DEF 14A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934 (Amendment     )

Filed by the Registrant [x] Filed by a Party other than the Registrant [  ]
Check the appropriate box:
[  ] Preliminary Proxy Statement	[  ] Confidential, for Use of the Commission Only
[x] Definitive Proxy Statement	(as permitted by Rule 14a-6(e)(2))
[  ] Definitive Additional Materials
[  ] Soliciting Material under § 240.14a-12

GLOBAL GEOPHYSICAL SERVICES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.

[  ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[  ] Fee paid previously with preliminary materials.

[  ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS   To be held on May 24, 2013  

NOTICE IS HEREBY GIVEN that the 2013 ANNUAL MEETING OF STOCKHOLDERS (“Annual Meeting”) of GLOBAL GEOPHYSICAL SERVICES, INC. (“Global,” “Company,”“GGS,”“we,” “us,” or “our”) will be held on:

Date:	Friday May 24, 2013
Time:	9:00 a.m.
Place:	13927 S. Gessner Rd., Missouri City, Texas 77489

At the Annual Meeting, the Board of Directors will ask stockholders to:

1. Elect the following three directors: George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz.

2. Approve, on an advisory basis, the compensation of our Named Executive Officers.

3. Ratify the appointment of UHY LLP as our independent registered certified public accounting firm for the 2013 fiscal year.

4. Consider any other business that is properly presented at the Annual Meeting.

The Board of Directors unanimously recommends a vote “FOR” all the proposals above.

The Record Date for the Annual Meeting is April 4, 2013. Only stockholders of record as of the close of business on that date are entitled to receive notice of, to attend, and to vote at the Annual Meeting, or any adjournment or postponement that may take place.

If your shares are directly held in your name as a stockholder of record, an admission ticket to the Annual Meeting is attached to your proxy card. If your shares are registered in the name of a broker, bank, trustee or other nominee and you plan to attend the Annual Meeting, bring your statement of account showing evidence of ownership as of the Record Date. All stockholders who plan to attend the Annual Meeting must present a government-issued photo identification card, such as a driver’s license or passport.

YOUR VOTE IS IMPORTANT. You may vote (1) in person at the Annual Meeting, (2) by completing and mailing the enclosed proxy card, (3) via the Internet, or (4) by telephone. Instructions are on your proxy card or on the voting instruction card provided by your broker. Please note that your broker cannot vote for Proposals No. 1 and No. 2 without your instructions.

By order of the Board of Directors,   James E. Brasher, Secretary     April 19, 2013 Missouri City, Texas

IMPORTANT NOTICE regarding the AVAILABILITY OF PROXY MATERIALS for the Annual Meeting:

The Proxy Statement and the Company’s Annual Report on Form 10-K are also available at

http://www.edocumentview.com/GGS and http://ir.globalgeophysical.com/annual-proxy.cfm

PROXY STATEMENT	4
INFORMATION CONCERNING PROXY SOLICITATION AND VOTING	4
What is a Proxy Statement?	4
What is a Proxy?	4
What is included in the proxy materials?	4
Who is entitled to vote? What is the Record Date?	4
What is the difference between a stockholder of record and a beneficial “street name” holder?	4
How do I vote?	5
Can I change my vote after I have voted?	5
What are “abstentions” and “broker non-votes” and how do they affect voting?	5
What constitutes a quorum?	6
What shares are included on my proxy card?	6
What does it mean if I get more than one proxy card?	6
What is “householding” and how am I affected?	6
Can I elect to receive or view the proxy materials electronically?	6
Who is paying for the costs of soliciting these proxies?	7
Who may attend the Annual Meeting?	7
How will the Annual Meeting be conducted?	7
How does a stockholder recommend a person for election to the Board for the 2014 Annual Meeting?	7
Where can I find the voting results of the Annual Meeting?	7
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING	7
Proposal No. 1 - Election of Directors	8
Vote Required	9
Recommendation of the Board	9
Proposal No. 2 - Advisory Vote on Executive Compensation	9
Vote Required	9
Recommendation of the Board	9
Proposal No.3 - Ratification of Independent Registered Certified Public Accounting Firm	9
Vote Required	10
Recommendation of the Board	10
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	10
Executive Officers and Directors	10
Current Executive Officers and Directors	10
Changes in Executive Officers and Directors during 2012 and 2013	11
Biographies	12
Executive Officers	12
Directors	14
Corporate Governance Principles and Director Independence	15
Board Committees	16
Audit Committee	17
Nominating and Corporate Governance Committee	18
Compensation Committee	19
Compensation Committee Interlocks and Insider Participation	19
Board and Committees Matters	19
Board Leadership Structure	19
The Board’s Role in Risk Oversight	19
2012 Overall Meeting Attendance Rates	20
Executive Sessions	20
Attendance of Directors at the Annual Meeting	20
Communication with the Board	20

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Code of Ethics for Our Executive Officers and Board of Directors	20
Certain Relationships and Related Person Transactions	20
Transactions with Executive Officers and Directors	21
Stockholders Agreement	21
Kelso Agreement	21
Review, Approval or Ratification of Transactions with Related Persons	21
COMPENSATION DISCUSSION AND ANALYSIS	21
Summary	21
Stockholder Advisory Vote on Executive Compensation	22
Objectives of Our Executive Compensation Program	22
Role of the Compensation Committee in Setting Executive Compensation	22
Use of Compensation Consultant	23
Role of Executive Officers in the Compensation Process	23
Executive Officer Compensation	23
Principal Components of Compensation of Our Named Executive Officers	23
Base Salary	24
Long-Term Incentive Compensation	24
Broad-Based Employee Benefits and Other Perquisites	25
401(k) Retirement Plan	25
Pension Benefits	25
Nonqualified Deferred Compensation	25
Compensation Mix	25
Tax and Accounting Implications	25
Deductibility of Executive Compensation/Internal Revenue Code Section 162(m)	25
Accounting for Stock-Based Compensation	26
Compensation Committee Report	26
Executive Compensation	26
Summary Compensation Table	26
Grants of Plan Based Awards for Fiscal Year 2012	27
Outstanding Equity Awards at Fiscal Year End 2012	28
Option Exercises and Stock Vested in Fiscal Year 2012	29
Employment Agreements and Change of Control Arrangements	29
Richard C.White Employment Agreement	29
Christopher P. Graham Employment Agreement	30
Change of Control Arrangements	31
Director Compensation	35
Equity Compensation Plan Information	36
AUDIT COMMITTEE MATTERS AND AUDIT COMMITTEE REPORT	36
Audit Committee Pre-Approval Policy and Procedures	36
Fees Paid to Auditors	36
Audit Committee Report	37
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	37
Security Ownership by Certain Beneficial Owners	38
Security Ownership by Executive Officers and Directors	39
Section 16(a) Beneficial Ownership Reporting Compliance	40
ANNUAL REPORT ON FORM 10-K	40
OTHER MATTERS	40
Stockholder Proposals for the 2014 Annual Meeting	40
No Incorporation by Reference	41
Directions to the Annual Meeting and Additional Information Regarding the Admission	41
If You Are Not Able to Attend the Annual Meeting	42

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PROXY STATEMENT

INFORMATION CONCERNING PROXY SOLICITATION AND VOTING

This proxy statement (“Proxy Statement”) is furnished in connection with the solicitation by the Board of Directors of the Company (“Board”) of the proxies to be voted at the 2013 Annual Meeting of Stockholders to be held on May 24, 2013, commencing at 9:00 a.m., at the Company’s headquarters located at 13927 S. Gessner Rd., Missouri City, Texas 77489, and any adjournment or postponement of such meeting.

What is a Proxy Statement?

A Proxy Statement is a document that the Securities and Exchange Commission (“SEC”) regulations require that we make available to you when we ask you to vote your shares at the Annual Meeting.

What is a Proxy?

A proxy is a document, also referred to as a “proxy card,” on which you authorize someone else to vote for you in the way that you want to vote (“Proxy”). You may also choose to abstain from voting. Our Board is soliciting proxies from stockholders who wish to vote at the Annual Meeting. By using a Proxy, you can vote even if you do not attend the Annual Meeting. This Proxy Statement describes the matters on which you are being asked to vote and provides information on those matters so that you can make an informed decision.

What is included in the proxy materials?

The materials include:

·   Notice of the 2013 Annual Meeting of Stockholders (“Notice”);

·   The Proxy Statement;

·   The Company’s annual report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on March 5, 2013 (“Annual Report” or “2012 Annual Report”); and

·   The proxy card.

The Company has delivered printed versions of all these materials to you by mail, in connection with the Company’s solicitation of proxies for use at the Annual Meeting.

Who is entitled to vote? What is the Record Date?

Only stockholders of record at the close of business on April 4, 2013 (“Record Date”) are entitled to vote at the Annual Meeting. Each stockholder is entitled to one vote for each share outstanding in his or her name on the books of the Company at the close of business on the Record Date. As of April 4, 2013, there were 343 stockholders of record and 37,965,582 shares of GGS common stock outstanding and entitled to vote.

Shares cannot be voted at the Annual Meeting unless the owner of record is present in person or is represented by a Proxy.

What is the difference between a stockholder of record and a beneficial “street name” holder?

A “stockholder of record” is a person or entity that held shares on the Record Date registered in his/her/its name on the records of Computershare Trust Company, N.A., Global’s transfer agent (“Computershare” or “Transfer Agent”). Persons or entities which held shares on the Record Date through a broker, bank, trustee or other nominee are considered “beneficial owners”. This is often called ownership in “street name,” since your name does not appear anywhere in our records. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. “Street name” holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank or other nominee how to vote their shares using the method described under “How do I vote?” below. 

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How do I vote?

If you held your shares in your own name as stockholder of record, you may vote (1) in person at the Annual Meeting, (2) by completing and mailing the enclosed proxy card, (3) via the Internet, or (4) by telephone.

·   To vote by mail, sign and date each proxy card that you receive and return it in the enclosed prepaid envelope. Proxies will be voted as you specify on each proxy card.

·   To vote by telephone or through the Internet, follow the instructions attached to your proxy card.

By completing, signing and returning the proxy card or voting by telephone or through the Internet, your shares will be voted as you direct. Please refer to the proxy card for instructions. If you sign and return your proxy card, but do not specify how you wish to vote, your shares will be voted as the Board recommends.

