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, 2011

[  ]          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    [x]                   No   [  ]

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    [x]                  No   [  ]

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 [  ] Accelerated filer [  ] Non-accelerated filer [x] Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes    [  ]                  No   [x]

At November 9, 2011, there were 37,014,627 shares of common stock, par value $0.01 per share, outstanding.

GLOBAL GEOPHYSICAL SERVICES, INC.

INDEX

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
Consolidated Balance Sheets as of  September 30, 2011 and  December 31, 2010	1
Consolidated Statements of Operations for the Three Month Period and Nine Month Period Ended September 30, 2011 and 2010	3
Consolidated Statements of Cash Flows for the Nine Month Period Ended September 30, 2011 and 2010	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	24
Item 3.  Quantitative and Qualitative Disclosure About Market Risk	35
Item 4.  Controls and Procedures	36
PART II.  OTHER INFORMATION
Item 1.  Legal Proceedings	36
Item 1A.  Risk Factors	36
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.  Defaults Upon Senior Securities	36
Item 4.  Removed and Reserved	36
Item 5.  Other Information	36
Item 6.  Exhibits	37

ii

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2011		2010
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,833,909	$	28,237,302
Restricted cash investments		5,646,240		2,443,857
Accounts receivable, net		107,837,971		69,509,391
Income and other taxes receivable		6,666,278		6,954,864
Prepaid expenses and other current assets		6,289,095		4,842,496
TOTAL CURRENT ASSETS		135,273,493		111,987,910
MULTI-CLIENT LIBRARY, net		223,529,721		145,896,355
PROPERTY AND EQUIPMENT, net		113,057,854		126,963,953
GOODWILL		12,380,964		12,380,964
INTANGIBLE ASSETS, net		10,512,789		7,870,811
OTHER		7,738,121		8,166,507
TOTAL ASSETS	$	502,492,942	$	413,266,500

See accompanying notes to consolidated financial statements.

1

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

	September 30,			December 31,
	2011			2010
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	56,491,891		$	44,058,306
Current portion of long-term debt		7,425,843			3,344,261
Current portion of capital lease obligations		5,755,638			-
Income and other taxes payable		3,256,698			5,601,356
Deferred revenue		47,323,149			47,496,895
Other payables		870,636			-
TOTAL CURRENT LIABILITIES		121,123,855			100,500,818
LONG-TERM DEBT, net of current portion and unamortized discount		265,703,148			209,418,242
CAPITAL LEASE OBLIGATIONS, net of current portion		3,029,987			-
NONCONTROLLING INTERESTS		1,358,383			1,490,745
OTHER LIABILITIES		750,000			-
TOTAL LIABILITIES		391,965,373			311,409,805
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common Stock, $.01 par value, authorized 100,000,000 shares, 46,603,114 and 45,586,215 issued and 36,958,497 and 36,142,985 outstanding at September 30, 2011 and December 31, 2010, respectively		466,031			455,862
Additional paid-in capital		244,408,332			239,248,935
Accumulated deficit		(37,887,783	)		(42,145,755	)
		206,986,580			197,559,042
Less: treasury stock, at cost, 9,644,617 and 9,443,230 shares at September 30, 2011 and December 31, 2010, respectively		96,459,011			95,702,347
TOTAL STOCKHOLDERS’ EQUITY		110,527,569			101,856,695
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	502,492,942		$	413,266,500

See accompanying notes to consolidated financial statements.

2

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Month Period Ended						Nine Month Period Ended
	September 30,						September 30,
	2011			2010			2011			2010
	(unaudited)						(unaudited)
REVENUES	$	110,127,691		$	60,469,517		$	272,263,468		$	161,240,902
OPERATING EXPENSES		88,132,332			54,040,413			209,206,662			152,018,068
GROSS PROFIT		21,995,359			6,429,104			63,056,806			9,222,834
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		11,228,816			10,183,285			33,465,236			30,210,560
INCOME (LOSS) FROM OPERATIONS		10,766,543			(3,754,181	)		29,591,570			(20,987,726	)
OTHER INCOME (EXPENSE)
Interest expense, net		(6,458,479	)		(5,626,367	)		(18,548,935	)		(15,635,670	)
Foreign exchange (loss) gain		(1,239,078	)		(44,028	)		462,245			(210,279	)
Loss on extinguishment of debt		-			-			-			(6,035,841	)
Other income (expense)		-			(100,229	)		(103	)		207,589
TOTAL OTHER EXPENSE		(7,697,557	)		(5,770,624	)		(18,086,793	)		(21,674,201	)
INCOME (LOSS) BEFORE INCOME TAXES		3,068,986			(9,524,805	)		11,504,777			(42,661,927	)
INCOME TAX EXPENSE (BENEFIT)		2,424,098			9,120,597			7,379,167			(4,714,609	)
INCOME (LOSS) AFTER INCOME TAXES		644,888			(18,645,402	)		4,125,610			(37,947,318	)
NET LOSS, attributable to noncontrolling interests		(238,523	)		-			(132,362	)		-
NET INCOME (LOSS), attributable to common shareholders	$	883,411		$	(18,645,402	)	$	4,257,972		$	(37,947,318	)
INCOME (LOSS) PER COMMON SHARE
Basic	$	.02		$	(.52	)	$	.12		$	(1.54	)
Diluted	$	.02		$	(.52	)	$	.12		$	(1.54	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		36,808,407			35,908,480			36,550,802			24,652,434
Diluted		36,808,778			35,908,480			36,552,712			24,652,434

See accompanying notes to consolidated financial statements.

