UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34709

GLOBAL GEOPHYSICAL SERVICES, INC.

(Name of registrant as specified in its charter)

DELAWARE		05-0574281
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13927 South Gessner Road

Missouri City, TX 77489

Telephone number: (713) 972-9200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer x		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No x

At November 3, 2010, there were 36,036,163 shares of common stock, par value $0.01 per share, outstanding.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2010		2009
	(unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	63,206,756	$	17,026,865
Restricted cash investments	6,546,590		5,346,066
Accounts receivable, net of allowances for doubtful accounts of $4,713,100 at September 30, 2010 and $1,697,830 at December 31, 2009	49,795,640		73,568,184
Income and other taxes receivable	10,010,841		10,159,498
Prepaid expenses and other current assets	3,109,990		10,626,831
TOTAL CURRENT ASSETS	132,669,817		116,727,444

MULTI-CLIENT LIBRARY, net	132,828,047		37,395,521

PROPERTY AND EQUIPMENT, net	111,497,295		140,217,953

GOODWILL AND OTHER INTANGIBLES, net	15,560,554		15,974,103

OTHER	11,883,384		6,304,570

TOTAL ASSETS	$	404,439,097	$	316,619,591

See accompanying notes to consolidated financial statements.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

	September 30,			December 31,
	2010			2009
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	56,533,159		$	34,272,606
Current portion of long-term debt	—			1,983,282
Current portion of capital lease obligations	—			1,767,353
Income and other taxes payable	2,453,613			875,255
Deferred revenue	48,412,716			43,545,291
Liability on derivative instruments	—			331,163
TOTAL CURRENT LIABILITIES	107,399,488			82,774,950

DEFERRED INCOME TAXES	—			3,826,131

LONG-TERM DEBT, net of current portion and unamortized discount	194,264,873			165,794,658

CAPITAL LEASE OBLIGATIONS, net of current portion	—			295,665

TOTAL LIABILITIES	301,664,361			252,691,404

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Common Stock, $.01 par value, authorized 100,000,000 and 0 shares, 45,393,401 and 0 issued and 35,987,013 and 0 outstanding at September 30, 2010 and December 31, 2009, respectively	453,934			—
Series A Convertible Preferred Stock, $.01 par value, authorized 0 and 50,000,000 shares, 0 and 28,358,394 issued and 0 and 20,617,751 outstanding at September 30, 2010 and December 31, 2009, respectively,	—			283,584
Class A Common stock, $.01 par value, authorized 0 and 30,000,000 shares, 0 and 4,000,000 issued and 0 and 3,709,100 outstanding at September 30, 2010 and December 31, 2009	—			40,000
Class B Common stock, $.01 par value, authorized 0 and 120,000,000 shares, 0 and 5,736,107 issued and 0 and 4,471,021 outstanding at September 30, 2010 and December 31, 2009, respectively	—			57,361
Additional paid-in capital	238,333,155			160,362,017
Accumulated deficit	(40,377,180		)	(2,429,862		)
	198,409,909			158,313,100
Less: treasury stock, at cost, 9,406,388 and 9,296,629 shares at September 30, 2010 and December 31, 2009, respectively	95,635,173			94,384,913
TOTAL STOCKHOLDERS’ EQUITY	102,774,736			63,928,187

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	404,439,097		$	316,619,591

See accompanying notes to consolidated financial statements.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Month Period Ended						Nine Month Period Ended
	September 30,						September 30,
	2010			2009			2010			2009
	(unaudited)						(unaudited)

REVENUES	$	60,469,517		$	89,709,234		$	161,240,902		$	214,237,104

OPERATING EXPENSES	54,040,413			72,965,982			152,117,059			180,080,451

GROSS PROFIT	6,429,104			16,743,252			9,123,843			34,156,653

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES	10,183,285			7,117,600			30,210,560			23,963,690

INCOME (LOSS) FROM OPERATIONS	(3,754,181		)	9,625,652			(21,086,717		)	10,192,963

OTHER INCOME (EXPENSE)
Interest expense, net	(5,626,367		)	(3,644,998		)	(15,635,670		)	(12,580,847		)
Unrealized gain on derivative instruments	—			72,075			331,163			522,496
Foreign exchange gain (loss)	(44,028		)	(281,680		)	(210,279		)	460,050
Loss on extinguishment of debt	—			—			(6,035,841		)	—
Other expense	(100,229		)	(10,600		)	(24,583		)	(22,299		)
TOTAL OTHER EXPENSE	(5,770,624		)	(3,865,203		)	(21,575,210		)	(11,620,600		)

INCOME (LOSS) BEFORE INCOME TAXES	(9,524,805		)	5,760,449			(42,661,927		)	(1,427,637		)

INCOME TAX EXPENSE (BENEFIT)	9,120,597			(607,125		)	(4,714,609		)	(3,078,705		)

NET INCOME (LOSS)	$	(18,645,402	)	$	6,367,574		$	(37,947,318	)	$	1,651,068

INCOME (LOSS) PER COMMON SHARE
Basic and diluted	$	(.52	)	$	.78		$	(1.54	)	$	.20

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted	35,908,480			8,204,124			24,652,434			8,213,728

See accompanying notes to consolidated financial statements.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Month Period Ended
	September 30,
	2010			2009
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(37,947,318	)	$	1,651,068
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense	97,612,551			53,694,505
Capitalized depreciation for multi-client library	(22,316,593		)	(2,165,074		)
Amortization of debt issuance costs	735,610			679,567
Loss on extinguishment of debt	6,035,841			—
Stock-based compensation	2,259,625			1,104,211
Non-cash charitable contribution	51,595			—
Non-cash revenue from multi-cleint data exchange	(5,650,101		)	—
Deferred tax benefit	(3,826,131		)	(96,060		)
Unrealized gain on derivative instrument	(331,163		)	(522,496		)
Loss on disposal of property and equipment	2,337,778			—
Effects of changes in operating assets and liabilities:
Accounts receivable	23,772,544			10,897,058
Prepaid expenses and other current assets	9,066,841			(9,504,245		)
Non-current deferred tax asset	(3,278,000		)	—
Other assets	759,228			(886,308		)
Accounts payable and accrued expenses	11,058,494			3,656,182
Deferred revenue	438,825			2,204,932
Income and other taxes receivable	148,657			(9,790,212		)
Income and other taxes payable	1,578,358			(6,146,054		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	82,506,641			44,777,074

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(8,632,772		)	(14,822,982		)
Investment in multi-client library	(117,993,803		)	(18,484,639		)
Change in restricted cash investments	(1,200,524		)	2,142,272
Proceeds from the sale of property and equipment	173,369			—
NET CASH USED IN INVESTING ACTIVITIES	(127,653,730		)	(31,165,349		)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of discount	194,018,000			7,455,926
Principal payments on long-term debt	(169,890,253		)	(10,298,434		)
Net payments on revolving credit facility	—			(25,832,055		)
Debt issuance costs	(5,922,307		)	—
Principal payments on capital lease obligations	(2,063,018		)	(4,171,472		)
Purchase of treasury stock	(1,250,260		)	(1,250,017		)
Issuances of stock, net	76,434,818			—
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	91,326,980			(34,096,052		)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	46,179,891			(20,484,327		)

CASH AND CASH EQUIVALENTS, beginning of period	17,026,865			30,444,316

CASH AND CASH EQUIVALENTS, end of period	$	63,206,756		$	9,959,989

See accompanying notes to consolidated financial statements.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

												Additional									Total
	Preferred			Common Stock						Common		Paid-in			Treasury			Accumulated			Stockholders’
	Stock			Class A			Class B			Stock		Capital			Stock			Deficit			Equity
Balances at December 31, 2009	$	283,584		$	40,000		$	57,361		$	—	$	160,362,017		$	(94,384,913	)	$	(2,429,862	)	$	63,928,187

Issuance of common stock, net of costs of issuance of $7,568,172	—			—			1,021			71,968		76,361,828			—			—			76,434,817

Conversion to common stock	(283,584		)	(40,000		)	(58,382		)	381,966		—			—			—			—

Compensation expense associated with stock grants	—			—			—			—		2,259,625			—			—			2,259,625

Charitable contribution expense associated with stock grant	—			—			—			—		51,595			—			—			51,595

Put option liability	—			—			—			—		(701,910		)	—			—			(701,910		)
.
Purchase of treasury stock	—			—			—			—		—			(1,250,260		)	—			(1,250,260		)

Net loss	—			—			—			—		—			—			(37,947,318		)	(37,947,318		)

Balances at September 30, 2010	$	—		$	—		$	—		$	453,934	$	238,333,155		$	(95,635,173	)	$	(40,377,180	)	$	102,774,736

See accompanying notes to consolidated financial statements.