If you held your shares through a broker, bank, trustee, or nominee they will be voted as you instruct on the voting instruction card provided by these organizations. Your broker, bank, trustee or other nominee should have enclosed, or should provide, a voting instruction card for you to use in directing them how to vote your shares. If you sign and return your card without giving specific instructions, your shares will be voted in accordance with the recommendations of our Board. If you do not provide timely instructions as to how your shares are to be voted, your broker, bank, trustee, or other nominee will have the authority to vote the shares only on “routine” matters (see the “What are abstentions and broker non-votes and how do they affect voting?” section of this Proxy Statement for further information). Being a beneficial owner, you may not vote your shares in person at the Annual Meeting unless you obtain a "legal proxy" from the broker, bank, trustee or nominee that holds your shares giving you the right to vote the shares at the meeting. Even if you plan to attend the Annual Meeting, we recommend that you also submit your Proxy or voting instructions as described in the Proxy Statement so that your vote will be counted if you later decide not to attend the meeting.

We know of no matters other than those listed in the Notice and in the Proxy Statement which are likely to be brought up for a vote at the Annual Meeting. However, if any other matters should properly come up for consideration before the Annual Meeting, or any adjournment or postponement thereof, the persons named in the Proxy will vote all proxies given to them, in accordance with the recommendation of the Board. Adjournments of the Annual Meeting may be made for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time by approval of the stockholders of common stock representing a majority of the votes present in person or by Proxy at the Annual Meeting, whether or not a quorum exists, without further notice other than by an announcement at the Annual Meeting.

Can I change my vote after I have voted?

If you held your shares in your own name as stockholder of record, any subsequent vote by any means will change your prior vote. For example, if you voted by telephone, a subsequent Internet vote will change your vote. If you wish to change your vote by mail, you may do so by requesting a new proxy card in writing at 13927 S. Gessner Rd., Missouri City, TX 77489, Attn. Adriana Mateescu, by phone at 713-808-7335, or by email at adriana.mateescu@globalgeophysical.com. Stockholders of record may also change their vote by voting in person at the Annual Meeting.

If you held your shares in street name, you should contact your brokerage firm, bank or other nominee to receive instructions on changing your vote. Subject to any rules your broker, trustee or nominee may have, you may change your proxy instructions at any time before your Proxy is voted at the Annual Meeting.

The last vote received prior to the Annual Meeting will be the one counted.

What are “abstentions” and “broker non-votes” and how do they affect voting?

Abstentions. If you specify on your proxy card that you wish to “abstain” from voting on an item, your shares will not be voted on that particular item. Abstentions are counted toward establishing a quorum but not toward determining the outcome of the proposal to which the abstention applies.

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Broker non-votes. Brokers must vote according to specific instructions they receive from the beneficial owners. Under the New York Stock Exchange (“NYSE”) rules, if your broker does not receive voting instructions from you, your broker has discretion to vote these shares on certain “routine” matters. The election of directors in an uncontested election (Proposal No. 1), and the advisory vote on executive compensation (Proposal No. 2) are “non-routine” matters. Consequently, your broker must receive voting instructions from you in order to vote with respect to Proposals No. 1 and No. 2. The ratification of our independent registered public accounting firm (Proposal No. 3) is considered a “routine” matter, and your broker will have discretion to vote with respect to Proposal No. 3. Proxies submitted by brokers that do not indicate a vote because they do not have discretionary voting authority and have not received instructions as to how to vote on a proposal will be considered as present for quorum purposes. On “routine” matters, shares voted by brokers without instructions are counted toward the outcome consistent with the brokers' vote.

What constitutes a quorum?

A quorum is the minimum number of shares required to hold a meeting. Under our Bylaws, the presence in person or by Proxy of the stockholders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum. Fifty percent or more of the outstanding shares must be present in person or by Proxy to constitute a quorum. If a quorum is not present at the Annual Meeting, the Board may call a second general meeting of stockholders, at which the quorum requirement will not apply.

What shares are included on my proxy card?

For stockholders of record, the proxy card you received covers the number of shares to be voted in your account as of the Record Date.

For beneficial owners, separate voting instructions will be provided by your broker, bank or other nominee for shares you hold in “street name”.

What does it mean if I get more than one proxy card?

It indicates that you may have multiple accounts with us, brokers, banks, trustees, or other holders of record. Sign and return all proxy cards, or vote each account by telephone or on the Internet, to ensure that all of your shares are voted. We encourage you to register all your accounts in the same name and address.

What is “householding” and how am I affected?

The SEC permits us to deliver a single copy of the proxy materials to stockholders who have the same address and last name. Each stockholder will continue to receive a separate proxy card. This procedure, called “householding,” will reduce the volume of duplicate information you receive and reduce our printing and postage costs. If you received one set of these documents at your household and you wish to receive separate copies, you may request them in writing at 13927 S. Gessner Rd., Missouri City, TX 77489, Attn. Adriana Mateescu, by phone at 713-808-7335, or by email at adriana.mateescu@globalgeophysical.com, and these documents will be promptly delivered to you. If you do not wish to participate in householding and prefer to receive separate copies of our proxy materials, now or in the future, please submit a request to us at the address, email address or phone number listed above.

Similarly, if you currently receive multiple copies of this document, you can request the elimination of the duplicate documents by contacting us at the address, email address or phone number listed above.

Beneficial owners can request information about householding by contacting their bank, brokerage firm or other nominee of record.

Can I elect to receive or view the proxy materials electronically?

Yes. If you are a stockholder of record, you may elect to receive the proxy materials electronically rather than in printed form. Choosing to receive future proxy materials by email will save the Company the cost of printing and mailing documents to you and will reduce the impact of the Company’s Annual Meetings on the environment. If you wish to provide your consent and enroll in this service, go to www.investorvote.com/GGS.

We have been sending e-mail notifications directing our stockholders to the Web site hosting the proxy materials as well as voting instructions for voting via the Internet. By consenting to electronic delivery, you are stating that you currently have, and expect to have in

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the future, access to the Internet. If you do not currently have or expect to have in the future, access to the Internet, please do not elect to have documents delivered electronically, as we will rely on your consent and will not deliver paper copies of future proxy materials. Your election to receive proxy materials by email will remain in effect until you terminate it.

To view the 2013 Proxy Statement and the 2012 Annual Report, you can also visit our website at www.globalgeophysical.com, where you can view them by selecting Investor Relations - Corporate Governance - Proxies and Annual Reports.

Who is paying for the costs of soliciting these proxies?

Our Board is soliciting your Proxy. We will not retain a proxy solicitor; however, our directors, officers and employees of the Company may solicit proxies in person, by mail, telephone, or email. Our directors, officers and employees will not be additionally compensated for these activities, but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation. The Company will bear the entire cost of solicitation of the proxies, including preparation, assembly, printing and mailing of this Proxy Statement, the proxy card, and any additional information furnished to stockholders.

Who may attend the Annual Meeting?

Any stockholder of record as of the Record Date may attend. Your admission ticket to attend the Annual Meeting is attached to your proxy card. Please vote your Proxy, and bring the admission ticket with you to the meeting.

If your shares are registered in the name of a broker, bank, trustee or other nominee and you plan to attend the meeting, bring your statement of account showing evidence of ownership as of the Record Date. However, as noted above, you will not be able to vote those shares at the Annual Meeting unless you have made arrangements with your bank, brokerage firm or other nominee of record.

How will the Annual Meeting be conducted?

Our Chairman of the Board, or such other director as designated by the Board, will call the Annual Meeting to order, preside at the meeting and determine the order of business. The only business that will be conducted or considered at the Annual Meeting is business discussed in this Proxy Statement, as no other matters have been brought to our attention to be voted at the Annual Meeting.

How does a stockholder recommend a person for election to the Board for the 2014 Annual Meeting?

Recommendations for nominations by stockholders should be in writing and addressed to our Corporate Secretary at our principal business address. See the “Stockholder Proposals for the 2014 Annual Meeting”section of this Proxy Statement for further information. Once the Corporate Secretary properly receives a recommendation for nomination, the recommendation is sent to the Nominating and Corporate Governance Committee for consideration. Candidates for directors nominated by stockholders will be given the same consideration as candidates nominated by other sources.

Where can I find the voting results of the Annual Meeting?

The Company intends to announce preliminary voting results at the Annual Meeting and will publish final results on a Current Report on Form 8-K filed with the SEC within four business days after the Annual Meeting.

PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

This Proxy Statement contains three proposals requiring stockholder action. Our Board recommendation for each of these proposals is set forth below:

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	Proposals	Board Recommendation
1.	The election of the following three Class II directors: George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz for a three-year term expiring at the Annual Meeting in 2016.	FOR
2.	The approval, on an advisory basis, of the compensation of our named executive officers.	FOR
3.	The ratification of UHY LLP as our independent registered certified public accounting firm for the 2013 fiscal year.	FOR

Each of the proposals is discussed in more detail in the pages that follow.

Proposal No. 1 - Election of Directors

Our Third Amended and Restated Certificate of Incorporation provides for a classified Board of Directors. The Board is divided into three classes, as nearly equal in size as is practicable, designated as Class I, Class II and Class III. One class of directors is to be elected at each Annual Meeting of Stockholders to serve for a three-year term.

On December 14, 2012, the Board unanimously approved the expansion of the Board from eight to nine members, and, while maintaining the three classes described above, the ninth member was added as a director to Class I. Mr. Richard C. White was appointed by the Board to fill the newly created position.

Effective January 25, 2013, Mr. Richard A. Degner resigned as a Class III director and Non-Executive Chairman of the Board of Directors, and Mr. White was nominated to replace Mr. Degner as Chairman of the Board of Directors.

Our Board currently consists of eight directors, and the classes and their current incumbents are as follows:

Class I (term expiring at the Annual Meeting in 2014):

Richard C. White, Joseph P. McCoy, and Damir S. Skerl

Class II (term expiring at the Annual Meeting in 2013)

George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz

Class III (term expiring at the Annual Meeting in 2015):

Michael C. Forrest and Michael S. Bahorich.

The Board has nominated Messrs. George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz to be elected to serve for a three-year term until the Annual Meeting in 2016, until their successors have been duly elected and qualified, or until the earlier of their retirement, resignation, death, or removal.

Should any of the nominees become unable or unwilling to serve as a director at the time of the Annual Meeting, the person or persons exercising the proxies will vote for the election of a substitute nominee designated by the Board. All of the nominees have consented to be nominated and have expressed their intention to serve if elected. The Board has no reason to believe that the nominees will be unable or unwilling to serve if elected. Only the nominees or a substitute nominee designated by the Board will be eligible to stand for election as a director at the Annual Meeting.