3

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Month Period Ended
	September 30,
	2011			2010
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss), attributable to common shareholders	$	4,257,972		$	(37,947,318	)
Adjustments to reconcile net income (loss) to net cash  provided by operating activities:
Depreciation and amortization expense		117,857,551			97,612,551
Capitalized depreciation for Multi-client library		(13,428,649	)		(22,316,593	)
Amortization of debt issuance costs		964,974			735,610
Loss on extinguishment of debt		-			6,035,841
Noncontrolling interests		(132,362	)		-
Stock-based compensation		3,853,946			2,259,625
Non-cash charitable contribution		154,784			51,595
Non-cash revenue from Multi-client data exchange		(2,015,697	)		(5,650,101	)
Deferred tax expense (benefit)		660,174			(7,104,131	)
Unrealized gain on derivative instrument		-			(331,163	)
(Gain) loss on disposal of property and equipment		(1,469,344	)		2,337,778
Effects of changes in operating assets and liabilities:
Accounts receivable, net		(38,328,580	)		23,772,544
Prepaid expenses and other current assets		(1,521,599	)		9,066,841
Other assets		321,366			759,228
Accounts payable and accrued expenses		7,772,056			11,058,494
Deferred revenue		(108,220	)		438,825
Income and other taxes receivable		288,586			148,657
Income and other taxes payable and other payables		(2,236,642	)		1,578,358
NET CASH PROVIDED BY OPERATING ACTIVITIES		76,890,316			82,506,641
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(16,838,097	)		(8,632,772	)
Investment in Multi-client library		(144,554,112	)		(117,993,803	)
Change in restricted cash investments		(3,202,383	)		(1,200,524	)
Purchase of business		(1,035,386	)		-
Proceeds from the sale of property and equipment		13,093,815			173,369
NET CASH USED IN INVESTING ACTIVITIES		(152,536,163	)		(127,653,730	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of discount		11,208,978			194,018,000
Principal payments on long-term debt		(7,327,396	)		(169,890,253	)
Net proceeds on revolving credit facility		55,000,000			-
Debt issuance costs		-			(5,922,307	)
Principal payments on capital lease obligations		(2,591,306	)		(2,063,018	)
Purchase of treasury stock		(756,664	)		(1,250,260	)
Issuances of stock, net		708,842			76,434,818
NET CASH PROVIDED BY FINANCING ACTIVITIES		56,242,454			91,326,980
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(19,403,393	)		46,179,891
CASH AND CASH EQUIVALENTS, beginning of period		28,237,302			17,026,865
CASH AND CASH EQUIVALENTS, end of period	$	8,833,909		$	63,206,756

See accompanying notes to consolidated financial statements.

4

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

			Additional								Total
	Common		Paid-in		Treasury			Accumulated			Stockholders'
	Stock		Capital		Stock			Deficit			Equity
Balances at December 31, 2010	$	455,862	$	239,248,935	$	(95,702,347	)	$	(42,145,755	)	$	101,856,695
Issuance of common stock		10,169		448,756		-			-			458,925
Compensation expense associated with stock grants		-		3,853,946		-			-			3,853,946
Charitable contribution expense associated with stock grant		-		154,784		-			-			154,784
				.
Put option liability		-		701,911		-			-			701,911
Purchase of treasury stock		-		-		(756,664	)		-			(756,664	)
Net income		-		-		-			4,257,972			4,257,972
Balances at September 30, 2011	$	466,031	$	244,408,332	$	(96,459,011	)	$	(37,887,783	)	$	110,527,569

See accompanying notes to consolidated financial statements.

5

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, 2010.  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, 2010.

NOTE 2 - SELECTED BALANCE SHEET ACCOUNTS

Restricted cash investments:

	September 30,		December 31,
	2011		2010
	(unaudited)
Pledged for letters of credit	$	5,646,240	$	2,443,857

Prepaid expenses and other current assets:

	September 30,		December 31,
	2011		2010
	(unaudited)
Mobilization costs, net	$	4,091,961	$	1,368,858
Prepaid expenses and other current assets		1,553,134		923,638
Note receivable, current portion		644,000		2,550,000
	$	6,289,095	$	4,842,496

6

Accounts receivable, net:

	September 30,			December 31,
	2011			2010
	(unaudited)
Accounts receivable, net	$	66,258,855		$	47,775,478
Unbilled		45,063,728			25,218,525
Allowance for doubtful accounts		(3,484,612	)		(3,484,612	)
	$	107,837,971		$	69,509,391

The Company sometimes experiences disagreements or disputes with customers relating to the Company's charges. As of September 30, 2011, the Company had disputes with certain customers which relate to charges for the Company's services. Included in accounts receivable at September 30, 2011 are net receivables of approximately $4,800,000 related to such disputes. If the amount ultimately recovered with respect to any of these disputes is less than the revenue previously recorded, the difference will be recorded as an expense. None of these are expected to have a materially adverse effect on the Company's earnings. Bad debt expense for the three months ended September 30, 2011 and 2010 was $0 and $93,314, respectively, and $0 and $3,097,996 for the nine months ended September 30, 2011 and 2010, respectively.

Other:

	September 30,		December 31,
	2011		2010
	(unaudited)
Debt issuance costs, net	$	5,045,992	$	5,526,060
Deferred tax asset		1,370,874		2,031,048
Investment in unconsolidated subsidiary		958,222		-
Other		363,033		609,399
	$	7,738,121	$	8,166,507

7

NOTE 3 - MULTI-CLIENT SERVICES LIBRARY

Multi-client Services library consisted of the following:

	September 30,		December 31,
	2011		2010
	(unaudited)
Multi-client library, at cost	$	435,347,296	$	276,372,586
Less: accumulated amortization		211,817,575		130,476,231
Multi-client library, net	$	223,529,721	$	145,896,355

Amortization expense for the three months ended September 30, 2011 and 2010 was $29,486,159 and $32,021,587, respectively, and $81,341,344 and $54,956,570 for the nine months ended September 30, 2011 and 2010, respectively.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30,		December 31,
	2011		2010
	(unaudited)
Machinery and equipment	$	315,239,933	$	300,785,427
Computers and software		15,951,986		10,134,094
Buildings		13,600,605		11,721,548
Boats		7,174,287		7,174,287
Land		2,035,153		2,035,153
Furniture and fixtures		215,854		138,976
		354,217,818		331,989,485
Less: accumulated depreciation		244,618,241		214,156,447
		109,599,577		117,833,038
Construction in process		3,458,277		9,130,915
Property and equipment, net	$	113,057,854	$	126,963,953

8

The following tables represent an analysis of depreciation expense:

	Three Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Gross depreciation expense	$	11,185,927	$	13,212,943
Less: capitalized depreciation for Multi-client library		4,230,471		10,282,418
Net depreciation expense	$	6,955,456	$	2,930,525

	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Gross depreciation expense	$	35,158,185	$	42,242,432
Less: capitalized depreciation for Multi-client library		13,428,649		22,316,593
Net depreciation expense	$	21,729,536	$	19,925,839

NOTE 5 - GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles included the following:

	September 30,		December 31,
	2011		2010
	(unaudited)
Customer list	$	3,984,000	$	3,934,000
Trademark		1,679,000		1,191,000
Patents		3,912,853		450,853
Non-compete agreements		865,539		865,539
Intellectual property		2,901,163		2,901,163
		13,342,555		9,342,555
Less: accumulated amortization		2,829,766		1,471,744
		10,512,789		7,870,811
Goodwill		12,380,964		12,380,964
Total goodwill and other intangibles	$	22,893,753	$	20,251,775

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, 2011 and 2010 was $456,402 and $121,183, respectively, and $1,358,022 and $413,549 for the nine months ended September 30, 2011 and 2010, respectively. Several immaterial acquisitions were made in the nine month period resulting in an increase of intangibles.