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GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The consolidated financial statements of Global Geophysical Services, Inc. and Subsidiaries (the “Company”) included herein are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2009. In the opinion of management, the accompanying unaudited financial information includes all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the interim financial information. Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods. Certain information in the footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009.

NOTE 2 - - SELECTED BALANCE SHEET ACCOUNTS

Restricted cash:

	September 30,		December 31,
	2010		2009
	(unaudited)

Pledged for letters of credit	$	5,996,019	$	4,462,500

Bank guarantee to foreign government for export equipment	550,571		883,566

	$	6,546,590	$	5,346,066

Prepaid expenses and other current assets:

	September 30,		December 31,
	2010		2009
	(unaudited)

Mobilization costs, net	$	—	$	9,410,108

Prepaid expenses and other current assets	1,559,990		1,216,723

Note receivable, current portion	1,550,000		—

	$	3,109,990	$	10,626,831

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Accounts receivable:

	September 30,			December 31,
	2010			2009
	(unaudited)

Accounts receivable, trade	$	37,456,893		$	57,731,675

Unbilled	17,051,847			17,534,339

Allowance for doubtful accounts	(4,713,100		)	(1,697,830		)

	$	49,795,640		$	73,568,184

Included in accounts receivable at September 30, 2010 are net receivables aggregating approximately $5,900,000 from two customers. Such receivables are in dispute; however, management and outside legal counsel believe the Company has performed services in accordance with the terms of the contract and, as such, they are fully collectible. The Company is in negotiations/arbitration to recover such amounts. Bad debt expense for the three months ended September 30, 2010 and 2009 was $93,314 and $15,549, respectively, and $3,097,996 and $3,413,641 for the nine months ended September 30, 2010 and 2009, respectively.

Other:

	September 30,		December 31,
	2010		2009
	(unaudited)

Debt issuance costs, net	$	5,677,898	$	4,167,856

Note receivable, net of current portion	1,550,000		—

Non-current deferred tax asset	3,278,000		—

Other	1,377,486		2,136,714

	$	11,883,384	$	6,304,570

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NOTE 3 - MULTI-CLIENT LIBRARY

Multi-client library consisted of the following:

	September 30,		December 31,
	2010		2009
	(unaudited)

Multi-client library, at cost	$	225,558,422	$	75,169,326

Less: accumulated amortization	92,730,375		37,773,805

Multi-client library, net	$	132,828,047	$	37,395,521

Amortization expense for the three months ended September 30, 2010 and 2009 was $32,021,587 and $839,580, respectively, and $54,956,570 and $7,692,486 for the nine months ended September 30, 2010 and 2009, respectively.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30,		December 31,
	2010		2009
	(unaudited)

Furniture and fixtures	$	138,976	$	138,976
Boats	6,424,288		6,424,288
Machinery and equipment	278,261,735		270,210,793
Computers and software	10,041,470		9,177,907
Land	2,035,153		2,035,153
Buildings	11,721,548		11,721,548
	308,623,170		299,708,665
Less: accumulated depreciation	200,601,170		160,759,486
	108,022,000		138,949,179
Construction in process	3,475,295		1,268,774

Net property and equipment	$	111,497,295	$	140,217,953

Depreciation expense for the three months ended September 30, 2010 and 2009 was $13,212,943 and $15,500,940, respectively, and $42,242,432 and $45,271,103 for the nine months ended September 30, 2010 and 2009, respectively.

Disposals are removed at cost less accumulated depreciation with any resulting gain or loss reflected in income from operations within the statement of operations during the reporting period. During the three months ended September 30, 2010, the Company disposed of property and equipment, incurring a loss of $2,337,778 which is included in operating expenses.

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NOTE 5 - GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles included the following:

	September 30,		December 31,
	2010		2009
	(unaudited)

Customer list	$	3,934,000	$	3,934,000
Trademark	924,000		924,000
Patents	450,852		450,852
Non-compete agreements	200,000		200,000
	5,508,852		5,508,852
Less: accumulated amortization	1,290,648		877,099
	4,218,204		4,631,753
Goodwill	11,342,350		11,342,350

Total goodwill and other intangibles	$	15,560,554	$	15,974,103

Intangible assets subject to amortization are amortized over their estimated useful lives which are between two and fifteen years. Amortization expense for the three months ended September 30, 2010 and 2009 was $121,183 and $146,183, respectively, and $413,549 and $730,916 for the nine months ended September 30, 2010 and 2009, respectively.

NOTE 6 - INCOME TAXES

The Company provides for income taxes during interim periods based on an estimate of the effective tax rate for the year. Discrete items and changes in the estimate of the annual effective tax rate are recorded in the period in which they occur.

The Company assesses the likelihood that deferred tax assets will be recovered from the existing deferred tax liabilities or future taxable income in each jurisdiction. To the extent the Company believes that recovery is not likely, it establishes a valuation allowance. The Company has recorded valuation allowances in several non-US jurisdictions for its net deferred tax assets since management believes it is more likely than not that these assets will not be realized because the future taxable income necessary to utilize these losses cannot be established, projected, or the Company no longer has operations in these jurisdictions.

The effective income tax rate for the nine months ended September 30, 2010 and 2009 was 11.0% and 215.7%, respectively.

The Company’s effective income tax rate in 2010 and 2009 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from US operations, and valuation allowances in non-US jurisdictions.

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NOTE 7 — INITIAL PUBLIC OFFERING

On April 21, 2010, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Credit Suisse Securities (USA) LLC and Barclays Capital Inc., as representatives of the several underwriters named therein (collectively, the “Underwriters”), providing for the offer and sale in a firm commitment offering of 7,500,000 shares of the Company’s common stock, par value $0.01 (the “Common Stock”), of which 500,000 shares were sold by selling stockholders, at a public offering price of $12.00 per share. Pursuant to the Underwriting Agreement, the Company and the selling stockholders granted the Underwriters a 30-day option to purchase up to an additional 625,000 shares and 500,000 shares of Common Stock, respectively, to cover over-allotments, which subsequently expired without being exercised.

The transactions contemplated by the Underwriting Agreement were consummated on April 27, 2010. The Company’s net proceeds from this offering were approximately $76.4 million after deducting underwriting discounts, fees and offering expenses. As described in the Company’s final prospectus dated April 22, 2010 (the “Prospectus”) contained in its Registration Statement on Form S-1 (File No. 333-162540), the Company used the net proceeds of the offering to pay down indebtedness and will use the remaining proceeds for anticipated capital expenditures and general working capital purposes. The Company did not receive any of the proceeds from the sale of the Common Stock sold by the selling stockholders.