If the above nominees are elected as proposed, the Board composition will be as follows:

Class I (term expiring at the Annual Meeting in 2014):

Richard C. White, Joseph P. McCoy, and Damir S. Skerl

Class II (term expiring at the Annual Meeting in 2016):

George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz

Class III (term expiring at the Annual Meeting in 2015):

Michael C. Forrest and Michael S. Bahorich.

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Vote Required

In accordance with our Bylaws, at all meetings of stockholders for the election of directors, a plurality of the votes of the shares of stock present in person or represented by Proxy at the meeting and entitled to vote on the election of directors is sufficient to elect directors. In addition, the Bylaws state that the stockholders do not have the right to cumulate their votes for the election of directors. Brokers do not have discretion to vote on this proposal without your instructions. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

Our Board recommends that you vote “FOR” the election of Messrs. George E. Matelich, Stanley de J. Osborne, and Karl F. Kurz.

Proposal No. 2 - Advisory Vote on Executive Compensation

The advisory vote on executive compensation described in this Proposal No. 2 is also referred to as the “say-on-pay” vote.

At the 2011 Annual Meeting, a non-binding advisory vote was taken on the frequency of future advisory votes regarding named executive officer compensation. Ninety-five percent (95%) of the shares cast were in favor of holding such an advisory vote on an annual basis. As a result, the Board decided to hold advisory votes on Named Executive compensation on an annual basis. The Company is providing its stockholders with the opportunity to cast an advisory vote on executive compensation as described below. The Board believes that it is appropriate and in the best interest of the Company to seek the views of stockholders on the design and effectiveness of the Company’s executive compensation program. The Company’s goal for its executive compensation program is to attract, motivate and retain a talented, entrepreneurial and creative team of executives who will provide leadership for the Company’s success in a dynamic and competitive market. The Company seeks to accomplish this goal in a way that rewards performance and is aligned with the long-term interests of the stockholders. The Company believes that its executive compensation program, which emphasizes long-term equity awards, satisfies this goal and is aligned with the long-term interests of its stockholders.

The “Compensation Discussion and Analysis” section of this Proxy Statement describes the Company’s executive compensation program in more detail.

The Company requests stockholder approval of the compensation of the Company’s Named Executive officers as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative disclosures that accompany the compensation tables).

As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by stockholders in their vote on this proposal and will continue to consider the outcome of the vote when making future compensation decisions for named executive officers.

Vote Required

Approval of Proposal No. 2 requires the affirmative vote of a majority of the shares of stock present in person or represented by Proxy at the Annual Meeting and entitled to vote on the subject matter in question, as per our Bylaws. Brokers do not have discretion to vote on this proposal without your instructions. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Recommendation of the Board

The Board recommends that you vote “FOR” the advisory resolution approving the compensation of our Named Executive Officers as described in this Proxy Statement.

Proposal No. 3 - Ratification of Independent Registered Certified Public Accounting Firm

UHY LLP (“UHY”) has been serving as the Company’s independent registered public accounting firm since its inception. Subject to ratification by our stockholders, the Audit Committee has appointed UHY as our

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independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2013 and to perform other audit-related services.

The reports of UHY on the consolidated financial statements of the Company for the year ended December 31, 2012 and for the year ended December 31, 2011 did not contain adverse opinions or a disclaimer of opinions and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the Company’s two most recent fiscal years, ended December 31, 2012 and December 31, 2011, and from January 1, 2013 through April 19, 2013, there were no disagreements with UHY on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to UHY’s satisfaction, would have caused UHY to make reference to the subject matter of such disagreements in connection with its reports on the Company’s consolidated financial statements for such years. During the Company’s two most recent fiscal years, ended December 31, 2012 and December 31, 2011, and from January 1, 2013 through April 19, 2013, there were no “reportable events” as defined under Item 304(a)(1)(v) of Regulation S-K.

At the 2013 Annual Meeting, the stockholders are being asked to ratify the appointment of UHY as the Company’s independent registered public accounting firm for 2013. In the event of a negative vote on such ratification, the Audit Committee will reconsider its selection. Even if this appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interest of the Company and its stockholders.

Representatives of UHY are expected to be present at the Annual Meeting and will be afforded an opportunity to make a statement, if they desire, and to respond to appropriate questions from stockholders.

Vote Required

Approval of Proposal No. 3 requires the affirmative vote of a majority of the shares of stock present in person or represented by Proxy at the Annual Meeting and entitled to vote on the subject matter in question, as per our Bylaws. Brokers have discretion to vote on this proposal without your instructions. If you do not instruct your broker how to vote on this proposal, your broker will vote on this proposal in its discretion.

Recommendation of the Board

The Board recommends that you vote “FOR” the ratification of UHY as our independent registered public accounting firm for fiscal 2013, as described in this Proposal No.3.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

Current Executive Officers and Directors

The following table sets forth certain information regarding our five executive officers and eight directors as of April 19, 2013:

Name	Age	Position(s)
Richard C. White	57	Chairman of the Board, President and Chief Executive Officer
P. Mathew Verghese	48	Senior Vice President and Chief Financial Officer
James E. Brasher	64	Senior Vice President, General Counsel and Secretary
Thomas J. Fleure	51	Senior Vice President, Geophysical Technology
Ross G. Peebles	49	Senior Vice President, E&P Services
Karl F. Kurz (1) (2) (3)	51	Director
Damir S. Skerl (1) (2) (3)	73	Director
George E. Matelich (2) (3)	56	Director
Joseph P. McCoy (1)	62	Director
Stanley de J. Osborne	42	Director
Michael C. Forrest	79	Director
Michael S. Bahorich	56	Director

_________________

(1)      Audit Committee member.

(2)      Nominating and Corporate Governance Committee member.

(3)      Compensation Committee member.

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Changes in Executive Officers and Directors during 2012 and 2013

The executive management structure described above is the result of the Company’s internal Corporate Excellence reorganization initiative, which was completed on January 25, 2013. The initiative focused on our strategic offerings and repositioned key management to support the revised corporate direction to enhance the Company’s performance-oriented culture and to improve the overall ability to execute the Company’s business plan on a global basis. As a result of the reorganization, the senior management functions were repositioned and consolidated among six senior level executives (as further revised and identified above), as follows:

Name	Position(s)
Richard C. White	Chairman of the Board, President and Chief Executive Officer
P. Mathew Verghese	Senior Vice President and Chief Financial Officer
Jesse Perez, III	Chief Accounting Officer
Christopher P. Graham	Senior Vice President, Secretary and General Counsel
Thomas J. Fleure	Senior Vice President, Geophysical Technology
Ross G. Peebles	Senior Vice President, E&P Services

At the end of fiscal year 2012, the management structure consisted of the following fourteen executive officers:

Name	Position(s)
Richard C. White	President and Chief Executive Officer
P. Mathew Verghese	Senior Vice President and Chief Financial Officer
Jesse Perez, III	Chief Accounting Officer
Christopher P. Graham	Senior Vice President, Secretary and General Counsel
Thomas J. Fleure	Senior Vice President, Geophysical Technology
Ross G. Peebles	Senior Vice President, E&P Services
Barry L. Weinman	Chief of Staff, DP&I Division
Kirk L. Girouard	Vice President, South America
Jeff M. Howell	Vice President, HSEQ
Lawrence M. Scott	Vice President, Microseismic Services
Duncan W. Riley, Jr.	Vice President, US and Canada Operations
Marc A. Lawrence	Vice President, Gulf of Mexico
Maurice Flynn	Vice President, Eastern Hemisphere
Norman H. Pedersen, II	General Manager, Worldwide Marine Operations

The following table sets forth a summary of the changes in the executive officers and directors listing, during 2012 and 2013, as follows:

Name	Change	Position(s)	Month/Year
Marc A. Lawrence	Appointed	Vice President, Gulf of Mexico	January, 2012
Maurice Flynn	Appointed	Vice President, Eastern Hemisphere	April, 2012
Norman H. Pedersen, II	Title change	General Manager, Worldwide Marine Operations	April, 2012
Craig A. Lindberg	Resigned	Senior Vice President, Strategic Initiatives	June, 2012

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Lawrence M. Scott	Title change	Vice President, Marketing and Strategic Business Development	June, 2012
Barry L. Weinman	Title change	Chief of Staff, DP&I Division	August, 2012
Richard A. Degner	Resigned	President and Chief Executive Officer	October, 2012
Richard A. Degner	Appointed	Non-Executive Chairman of the Board	October, 2012
Richard C. White	Appointed	President and Chief Executive Officer	October, 2012
Christopher T. Usher	Resigned	Senior Vice President, Data Processing, Analysis and Interpretation, and Chief Technology Officer	November, 2012
Lawrence M. Scott	Title change	Vice President, Global Microseismic	December, 2012
Ross G. Peebles	Appointed	Senior Vice President, E&P Services	December, 2012
Richard C. White	Appointed	Director	December, 2012
Kirk L. Girouard	Retired	Vice President, South America	January, 2013
Richard A. Degner	Resigned	Director and Non-Executive Chairman of the Board	January, 2013
Richard C. White	Appointed	Chairman of the Board	January, 2013
Jesse Perez, III	Resigned	Chief Accounting Officer	February, 2013
Christopher P. Graham	Resigned	Senior Vice President, Secretary and General Counsel	February, 2013
Karl F. Kurz	Appointed	Chairman of Compensation Committee	March, 2013
Joseph P. McCoy	Appointed	Chairman of Audit Committee	March, 2013
James E. Brasher	Appointed	Senior Vice President, General Counsel and Secretary	March, 2013

Biographies

Current Executive Officers and Named Executive Officers

Richard C. White was appointed as our President and Chief Executive Officer in October 2012, and later elected as Director in December of the same year and Chairman of the Board of Directors in January 2013. Before joining the Company, Mr. White served as the President and Chief Executive Officer of NuTec Energy Services Inc. He held that position from October 2001 until his retirement from NuTec in September 2002. Mr. White was the Chief Executive Officer of Veritas DGC Land, Inc. from January 2000 through June 2000. From 1995 until his retirement in October 1999, Mr. White served as President of Western Geophysical Company, as well as Senior Vice President of Western Atlas Inc. He also served as Vice President of Baker Hughes Incorporated from August 1998 until October 1999. Prior to 1995, he held various other executive positions with Western Geophysical Company, including Chief Operating Officer. Mr. White also previously served on the board of directors of Geospace Technologies Corp. (formerly OYO Geospace Corp.) from 2008 through the date of his appointment at the Company; OMNI Energy Services Corp. from 2001 through 2010; and VGS Seismic Canada, Inc. from 2005 through 2009.