9

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, 2011 and 2010 was 64.1% and 11.1%, respectively.

The Company’s effective income tax rate in 2011 and 2010 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.

NOTE 7 - 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 10.5% 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. (See Note 15)

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.

Interest — The Notes will bear interest from April 27, 2010 at a rate of 10.5% 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.

10

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, 2011, the Company is in compliance with all respective covenants.

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 $876,316 and $396,248 at September 30, 2011 and December 31, 2010, respectively.

Bank of America Revolving Credit Facility: On April 30, 2010, the Company entered into a 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 provided for borrowings of up to $50.0 million. On June 9, 2011, the Company amended the Revolving Credit Facility to provide for borrowings of up to $70.0 million under substantially similar terms. 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 pays 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 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.

11

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 the same to be immediately due and payable. As of September 30, 2011, the Company was 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 10.5% 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.

Promissory Notes: In April 2011, in exchange for insurance services provided, the Company issued two negotiable promissory notes for $1,360,642 and $512,005 at interest rates of 3.05% and 3.19% per annum, respectively. The notes are due March 21, 2012 and January 8, 2012, respectively.

In June 2011, the Company issued three promissory notes to three financial institutions in Colombia for $3,193,880 at interest rates ranging from 6.7% to 7.2%. The notes were paid in full in August 2011. During the third quarter of 2011 the Company issued four promissory notes to three financial institutions in Colombia for $6,142,452 at interest rates ranging from 7.8% to 9.2%. The notes are due in February and March 2012 for $3,784,002 and $2,358,450, respectively.

Letter of Credit Facility:  In February 2007, the Company entered into a $10 million revolving line of credit which is secured by restricted cash.  The terms of the letter of credit facility as currently written only allow for letters of credit to be drawn on the available credit; however, the cash balance in excess of the total outstanding letters of credit may be withdrawn at any time.  As of September 30, 2011 and December 31, 2010, the letters of credit outstanding were $5,121,061 and $2,432,700, respectively.

Long-term debt consisted of the following:

	September 30,		December 31,
	2011		2010
	(unaudited)
Senior notes	$	200,000,000	$	200,000,000
Revolving credit facility		70,000,000		15,000,000
Promissory notes		7,391,452		3,344,261
Notes payable - insurance		834,391		-
		278,225,843		218,344,261
Less:  unamortized discount		5,096,852		5,581,758
		273,128,991		212,762,503
Less:  current portion		7,425,843		3,344,261
Long-term debt, net of current portion and unamortized discount	$	265,703,148	$	209,418,242

12

NOTE 8 – CAPITAL LEASE

In April 2011, the Company entered into a sale and leaseback transaction for certain seismic equipment that is accounted for as a capital lease, with an interest rate of 5.25% per year. The Company received proceeds of $7,715,520 and will make monthly payments until the maturity date of May 2013. The balance as of September 30, 2011 is $5,149,214. In September 2011, the Company entered into another sale and leaseback transaction for certain computer equipment and vehicles that are accounted for as a capital lease, with an interest rate of 5.44% per year. The Company received proceeds of $4,000,995 and will make monthly payments until the maturity date of September 2013. The balance as of September 30, 2011 was $3,636,411.

NOTE 9 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows current 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.

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, 2011 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 current 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, 2011 and December 31, 2010:

13

 

		September 30, 2011				December 31, 2010
		(unaudited)
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Long-term debt	$	194,903,148	$	193,250,000	$	194,418,242	$	198,250,000

The Company is not a party to any hedge arrangements, commodity swap agreements 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 - STOCK-BASED COMPENSATION

The Company follows the current 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, 2011, a total of 4,830,400 options have been granted and 2,297,500 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,
	2011			2010
Risk-free interest rates		2.68	%		2.76	%
Expected lives (in years)		7.00			7.00
Expected dividend yield		0.00	%		0.00	%
Expected volatility		59.08	%		60.58	%

The computation of expected volatility during the nine months ended September 30, 2011 and 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.

14

A summary of the activity of the Company’s stock option plan for the nine months ended September 30, 2011 is presented below:

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned
	Exercise		Optioned			Contractual		Grant Date
	Price		Shares			Term in Years		Fair Value
Balance as of December 31, 2010	$	22.93		2,884,100				$	6.04
Expired		-		-					-
Granted		21.92		65,000					13.49
Exercised		-		-					-
Forfeited		23.03		(416,200	)				8.19
Balance as of September 30, 2011	$	22.89		2,532,900			6.91	$	5.88
Exercisable as of September 30, 2011	$	22.99		1,724,150			6.82	$	4.26

Compensation expense associated with stock options for the three months ended September 30, 2011 and 2010 was $421,752 and $434,025, respectively, and $1,331,331 and $1,196,010 for the nine months ended September 30, 2011 and 2010, respectively, and is included in selling, general and administrative expenses in the statements of operations. At September 30, 2011 and 2010, the Company had 808,750 and 1,603,825 of nonvested stock option awards, respectively. The total cost of nonvested stock option awards which the Company had not yet recognized was approximately $3,082,000 at September 30, 2011.  Such amount is expected to be recognized over a period of 4 years from September 30, 2011.

Stock Warrants:  In July 2011, the holder of the Company’s 390,000 outstanding warrants exercised them in a cashless transaction, with 295,984 net shares being transferred to the holder.