Upon completion of the initial public offering, all existing shares of the Company’s outstanding Class A and Class B common stock and the Company’s Series A convertible preferred stock were converted into one class of common stock (the “Stock Conversions”). Under the terms of its amended certificate of incorporation the Company is authorized to issue 105,000,000 shares of capital stock which consists of 100,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share.

NOTE 8 - LONG-TERM DEBT

Senior Notes: On April 22, 2010, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers (the “Initial Purchasers”), relating to the offer and sale by the Company of $200 million aggregate principal amount of its 10-1/2% senior notes due 2017 (the “Notes”). The Company’s net proceeds from the offering were approximately $188.1 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the Notes occurred on April 27, 2010. The Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and in offshore transactions in reliance on Regulation S under the Securities Act.

The Notes are a general unsecured, senior obligation of the Company. The Notes are unconditionally guaranteed as to principal, premium, if any, and interest by the Company’s domestic subsidiaries (the “Guarantors”) on a senior unsecured basis.

The Company used the proceeds from the offering and sale of the Notes to repay outstanding indebtedness and plans to use the remaining proceeds for anticipated capital expenditures and for general working capital purposes.

On April 27, 2010, in connection with the offering of the Notes, the Company entered into (i) an Indenture with The Bank of New York Mellon Trust Company, N.A., (the “Trustee”), and (ii) a Registration Rights Agreement with the Initial Purchasers. The following is a brief summary of the material terms and conditions of the Indenture and the Registration Rights Agreement.

The Company and the Guarantors entered into an Indenture with the Trustee, pursuant to which the Company issued the Notes at a price equal to 97.009% of their face value.

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Interest — The Notes will bear interest from April 27, 2010 at a rate of 10-1/2% per annum. The Company will pay interest on the Notes semi-annually, in arrears, on May 1 and November 1 of each year, beginning November 1, 2010.

Principal and Maturity — The Notes were issued with a $200 million aggregate principal amount and will mature on May 1, 2017.

Optional Redemption by the Company — At any time prior to May 1, 2013, the Company may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds of certain equity offerings at a redemption price of 110.500% of the aggregate principal amount of the Notes redeemed if at least 65% of the aggregate principal amount of the Notes remains outstanding immediately after such redemption and the redemption occurs within 90 days of the closing date of such equity offering. On or after May 1, 2014, the Company may redeem the Notes at the following percentages of the original principal amount: (i) 105.250% from May 1, 2014 to April 30, 2015; (ii) 102.625% from May 1, 2015 to April 30, 2016; and (iii) 100% from May 1, 2016 and thereafter.

Repurchase Obligations by the Company — If there is a change of control of the Company (as defined in the Indenture), each holder of the Notes may require the Company to purchase their Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

Events of Default — The Indenture also contains events of default including, but not limited to, the following: (i) nonpayment; (ii) defaults in certain other indebtedness of the Company or the Guarantors; and (iii) the failure of the Company or the Guarantors to comply with their respective covenants in the event of a mandatory redemption, optional redemption, option to repurchase, or a merger, consolidation or sale of assets. Upon an event of default, the holders of the Notes or the Trustee may declare the Notes due and immediately payable. As of September 30, 2010, the Company is in compliance with all respective covenants.

Bank of America Revolving Credit Facility: On April 30, 2010, the Company entered into a new revolving credit facility under the terms of a Credit Agreement (the “Revolving Credit Facility”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender from time to time party thereto. The Revolving Credit Facility provides for borrowings of up to $50.0 million. The loans under the Revolving Credit Facility bear interest at a rate equal to LIBOR plus the Applicable Rate or the Base Rate plus the Applicable Rate. The Base Rate is defined as the higher of (x) the prime rate and (y) the Federal Funds rate plus 0.50%. The Applicable Rate is defined as a percentage determined in accordance with a pricing grid based upon the Company’s leverage ratio, that will decline from LIBOR plus 4.00% or the prime rate plus 3.00% to a minimum rate equal to LIBOR plus 3.50% or the prime rate plus 2.50%. The Company is able to prepay borrowings under the Revolving Credit Facility at any time without penalty or premium, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The Company also will pay a commitment fee of 0.75% per annum on the actual daily unused portions of the Revolving Credit Facility.

The Company’s Revolving Credit Facility is secured by a first priority lien on substantially all of the Company’s assets, the assets of the Company’s non-foreign subsidiaries, the stock of the Company’s non-foreign subsidiaries and 66% of the stock of certain of the Company’s foreign subsidiaries. In addition, the Company’s non-foreign subsidiaries will guarantee the Company’s obligations under the Revolving Credit Facility.

The terms of the Revolving Credit Facility will limit the Company’s ability and the ability of certain of the Company’s subsidiaries to, among other things: incur or guarantee additional indebtedness; grant additional liens on the Company’s assets; make certain investments or certain acquisitions of substantially all or a portion of another entity’s business or assets; merge with another entity or dispose of the Company’s assets; pay dividends; enter into transactions with affiliates; engage in other lines of business and repurchase stock.

Additionally, the Revolving Credit Facility requires that the Company maintain certain ratios of total senior, secured debt to consolidated EBITDA (as defined therein), and of consolidated EBITDA to consolidated interest. The Revolving Credit Facility includes customary provisions with respect to events of default. Upon the occurrence and continuation of an event of default under the Revolving Credit Facility, the lenders will be able to, among other things, terminate their revolving loan commitments, accelerate the repayment of the loans outstanding and declare

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the same to be immediately due and payable. As of September 30, 2010, the Company is in compliance with all respective covenants.

In connection with the closing of the Company’s initial public offering and the sale of $200 million of the Company’s 10-1/2% senior notes due 2017 on April 27, 2010, the Company repaid all outstanding borrowings under the First Lien Credit Agreement, the Second Lien Credit Agreement, and the Construction Loan Agreement. These repayments resulted in the termination of each of these borrowing arrangements. The prepayment of the Construction Loan Agreement resulted in the incurrence of $160,000 in prepayment penalties.

Notes Payable - Insurance: During 2009, in exchange for insurance services provided, the Company issued two negotiable promissory notes for $1,602,706 and $453,220 at an interest rate of 3.69% per annum. The notes matured on March 8, 2010 and June 29, 2010, respectively, and have been paid in full.

Line of Credit: In February 2007, the Company entered into a $5 million revolving line of credit which is secured by $5 million cash. The terms of the revolving line of credit as currently written only allow for letters of credit to be drawn on the available credit, however, the cash balance above the total outstanding letters of credit may be withdrawn at any time lowering the available credit dollar-for-dollar. As of September 30, 2010, the line of credit serves as collateral for several letters of credit totaling $2,882,700.

Long-term debt consisted of the following:

	September 30,		December 31,
	2010		2009
	(unaudited)

Senior notes	$	200,000,000	$	—
First lien term loan	—		113,900,000
Second lien term loan	—		50,000,000
Notes payable - insurance	—		627,816
Mortgage	—		5,362,437
	200,000,000		169,890,253
Less: unamortized discount	5,735,127		2,112,313
	194,264,873		167,777,940
Less: current portion	—		1,983,282

Total notes payable and line of credit, net of current portion	$	194,264,873	$	165,794,658

Interest Rate Swap: On March 7, 2007, the Company entered into a $70 million notional value interest rate collar to protect its interests from unanticipated fluctuations in cash flows caused by volatility in the interest rate on its floating-rate debt. The 2 year swap arrangement effectively capped the 3-month LIBOR rate at 5.75% and set the floor at 4.55%. The interest rate swap was terminated on March 31, 2010.

NOTE 9 — FAIR VALUES OF FINANCIAL INSTRUMENTS

Effective January 1, 2009, the Company adopted guidance as it relates to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements.