P. Mathew Verghesejoined us in March 2009 as Senior Vice President and Chief Financial Officer. Prior to joining us, Mr. Verghese was a Senior Vice President in the Capital Markets Division at Lehman Brothers Inc., an investment bank, from April 2007 to September 2008, and with Barclays Capital, Inc., an investment bank, from September 2008 until December 2008. While at Lehman Brothers, he served as an Investment Manager and Chief Operating Officer of the Lehman Energy Fund, a principal investments group which specialized in debt and private equity investments to the energy sector. Mr. Verghese was formerly a partner at Arthur Andersen LLP, and Chief Financial Officer of Andersen Business Consulting. Mr. Verghese serves on the Board of Trustees of the Star of Hope Mission and is past Chairman of the Board of Advisors of the College of Technology at the University of Houston. He received a Bachelor of Business Administration from the University of Houston.

James E. Brasher was appointed as our Senior Vice President, General Counsel and Secretary in March 2013. Prior to joining the Company, Mr. Brasher was engaged in private practice from May 2012 to the present. He served as the Vice President, Senior Legal Counsel and Corporate Secretary of Petroleum Geo-Services, Inc. from April 2004 to May 2012. Mr. Brasher was the Senior Vice President and General Counsel of Reservoir Technologies, Inc. from January 2000 to October 2003.

Thomas J. Fleurejoined us in August 2004 and currently serves as our Senior Vice President, Geophysical Technology. Mr. Fleure also served as our Director from December 2004 to April 2011. Prior to joining us, Mr. Fleure spent 21 years at Western Geophysical and its successor, WesternGeco, where he held several senior management positions in both technology and operations, including positions as InTouch Manager for Geophysics and Survey Evaluation and Design, Applied Technology Special Projects Manager,

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and Manager of Western Hemisphere Marine Operations. Mr. Fleure received a Bachelor of Science in Geophysical Engineering from the Colorado School of Mines.

Ross G. Peebles was appointed as our Senior Vice President, E&P Services in December 2012. Mr. Peebles brings to Global over 20 years of experience in the geosciences and professional services related to hydrocarbon exploration and production. In his role, he will be responsible for all aspects of seismic and microseismic processing and interpretation as they relate to such exploration and production services. While Mr. Peebles began his career as a geologist specializing in carbonate and fractured reservoirs, he soon moved into integrated field development studies, while most recently has been developing workflows for the characterization and development of unconventional resources. Starting in 1989, Mr. Peebles spent 15 years at Halliburton where he was Global Manager of the Reservoir Description group, Director of the Moscow Technology Center, and Director of Technical Excellence for the Consulting Business at Landmark Graphics. In 2004, he moved to Paradigm Geophysical Corp., where he served in various executive positions including Vice President for Mexico, Vice President of Applied Technologies and Vice President of Consulting Operations. Mr. Peebles joined the Company in 2011, and he served as Director of Unconventional Consulting and Vice President of Interpretation prior to taking his current role as Senior Vice President, E&P Services. He has a Bachelor of Science degree in Geological Oceanography from the Florida Institute of Technology and a Master of Science degree in Geoscience from the University of Texas at Dallas. Mr. Peebles’ career has included assignments in Washington D.C., Abu Dhabi, Aberdeen, Moscow, Villahermosa and Houston.

Richard A. Degnerfounded our Company in June 2003, and served as our Chairman of the Board, President and Chief Executive Officer until October 2012, and as Non-Executive Chairman of the Board, and as President, and as Chief Executive Officer of Autoseis, Inc., a wholly-owned subsidiary of the Company until his departure from the Company in January 2013. Prior to founding the company, Mr. Degner served as President of PGS Onshore, Inc., a geophysical services company, from December 1999 to June 2003. Prior to joining PGS Onshore, Mr. Degner held various management positions during a 17-year career with Western Geophysical, including Vice President - Western Hemisphere Operations from January 1997 to September 1999. Mr. Degner received a Bachelor of Science in both Geophysical Engineering and Geological Engineering from the Colorado School of Mines and a Masters of Business Administration from Rice University. Mr. Degner's more than twenty years of experience with other seismic companies gave him the vision that served as the foundation of our Company.

Jesse Perez, III was appointed in July 2011 as our Chief Accounting Officer. Prior to joining Global, Mr. Perez served as the CFO for Houston based Geotrace Technology, Inc. He began his career in 1980 with Western Geophysical (n/k/a WesternGeco, a business segment of Schlumberger), where he ultimately became SVP of Finance and Administration. Since 1999 he has held the position of CFO with Reservoir Technologies Inc. and NuTech Energy Services. Mr. Perez currently serves on the Board of the SEG’s SEAM Corporation. He was a recipient of the Houston Business Journal’s “Best CFO of the Year” award in 2008 and 2009. Mr. Perez received a Bachelor of Science degree in Accounting from the University of Houston, and he is a CPA in the State of Texas. He resigned in February 2013.

Christopher P. Graham joined the Company in October 2010 as our Senior Vice President, Secretary and General Counsel. Before joining the Company, Mr. Graham was a Shareholder with the firm of Chamberlain, Hrdlicka, White, Williams & Martin (n/k/a Chamberlain, Hrdlicka, White, Williams & Aughtry), headquartered in Houston, Texas, where he practiced law for the previous decade. Mr. Graham graduated magna cum laude from the University of Houston Law Center, and focused much of his successful legal career on business counseling, risk management and securities matters. He has substantial experience representing a broad spectrum of clients in energy, exploration and production, oilfield services, technology and maritime sectors. Mr. Graham is also a graduate of the University of Texas with a Bachelor of Business Administration. He resigned in February 2013.

Christopher T. Usherjoined us in January 2010 as Senior Vice President, Data Processing, Analysis and Interpretation and Chief Technology Officer. Prior to joining us, Mr. Usher served as Senior Director, Landmark Software and Services at the Landmark division of Halliburton, an oilfield services corporation, from October 2005 to January 2010. From November 2003 to September 2005, Mr. Usher was Senior Corporate Vice President of Integrated Services at Paradigm Geotechnology. Prior to that Mr. Usher held several senior level positions in the geophysical industry including President of PGS' Data Processing Division, Vice President of Worldwide Technology at Western Geophysical, and Vice President of Eastern Hemisphere Data Processing at Western Geophysical. He is a former Director of SensiLaser Technologies, Inc. Mr. Usher graduated from Yale University with a Bachelor of Science in Geology and Geophysics. He resigned in November 2012.

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Directors

Karl F. Kurz joined us in December 2010 and serves as a member of our Board of Directors and Chairman of the Compensation Committee. He brings over thirty years of energy industry experience, with particular focus in executive management, operations, midstream, marketing, business development and planning. Mr. Kurz currently is a private investor. From September 2009 through September 2012, he worked for CCMP Capital Advisors, LLC (a global private equity firm specializing in buyouts and growth equity investments) as its Managing Director and Co-Head of the Energy Group. Previously, Mr. Kurz served as the Chief Operating Officer for Anadarko Petroleum Corporation, from December 2006 through March 2009. He had responsibility for global exploration and production, marketing, midstream, land, technology, and engineering services. Mr. Kurz joined Anadarko in 2000 as Manager, Energy Marketing. He was promoted to Vice President, Marketing in November 2003, to Senior Vice President, Marketing, and General Manager, U.S. Onshore in May 2005 and to Senior Vice President, North America Operations, Midstream and Marketing in August 2006. Mr. Kurz has been involved in the energy industry for over 27 years. He began his career with ARCO Oil & Gas Company in 1983 and spent seven years in various upstream roles, with a focus on reservoir and production engineering. In 1990, he continued his career with a move into ARCO Oil & Gas Company’s Crude Oil Marketing Department. Mr. Kurz became Manager of Vastar Resources, Inc.’s Crude Oil and NGL Marketing Department in 1995 and was promoted to General Manager of Midstream and Marketing in 1998. Mr. Kurz holds a Bachelor of Science in petroleum engineering from Texas A&M University, graduating Magna Cum Laude in 1983. He is also a graduate of Harvard’s Advanced Management Program in 2008. Mr. Kurz has served on the Board of Directors of Natural Gas Supply Association, the American Petroleum Institute, and the Independent Petroleum Association of America.  Mr. Kurz also served on the board of Western Gas Partners (WES) from December 2007 through March 2008, and currently serves on the Board of SemGroup (SEMG) Corporation. He also chairs the Compensation Committee of SemGroup (SEMG) Corporation. Mr. Kurz provides us with valuable insight with regard to operations and business development from the perspective of an independent oil company.

Damir S. Skerljoined us in June 2005 and serves as a member of our Board of Directors and Chairman of the Nominating and Governance Committee. Mr. Skerl currently serves as President of Skerl & Associates, LLC, an engineering consulting company, a position he has held since December 1998, and Chief Executive Officer and Chairman of the Board of Directors of Smart Drilling and Completion, Inc., a company that owns proprietary drilling technology ("SDCI"), positions he has held since March 2000. From August 1998 to December 1999, Mr. Skerl served as Senior Vice President, Oilfield Operations for Baker Hughes Inc. From December 1990 to August 1998, Mr. Skerl served as Executive Vice President of Western Atlas International, Inc., and as President of Western Atlas Logging Services from August 1992 to August 1998 and as Executive Vice President of Western Atlas, Inc. from August 1996 to August 1998. Prior to that time, Mr. Skerl worked at Western Geophysical, where he served as Senior Vice President of International Operations and as a technical manager of seismic data processing. Mr. Skerl is a director of PrimeGeoscience, Inc. Mr. Skerl received a Bachelor of Science in Applied Geophysics and Geology of Mineral Resources from University of Zagreb, Croatia.Mr. Skerl brings knowledge of the technical aspects of oilfield services and overseas operations, which significantly contributes to our business planning and development.

George E. Matelichjoined us in December 2006 and serves as a member of our Board of Directors. Mr. Matelich currently serves as a Managing Director of Kelso & Company, L.P., a private equity firm. He joined Kelso in January 1985, after serving in the mergers and acquisitions and corporate finance departments at Lehman Brothers Kuhn Loeb from September 1982 to December 1984. From June 1978 to August 1980, Mr. Matelich was a consultant with Ernst & Ernst. Mr. Matelich is a Director of Hunt Marcellus, LLC and Venari Resources, LLC. Mr. Matelich is currently a trustee of the University of Puget Sound, serves as a Director on the Board of the American Prairie Foundation, and is a member of the Stanford Graduate School of Business Advisory Council. Mr. Matelich was a Director of CVR Energy, Inc. and CVR Partners, L.P. He received a Bachelor of Arts in Business Administration, summa cum laude, from the University of Puget Sound and a Masters of Business Administration from the Stanford Graduate School of Business. Mr. Matelich's prior experience as a director for several companies, as well as his experience with our largest stockholder, further aligns the interests of the Company with those of our stockholders.