       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 December 31, 2010		595,053		$	9.90
Granted		690,350			11.70
Vested		(130,479	)		8.67
Forfeited		(154,593	)		11.07
Nonvested restricted shares outstanding September 30, 2011		1,000,331		$	11.12

Compensation / charitable contribution expense associated with restricted stock for the three months ended September 30, 2011 and 2010 was $1,001,255 and $416,080, respectively, and $2,677,400 and $1,115,210 for the nine months ended September 30, 2011 and 2010, respectively, and 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, 2011 was approximately $8,012,000. This amount is expected to be recognized over the next three years.

15

Employee Stock Purchase Plan: During the third quarter of 2011, the Company launched an Employee Stock Purchase Plan (ESPP). Under the terms of the ESPP, employees can choose to have a portion of their earnings withheld, subject to certain restrictions, to purchase the Company's common stock. The purchase price of the stock is 85% of the lower of the stock price at the beginning or end of the plan period at three-month intervals.

NOTE 11 - EARNINGS PER SHARE

The Company follows current guidance for share-based payments which are considered as participating securities. 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 Month Period Ended					Nine Month Period Ended
	September 30,					September 30,
	2011		2010			2011		2010
	(unaudited)					(unaudited)
Net income (loss), attributable to common shareholders	$	883,411	$	(18,645,402	)	$	4,257,972	$	(37,947,318	)
Basic
Weighted average shares outstanding:		36,808,407		35,908,480			36,550,802		24,652,434
Diluted
Shares issuable from the assumed conversion of stock options		371		-			1,910		-
Total		36,808,778		35,908,480			36,552,712		24,652,434
Basic income (loss) per share	$	.02	$	(.52	)	$	.12	$	(1.54	)
Diluted income (loss) per share	$	.02	$	(.52	)	$	.12	$	(1.54	)

For the three and nine months ended September 30, 2011, 2,513,900 out-of-the-money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

For the three and nine months ended September 30, 2010, 2,930,300 stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

Due to the net loss for the three and nine months ended September 30, 2010, 390,000 in-the-money stock warrants have been excluded from diluted earnings per share because they are considered anti-dilutive.

16

NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information:

	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Interest paid	$	12,095,291	$	5,788,141
Income taxes paid	$	6,718,993	$	3,495,631

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

	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Property and equipment additions financed through accounts payable and accrued expenses	$	4,661,529	$	10,500,149
Option payable recorded against additional paid in capital	$	-	$	701,910
Property and equipment sale financed through note receivable	$	644,000	$	3,100,000
Non-cash Multi-client asset recorded as deferred revenue	$	65,526	$	4,428,599
Note payable related to purchase of business	$	1,000,000	$	-
Original issue discount on notes payable	$	-	$	5,982,000
Investment in unconsolidated subsidiaries	$	958,222	$	-
Property and equipment additions financed through capital leases	$	11,376,931	$	-

17

NOTE 13 – SEGMENT INFORMATION

The Company has two reportable segments: Proprietary Services and Multi-client Services.

The following table sets forth significant information concerning the Company’s reportable segments as of and for the three months and nine months ended September 30, 2011 and 2010:

	As of and for the Three Month Period Ended September 30, 2011 (unaudited)
	Proprietary Services			Multi-Client Services		Corporate			Total
Revenues	$	60,139,931		$	49,987,760	$	-		$	110,127,691
Income (loss) before income taxes	$	(5,343,878	)	$	16,239,645	$	(7,826,781	)	$	3,068,986
Income tax expense	$	2,561,373		$	-	$	(137,275	)	$	2,424,098
Net loss, attributable to noncontrolling interests	$	-		$	-	$	(238,523	)	$	(238,523	)
Net income (loss), attributable to common shareholders	$	(7,905,251	)	$	16,239,645	$	(7,450,983	)	$	883,411
Total assets	$	70,079,993		$	272,434,138	$	159,978,811		$	502,492,942
	As of and for the Three Month Period Ended September 30, 2010 (unaudited)
	Proprietary Services			Multi-Client Services		Corporate			Total
Revenues	$	18,324,307		$	42,145,210	$	-		$	60,469,517
Income (loss) before income taxes	$	(4,977,974	)	$	4,956,135	$	(9,502,966	)	$	(9,524,805	)
Income tax expense	$	551,893		$	-	$	8,568,704		$	9,120,597
Net income (loss), attributable to common shareholders	$	(5,529,867	)	$	4,956,135	$	(18,071,670	)	$	(18,645,402	)
Total assets	$	35,816,570		$	158,504,492	$	210,118,035		$	404,439,097

	As of and for the Nine Month Period Ended September 30, 2011 (unaudited)
	Proprietary Services			Multi-Client Services		Corporate			Total
Revenues	$	145,629,326		$	126,634,142	$	-		$	272,263,468
Income (loss) before income taxes	$	2,803,202		$	32,292,881	$	(23,591,306	)	$	11,504,777
Income tax expense	$	6,199,529		$	-	$	1,179,638		$	7,379,167
Net loss, attributable to noncontrolling interests	$	-		$	-	$	(132,362	)	$	(132,362	)
Net income (loss), attributable to common shareholders	$	(3,396,327	)	$	32,292,881	$	(24,638,582	)	$	4,257,972
Total assets	$	70,079,993		$	272,434,138	$	159,978,811		$	502,492,942
	As of and for the Nine Month Period Ended September 30, 2010 (unaudited)
	Proprietary Services			Multi-Client Services		Corporate			Total
Revenues	$	79,440,093		$	81,800,809	$	-		$	161,240,902
Income (loss) before income taxes	$	(27,068,302	)	$	14,870,232	$	(30,463,857	)	$	(42,661,927	)
Income tax expense (benefit)	$	2,506,988		$	-	$	(7,221,597	)	$	(4,714,609	)
Net income (loss), attributable to common shareholders	$	(29,575,290	)	$	14,870,232	$	(23,242,260	)	$	(37,947,318	)
Total assets	$	35,816,570		$	158,504,492	$	210,118,035		$	404,439,097

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NOTE 14 – RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS,” (“ASU 2011-04”). ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively. ASU 2011-04 will be effective for interim and annual periods beginning after Dec. 15, 2011, with early adoption permitted. We believe that the adoption of this standard will not materially expand our consolidated financial statement footnote disclosures.