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This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities are as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 — Inputs that are both significant to the fair value measurement and unobservable.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the financial instruments that could have been realized as of September 30, 2010 or that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement.

In the normal course of operations, the Company is exposed to market risks arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential for change in the fair value of debt instruments resulting from an adverse movement in interest rates.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate their fair value due to the short maturity of those instruments, and therefore, have been excluded from the table below. The fair value of the Notes is determined by multiplying the principal amount by the market price. The following table sets forth the fair value of the Company’s financial assets and liabilities as of September 30, 2010 and December 31, 2009:

	September 30, 2010				December 31, 2009
	(unaudited)
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value

Long-term debt	$	194,264,873	$	202,750,000	$	—	$	—

The Company is not a party to any hedge arrangements, commodity swap agreement or other derivative financial instruments.

The Company utilizes foreign subsidiaries and branches to conduct operations outside of the United States. These operations expose the Company to market risks from changes in foreign exchange rates.

NOTE 10 - - DEBT ISSUANCE COSTS

The costs related to the issuance of debt are capitalized and amortized to interest expense using the effective interest method over the maturity period of the related debt. Accumulated amortization is $1,566,138 and $1,159,580 at September 30, 2010 and December 31, 2009, respectively.

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The Company recognized a loss on the extinguishment of debt in the amount of $6,035,841, which consisted of $4,005,707 and $2,030,134 for the debt issuance costs and the unamortized portion of the original issue discount, respectively, related to the Company’s Prior Facilities upon refinancing with the Notes offering in April 2010.

NOTE 11 - - STOCK-BASED COMPENSATION

The Company follows the accounting guidance for share-based payments which requires all stock-based payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.

In July 2006, the Company’s board of directors and stockholders adopted the Global Geophysical Services, Inc. 2006 Incentive Compensation Plan (the “2006 Incentive Plan”). The 2006 Incentive Plan provides for a variety of incentive awards, including nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Internal Revenue Code, or (the “Code”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based awards, and other stock-based awards. A total of 9,203,058 shares of common stock are reserved for issuance under the 2006 Incentive Plan. As of September 30, 2010, a total of 4,681,400 options have been granted and 1,751,100 have been forfeited.

Incentive Stock Options: The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model. The volatility is based on expected volatility over the expected life of eighty-four months. As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model. The following assumptions were used:

	Nine Months
	Ended
	September 30, 2010

Risk-free interest rates	2.76	%
Expected lives (in years)	7.00
Expected dividend yield	0.00	%
Expected volatility	60.58	%

The computation of expected volatility during the nine months ended September 30, 2010 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

A summary of the activity of the Company’s stock option plan for the nine months ended September 30, 2010 is presented below:

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					Weighted			Weighted
	Weighted				Average			Average
	Average		Number of		Remaining	Aggregate		Optioned
	Exercise		Optioned		Contractual	Intrinsic		Grant Date
	Price		Shares		Term in Years	Value		Fair Value

Balance as of December 31, 2009	$	22.95	2,642,200		10	$	—	$	4.97
Expired			—
Granted	22.53		478,900		10	—		11.98
Exercised			—
Forfeited	22.70		(190,800	)	—	—		6.48

Balance as of September 30, 2010	$	22.90	2,930,300					$	6.02

Exercisable as of September 30, 2010	$	23.07	1,326,475		—	$	—	$	—

Compensation expense associated with stock options for the three months ended September 30, 2010 and 2009 was $434,025 and $195,809, respectively, and $1,196,010 and $520,981 for the nine months ended September 30, 2010 and 2009, respectively, is included in selling, general and administrative expenses in the statement of operations. At September 30, 2010 and 2009, the Company had 1,603,825 and 1,595,075 of nonvested stock option awards, respectively. The total cost of nonvested stock option awards which the Company had not yet recognized was approximately $4,344,000 at September 30, 2010. Such amount is expected to be recognized over a period of 4 years from September 30, 2010.

Stock Warrants: At September 30, 2010, the Company has outstanding warrants which entitle the holders to purchase an aggregate of 390,000 shares of common stock of the Company at an exercise price of $4.25 per share.

Restricted Stock: To encourage retention and performance, the Company granted certain employees and consultants restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable.

	Number of		Weighted
	Nonvested		Average
	Restricted		Grant Date
	Share Awards		Fair Value
Nonvested Restricted Shares Outstanding January 1, 2010	281,289		$	7.88
Granted	298,900		9.85
Vested	(87,438	)	5.07
Forfeited	(21,848	)	7.17

Nonvested Restricted Shares Outstanding September 30, 2010	470,903		$	9.69

Compensation / charitable contribution expense associated with restricted stock for the three months ended September 30, 2010 and 2009 was $416,080 and $186,384, respectively, and $1,115,210 and $582,339 for the nine months ended September 30, 2010 and 2009, respectively, is included in selling, general and administrative expenses in the statements of operations. The total cost of non-vested stock awards which the Company has not yet recognized at September 30, 2010 was approximately $3,271,000. This amount is expected to be recognized over the next three years.

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NOTE 12 - EARNINGS PER SHARE

The Company adopted the guidance for share-based payments which are considered as participating securities on January 1, 2009. Upon adoption, all share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2010			2009		2010			2009
	(Unaudited)					(Unaudited)

Net loss	$	(18,645,402	)	$	6,367,574	$	(37,947,318	)	$	1,651,068

Basic and diluted common shares outstanding	35,908,480			8,204,124		24,652,434			8,213,728

Basic and diluted (loss) income per share	$	(.52	)	$	.78	$	(1.54	)	$	.20

For the nine months ended September 30, 2010 and 2009, 2,930,300 and 2,449,000, respectively, out-of-the-money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

For the nine months ended September 30, 2010 and 2009, 390,000 and 0, respectively, stock warrants have been excluded from diluted earnings per share because they are considered anti-dilutive.

NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Month Period Ended September 30,
	2010		2009
	(unaudited)

Interest paid	$	5,788,141	$	11,794,044

Income taxes paid	$	3,495,631	$	3,559,375

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The following is supplemental disclosure of non-cash investing and financing activities:

	Nine Month Period Ended September 30,
	2010		2009
	(unaudited)

Property and equipment additions financed through capital leases	$	—	$	176,619

Property and equipment additions financed through accounts payable and accrued expenses	$	10,500,149	$	5,628,883

Option payable recorded against additional paid in capital	$	701,910	$	—

Note payable converted to preferred stock	$	—	$	8,000,000

Original issue discount on notes payable	$	5,982,000	$	—

Property and equipment sale financed through note receivable	$	3,100,000	$	—

Non-cash multi-client asset recorded as deferred revenue	$	4,428,599	$	—

NOTE 14 — RECENTLY ISSUED ACCOUNTING STANDARDS

There are no new accounting pronouncements that have a material impact on the Company’s consolidated financial statements.

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NOTE 15 — GUARANTEES OF REGISTERED SECURITIES

On August 3, 2010, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission. Under this registration statement, the Company exchanged $200 million of its publicly registered 10.50% senior notes due 2017 for a like amount of its privately placed 10.50% senior notes due 2017. The debt securities sold are fully and unconditionally guaranteed, on a joint and several basis, by the guarantor subsidiaries which will correspond to all subsidiaries located in the United States. The non-guarantor subsidiaries consist of all subsidiaries outside of the United States.