Joseph P. McCoy joined us inApril 2011 and serves as a member of our Board of Directors and as Chairman of the Audit Committee. Mr. McCoy has also been a member of the Board of Directors, since September 2007, and has been served as Chairman of the Audit Committee, since April 2009, of Linn Energy, LLC. As of April 2011, Linn Energy created Linnco and via an IPO went public in October 2011. Mr. McCoy is a member of the Board of Directors of Linnco and serves as its audit committee chair. In August 2011, he joined the Board of Directors of Scientific Drilling, Inc., a privately held company, and serves as its Audit Committee Chairman. Mr. McCoy served as Senior Vice President and Chief Financial Officer of Burlington Resources Inc. from 2005 until 2006 and Vice President and Controller (Chief Accounting

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Officer) of Burlington Resources Inc. from 2001 until 2005. Prior to joining Burlington Resources, Mr. McCoy spent 27 years with Atlantic Richfield Company (ARCO) and affiliates in a variety of financial positions. Mr. McCoy served as a member of the Board of Directors of Rancher Energy, Inc. and BPI Energy Corp. from 2007 to 2009. Since 2006, other than his service on various Board of Directors, as identified above, Mr. McCoy has been retired. Mr. McCoy's significant experience as Chairman of an Audit Committee, Chief Financial Officer, Controller and Chief Accounting Officer of other publicly traded companies is expected to contribute substantially to our Audit Committee and financial operations.

Stanley de J. Osbornejoined us in March 2007 and serves as a member of our Board of Directors. Mr. Osborne currently serves as a Managing Director of Kelso & Company, L.P., a private equity firm. Mr. Osborne joined Kelso in July 1998. He was an associate at Summit Partners from May 1996 to June 1998 and an associate in the private equity group and an analyst in the financial institutions group at J.P. Morgan & Co. from September 1993 to May 1996. Mr. Osborne is a Director of Custom Building Products, Inc., Hunt Marcellus, LLC, Logan’s Roadhouse, Inc., Power Holdings, Tallgrass Energy Partners, LP, and Traxys S.a.r.l. Mr. Osborne previously served as a Director of CVR Energy, Inc., CVR Partners, L.P., and Shelter Bay Energy, Inc. He received a Bachelor of Arts in Government from Dartmouth College. Mr. Osborne's service as a director of several other companies and organizations brings substantial knowledge to our Board of Directors.

Michael C. Forrest, an oil and gas exploration consultant since September 1997, joined us in June 2005 and serves as a member of our Board of Directors. Since January 2001 he has served as Chairman of the DHI (Direct Hydrocarbon Indicator) Interpretation and Risk Analysis Consortium sponsored by Rose & Associates, LLP, an oil and gas exploration and production risk management consulting firm. He has been a director of the Society of Exploration Geophysicists Foundation since January 2009. From June 1999 to June 2003, Mr. Forrest served as a director of Matador Petroleum, a private oil and gas exploration and production company. From March 1995 to June 1999, Mr. Forrest served as Vice Chairman and Chief Operating Officer and from June 1992 to March 1995 as Senior Vice President Business Development and Technology of Maxus Energy Corporation after Maxus was purchased by YPF of Argentina. Prior to that time, Mr. Forrest held a number of management positions with Shell Oil Company, including Exploration Manager, Alaska Division, General Manager Exploration, Shell Offshore (Gulf of Mexico) and President of Pecten International Company, a Shell U.S.A. subsidiary. Mr. Forrest received a Bachelor of Science in Geophysical Engineering from St. Louis University. Mr. Forrest's significant experience provides a substantial insight to the needs of our national oil company customers and provides valuable direction for business planning and development.

Michael S. Bahorich was appointed as a member of our Board of Directors in April 2011. Mr. Bahorich has been Chief Technology Officer of Apache Corp. since November 2010. Mr. Bahorich served as Technology Officer of Apache Corp. from February 2009 to November 2010. He served as Executive Vice President of Exploration and Production Technology of Apache Corp. since May 2000 and Vice President, exploration and production technology since January 1999, Vice President, exploration technology since December 1997 and Chief Geophysicist since 1996. From 1981 to joining Apache Corp., he held positions of increasing responsibility at Amoco Corporation in Denver, Colorado and Tulsa, Oklahoma, most recently as a resource manager for Amoco's mid-continent business unit. He is a past president of the Society of Exploration Geophysicists and serves on advisory boards at Yale and Stanford. Mr. Bahorich is a Graduate of the University of Missouri at Columbia, and received his Master's Degree in Geophysics from Virginia Polytechnic Institute (VPI). Mr. Bahorich’s innovative approach, coupled with broad E&P knowledge, vision and experience, adds valuable insight to our Board of Directors.

Corporate Governance Principles and Director Independence

In accordance with our Bylaws and the laws of Delaware, our state of incorporation, our business and affairs are managed under the direction of our board of directors (“Board”). Our Board generally meets on a quarterly basis to review any significant developments and to act on matters requiring board approval. Between regularly scheduled meetings, our Board may also hold special meetings, execute unanimous written consents, and participate in telephone conference calls.

Our directors believe that Board independence is crucial and is the key for the Board to function properly, allowing it to provide oversight and maintain managerial accountability. It is the policy of our Board that a majority of the members of our Board consist of independent members. Our Board has adopted the Corporate Governance Principles which contain the following guidelines to assist our Board in determining director independence in accordance with the applicable SEC and NYSE rules:

·   No director who is one of our employees or former employees, or whose immediate family member is one of our executive officers or former executive officers, shall be considered "independent" until three years after such employment has ended;

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·   No director who is receiving, or in the last three years has received, or whose immediate family member is receiving, or in the last three years has received, more than $120,000 in a single year in direct compensation from us, other than fees received in such director's capacity as a member of the Board or any Board committee and pension payments or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) shall be considered "independent" Compensation received by an immediate family member for service as one of our non-executive employees need not be considered in determining independence;

·   No director who is, or in the past three years has been, affiliated with or employed by, or whose immediate family member is, or in the past three years has been, affiliated with or employed in a professional capacity by, one of our present or former internal auditors or independent auditing firms shall be considered "independent";

·   No director who is, or in the past three years has been, employed as, or whose immediate family member is, or in the past three years has been, employed as, an executive officer by any company for which any of our executive officers serves as a member of its compensation committee (or, in the absence of a compensation committee, the board committee performing equivalent functions, or, in the absence of such committee, the board) shall be considered "independent"; and

·   No director who is an executive officer or an employee, or whose immediate family member is an executive officer, of a company that makes payments to, or receives payments from us for property or services in an amount which, in any single fiscal year, exceeds the greater of $1,000,000 or 2% of such other company's consolidated gross revenue shall be considered "independent" until three years after such payments fall below such threshold.

For purposes of determining director independence, an "immediate family member" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person's home. When applying the three-year look-back provisions, an immediate family member does not include individuals who are no longer immediate family members as a result of legal separation or divorce, or those who have died or become incapacitated.

The Board has determined that each current director and each director nominee is independent, except for Mr. White our Chairman of the Board. Our Board has affirmatively determined that Messrs. Kurz, Skerl, Matelich, McCoy, Osborne, Forrest, and Bahorich do not have any material relationships with us that may interfere with the exercise of their independence from management and are independent directors under applicable NYSE rules, SEC rules and in accordance with our Corporate Governance Principles. In making this determination, our Board specifically reviewed our relationship with Messrs. Osborne and Matelich, each of whom is a managing director of Kelso & Company, L.P. a private equity firm (“Kelso”). Kelso affiliates are one of our largest stockholders. Under the NYSE rules a director's ownership of a significant amount of equity in a listed company does not prohibit a finding of independence. None of Messrs Kurz, Skerl, Matelich, McCoy, Osborne, Forrest, and Bahorich has received any type of management, advisory or consulting fees during the period these individuals have served on our board. Our Board believes that Messrs. Matelich and Osborne's affiliation with a large stockholder enhances their ability to represent the interests of our other stockholders in any situation where the interests of management and the stockholders might differ. Based upon a review of the foregoing matters, our Board determined that Messrs. Matelich and Osborne are independent.

Board Committees

Our Board has established the following three standing committees: the Audit Committee, the Nominating and Corporate Governance Committee, and the Compensation Committee, to assist it in the overall management and supervision of the Company’s business operations. In addition to the Corporate Governance Principles, the Board has adopted written Charters for each of the three standing committees, clearly outlining the mission and the responsibilities of the respective committee. Copies of the committees’ charters are available on the Company’s website at www.globalgeophysical.com under Investor Relations - Corporate Governance - Overview.

The following table provides the composition of our Board Committees as of April 19, 2013:

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Name	Audit Committee	Nominating and Corporate Governance Committee	Compensation Committee
Richard C. White (1)
Karl F. Kurz (2)	Member	Member	Chair
Damir S. Skerl	Member	Chair	Member
George E. Matelich(3)		Member	Member
Joseph P. McCoy (4)	Chair
Stanley de J. Osborne
Michael C. Forrest
Michael S. Bahorich

________________________

(1)   Chairman of the Board of Directors.

(2)   Mr. Kurz resigned as Chairman Audit Committee and was appointed as Chairman of the Compensation Committee in March 2013. He remains a member of the Audit Committee.

(3)   Mr. Matelich resigned as Chairman of the Compensation Committee in March 2013; he remains a member of the same committee.

(4)   Mr. McCoy was appointed as Chairman of the Audit Committee in March 2013.

Audit Committee

The principal function of our Audit Committee will be to assist our Board in the areas of financial reporting and accounting integrity. Per the Charter, the purpose of our Audit Committee is to oversee (i) the integrity of the Company's financial statements and disclosures, (ii) the Company's compliance with legal and regulatory requirements, (iii) the qualifications, independence and performance of the Company's independent auditing firm, (iv) the performance of the Company's internal audit function and independent auditing firm, (v) the Company's internal control systems, and (vi) the Company's procedures for monitoring compliance with the Company's Code of Business Conduct and Ethics.