In September 2011, the FASB issued Accounting Standards Update No.  2011-08, “Testing Goodwill for Impairment (Topic 350):  Intangibles—Goodwill and Other” (“ASU 2011-08”).  ASU 2011-08 amends current goodwill impairment testing guidance by providing entities with an option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 will become effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011; however, early adoption is permitted.  We believe that this pronouncement will not have a material effect on our results of operations, financial condition, or cash flows.

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.

19

Separate condensed consolidating financial statement information for the guarantor subsidiaries and non-guarantor subsidiaries as of September 30, 2011 and December 31, 2010 and for the three and nine months ended September 30, 2011 and 2010 is as follows:

	As of September 30, 2011 (Unaudited)
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	135,148,200	$	51,496,285		$	(51,370,992	)	$	135,273,493
Multi-client library, net		223,529,721		-			-			223,529,721
Property and equipment, net		110,068,644		2,989,210			-			113,057,854
Investment in subsidiaries		1,099		-			(1,099	)		-
Intercompany accounts		33,721,264		(33,721,264	)		-			-
Other non-current assets		30,480,862		151,012			-			30,631,874
TOTAL ASSETS	$	532,949,790	$	20,915,243		$	(51,372,091	)	$	502,492,942
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	119,170,085	$	53,324,762		$	(51,370,992	)	$	121,123,855
Long-term debt and capital lease      obligations, net of current portion and      unamortized discount		268,733,135		-			-			268,733,135
Deferred income tax and other      non-current liabilities		2,108,383		-			-			2,108,383
TOTAL LIABILITIES		390,011,603		53,324,762			(51,370,992	)		391,965,373
Stockholders' equity		142,938,187		(32,409,519	)		(1,099	)		110,527,569
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	532,949,790	$	20,915,243		$	(51,372,091	)	$	502,492,942
	As of December 31, 2010
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	116,600,714	$	26,123,142		$	(30,735,946	)	$	111,987,910
Multi-client library, net		145,896,355		-			-			145,896,355
Property and equipment, net		125,342,454		1,621,499			-			126,963,953
Investment in subsidiaries		1,099		-			(1,099	)		-
Intercompany accounts		17,325,928		(17,325,928	)		-			-
Other non-current assets		28,403,426		14,856			-			28,418,282
TOTAL ASSETS	$	433,569,976	$	10,433,569		$	(30,737,045	)	$	413,266,500
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	98,383,785	$	32,852,979		$	(30,735,946	)	$	100,500,818
Long-term debt and capital lease      obligations, net of current portion and      unamortized discount		209,418,242		-			-			209,418,242
Deferred income tax and other non-current liabilities		1,490,745		-			-			1,490,745
TOTAL LIABILITIES		309,292,772		32,852,979			(30,735,946	)		311,409,805
Stockholders' equity		124,277,204		(22,419,410	)		(1,099	)		101,856,695
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	433,569,976	$	10,433,569		$	(30,737,045	)	$	413,266,500

20

	Three Month Period Ended September 30, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	83,697,333		$	29,746,731		$	(3,316,373	)	$	110,127,691
Expenses:
Operating expenses		60,784,083			30,398,002			(3,049,753	)		88,132,332
Selling, general and administrative expenses		8,100,650			3,394,786			(266,620	)		11,228,816
Total expenses		68,884,733			33,792,788			(3,316,373	)		99,361,148
Income (loss) from operations		14,812,600			(4,046,057	)		-			10,766,543
Interest (expense) income, net		(6,459,807	)		1,328			-			(6,458,479	)
Other expense, net		(258,581	)		(980,497	)		-			(1,239,078	)
Income (loss) before income taxes		8,094,212			(5,025,226	)		-			3,068,986
Income tax expense		1,545,449			878,649			-			2,424,098
Income (loss) after income taxes		6,548,763			(5,903,875	)		-			644,888
Net loss, attributable to noncontrolling interests		(238,523	)		-			-			(238,523	)
Net income (loss), attributable to common shareholders	$	6,787,286		$	(5,903,875	)	$	-		$	883,411
	Three Month Period 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
Loss from operations		304,454			(4,058,635	)		-			(3,754,181	)
Interest (expense) income, 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	)
Income tax expense (benefit)		9,104,750			15,847			-			9,120,597
Net loss, attributable to common shareholders	$	(14,562,968	)	$	(4,082,434	)	$	-		$	(18,645,402	)

21

	Nine Month Period Ended September 30, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	224,035,505		$	54,989,286		$	(6,761,323	)	$	272,263,468
Expenses:
Operating expenses		160,631,682			54,559,716			(5,984,736	)		209,206,662
Selling, general and administrative expenses		26,267,006			7,974,817			(776,587	)		33,465,236
Total expenses		186,898,688			62,534,533			(6,761,323	)		242,671,898
Income (loss) from operations		37,136,817			(7,545,247	)		-			29,591,570
Interest (expense) income, net		(18,561,829	)		12,894			-			(18,548,935	)
Other income (expense), net		1,225,266			(763,124	)		-			462,142
Income (loss) before income taxes		19,800,254			(8,295,477	)		-			11,504,777
Income tax expense		5,684,535			1,694,632			-			7,379,167
Income (loss) after income taxes		14,115,719			(9,990,109	)		-			4,125,610
Net loss, attributable to noncontrolling interests		(132,362	)		-			-			(132,362	)
Net income (loss), attributable to common shareholders	$	14,248,081		$	(9,990,109	)	$	-		$	4,257,972
	Nine Month Period 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		130,505,007			32,975,309			(11,462,248	)		152,018,068
Selling, general and administrative expenses		24,004,281			7,041,487			(835,208	)		30,210,560
Total expenses		154,509,288			40,016,796			(12,297,456	)		182,228,628
Loss from operations		(9,473,929	)		(11,513,797	)		-			(20,987,726	)
Interest (expense) income, net		(15,635,719	)		49			-			(15,635,670	)
Other income (expenses), net		(5,845,506	)		(193,025	)		-			(6,038,531	)
Loss before income taxes		(30,955,154	)		(11,706,773	)		-			(42,661,927	)
Income tax expense (benefit)		(5,492,660	)		778,051			-			(4,714,609	)
Net loss, attributable to common shareholders	$	(25,462,494	)	$	(12,484,824	)	$	-		$	(37,947,318	)

22

	Nine Month Period Ended September 30, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	78,129,883		$	(1,239,567	)	$	-	$	76,890,316
Net cash used in investing activities		(151,198,657	)		(1,337,506	)		-		(152,536,163	)
Net cash provided by financing activities		56,242,454			-			-		56,242,454
Net decrease in cash and cash equivalents	$	(16,826,320	)	$	(2,577,073	)	$	-	$	(19,403,393	)
	Nine Month Period 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 (used in) provided by investing activities		(129,368,849	)		1,715,119			-		(127,653,730	)
Net cash used in financing activities		91,326,980			-			-		91,326,980
Net increase in cash and cash equivalents	$	44,627,542		$	1,552,349		$	-	$	46,179,891

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.