Separate condensed consolidating financial statement information for the guarantor subsidiaries and non-guarantor subsidiaries as of September 30, 2010 and December 31, 2009 and for the three and nine months ended September 30, 2010 and 2009 is as follows:

	September 30, 2010 (Unaudited)
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	136,672,036	$	23,975,461		$	(27,977,680	)	$	132,669,817
Property and equipment, net	111,089,702		407,593			—			111,497,295
Multi-client library, net	132,828,047		—			—			132,828,047
Investment in subsidiaries	1,099		—			(1,099		)	—
Intercompany accounts	16,466,157		(16,466,157		)	—			—
Other non-current assets	27,480,958		(37,020		)	—			27,443,938
TOTAL ASSETS	$	424,537,999	$	7,879,877		$	(27,978,779	)	$	404,439,097

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	111,102,050	$	24,275,118		$	(27,977,680	)	$	107,399,488
Long-term debt and capital lease obligations, net of current portion	194,264,873		—			—			194,264,873
Deferred income tax and other non-current liabilities	—		—			—			—
TOTAL LIABILITIES	305,366,923		24,275,118			(27,977,680		)	301,664,361

Stockholders’ equity	119,171,076		(16,395,241		)	(1,099		)	102,774,736
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	424,537,999	$	7,879,877		$	(27,978,779	)	$	404,439,097

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	December 31, 2009
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	82,022,731	$	56,456,406		$	(21,751,693	)	$	116,727,444
Property and equipment, net	138,394,183		1,823,770			—			140,217,953
Multi-client library, net	37,395,521		—			—			37,395,521
Investment in subsidiaries	1,099		—			(1,099		)	—
Intercompany accounts	37,679,846		(37,679,846		)	—			—
Other non-current assets	22,211,327		67,346			—			22,278,673
TOTAL ASSETS	$	317,704,707	$	20,667,676		$	(21,752,792	)	$	316,619,591

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	79,948,550	$	24,578,093		$	(21,751,693	)	$	82,774,950
Long-term debt and capital lease obligations, net of current portion	166,090,323		—			—			166,090,323
Deferred income tax and other non-current liabilities	3,826,131		—			—			3,826,131
TOTAL LIABILITIES	249,865,004		24,578,093			(21,751,693		)	252,691,404

Stockholders’ equity	67,839,703		(3,910,417		)	(1,099		)	63,928,187
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	317,704,707	$	20,667,676		$	(21,752,792	)	$	316,619,591

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	Three months ended September 30, 2010 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	60,679,392		$	1,427,755		$	(1,637,630	)	$	60,469,517

Expenses:
Operating expenses	51,437,628			3,996,278			(1,393,493		)	54,040,413
Selling, general and administrative expenses	8,937,310			1,490,112			(244,137		)	10,183,285
Total expenses	60,374,938			5,486,390			(1,637,630		)	64,223,698
Income (loss) from operations	304,454			(4,058,635		)	—			(3,754,181		)
Interest income (expense), net	(5,626,396		)	29			—			(5,626,367		)
Other expenses, net	(136,276		)	(7,981		)	—			(144,257		)
Loss before income taxes	(5,458,218		)	(4,066,587		)	—			(9,524,805		)
Provision for income taxes	9,104,750			15,847			—			9,120,597
Net loss	$	(14,562,968	)	$	(4,082,434	)	$	—		$	(18,645,402	)

	Three months ended September 30, 2009 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	79,874,377		$	15,093,712		$	(5,258,855	)	$	89,709,234

Expenses:
Operating expenses	57,837,193			20,139,555			(5,010,766		)	72,965,982
Selling, general and administrative expenses	5,130,626			2,235,063			(248,089		)	7,117,600
Total expenses	62,967,819			22,374,618			(5,258,855		)	80,083,582
Income (loss) from operations	16,906,558			(7,280,906		)	—			9,625,652
Interest expense, net	(3,644,998		)	—			—			(3,644,998		)
Other income (expenses), net	(332,689		)	112,484			—			(220,205		)
Income (loss) before income taxes	12,928,871			(7,168,422		)	—			5,760,449
Provision (benefit) for income taxes	(687,176		)	80,051			—			(607,125		)
Net income (loss)	$	13,616,047		$	(7,248,473	)	$	—		$	6,367,574

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	Nine months ended September 30, 2010 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	145,035,359		$	28,502,999		$	(12,297,456	)	$	161,240,902

Expenses:
Operating expenses	130,603,998			32,975,309			(11,462,248		)	152,117,059
Selling, general and administrative expenses	24,004,281			7,041,487			(835,208		)	30,210,560
Total expenses	154,608,279			40,016,796			(12,297,456		)	182,327,619
Loss from operations	(9,572,920		)	(11,513,797		)	—			(21,086,717		)
Interest income (expense), net	(15,635,719		)	49			—			(15,635,670		)
Other expenses, net	(5,746,515		)	(193,025		)	—			(5,939,540		)
Loss before income taxes	(30,955,154		)	(11,706,773		)	—			(42,661,927		)
Provision (benefit) for income taxes	(5,492,660		)	778,051			—			(4,714,609		)
Net loss	$	(25,462,494	)	$	(12,484,824	)	$	—		$	(37,947,318	)

	Nine months ended September 30, 2009 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	165,245,357		$	71,785,729		$	(22,793,982	)	$	214,237,104

Expenses:
Operating expenses	136,458,939			65,708,136			(22,086,624		)	180,080,451
Selling, general and administrative expenses	15,236,156			9,434,892			(707,358		)	23,963,690
Total expenses	151,695,095			75,143,028			(22,793,982		)	204,044,141
Income (loss) from operations	13,550,262			(3,357,299		)	—			10,192,963
Interest expense, net	(12,580,847		)	—			—			(12,580,847		)
Other income, net	903,502			56,745			—			960,247
Income (loss) before income taxes	1,872,917			(3,300,554		)	—			(1,427,637		)
Provision (benefit) for income taxes	(5,931,963		)	2,853,258			—			(3,078,705		)
Net income (loss)	$	7,804,880		$	(6,153,812	)	$	—		$	1,651,068

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	Nine months ended September 30, 2010 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	82,669,411		$	(162,770	)	$	—	$	82,506,641
Net cash provided by (used in) investing activities	(129,368,849		)	1,715,119			—		(127,653,730		)
Net cash provided by financing activities	91,326,980			—			—		91,326,980
Net increase in cash and cash equivalents	$	44,627,542		$	1,552,349		$	—	$	46,179,891

	Nine months ended September 30, 2009 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	51,608,681		$	(6,831,607	)	$	—	$	44,777,074
Net cash provided by (used in) investing activities	(31,527,661		)	362,312			—		(31,165,349		)
Net cash used in financing activities	(34,096,052		)	—			—		(34,096,052		)
Net decrease in cash and cash equivalents	$	(14,015,032	)	$	(6,469,295	)	$	—	$	(20,484,327	)

NOTE 16 - - SUBSEQUENT EVENTS

The Company evaluates events and transactions that occur after the balance sheet date but before the consolidated financial statements are issued. The Company evaluated such events and transactions through the date when the consolidated financial statements were filed electronically with the Securities and Exchange Commission.

Subsequent to September 30, 2010, the Company acquired a business for an aggregate purchase price of $5.5 million.

Subsequent to September 30, 2010, the Company cancelled certain operating leases and purchased the equipment from the lessor.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in combination with our Interim Financial Statements contained in this Form 10-Q and our Financial Statements for the year ended December 31, 2009 included in our Registration Statement on Form S-1 (File No. 333-162540).