Our Audit Committee will meet periodically with our management, and our independent registered public accounting firm to review our financial information and ensure such parties are properly discharging their responsibilities. The independent registered public accounting firm will report directly to our Audit Committee and will annually meet with our Audit Committee. Our Audit Committee will have the authority to investigate any matters brought to its attention and to retain outside legal, accounting or other consultants if deemed necessary. Members of our Audit Committee may not simultaneously serve on the audit committee of more than two other public companies, except if the Board affirmatively determines that that such simultaneous service on multiple audit committees will not impair the ability of such member to serve on the Audit Committee. The Board has determined that none of our members of the Audit Committee serves simultaneously on the audit committee of more than two other public companies. In addition to the above, our Audit Committee will meet, or otherwise discuss, its:

·   Review of the Company's financial statements and the disclosures that are to be included in the Company's Form 10-Q and Form 10-K filings with the SEC, including the disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations"; and

·   Preparation of the Committee's report to be included in the Company's proxy statement in connection with the Company's annual meetings of stockholders.

The Board has determined that each member of the Audit Committee is financially literate, has accounting or related financial management expertise within the meaning of the listing standards of the NYSE, and is independent as defined under the NYSE listing standards. In addition, the Board has determined that at least one member of the Audit Committee qualifies as an Audit Committee Financial Expert, as such term is defined by the SEC. Mr. McCoy has been designated to serve as the Audit Committee Financial Expert. The Board also believes that the collective experiences of the other members of the Audit Committee make them well qualified to serve on the Company’s Audit Committee. Stockholders should understand that Mr. McCoy’s designation as an Audit Committee Financial Expert is a SEC disclosure requirement, and it does not impose on Mr. McCoy any duties, obligations or liabilities that are greater than those which are generally imposed on him as a member of the Audit Committee and the Board, and his designation as an Audit Committee Financial Expert pursuant to this requirement does not affect the duties, obligations or liabilities of any other member of the Audit Committee or the Board.

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Nominating and Corporate Governance Committee

The purpose of our Nominating and Corporate Governance Committee is to:

·   Identify and recommend to our Board individuals qualified to be nominated for election to our Board;

·   Recommend to our Board the members and chairperson for each board committee;

·   Periodically review and assess our Corporate Governance Principles and our Code of Business Conduct and Ethics and make recommendations for changes thereto to our Board;

·   Oversee the annual self-evaluation of the performance of our Board and the annual evaluation of our management; and

·   Recommend to our Board a successor to our Chief Executive Officer when a vacancy occurs.

Our Nominating and Corporate Governance Committee established certain criteria it considers as guidelines in considering nominations to our Board. The criteria will include:

·   Personal characteristics, including such matters as integrity, age, education, diversity of background and experience, absence of potential conflicts of interest with us or our operations, and the availability and willingness to devote sufficient time to the duties of being a director;

·   Experience in corporate management, such as serving as an officer or former officer of a publicly held company;

·   Experience in our industry and with relevant social policy concerns;

·   Experience as a board member of another publicly held company;

·   Academic expertise in an area of our operations; and

·   Practical and mature business judgment.

The criteria are not exhaustive and our Nominating and Corporate Governance Committee and our Board may consider other qualifications and attributes which they believe are appropriate in evaluating the ability of an individual to serve as a member of our Board. Our Nominating and Corporate Governance Committee's goal will be to assemble a board of directors that brings a variety of perspectives and skills derived from high quality business and professional experience. In order to ensure that the Board consists of members with a variety of perspectives and skills, our Nominating and Corporate Governance Committee will not set any minimum qualifications and also considers candidates with appropriate non-business backgrounds. Other than ensuring that at least one member of our Board and Audit Committee is a financial expert, and a majority of our Board meets all applicable independence requirements, our Nominating and Corporate Governance Committee will not have any specific skills that it believes are necessary for any individual director to possess. Instead, our Nominating and Corporate Governance Committee will evaluate potential nominees based on the contribution such nominee's background and skills could have upon the overall functioning of our Board.

Our Board believes that, based on our Nominating and Corporate Governance Committee's knowledge of our Corporate Governance Principles and the needs and qualifications of our Board at any given time, our Nominating and Corporate Governance Committee will be best equipped to select nominees that will result in a well-qualified and well-rounded board of directors. In making its nominations, our Nominating and Corporate Governance Committee identifies nominees by first evaluating the current members of our Board willing to continue their service. Current members with qualifications and skills, consistent with our Nominating and Corporate Governance Committee's criteria for Board service, will be re-nominated. As to new candidates, our Nominating and Corporate Governance Committee will generally poll our Board members and members of management for recommendations. Our Nominating and Corporate Governance Committee may also review the composition and qualification of the Board of our competitors, and may seek input from industry experts or analysts. Our Nominating and Corporate Governance Committee will review the qualifications, experience and background of the candidates. Final candidates will be interviewed by the independent directors and executive management. In making its determinations, our Nominating and Corporate Governance Committee will evaluate each individual in the context of our board as a whole, with the objective of assembling a group that can best represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, our Nominating and Corporate Governance Committee will make its recommendation to our Board. Our Nominating and Corporate Governance Committee may in the future choose to engage third-party search firms in situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate.

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Compensation Committee

The purpose of our Compensation Committee is to develop and administer an overall compensation program designed to achieve our operating objectives and performance goals while properly blending it with the short-term and long-term interests of our stockholders. Our Compensation Committee will annually review market and industry data to assess our competitive position with respect to each element of total compensation and to ensure the attraction, retention and appropriate reward to our Chief Executive Officer and other executive officers. In addition to the determination of annual base salaries, our Compensation Committee will be responsible for determining and recommending variable annual bonuses in the form of cash and/or equity awards. Currently, the variable portion of management's annual compensation package is based on certain discretionary related criteria for which our Compensation Committee is responsible for establishing and approving. In addition to the above, our Compensation Committee will have the following duties and responsibilities:

·   Review, recommend, and discuss with management the compensation discussion and analysis section included in our annual Proxy Statement or Annual Report on Form 10-K; and

·   Prepare an annual report on executive compensation for inclusion in our annual Proxy Statement or Annual Report on Form 10-K.

Compensation Committee Interlocks and Insider Participation

None of our current executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee.

Board and Committees Matters

Board Leadership Structure

Mr. White serves as our Chairman of the Board, President and Chief Executive Officer (“CEO”). The Board believes that independent oversight of management is an important component of an effective board of directors. However, the Board members have determined that the most effective Board leadership structure for Global at the present time is for the CEO to also serve as Chairman of the Board, a structure that has served Global well for many years. The independent Board members believe that because the CEO is ultimately responsible for the day-to-day operation of the Company and for executing the Company’s strategy, and because the performance of the Company is an integral part of Board deliberations, the CEO is the director best qualified to act as Chairman of the Board. The Board retains the authority to modify this structure to best address the Company’s unique circumstances, and to advance the best interests of all stockholders, as and when appropriate.

The Board also believes that its existing corporate governance practices achieve independent oversight and management accountability, which is the goal that many companies seek to achieve by separating the roles of Chairman and CEO. Global’s corporate governance practices provide for strong independent leadership, active participation by independent directors and for independent evaluation of, and communication with, many members of our senior management. These governance practices are reflected in Global’s Corporate Governance Principles and the various Committee Charters, which are available on our website at www.globalgeophysical.com.

The Board’s Role in Risk Oversight

On a day to day basis, it is management’s responsibility to manage risk and bring to the attention of the Board the significant risks facing the Company and the controls in place to manage those risks. Generally, the Board oversees risks related to the Company’s strategic and operational objectives and is responsible for overseeing the amounts and types of risks taken by management in executing those objectives.

We have processes and structures in place to manage our key strategic, operational, financial, and compliance risks. While our entire Board is responsible for monitoring and evaluating the risks we face and our risk management processes, our Board has delegated to the Audit Committee the responsibility for oversight of certain of the Company’s risk oversight and compliance matters, including oversight of (i) material legal proceedings and material contingent liabilities, (ii) the Company’s policies regarding risk assessment and management, (iii) the Company’s compliance programs with respect to legal and regulatory requirements and the Company’s Code of Business Conduct and Ethics, (iv) related party transactions and conflicts of interest, and (v) the establishment of procedures for the receipt and handling of complaints regarding accounting, internal accounting controls and auditing matters.

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2012 Overall Meeting Attendance Rates

During 2012, the Board held fifteen Board and Board Committee meetings. Our directors had an overall attendance rate of 99%. In addition, as allowed by our Bylaws, the Board makes decisions by way of written consent. From time to time between meetings, Board and committee members may confer with each other and with management and independent consultants, and representatives of management may meet with the independent consultants on behalf of the relevant committee.

Executive Sessions

Our Board and each of our committees regularly meet in executive sessions outside the presence of management. Mr. Kurz presides over the executive sessions of the non-management, independent directors of our Board. In addition, each committee chair presides over the executive sessions of their respective committee. Mr. White does not serve on any committee of our Board.

Attendance of Directors at the Annual Meeting

While we do not have a formal policy requiring them to do so, our directors are welcome and we encourage them to attend our Annual Meeting. The Company will make all appropriate arrangements for all those directors who choose to attend.

Communication with the Board

You can contact the Board to provide comments, to ask questions, or to submit concerns (if you so prefer, anonymously or confidentially) by mail, at the following address:

Corporate Secretary

Global Geophysical Services, Inc.

13927 S. Gessner Road

Missouri City, TX 77489.

Communications are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items which are unrelated to the duties and responsibilities of the Board should be excluded, such as: product complaints, product inquiries, new product suggestions, resumes and other forms of job inquiries, surveys, or business solicitations or advertisements.

In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded, with the provision that any communication that is filtered out must be made available to any non-management director upon request.

You may also communicate online with our Board by completing the form provided on our website at www.globalgeophysical.com and selecting Investor Relations - Corporate Governance - Contact the Board.

Code of Ethics for Our Executive Officers and Board of Directors

Our Board has adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies not only to our employees, but also to the directors and the executive officers, including our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Controller, and any other senior financial officers performing similar functions, as defined in the Code of Ethics. We have a toll-free reporting service available that permits employees to confidentially report violations of our Code of Ethics or other issues of significant concern. As of the date of this Proxy Statement, all executive officers and directors have signed and acknowledged our Code of Ethics.

If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we will disclose the amendment or waiver by posting the required information on our website. You may view a copy of our Code of Ethics by visiting our website at www.globalgeophysical.com and then selecting Investor Relations - Corporate Governance - Overview - Code of Business Conduct and Ethics.

Certain Relationships and Related Person Transactions

The descriptions set forth below are qualified in their entirety by reference to the applicable agreements.

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Transactions with Executive Officers and Directors

Two of our directors, Messrs. Matelich and Osborne, are affiliated with Kelso.

