contracts. Client contracts for our services vary in terms and conditions and typically range from one month to 12 months in duration. We review the deliverables in each contract and, where applicable, apply the accounting guidance contained in EITF 00-21, "Accounting for Revenue Contracts with Multiple Deliverables." We recognize revenue in accordance with the terms of the contract. These contracts are "turnkey" or "term" agreements or a combination of the two. Under turnkey agreements or the turnkey portions thereof, we recognize period revenue based upon objectively quantifiable measures of progress, such as square miles or linear kilometers of data acquired. Under term agreements or the term portions thereof, period revenue is recognized on a day-rate basis. Accordingly, revenue is recognized based upon work performed as a percentage of total work to be performed under the "turnkey" contract. With respect to those contacts where our client pays separately for the mobilization of equipment, EITF 00-21 requires us to recognize such mobilization fees as revenue during the performance of the seismic acquisition, using the same revenue recognition method as for the acquisition work. We also receive reimbursements for certain out-of-pocket expenses under the terms of our service contracts. We record amounts billed to clients in revenue as the gross amount including out-of-pocket expenses that are reimbursed by the client.

        Allowance for Doubtful Accounts.    We estimate our allowance for doubtful accounts receivable based on our past experience of historical write-offs, our current client base and our review of past due accounts. The inherent volatility of the energy industry's business cycle can cause swift and unpredictable changes in the financial stability of our clients.

31

        Impairment of Long-lived Assets.    In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," we evaluate the recoverability of property and equipment, and other long-lived assets if facts and circumstances indicate that any of those assets might be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset's carrying amount to determine if an impairment of such property is necessary. The effect of any impairment would be to expense the difference between the fair value of such property and its carrying value.

        Depreciable Lives of Property, Plant and Equipment.    Our property, plant and equipment are capitalized at historical cost and depreciated over the useful life of the asset. Our estimation of this useful life is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. The technology of the equipment used to gather data in the seismic industry has historically evolved such that obsolescence does not occur quickly. As circumstances change and new information becomes available these estimates could change. We amortize these capitalized items using the straight-line method. Capital assets are depreciated over one to ten years depending on the classification of the asset.

        Tax Accounting.    We account for our income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of amounts of taxes payable or refundable for the current year and an asset and liability approach in recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns. We determine deferred taxes by identifying the types and amounts of existing temporary differences, including foreign tax credits, measuring the total deferred tax asset or liability using the applicable tax rate and reducing the deferred tax asset by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Our methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining our annual effective tax rate and the valuation of deferred tax assets, which can create variance between actual results and estimates. The process involves making forecasts of current and future years' taxable income and unforeseen events may significantly affect these estimates. Those factors, among others, could have a material impact on our provision or benefit for income taxes.

        Stock-Based Compensation.    In December 2004, the FASB issued SFAS No. 123R, "Share-based Payment," which revises SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123R requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award, with limited exceptions. The fair value of the award must be re-measured at each reporting date through the settlement date, with changes in fair value recognized as compensation expense of the period. SFAS No. 123R requires that we use an option-pricing model, adjusted for the unique characteristics of those instruments, to determine fair value as of the grant date of the stock options. In so doing, we will use the Black-Scholes option-pricing model, which requires various assumptions as to interest rates, volatility, dividend yields and expected lives of stock-based awards. Historically, we have not issued any stock options in exchange for employee services.

        The following table describes estimates, assumptions and methods regarding critical accounting estimates used to prepare our financial statements. We consider an estimate to be critical if it is subjective and if changes in the estimate using different assumptions would result in a material impact on our financial position or results of operations.

32

33

Results of Operations

        The following table sets forth our results of operations for the periods indicated. Our results of operations between the periods presented vary significantly primarily due to the fact that 2003 and 2004 were characterized by organization and capital raising activities and our first crew was launched in May 2005. See Note A of the notes to our historical financial statements included elsewhere in this prospectus for more detail.

34

(1)

Includes interest income, other income, and other expense.

Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005

        Revenue.    We generated revenue of $35.3 million in the six months ended June 30, 2006 compared to $816,051 in the six months ended June 30, 2005. The increase was a result of having seven seismic data acquisition crews operating in the six months ended June 30, 2006 compared to one seismic crew operating in the six months ended June 30, 2005. Our first seismic crew was launched in May 2005 and our second crew was launched in July 2005.

        Operating Expenses.    We incurred operating expenses of $27.1 million in the six months ended June 30, 2006 compared to $833,838 in the six months ended June 30, 2005. The increase was primarily the result of operating seven seismic data acquisition crews in the six months ended June 30, 2006 compared to one seismic data acquisition crew operating in the six months ended June 30, 2005.

        Selling, General and Administrative Expenses.    We incurred selling, general and administrative expenses of $3.5 million in the six months ended June 30, 2006 compared to $1.3 million in the six months ended June 30, 2005. The increase was primarily the result of hiring the management and increasing the corporate infrastructure necessary to administer the operations of the seven seismic data acquisition crews active in the six months ended June 30, 2006 and to prepare for the launch of future seismic crews. One seismic data acquisition crew was operating in the six months ended June 30, 2005 and selling, general and administrative expenses recorded in that time period were associated with setting up the infrastructure of the company, building expansion crews, and administering the first seismic data acquisition crew.