Forward Looking Statements

Statements other than statements of historical fact included in this Form 10-Q that relate to forecasts, estimates or other expectations regarding future events regarding technological advancements and our financial position, business strategy and plans and objectives of our management for future operations, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us or our management, identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about business outlook for the year, backlog and bid activity, business strategy, and related financial performance and statements with respect to future events. Such forward-looking statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, industry conditions, market position, future operations, profitability, liquidity, backlog, capital resources and other information currently available to management and believed to be appropriate. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, the volatility of oil and natural gas prices, disruptions in the global economy, dependence upon energy industry spending, delays, reductions or cancellations of service contracts, high fixed costs of operations, weather interruptions, inability to obtain land access rights of way, industry competition, limited number of customers, credit risk related to our customers, asset impairments, the availability of capital resources, and operational disruptions. A discussion of these factors, including risks and uncertainties, is set forth under “Risk Factors” in our Registration Statement on Form S-1/A filed with the Securities and Exchange Commission. These forward-looking statements reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategies and liquidity. Although the Company believes that the expectations reflected in such statements are reasonable, the Company can give no assurance that such expectations will be correct. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. We assume no obligation to update any such forward-looking statements.

Backlog estimates are based on a number of assumptions and estimates including assumptions related to foreign exchange rates, proportionate performance of contracts and our valuation of assets, such as seismic data, to be received by us as payment under certain agreements. The realization of our backlog estimates are further affected by our performance under term rate contracts, as the early or late completion of a project under term rate contracts will generally result in decreased or increased, as the case may be, revenues derived from these projects. Contracts for services are occasionally modified by mutual consent and may be cancelable by the client under certain circumstances. Consequently, backlog as of any particular date may not be indicative of actual operating results for any future period.

Overview

We provide an integrated suite of seismic data solutions to the global oil and gas industry, including our high resolution RG-3D Reservoir Grade™ (“RG3D”) seismic solutions. Our seismic data solutions consist primarily of seismic data acquisition, processing and interpretation services. Through these services, we deliver data that enable the creation of high resolution images of the earth’s subsurface and reveal complex structural and stratigraphic details. These images are used primarily by oil and gas companies to identify geologic structures favorable to the accumulation of hydrocarbons, to reduce risk associated with oil and gas exploration, to optimize well completion techniques and to monitor changes in hydrocarbon reservoirs. We integrate seismic survey design, data acquisition, processing and interpretation to deliver enhanced services to our clients. In addition, we own and market a growing multi-client seismic data library and license this data to clients on a non-exclusive basis.

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Results of Operations

Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009 (unaudited)

The following table sets forth our consolidated revenues for the period indicated:

	Three Months Ended
	September 30,
	(unaudited)
	2010				2009
(Amounts in millions)	Amount		%		Amount		%
Seismic data services	$	18.3	30	%	$	89.6	100	%
Multi-client	42.2		70	%	0.1		0	%
Total	$	60.5	100	%	$	89.7	100	%

Revenues by Region

	Three Months Ended
	September 30,
	(unaudited)
	2010				2009
	Amount		%		Amount		%
US	$	43.5	72	%	$	70.5	79	%
Latin America	12.5		21	%	7.0		7	%
Europe, Africa, Middle East (EAME)	4.5		7	%	12.2		14	%
Asia Pacific	0.0		0	%	0.0		0	%
Total	$	60.5	100	%	$	89.7	100	%

Revenues. We recorded $60.5 million for the three months ended September 30, 2010 compared to $89.7 million for the corresponding period of the previous year, a decline of $29.2 million or 33%. The revenue decrease in the third quarter of 2010 compared to the same quarter of 2009 was primarily the result of a large proprietary project performed in 2009 in the US. This was offset by an increase in our multi-client revenues during this same period.

The Company’s proprietary seismic acquisition revenue totaled $18.3 million as compared to $89.6 million for the same period of 2009, a decrease of $71.3 million or 80%. The decrease in U.S. seismic acquisition revenue of $69.1 million is primarily a result of a shift from proprietary to multi-client demand in the North American unconventional resource plays.

International proprietary seismic acquisition revenues for the same period in 2010 declined $2.2 million or 12% compared to the same period in 2009. The revenues from our Europe, Africa and Middle East operations decreased by $7.7 million, primarily due to crew reductions in 2010, while the revenues from our Latin America increased by $5.5 million or 79% compared to the same period in 2009.

Our multi-client revenues increased to $42.2 million for the three months ended September 30, 2010 from $0.1 million. The $42.2 million in multi-client revenues included $36.0 million of pre-commitment revenue, $0.9 million of late sale revenue and $5.3 million in a data swap transaction. The increase was mainly the result of additional projects in Eagle Ford and Haynesville shale plays.

Operating expenses. Our operating expenses, excluding depreciation and amortization decreased by $47.9 million to $9.0 million for the three months ended September 30, 2010, a decrease of 84%. Operating expenses represented 14.9% of revenue for the third quarter 2010 compared to 63.4% in the same period of 2009. Multi-client costs are capitalized when incurred and later expensed through proportional performance in line with our multi-

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client revenue recognition. In the three months ended September 30, 2010, the company’s capitalized multi-client investments less depreciation was $52.2 million compared to $6.4 million in the same period in 2009. In the three months ended September 30, 2010, the company disposed of property and equipment incurring a loss of $2.4 million compared to nil in the same period of 2009.

Selling, General and Administrative Expenses. SG&A, excluding depreciation and amortization, increased by $3.1 million, or 46%, to $9.8 million for the quarter ended September 30, 2010. Our bad debt expense was $0.1 million for the three months ending September 30, 2010, compared to nil in the same period in 2009. Overall compensation and employee benefits increased by $1.3 million and legal fees increased by $0.4 million in the third quarter of 2010 attributable to our increase in sales and marketing staff and certain added costs related to being a public company.

Depreciation and Amortization Expenses. Depreciation and amortization expense combined increased by $28.9 million, or 175%, to $45.4 million for the three months ended September 30, 2010. Depreciation expense decreased by $2.3 million, or 15%, to $13.2 million at September 30, 2010 as some of our older equipment is becoming fully depreciated and capital investments in recent quarters has been less than our historical average. Multi-client amortization increased by $31.3 million, or 3913%, to $32.1 million as a result of the increase in multi-client data sales. Also included in our results is $4.6 million of additional amortization charge against our data library attributable to the weather related delays experienced in the first three quarters during 2010.

Interest Expense, Net. Interest expense, net, increased by $2.0 million, or 56%, to $5.6 million for the quarter ended September 30, 2010. The increase is a result of increases in borrowing costs from the issuance of $200 million, 10.5% senior notes.

Other Income (Expense), Net. Other income (expense), net, was a loss of $.01 million for the quarter ended September 30, 2010 compared to a loss of $0.2 million in the same quarter of 2009. The primary difference related to a foreign exchange loss in 2009 for $0.3 million versus nil in 2010.

Income Tax Expense (benefit). Our income tax expense for the three months ended September 30, 2010 was an expense of $9.1 million compared to a benefit of $0.6 million in the same period in 2009. The $9.1 million tax expense brings the full year estimated tax rate in line with the expected year end estimate. The Company’s effective income tax rate in 2010 and 2009 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from US operations, and valuation allowances in non-US jurisdictions.

EBITDA. We define EBITDA as net income before interest, taxes, depreciation and amortization. EBITDA is not a measure of financial performance derived in accordance with Generally Accepted Accounting Principles (GAAP) and should not be considered in isolation or as an alternative to net income as an indication of operating performance. The table below presents a reconciliation of EBITDA to net income (loss):

	Three Months Ended
	September 30,
(Amounts in millions)	2010			2009
Net (loss) income	$	(18.6	)	$	6.4
Interest expense, net	5.6			3.7
Income tax expense (benefit)	9.1			(0.6		)
Depreciation and amortization	47.7		(1)	16.5
EBITDA	$	43.8		$	26.0

(1) Includes $2.4 million loss on sale of assets

Our management believes EBITDA is useful to an investor in evaluating our operating performance because this measure is widely used by investors in the energy industry to measure a company’s operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon, among other factors, accounting methods, book value of assets, capital

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structure and the method by which assets were acquired. We believe EBITDA helps investors more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating structure. EBITDA is also used as a supplemental financial measure by our management in presentations to our board of directors, as a basis for strategic planning and forecasting, and as a component for setting incentive compensation.