Stockholders Agreement

On November 30, 2006, we entered into a stockholders agreement with affiliates of Kelso (“Kelso affiliates”) and stockholders other than the Kelso affiliates. Pursuant to this agreement, (a) Kelso affiliates were given the right to make an unlimited number of requests that we register their shares of our common stock under the Securities Act of 1933, (b) following the first anniversary of an initial public offering, the Kelso affiliates were given the right to make a request for such registration on a delayed or continuous basis under Rule 415, and (c) the stockholders other than the Kelso affiliates were given the right to make an unlimited number of requests that we register their shares of our common stock provided that at least $25.0 million in shares is registered at any one time. In any demand registration, all of the parties to the registration rights agreement have the right to participate on a pro rata basis, subject to certain conditions. In addition, if we propose to register any of our shares (other than registrations related to exchange offers, benefit plans and certain other exceptions), all of the holders of registration rights under the stockholders agreement have the right to include their shares in the registration statement, subject to certain conditions. In connection with the completion of the offering in April 2010, the parties have amended this agreement such that the parties to the agreement do not have registration rights with respect to the offering.

Pursuant to the terms of the stockholders agreement, Kelso affiliates requested registration of all shares owned or beneficially owned by Kelso affiliates, including those shares subject to warrant agreements. On July 28, 2011 we filed a registration statement Form S-3 registering all 12,396,634 shares owned by Kelso affiliates or beneficially owned by Kelso for resale. The registered shares included 295,984 shares that were issued pursuant to a cashless exercise of all warrants held or beneficially held by Kelso affiliates. The registration statement was declared effective on September 8, 2011.

Kelso Agreement

On December 1, 2006, we entered into an agreement with Kelso, pursuant to which Kelso may provide consulting and advisory services to the Company. Pursuant to this agreement, we have agreed to reimburse Kelso and certain of its affiliates for their expenses incurred in connection with their investment in us and in connection with any services to be provided by them to us on a going-forward basis. We have also agreed to indemnify and hold harmless Kelso and certain of its affiliates with respect to their investment in us and any services to be provided by them to us on a going-forward basis.

Review, Approval or Ratification of Transactions with Related Persons

Our conflict of interest policy prohibits employees and officers from engaging in any activity which might create or appear to create a conflict of interest or interfere with our business, except as approved by our Audit Committee. Furthermore, we will require that all conflicts of interest be fully disclosed by each employee. This policy is disclosed in our Code of Ethics. We also have a written prohibition of personal loans to executive officers or directors in our Corporate Governance policies, under which we are prohibited from making or renewing any personal loan to our executive officers or directors. In addition, pursuant to our Code of Ethics, our executive officers and directors are required to be free from actual or apparent conflicts of interest that would interfere with their loyalty to us or to our stockholders. Similarly, our Code of Ethics prohibits our executive officers and directors from appropriating business opportunities that are presented to the Company, from competing with the Company, and from using their positions with the Company or Company information for personal gain.

COMPENSATION DISCUSSION AND ANALYSIS

Summary

In this section, we provide information regarding the objectives and elements of our compensation philosophy, policies and practices with respect to the compensation of our executive officers who appear in the "Summary Compensation Table" below (referred to collectively throughout this section as our "Named Executive Officers").  The Compensation Committee has responsibility for establishing, implementing and monitoring adherence to our compensation objectives.

Our Named Executive Officers for the fiscal year ended December 31, 2012 were:

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Name	Position(s)
Richard C. White	President and Chief Executive Officer
Richard A. Degner	Former President and Chief Executive Officer
P. Mathew Verghese	Senior Vice President and Chief Financial Officer
Ross G. Peebles	Senior Vice President, E&P Services
Jesse Perez, III	Former Chief Accounting Officer
Christopher P. Graham	Former Senior Vice President, Secretary and General Counsel
Christopher T. Usher	Former Senior Vice President, Data Processing, Analysis and Interpretation and Chief Technology Officer

Stockholder Advisory Vote on Executive Compensation

At the 2011 Annual Meeting, the stockholders, on an advisory basis, voted in favor of an annual advisory vote on the frequency of holding future votes to approve the compensation of the Company’s Named Executive Officers. In accordance with the stockholder’s preference, the Company will hold an advisory vote on executive compensation every year. Proposal No. 2 in this Proxy Statement contains the resolution and supporting materials with respect to this year’s advisory vote on executive compensation.

We conducted the last advisory vote on executive compensation last year, at our 2012 Annual Meeting of Stockholders. The advisory vote is not binding on the Company, our Board of Directors or our Compensation Committee, although we believe it is important for our stockholders to have a means to express their opinions regarding our executive compensation philosophy, programs and policies. The stockholders approved the compensation of the Company’s Named Executive Officers with 82% of votes cast in favor of the “say-on-pay” advisory proposals. The Compensation Committee values the opinions expressed by our stockholders and took into consideration the strong support of the stockholders when evaluating the compensation policies and overall objectives for 2013. As a result the Compensation Committee decided to retain the general approach and structure of the Company’s executive compensation program.

Objectives of Our Executive Compensation Program

Our executive compensation philosophy is based on pay-equity and at-risk compensation. We believe that a properly designed compensation program can substantially reinforce high performance. For this reason, our total compensation program is designed so that a significant amount of executive compensation is equity-based and therefore at risk. Our executive compensation program is designed to achieve the following objectives:

·   Attract and retain talented and experienced executives to lead our Company.  Our overall compensation levels are targeted to attract and retain the type of talent needed for us to maintain a leadership position in the seismic services industry.

·   Align the interests of our executives with those of our stockholders.  We believe that the best way to inspire cost-consciousness, leadership and performance is by distributing ownership in the form of equity-based compensation throughout our ranks. To align the interests of our executives with those of our stockholders, we provide a significant portion of compensation in the form of stock-based awards under our 2006 Incentive Compensation Plan.

·   Foster a team approach to achieve our business objectives.  We believe an environment that promotes collaboration will best ensure the achievement of our long-term success. Accordingly, we have an internal pay-equity practice that recognizes the importance of all employees and encourages collaboration in the achievement of our business objectives.

Role of the Compensation Committee in Setting Executive Compensation

Our Compensation Committee is responsible for establishing, implementing and monitoring our compensation programs, including those applicable to our Named Executive Officers. In particular, the Compensation Committee's role is to oversee, on behalf of our Board, our compensation and benefit plans and policies, administer our incentive compensation plan (including reviewing and approving equity grants to directors and executive officers) and review and approve annually all compensation decisions relating to our Named Executive Officers and other executive officers. The Compensation Committee meets at least annually to review executive compensation programs, approve compensation levels, review management performance and approve final executive bonus payments.

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Use of Compensation Consultant

In past years the Compensation Committee, through its collective experience in the seismic industry, has set executive compensation levels by relying on its general understanding of the compensation practices of other similar companies and considering general marketplace information. Pursuant to its charter, the Compensation Committee has the authority to retain an independent consultant as it deems appropriate and necessary. Previously, the Compensation Committee retained the services of Pearl Meyer & Partners (“Pearl Meyer”) to serve as the Company's independent compensation consultant. The Compensation Committee recently requested a formal executive compensation review from Pearl Meyer to benchmark executive officer compensation against a peer group and to provide guidance to the Compensation Committee on its compensation practices, particularly cash bonus and equity compensation for the executive officer group. Pearl Meyer issued a written report to the Compensation Committee in the form of a Director Compensation Review and an Executive Compensation Review on January 31, 2013 and April 11, 2013, respectively. The Compensation Committee is in the process of analyzing Pearl Meyer’s report and may implement certain recommendations by the end of fiscal year 2013 or early fiscal year 2014.

Role of Executive Officers in the Compensation Process

Our President and Chief Executive Officer ("CEO") is a current member of our Board of Directors. Our CEO has participated in deliberations with our Board and has participated in Compensation Committee meetings (although he is not a member of the Compensation Committee) concerning senior executive officer compensation (other than his own). The Compensation Committee solicits recommendations from our CEO on compensation decisions affecting other members of our senior executive management team. No other executive officer assumes an active role in the evaluation, design or administration of our executive officer compensation program.

Executive Officer Compensation

Principal Components of Compensation of Our Named Executive Officers

The compensation package offered to our executive officers, including our Named Executive Officers, consists of the following components:

Element	Form of Compensation	Purpose of Compensation
Base Salary	Cash	Provides competitive fixed compensation to reflect the roles, responsibilities, skills, experience and performance of the executives
Short-Term Incentive	Cash Bonus and Commissions	Motivate and rewards the achievement of short-term corporate goals and reward the successful marketing of our programs
Long-Term Incentive	Stock Option and Restricted Stock Grants	Motivates and rewards financial performance over a sustained period and aligns management and stockholder interests by encouraging management ownership Reinforces high-energy entrepreneurial spirit, which we believe is a key factor to high performance in our industry
Health, Retirement and Other Benefits	Eligibility to participate in plans generally available to all employees, including 401(k); Employee Stock Purchase Plan; vacation; health; life insurance, and disability plans	Plans are part of broad-based employee benefits

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Base Salary

We provide our executive officers and other employees with base salary to compensate them for services rendered during the year. We have historically set pay at levels that reflect the qualifications of each individual and what we believe to be the individual’s competing opportunities in the market. Base salaries are generally reviewed on an annual basis, considering various factors, such as (i) the executive's individual performance, (ii) the performance of the executive's division, (iii) our company-wide performance, (iv) the executive's experience and expertise, (v) the executive's position and job responsibility, (vi) the executive's years of service with us, and (vii) the average base pay level for similar positions within our Company. The weight given to each of these factors varies and the Compensation Committee exercises subjective judgment when making salary recommendations with respect to our executive officers.

Cash bonuses are paid at the sole discretion of the Compensation Committee, taking into account recommendations from our CEO for executives other than himself. Each year, the Compensation Committee establishes a bonus pool from which employee bonuses are paid. The amount of the pool is determined by the Compensation Committee at the end of the year based on our overall corporate performance.

The Compensation Committee does not use a formula to determine the size of the bonus pool, nor does it establish performance metrics in advance. All employees who commence employment with us prior to November 30th of the applicable bonus year and continue to be employed with us as of December 31st of that year are eligible to receive bonuses with respect to that year, or otherwise at the discretion of the Board of Directors. The amount that each employee receives is equal to a percentage of his or her total compensation and is based on factors such as his or her role within the company, tenure, and individual performance as assessed by our senior managers and head of human resources and communicated to our CEO. No particular factor is assigned any particular weight and all individual bonus determinations are made in the sole discretion of the Compensation Committee, taking into account our CEO's recommendations (except in the case of our CEO whose bonus determination is made solely by the Compensation Committee). These cash bonuses reflect our belief that retaining proven talent is paramount to our future success. For 2013, the Compensation Committee has approved a formulaic bonus plan supported by the Company’s Management Team for determining the size of the bonus pool and the amount each employee is eligible to receive.  The plan is performance metric based on free-cash flow generation, net operating profit improvement, backlog growth, and the accomplishment of HSEQ management metrics.