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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, 2010 included in our form 10-K (Commission file number: 001-34709).

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 form 10-K (Commission file number: 001-34709) 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.

Our backlog estimates represent those seismic data acquisition projects for which a client has executed a contract and has a scheduled start date for the project as well as unrecognized pre-committed funding from our Multi-client Services segment. Backlog estimates are based on a number of assumptions and estimates including assumptions related to foreign exchange rates and 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 is 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 also occasionally modified by mutual consent. Because of potential changes in the scope or schedule of our clients' projects, we cannot predict with certainty when or if our backlog will be realized. Even where a project proceeds as scheduled, it is possible that the client may default and fail to pay amounts owed to us. In addition, the contracts in our backlog are cancelable by the client. Material delays, payment defaults or cancellations could reduce the amount of backlog currently reported, and consequently, could inhibit the conversion of that backlog into revenues.

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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, microseismic monitoring, data 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 seismic data library and license this data to clients on a non-exclusive basis.

We provide seismic data acquisition for land, transition zone and shallow marine areas, including challenging environments such as marshes, forests, jungles, arctic climates, mountains and deserts worldwide. Our management team has significant operational experience in most of the major U.S. shale plays, including the Haynesville, Barnett, Bakken, Fayetteville, Eagle Ford and Woodford, where we believe our high resolution RG3D seismic solutions are particularly well-suited.

We currently own approximately 170,000 recording channels which include approximately 8000 of our proprietary AutoSeis channels. We expect a higher level of our recording channels (including previously idle marine OBC channels) to be deployed or in use or use during the fourth quarter versus the third quarter.

We primarily generate revenues by providing Proprietary Services and Multi-client Services to our clients. Our Proprietary Services generate revenues by conducting geophysical surveys for our clients on a contractual basis where our clients generally acquire all rights to the seismic data obtained through such survey. We also generate revenues by providing microseismic monitoring, data processing and interpretation services. Our Multi-client Services generate revenues by selling licenses, on a non-exclusive basis, to data we own as a part of our seismic data library.

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Results of Operations

Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010 (unaudited)

The following table sets forth our consolidated revenues for the period indicated (amounts in millions):

	Three Month Period Ended
	September 30,
Revenues by Service	(unaudited)
	2011					2010
	Amount		%			Amount		%
Proprietary Services	$	60.1		55	%	$	18.3		30	%
Multi-client Services		50.0		45	%		42.2		70	%
Total	$	110.1		100	%	$	60.5		100	%
	Three Month Period Ended
	September 30,
Revenues by Area	(unaudited)
	2011					2010
	Amount		%			Amount		%
United States	$	56.8		52	%	$	43.5		72	%
International		53.3		48	%		17.0		28	%
Total	$	110.1		100	%	$	60.5		100	%

Revenues. We recorded revenues of $110.1 million for the three months ended September 30, 2011 compared to $60.5 million for the same period ended in 2010, an increase of $49.6, or 82%.

We recorded revenues from Proprietary Services of $60.1 million for the three months ended September 30, 2011, compared to $18.3 million for the same period in 2010, an increase of $41.8 million. Latin America represented $40.7 million of that revenue, an increase of $28.2 million from the corresponding period in 2010. This growth was driven by additional program activity in Colombia and Brazil.  

Multi-client Services generated revenues of $50.0 million for the three months ended September 30, 2011 compared to $42.2 million for the same period of 2010, an increase of $7.8 million, or 18%.  The $50.0 million in Multi-client Services revenues included $16.5 million of late sale revenues and $32.5 million of pre-commitment revenues. This compared to $0.9 million in late sales revenues and $36.0 million of pre-commitment revenues during the same period of 2010.

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The following table sets forth our consolidated Multi-client Services revenues for the period indicated (amounts in millions):

	Three Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Multi-client revenues
Pre-commitments	$	32.5	$	36.0
Late sales		16.5		.9
Subtotal		49.0		36.9
Non-cash data swaps		1.0		5.3
Total revenue	$	50.0	$	42.2

Operating expenses. Operating expenses, excluding depreciation and amortization increased by $38.6 million to $47.6 million for the three months ended September 30, 2011.  The primary causes of the increases to cost were compensation, including local labor and benefits were up by $11.9 million, subcontractor cost up by $10.7 million, reimbursable cost up by $1.7 million and material and supplies up by $4.0 million from the ramp up in costs on the continuation of projects in our International areas for the three months ended September 30, 2011 versus the same period in 2010.

Selling, General and Administrative Expenses. SG&A, excluding depreciation and amortization, increased by $0.8 million, or 8%, to $10.6 million for the three months ended September 30, 2011.  The SG&A cost increases relate to our expanded sales and marketing staff, increased accounting and administrative costs and increases in our stock based compensation for the three months ended September 30, 2011.

Depreciation and Amortization Expenses.  Total net depreciation and amortization expense increased by $1.9 million, or 5%, to $36.9 million for the three months ended September 30, 2011.  The Multi-client Services amortization expense was $29.5 million for the three months ended September 30, 2011, representing a 59% average amortization rate for the period.  Gross depreciation expense for the quarter ended September 30, 2011 was $11.2 million, of which, $4.2 million was capitalized in connection with our Multi-client Services investments resulting in a net depreciation expense of $7.0 million.  Some of our older equipment continues to become fully depreciated and capital investments are less than our historical average.