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009 (unaudited)

The following table sets forth our consolidated revenues for the period indicated:

	Nine Months Ended
	September 30,
	(unaudited)
	2010				2009
(Amounts in millions)	Amount		%		Amount		%
Seismic data services	$	79.4	49	%	$	204.9	96	%
Multi-client	81.8		51	%	9.3		4	%
Total	$	161.2	100	%	$	214.2	100	%

Revenues by Region

	Nine Months Ended
	September 30,
	(unaudited)
	2010				2009
	Amount		%		Amount		%
US	$	89.3	56	%	$	119.5	56	%
Latin America	39.3		24	%	32.2		15	%
Europe, Africa, Middle East (EAME)	7.8		5	%	32.6		15	%
Asia Pacific	24.8		15	%	29.9		14	%
Total	$	161.2	100	%	$	214.2	100	%

Revenues. The revenue decrease of $53.0 million for the nine months ended September 30, 2010 compared to the same period of 2009 was primarily the result of program delays caused by adverse weather conditions, permit and access considerations, crew scheduling and program start-up cycles, and an overall slowdown in seismic demand.

The Company’s proprietary seismic acquisition revenue totaled $79.4 million for the nine months ended September 30, 2010 as compared to $204.9 million for the same period of 2009, a decrease of $125.5 million or 61%. The decrease in U.S. seismic acquisition revenue of $102.7 million is primarily a result of a shift from proprietary to multi-client demand in the North American unconventional resource plays.

International proprietary seismic acquisition revenues for the nine months ended September 30, 2010 declined $22.8 million, or 24%, compared to the same period in 2009. The revenues from our Europe, Africa and Middle East operations decreased by $24.8 million, primarily due to crew reductions in 2010, while the revenues from our Latin America and Asia Pacific operations increased by $7.1 million and decreased by $5.1 million, respectively.

Multi-client revenues increased to $81.8 million for the nine months ended September 30, 2010 from $9.3 million, an increase of $72.5 million.. The $81.8 million in multi-client revenues included $70.5 million of pre-commitment revenue, $5.7 million of late sale revenue and $5.6 million in data swap transactions. The increase was mainly the result of additional projects in Eagle Ford, Haynesville, and Bakken shale plays.

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Operating expenses. Our operating expenses, excluding depreciation and amortization decreased by $72.1 million to $55.6 million for the nine months ended September 30, 2010, a decrease of 57%. Operating expenses represented 34.5% of revenue for the first nine months of the year compared to 59.6% in the same period of 2009. Our Multi-client investment costs are up year over year. Multi-client costs are capitalized when incurred and later expensed through proportional performance in line with our multi-client revenue recognition. In the nine months ended September 30, 2010, the company’s capitalized multi-client investments less depreciation was $116.8 million compared to $18.5 million in the same period in 2009. Mobilization costs are capitalized when incurred and later expensed as data acquisition progresses which increased our operating expenses. For the nine months ended September 30, 2010, we recognized previously capitalized expenses of $9.4 million as compared to the same period in 2009 where we capitalized $8.9 million of expenses associated with crew mobilization. This had the effect of increasing operating costs by $18.3 million. In the nine months ended September 30, 2010, the company disposed of property and equipment incurring a loss of $2.3 million compared to nil in the same period of 2009.

Selling, General and Administrative Expenses. SG&A, excluding depreciation and amortization, increased by $6.6 million, or 29%, to $29.2 million for the nine months ended September 30, 2010. Our bad debt expense was $3.1 million for the nine months ending September 30, 2010, a decrease of $0.3 million compared to the same period in 2009. Overall compensation and employee benefits increased by $4.9 million and legal fees increased by $1.0 million for the nine months ended September 30, 2010 mainly attributable to our increase in sales and marketing staff and certain added costs related to being a public company.

Depreciation and Amortization Expenses. Depreciation and amortization expense combined increased by $43.9 million, or 82%, to $97.6 million for the nine months ended September 30, 2010. Depreciation expense decreased by $3.1 million, or 7%, to $42.2 million at September 30, 2010 as some of our older equipment is becoming fully depreciated and capital investments in recent quarters has been less than our historical average. Multi-client amortization increased by $47.3 million, or 614%, to $55.0 million as a result of the increase in multi-client data sales. Amortization related to intangible assets decreased $0.3 million, or 43%, to $0.4 million for the nine months ended September 30, 2010. Also included in our results is $4.6 million of additional amortization charge against our data library attributable to the weather related delays experienced in the first three quarters during 2010.

Interest Expense, Net. Interest expense, net, increased by $3.0 million, or 24%, to $15.6 million for the nine months ended September 30, 2010. The increase is a result of increases in borrowing costs from the issuance of $200 million, 10-1/2% senior notes.

Other Income (Expense), Net. Other income (expense), net, was a loss of $5.9 million for the nine months ended September 30, 2010 compared to a gain of $1.0 million in the same quarter of 2009. The carrying value of the interest rate hedge held as a requirement under our previous credit facility decreased by $0.2 million, or 40% to $0.3 million for the nine months ended September 30, 2010. In the nine month ended September 30, 2010 there was a $6.0 million loss attributable to the extinguishment of debt from the previous credit facility versus nil in the same period in 2009. In the nine month period ended September 30, 2010 we recorded a foreign exchange loss of $0.2 million compared to a gain of $0.5 million in the same period of 2009.

Income Tax Benefit. Our income tax expense for nine month ended September 30, 2010 was a benefit of $4.7 million compared to a benefit of $3.1 million at the period in 2009. The effective income tax rate for the nine month ended September 30, 2010 and 2009 was 11.0 % and 215.7% respectively. The Company’s effective income tax rate in 2010 and 2009 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from US operations, and valuation allowances in non-US jurisdictions.

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	Nine Months Ended
	September 30,
(Amounts in millions)	2010			2009
Net (loss) income	$	(37.9	)	$	1.7
Interest expense, net	21.6		(1)	12.6
Income tax benefit	(4.7		)	(3.1		)
Depreciation and amortization	99.9		(2)	53.7
EBITDA	$	78.9		$	64.9

(1) Includes $6.0 million loss on extinguishment of debt

(2) Includes $2.3 million loss on sale of assets

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated by the seismic data services and multi-client services we provide to our clients, debt and equity offerings, our revolving credit facility, and equipment financings such as capital leases. Our primary uses of capital include the acquisition of seismic data recording equipment, seismic vehicles and vessels, other equipment needed to outfit new crews and to enhance the capabilities of and maintain existing crews’ energy sources, and investments in multi-client data for our library. We also use capital to fund the working capital required to launch new crews and operate existing crews. Our cash position, consistent with our revenues, depends to a large extent on the level of demand for our services. Historically, we have supplemented cash from operations with borrowings under our Revolving Credit Facility periodically from time to time as the need arises.

As of September 30, 2010, we had available liquidity as follows:

(Amounts in millions)	September 30, 2010
Available cash	$	63.2
Undrawn borrowing capacity under Revolving Credit Facility	50.0
Net available liquidity	$	113.2

The following table summarizes the net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2010 and 2009:

	Nine Month Period Ended
	September 30,
(Amounts in millions)	2010		2009
Operating activities	82.5		44.8
Investing activities	(127.7	)	(31.2	)
Financing activities	91.3		(34.1	)

Operating Activities. Net cash provided by operating activities was $82.5 million for the nine months ended September 30, 2010 compared to $44.8 million for the nine months ended September 30, 2009, an increase of $37.7 million. The increase was largely driven by changes in depreciation and amortization expenses.