        Depreciation Expense.    We recorded depreciation expenses of $3.8 million in the six months ended June 30, 2006 compared to $143,790 in the six months ended June 30, 2005. The increase resulted from the purchase of seismic recording equipment, vibrators, vehicles, and other assets necessary to operate the seven seismic data acquisition crews active in the six months ended June 30, 2006 compared to one seismic data acquisition crew operating in the six months ended June 30, 2005.

        Interest Expense.    Interest expense was $755,272 in the six months ended June 30, 2006 compared to $131,698 in the six months ended June 30, 2005. Substantially all of the interest expense incurred in both periods was related to financed seismic recording equipment and other financed equipment.

        Other Income, Net.    We recorded other income of $11,522 in the six months ended June 30, 2006 compared to $79,486 in six months ended June 30, 2005. The majority of the amount recorded in the six months ended June 30, 2006 was related to employees we leased to a company developing seismic

35

recording equipment and was recorded prior to the launch of our first seismic data acquisition crew. Other income includes interest income, other income, and other expenses.

        Income Tax Expense.    Income tax expense was $1.4 million in the six months ended June 30, 2006 compared to $0 in the six months ended June 30, 2005. Of the $1.4 million income tax expense recorded in the six months ended June 30, 2006, $212,486 was recorded as foreign and $350,115 was recorded as U.S. Federal current, and $879,091 was recorded as U.S. Federal deferred.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

        Revenue.    We generated revenue of $24.7 million in 2005 compared to $0 in 2004. The increase is the result of launching and operating four seismic data acquisition crews in 2005 compared to zero seismic data acquisition crews operating in 2004. Our first seismic data acquisition crew was launched in May 2005.

        Operating Expenses.    We incurred operating expenses of $17.5 million in 2005 compared to $2,049 in 2004. The increase was the result of launching and operating four seismic data acquisition crews in 2005 compared to no seismic data acquisition crews operating in 2004.

        Selling, General and Administrative Expenses.    We incurred selling, general and administrative expenses of $5.2 million in 2005 compared to $204,474 in 2004. This increase was primarily the result of hiring the management and increasing the corporate infrastructure necessary to administer the operations of the four seismic data acquisition crews operating at December 31, 2005 and to prepare for the launch of future seismic crews. As of December 31, 2005 we had 230 employees compared to ten employees as of December 31, 2004. No seismic data acquisition crews were operating in 2004 and selling, general and administrative expenses recorded in that time period were associated with setting up the infrastructure of the company and the administration of the first seismic data acquisition crew.

        Depreciation Expense.    We recorded depreciation expense of $1.8 million in 2005 compared to $1,072 in 2004. This increase was due to the purchase of seismic recording equipment, vibrators, vehicles, and other assets necessary to operate the four seismic data acquisition crews active in 2005. No seismic data acquisition crews were operating in 2004, and depreciation in this period is associated with assets used in the corporate infrastructure.

        Interest Expense.    Interest expense was $624,092 in 2005 compared to $0 in 2004. Interest expense incurred in 2005 was related to financed seismic recording equipment and other financed equipment.

        Other Income, Net.    We recorded other income of $118,016 compared to $32,162 in 2004. The majority of the amount recorded in both periods was related to employees we leased to a company developing seismic recording equipment and was recorded prior to the launch of our first seismic data acquisition crew. Other income includes interest income, other income, and other expenses.

        Income Tax Expense.    Income tax expense was $495,365 in 2005 compared to $0 in 2004. Of the $495,365 income tax expense recorded in 2005, $123,365 was foreign and $372,000 was recorded as U.S. Federal deferred. As of December 31, 2005, we had approximately $1.6 million in net operating loss carryforwards. These tax loss carryforwards expire in varying amounts in through 2024 and 2025. The valuation allowance decreased by $61,100 in 2005 and increased by $59,283 in 2004.

Year Ended December, 31, 2004 Compared to Year Ended December 31, 2003

        Revenue.    We had no revenue in either 2004 or 2003 because we were conducting only development activities during these periods.

36

        Operating Expenses.    We incurred operating expenses of $2,049 in 2004 compared to $0 in 2003. All of the operating expenses recorded in 2004 were related to equipping and launching of new seismic crews.

        Selling, General and Administrative Expenses.    We incurred selling, general and administrative expenses of $204,474 in 2004 compared to $5,345 in 2003. Our selling, general and administrative expenses in 2004 were related to hiring management personnel and increasing the corporate infrastructure necessary to administer the operations of our planned seismic data acquisition crews and to prepare for the launch of future seismic crews. Our selling, general and administrative expenses in 2003 were related to the formation of the company.

        Depreciation Expense.    We recorded depreciation expense of $1,072 in 2004 compared to $0 in 2003. No seismic data acquisition crews were operating in either 2004 or 2003, and depreciation in these periods is associated with assets used in the corporate infrastructure.