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The following table summarizes our depreciation and amortization for the three month period ended (amounts in millions):

	Three Month Period Ended
	September 30,
	2011			2010
	(unaudited)
Gross depreciation expense	$	11.2		$	13.2
Less: capitalized depreciation for Multi-client library		4.2			10.3
Net depreciation expense	$	7.0		$	2.9
Amortization of intangibles expense		0.4			0.1
Multi-client amortization expense		29.5			32.0
Total net depreciation and amortization expense	$	36.9		$	35.0
Average Multi-client amortization rate for the period		59	%		76	%

Interest Expense, Net. Interest expense, net, increased by $0.9 million, or 16%, to $6.5 million for the three months ended September 30, 2011, compared to $5.6 million for the same quarter of 2010.  The increases to interest expense relates to higher borrowings under the Revolving Credit Facility and borrowings under various Promissory Notes.

Other Income (Expense), Net. Other income (expense), net, was a loss of $1.2 million for the three months ended September 30, 2011 compared to a loss of $0.1 million in the same quarter of 2010. We recorded a foreign exchange loss in the third quarter of 2011 for $1.2 million compared to nil in the same period of 2010 related primarily to exchange rate changes with the Colombian Peso.

Income Tax Expense (Benefit). Our income tax expense for the three months ended September 30, 2011 was $2.4 million compared to $9.1 million in the same period of 2010. The effective income tax rate for the three months ended September 30, 2011 and 2010 was adjusted to reflect the effective tax rate of 64.1% and 11.1%, respectively for the nine months ended September 30, 2011 and 2010. The Company’s effective income tax rate in 2011 and 2010 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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Results of Operations

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010 (unaudited)

The following table sets forth our consolidated revenues for the period indicated (amounts in millions):

	Nine Month Period Ended
	September 30,
Revenues by Service	(unaudited)
	2011					2010
	Amount		%			Amount		%
Proprietary Services	$	145.7		54	%	$	79.4		49	%
Multi-client Services		126.6		46	%		81.8		51	%
Total	$	272.3		100	%	$	161.2		100	%
	Nine Month Period Ended
	September 30,
Revenues by Area	(unaudited)
	2011					2010
	Amount		%			Amount		%
United States	$	140.9		52	%	$	89.3		55	%
International		131.4		48	%		71.9		45	%
Total	$	272.3		100	%	$	161.2		100	%

                Revenues. We recorded revenues of $272.3 million for the nine months ended September 30, 2011 compared to $161.2 million for the same period ended in 2010, an increase of $111.1 million, or 69%.

We recorded revenues from Proprietary Services of $145.7 million for the nine months ended September 30, 2011, compared to $79.4 million for the same period in 2010, an increase of $66.3 million, or 84%. Latin America represented $108.5 million of that revenue, an increase of $69.2 million from the corresponding period in 2010. This growth was driven by additional program activity in Colombia and Brazil.  

Multi-client Services generated revenues of $126.6 million for the nine months ended September 30, 2011 compared to $81.8 million for the same period of 2010, an increase of $44.8 million, or 55%.  The $126.6 million in Multi-client Services revenues included $34.1 million of late sale revenues and $90.5 million of pre-commitment revenues. This compared to $5.7 million in late sales revenues and $70.5 million of pre-commitment revenues during the same period of 2010.

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The following table sets forth our consolidated Multi-client Services revenues for the period indicated (amounts in millions):

	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Multi-client revenues
Pre-commitments	$	90.5	$	70.5
Late sales		34.1		5.7
Subtotal		124.6		76.2
Non-cash data swaps		2.0		5.6
Total revenue	$	126.6	$	81.8

Operating expenses. Operating expenses, excluding depreciation and amortization increased by $37.8 million to $93.4 million for the nine months ended September 30, 2011, an increase of 68%.  The increases for the nine months ended September 30, 2011 are primarily related to additional crew activities in Latin America and the Eastern Hemisphere.

Selling, General and Administrative Expenses. SG&A, excluding depreciation and amortization, increased by $2.2 million, or 8%, to $31.4 million for the nine months ended September 30, 2011.  The SG&A cost increases relate to our expanded sales and marketing staff, increased accounting and administrative costs and increases in our stock based compensation for the nine months ended September 30, 2011.  This was slightly offset from bad debt expense of $3.0 million recorded in the same period of 2010 versus nil in 2011.

Depreciation and Amortization Expenses.  Total net depreciation and amortization expense increased by $29.1 million, or 39%, to $104.4 million for the nine months ended September 30, 2011.  The Multi-client Services amortization expense was $81.3 million for the nine months ended September 30, 2011, representing a 64% average amortization rate compared to a 67% rate during the same period of 2010.  Gross depreciation expense for the nine months ended September 30, 2011 was $35.1 million, of which, $13.4 million was capitalized in connection with our Multi-client Services investments resulting in a net depreciation expense of $21.7 million.  Some of our older equipment continues to become fully depreciated and capital investments are less than our historical average.

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The following table summarizes our depreciation and amortization for the nine month period ended (amounts in millions):

	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Gross depreciation expense	$	35.1	$	42.2
Less: capitalized depreciation for Multi-client library		13.4		22.3
Net depreciation expense	$	21.7	$	19.9
Amortization of intangibles expense		1.4		0.4
Multi-client amortization expense		81.3		55.0
Total net depreciation & amortization expense	$	104.4	$	75.3

Average Multi-client amortization rate for the period 64  % 67  %

Interest Expense, Net. Interest expense, net, increased by $2.9 million, or 19%, to $18.5 million for the nine months ended September 30, 2011, compared to $15.6 million for the same quarter of 2010.  The increases to interest expense relates to our borrowing costs from the issuance of $200 million, 10.5% senior notes and from our borrowings against the revolving line of credit.

Other Income (Expense), Net. Other income (expense), net, was a gain of $0.5 million for the nine months ended September 30, 2011 compared to a loss of $5.9 million in the same quarter of 2010. We recorded a foreign exchange gain for the nine months ended September 30, 2011 for $0.5 million, compared to a loss of $0.2 million during the same period of 2010, resulting in an overall increase to income for $0.7 million. During the nine months ended September 30, 2010, we recorded a loss on the extinguishment of our prior debt for $6.0 million, compared to nil in the same period of 2011.