Investing Activities. Net cash used in investing activities was $127.7 million for the nine months ended September 30, 2010 compared to $31.2 million for the nine months ended September 30, 2009, an increase of $96.5 million. The increase was primarily the result of increased investment in our multi-client library. The following table sets forth our investment in our multi-client library for the period indicated:

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	Nine Month Period Ended
	September 30,
(Amounts in millions)	2010	2009
Cash investment in multi-client library assets	118.0	18.5
Capitalized depreciation (1)	22.3	2.2
Non-cash data exchange	10.1	0.0

	At September 30,
	2010		2009
Total capitalized investment at cost (cummulative, at period end)	$	225.5	$	75.2
Less: Accumulated amortization of multi-client library assets	92.7		37.8
Multi-client net book value (at period end)	$	132.8	$	37.4

(1) Represents capitalized cost of the equipment, owned or leased, and utilized in connection with multi-client seismic acquisition.

Financing Activities. Net cash provided by financing activities was $91.3 million in the nine months ended September 30, 2010 compared to net cash used in financing activities of $34.1 million in the nine months ended September 30, 2009, an increase of $125.4 million. The increase is primarily the result of our initial public offering and the sale of our $200 million 10-1/2% senior notes (described below).

Capital Resources. In connection with the closing of our initial public offering and the sale of our $200 million 10-1/2% senior notes due 2017 on April 27, 2010 (described below), we repaid all outstanding borrowings under our First Lien Credit Agreement, our Second Lien Credit Agreement, and our Construction Loan Agreement. These repayments resulted in the termination of each of these borrowing arrangements. The prepayment of our Construction Loan Agreement resulted in the incurrence of $160,000 in prepayment penalties. In addition, we repaid all outstanding capital lease commitments.

On April 22, 2010, we entered into a Purchase Agreement with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers (the “Initial Purchasers”), relating to the offer and sale by us of $200 million aggregate principal amount, 10-1/2% senior notes due May 1, 2017 (the “Notes”). We received net proceeds from the offering of approximately $188.1 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the Notes occurred on April 27, 2010. The Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and in offshore transactions in reliance on Regulation S under the Securities Act.

On April 27, 2010, we completed an initial public offering of our shares on the New York Stock Exchange. The net proceeds from this offering were approximately $76.4 million after deducting underwriting discounts, fees and offering expenses. As described in our final prospectus dated April 22, 2010 (the “Prospectus”) contained in our Registration Statement on Form S-1 (File No. 333-162540), we used the net proceeds of the offering to pay down indebtedness and the remaining proceeds will be used for anticipated capital expenditures and general working capital purposes. The Company will not receive any of the proceeds from the sale of the Common Stock sold by the selling stockholders.

On April 30, 2010, we completed the closing of a new revolving credit facility under the terms of a Credit Agreement (the “Revolving Credit Facility”) with Bank of America, N.A., as administrative agent for each lender party to the Revolving Credit Facility. Our Revolving Credit Facility provides for borrowings of up to $50.0 million. The loans under our Revolving Credit Facility bear interest at a rate equal to LIBOR plus the Applicable Rate or the Base Rate plus the Applicable Rate. The Base Rate is defined as the higher of (x) the prime rate and (y) the Federal Funds rate plus 0.50%. The Applicable Rate is defined as a percentage determined in accordance with a pricing grid based upon our leverage ratio, that will decline from LIBOR plus 4.00% or the prime rate plus 3.00% to a minimum rate equal to LIBOR plus 3.50% or the prime rate plus 2.50%. We are able to prepay borrowings under

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our Revolving Credit Facility at any time without penalty or premium, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. We also will pay a commitment fee of 0.75% per annum on the actual daily unused portions of the Revolving Credit Facility.

Capital Expenditures. Capital expenditures for the nine months ended September 30, 2010 were $126.6 million consisting of purchases of property and equipment of $8.6 million and investments in our multi-client library of $118.0 million.

Contractual Obligations

The following table summarizes the payments due in specific periods related to our contractual obligations as of September 30, 2010:

(Amounts in millions)	Total		Within 1 Year		1-3 Years		3-5 Years		After 5 Years

Debt obligations	$	200.0	$	0.0	$	0.0	$	0.0	$	200.0
Operating lease obligations	7.7		7.2		0.4		0.1		0.0
Option payable (1)	0.7		0.7		0.0		0.0		0.0
	$	208.4	$	7.9	$	0.4	$	0.1	$	200.0

(1) Represents an option to purchase from a former employee 46,794 shares of common stock at $15 per share

Off Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements.

Backlog

The Company’s Backlog as of September 30, 2010 was approximately $225 million compared to $145 million as of September 30, 2009. Backlog as of June 30, 2010 was approximately $179 million.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The primary sources of market risk are the volatility of oil and gas prices and the concentration of our clients in the oil and gas industry. The volatility of oil and gas prices may have a positive or negative effect on demand and pricing for our services. The concentration of substantially all of our clients in the oil and gas industry may have a positive or negative effect on our exposure to credit risk since all of our clients are similarly affected by changes in industry and economic conditions. We regularly maintain deposits in our bank accounts in excess of the $250,000 guaranteed by the Federal Deposit Insurance Corporation. We are subject to market risk exposure related to changes in interest rates on our outstanding floating rate debt. Borrowings under our Revolving Credit Facility bear floating-rate interest, at our option, based on LIBOR or the prime rate. We do not enter into interest rate hedges or other derivatives for speculative purposes.

Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of unsecured trade receivables. In the normal course of business, we provide credit terms to our clients. Accordingly, we perform ongoing credit evaluations of our clients and maintain allowances for possible losses.

We conduct business in many foreign countries. We are subject to foreign exchange risks because our contracts may, from time-to-time, be denominated in currencies other than the U.S. dollar while a significant portion of our

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operating expenses and income taxes accrue in other currencies. Movements in the exchange rates between the U.S. dollar and other currencies may adversely affect our financial results. Historically, we have not attempted to hedge foreign exchange risk. For the nine months ended September 30, 2010, approximately 19% of our revenues were recorded in foreign currencies, and we recorded net foreign exchange loss of $0.2 million, or 0.1% of revenues. We attempt to match our foreign currency revenues and expenses in order to balance our net position of receivables and payables in foreign currency. Nevertheless, during the past three years, foreign-denominated revenues have exceeded foreign-denominated payables primarily as a result of contract terms required by our national oil company clients. Our management believes that this will continue to be the case in the future.

Item 4. Controls and Procedures

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have performed an evaluation of the design, operation and effectiveness of the Company disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of September 30, 2010. Based on that evaluation, the Company’s principal executive and principal financial officers have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2010.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Neither the Company nor any of its subsidiaries is a party to any pending legal proceedings other than certain routine litigation that is incidental to the Company’s business and that the Company believes is unlikely to materially impact the Company. Moreover, the Company is not aware of any such legal proceedings that are contemplated by governmental authorities with respect to the Company, any of its subsidiaries, or any of their respective properties.

Item 1A. Risk Factors

There have been no material changes in the risk factors included in our Registration Statement on Form S-1 (File No. 333-162540).

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Exhibit No.		Description

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	GLOBAL GEOPHYSICAL SERVICES, INC.


Date: November 3, 2010	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer
	(Authorized Officer)


Date: November 3, 2010	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: November 3, 2010	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer

Date: November 3, 2010	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer

Dated: November 3, 2010	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009	1

Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2010 and 2009	3

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009	4

Consolidated Statements of Stockholders’ Equity	5

Notes to Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosure About Market Risk	31

Item 4. Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	32

Item 1A. Risk Factors	32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3. Defaults Upon Senior Securities	32

Item 4. Removed and Reserved	33

Item 5. Other Information	33

Item 6. Exhibits	33