Income Tax Expense (Benefit). Our income tax expense for the nine months ended September 30, 2011 was $7.4 million compared to a benefit of $4.7 million in the same period of 2010. The effective income tax rate for the nine months ended September 30, 2011 and 2010 was approximately 64.1% and 11.1%, respectively. The Company’s effective income tax rate in 2011 and 2010 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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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 Month Period Ended											Nine Month Period Ended
	September 30,											September 30,
	2011					2010						2011					2010
	(unaudited)											(unaudited)
	Amount			Per Share (3)		Amount			Per Share (3)			Amount			Per Share (3)		Amount			Per Share (3)
UNAUDITED
Net Income (Loss), attributable to common share holders	$	883,411		$	.02	$	(18,645,402	)	$	(.52	)	$	4,257,972		$	.12	$	(37,947,318	)	$	(1.54	)
Net loss, attributable to noncontrolling interests		(238,523	)				-						(132,362	)				-
Income tax expense (benefit)		2,424,098					9,120,597						7,379,167					(4,714,609	)
Interest expense, net		6,458,479					5,626,367						18,548,935					15,635,670
EBIT	$	9,527,465		$	.26	$	(3,898,438	)	$	(.11	)	$	30,053,712		$	.82	$	(27,026,257	)	$	(1.10	)
Add: Multi-client amortization		29,486,159					32,021,587						81,341,344					54,956,571
Add: Net depreciation and other amortization (2)		7,055,707					5,488,476						21,618,215					22,677,165
EBITDA	$	46,069,331		$	1.25	$	33,611,625		$	.94		$	133,013,271		$	3.64	$	50,607,479		$	2.05

(1) EBIT, EBITDA, EBIT per share and EBITDA per share (as defined in the calculations above) are non GAAP measurements. Management uses EBIT and EBITDA because it believes that such measurements are widely accepted financial indicators used by investors and analyst to analyze and compare companies on the basis of operating performance.

(2) Excludes gain (loss) of sale of assets and includes amortization of intangibles

(3) Calculated using diluted weighted average shares outstanding

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 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.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated by the Proprietary 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 Services 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 as the need arises.

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As of September 30, 2011, we had available liquidity as follows (amounts in millions):

	As of September 30, 2011
	(unaudited)
Available cash	$	8.8
Undrawn borrowing capacity under Revolving Credit Facility		-
Net available liquidity	$	8.8

We are considering additional options for providing liquidity since we currently have no further borrowing capacity under our Revolving Credit Facility. Any further reductions in our liquidity, from delayed collections from clients or otherwise, may result in scaling back our operations, reductions in capital expenditures and / or multi-client investments.

The following table summarizes the net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2011 and 2010 (amounts in millions):

	Nine Month Period Ended
	September 30,
	2011			2010
	(unaudited)
Adjustments to reconcile net income  (loss)  to net cash	$	110.7		$	35.7
Effects of changes in operating assets and liabilities		(33.8	)		46.8
Operating activities		76.9			82.5
Investing activities		(152.5	)		(127.7	)
Financing activities		56.2			91.3

Operating Activities. Net cash provided by operating activities was $76.9 million for the nine months ended September 30, 2011 compared to $82.5 million for the same period ended 2010, a decrease of $5.6 million. The primary changes were in net income which increased by $42.2 million, depreciation and amortization net of capitalized depreciation increase of $29.1 million, and were offset by the decrease in accounts receivable, net of $62.1 million.

Investing Activities. Net cash used in investing activities was $152.5 million for the nine months ended September 30, 2011 compared to $127.7 million for the same period ended 2010, an increase of $24.8 million. The increase was primarily the result of increased investment in our Multi-client Services library.  The following table sets forth our investment in our Multi-client Services library for the period indicated (amounts in millions):

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	Nine Month Period Ended
	September 30,
	2011		2010
	(unaudited)
Multi-client investment (period)
Cash	$	144.6	$	118.2
Capitalized depreciation (1)		13.4		22.3
Non-cash data swaps		1.0		9.9
Total	$	159.0	$	150.4
Investment (cumulative)
Cash	$	374.8	$	177.7
Capitalized depreciation (1)		40.6		29.1
Non-cash data swaps		19.9		18.7
Total	$	435.3	$	225.5
Cumulative amortization		211.8		92.7
Multi-client net book value	$	223.5	$	132.8

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

Financing Activities. Net cash provided by financing activities was $56.2 million in the nine months ended September 30, 2011 compared to $91.3 million for the same period in 2010, a decrease of $35.1 million.  The decrease represents the impact of the Company’s Initial Public Offering and Senior Notes offering during 2010, offset by borrowing under our Revolving Credit Facility for the period in 2011.

Capital Resources  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. On June 9, 2011, we amended the Revolving Credit Facility to provide for borrowings of up to $70.0 million under substantially similar terms. 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 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, 2011 were $191.9 million consisting of purchases of property and equipment of $32.9 million and investments in our Multi-client Services library of $159.0 million.

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Contractual Obligations

The following table summarizes the payments due in specific periods related to our contractual obligations as of September 30, 2011 (amounts in millions):

	Total		Within 1 Year		1-3 Years		3-5 Years		After 5 Years
Debt obligations	$	278.2	$	7.4	$	70.4	$	0.4	$	200.0
Capital lease obligations		8.8		5.8		3.0		-		-
Operating lease obligations		1.2		0.6		0.5		0.1		-
	$	288.2	$	13.8	$	73.9	$	0.5	$	200.0

Off Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements.

Backlog

The Company’s Backlog as of September 30, 2011 was approximately $239 million ($128 million Multi-client Services pre-commitments; $111 million Proprietary Services) compared to $225 million as of September 30, 2010. Backlog as of June 30, 2011 was approximately $260 million and at March 31, 2011 was approximately $278 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 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, 2011, approximately 40% of our revenues were recorded in foreign currencies, and we recorded net foreign exchange gain of $0.5 million. 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.

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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, 2011.  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, 2011.

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 form 10-K (Commission file number: 001-34709).

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

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  (Removed and Reserved)

Item 5.  Other Information

None

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Item 6.  Exhibits (items indicated by an (*) are filed herewith)

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.
31.3*	Certification of Chief Accounting 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.
32.3	Certification of Chief Accounting 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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GLOBAL GEOPHYSICAL SERVICES, INC.
Date:  November 9, 2011	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer
	(Principal Executive Officer)
Date:  November 9, 2011	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)
Date:  November 9, 2011	/s/ Jesse Perez
	Jesse Perez
	Chief Accounting Officer
	(Principal Accounting Officer)

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