In establishing the size of the 2012 bonus pool, the Compensation Committee considered our overall performance and our CEO's recommendations regarding executive performance. When making recommendations regarding bonuses paid to our Named Executive Officers, our CEO considered the seniority of each member of management and each executive officer's contribution to our growth and profitability. For fiscal year 2012, Mr. Verghese received cash bonus compensation of $95,000, Mr. Peebles received cash bonus compensation of $40,000, Mr. Perez received cash bonus compensation of $45,000, and Mr. Graham received cash bonus compensation of $84,000. Mr. White received cash bonus compensation of $21,250, which represents 50% of the signing bonus owed pursuant to the terms and conditions of his employment agreement, and he waived receipt of the 2012 annual bonus he was entitled pursuant to such employment agreement. As Mr. Degner and Mr. Usher ceased to be executive officers in 2012, they were not eligible for and did not receive any cash bonus compensation.

In addition to cash bonuses, sales commissions may be paid based upon the successful marketing of our programs. No Named Executive Officer received a commission payment in fiscal year 2012.

Long-Term Incentive Compensation

We believe that widely distributing ownership of the company to our employees through the grant of equity awards is critical to establishing and building a high performance, value conscious culture. A key objective of our compensation program is to encourage loyalty and reward long-term strategic accomplishments and enhancement of longer-term stockholder value through equity-based incentives which include stock option grants and restricted stock awards.  The historical practice of the Board has been to grant equity-based awards to attract, retain, motivate and reward employees, particularly executive officers and managers, and to create a culture of ownership in our company. Such grants have primarily consisted of restricted stock and stock options. Stock option grants typically vest over four years and restricted stock awards typically vest over eight calendar quarters beginning on the last day of the first full calendar quarter following the first anniversary of the grant date.

All equity compensation awards are granted pursuant to our 2006 Incentive Compensation Plan. We do not grant equity awards on an annual basis. We have historically granted stock options with an exercise price in excess of the grant date fair value in order to create an incentive for the employees to create value. Generally, the Board has granted awards of restricted stock or stock options to employees when they join the Company.

To date we have not implemented any specific equity granting policies or stock ownership guidelines for our executives. We are presently reviewing best practices and reevaluating our position with respect to equity

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granting policies and stock ownership guidelines. Each of the Named Executive Officers received an equity grant in fiscal year 2012.

Broad-Based Employee Benefits and Other Perquisites

We believe that establishing competitive benefit packages for our employees is an important factor in attracting and retaining highly qualified personnel. Executive officers, including our Named Executive Officers, are eligible to participate in all of our employee benefit plans, including company-paid medical, dental, vision, group life and accidental death and dismemberment insurance, our employee stock purchase plan and our 401(k) retirement plan, on the same basis as other employees. We also pay certain life insurance premiums on behalf of our employees, including Named Executive Officers.

401(k) Retirement Plan

Under our 401(k) retirement plan, we currently provide a matching contribution of 100% on the first 3% of employee contributions and 50% on the next 2% of employee contributions. At the discretion of our board, we may also elect to make a profit sharing contribution to the 401(k) retirement plan. We did not make a profit sharing contribution in 2012.

Pension Benefits

None of our Named Executive Officers is covered by a pension plan or other similar benefit plan that provides for payments or other benefits at, following, or in connection with retirement.

Nonqualified Deferred Compensation

None of our Named Executive Officers is covered by a defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.

Compensation Mix

Our current compensation package is designed to provide a balance between achieving our business objectives and providing competitive compensation to our executives. The cash components—base salary and annual cash bonus compensation—are designed to provide a link between our operations management and financial performance and the compensation that is earned by the executives. The equity compensation component is designed to encourage high performance by closely aligning an executive's pay with the interests of our stockholders. To date we have not established any formula for determining the portion of an executive's compensation that will be paid in equity versus cash or the amount that should be guaranteed versus at-risk. However, our historical practice has been to provide the senior members of our management team with a significant percentage of their total compensation in the form of equity-based compensation—generally stock options or restricted stock.

Tax and Accounting Implications

Deductibility of Executive Compensation/Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code, or the Code (as interpreted by IRS Notice 2007-49) denies a federal income tax deduction for certain compensation in excess of $1.0 million per year paid to the chief executive officer, chief financial officer and the three other most highly-paid executive officers (other than the chief executive officer and chief financial officer) of a publicly-traded corporation. Certain types of compensation, including compensation based on performance criteria that are approved in advance by stockholders, are excluded from the deduction limit. The Board's policy is to qualify compensation paid to our executive officers for deductibility for federal income tax purposes to the extent feasible. However, to retain highly skilled executives and remain competitive with other employers, the Board reserves the right to design compensation programs that recognize a full range of performance criteria considered important to our success, even when the compensation paid under such programs may not be deductible. We have intended to structure equity awards to the Named Executive Officers under the 2006 Incentive Compensation Plan as qualifying performance-based compensation for Section 162(m) purposes. However, no assurances can be given, notwithstanding the Company’s efforts, that compensation intended by the Company to satisfy the requirements for deductibility under Section 162(m) does in fact do so.

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Accounting for Stock-Based Compensation

We account for stock-based payments under our stock incentive plan in accordance with the requirements of FASB ASC 718.

Compensation Committee Report

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management.  Based on our review and discussions with management, we recommend to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2012.

This report is hereby submitted by the members of the Compensation Committee of the Board of Directors:

·   Karl F. Kurz (Chairman)

·   Damir S. Skerl

·   George E. Matelich.

Executive Compensation

The following narrative, tables and footnotes describe the "total direct compensation" earned during fiscal years 2012, 2011 and 2010 by our Named Executive Officers. The total direct compensation presented below in the "Summary Compensation Table" does not reflect the actual compensation received by our Named Executive Officers in each such fiscal year. The actual value realized by our Named Executive Officers in fiscal year 2012 from long-term incentives is presented in the Option Exercises and Stock Vested table.

Summary Compensation Table

The following table sets forth information concerning the compensation paid to our Named Executive Officers for services to the Company during the fiscal years ended December 31, 2012, 2011 and 2010:
 

				Stock	Option	All Other
		Salary	Bonus	Awards	Awards	Compensation	Total
Name and Title	Year	($)	($)(1)	($)(2)	($)(3)	($)(4)	($)
Richard C. White (5)	2012	66,250	21,250	969,175	-	161	1,056,836
President and Chief	2011	-	-	-	-	-	-
Executive Officer	2010	-	-	-	-	-	-
Richard A. Degner	2012	300,000	-	92,300	-	15,250	407,550
Former President and Chief	2011	264,000	66,000	296,750	-	11,190	637,940
Executive Officer	2010	240,000	96,000	-	-	13,690	349,690
P. Mathew Verghese	2012	252,000	95,000	46,150	-	450	393,600
Senior Vice President	2011	252,000	37,800	89,025	-	5,058	383,883
and Chief Financial Officer	2010	240,000	96,000	210,000	-	355	546,355
Ross G. Peebles (6)	2012	187,750	40,000	234,000	-	444	462,194
Senior Vice President,	2011	123,958	18,483	74,150	153,927	175	370,693
E&P Services	2010	-	-	-	-	-	-
Jesse Perez, III (7)	2012	210,000	45,000	184,600	-	11,430	451,030
Former Chief Accounting	2011	93,305	30,000	359,600	-	161	483,066
Officer	2010	-	-	-	-	-	-
Christopher P. Graham	2012	249,000	84,000	46,150	-	10,330	389,480
Former Senior Vice President, Secretary	2011	240,000	80,000	178,050	328,790	7,070	833,910
and General Counsel	2010	44,545	60,000	277,550	-	11	382,106
Christopher T. Usher	2012	263,892	-	321,900	-	15,265	601,057
Former Senior Vice President, Data Processing,	2011	252,000	100,800	307,750	-	670	661,220
Analysis and Interpretation and Chief Technology Officer	2010	210,000	81,008	420,000	-	338	711,346

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_____________________

(1)   The amounts in this column represent discretionary bonuses to each of our Named Executive Officers with respect to the applicable year; except (i) in 2010, Mr. Graham was paid a signing bonus of $30,000 in 2012, and (ii) in 2012, Mr. White was paid a signing bonus of $21,250, which represents 50% of the signing bonus owed pursuant to the terms and conditions of his employment agreement. Discretionary bonuses reported in 2011 and 2012 were earned in their respective fiscal years; however, they were not all paid until January 2012 and January 2013, respectively.

(2)   The amounts in this column represent the grant date fair value of the full equity awards with respect to stock awards for the fiscal year computed in accordance with FASB ASC 718.

(3)   The amounts in this column represent the grant date fair value of the full equity awards with respect to option awards for the fiscal year computed in accordance with FASB ASC 718.

(4)   The amounts in this column represent the Company matching contributions made to each of the Named Executive Officers under our 401(k) retirement plan and amounts we paid for life insurance premiums for the Named Executive Officers. Life insurance premiums paid for Messrs. White, Degner, Verghese, Peebles, Perez, Graham, and Usher in 2012 were $161, $690, $450, $444, $1,290, $270, and $661, respectively.

(5)   Mr. White commenced employment in October of 2012. The 2012 amounts do not represent a full year's compensation. Pursuant to his employment agreement, Mr. White was entitled to receive an award of restricted stock valued of $1,000,000. Mr. White and the Company agreed that the amount of shares actually granted would be determined on a ten day weighted average stock price. The ten day weighted average stock price was $5.19, resulting in a restricted stock grant of 192,679 shares.

(6)   Mr. Peebles’ fiscal 2011 compensation represents amounts earned commencing in April of 2011, his month of hire, through December 2011. The 2011 amounts do not represent a full year's compensation.

(7)   Mr. Perez's fiscal 2011 compensation represents amounts earned commencing in July of 2011, his month of hire, through December 2011. The 2011 amounts do not represent a full year's compensation.

Grants of Plan Based Awards for Fiscal Year 2012

The following table reports all grants of plan-based awards made during fiscal year 2012 to our Named Executive Officers:

Named Executive Officer	Grant Date	All Other Stock Awards: Number of Shares of Stock or Units (#)(1)	All Other Stock Awards: Number of Securities Underlying Options (#)	Exercise of Base Price of Option Awards ($)/Sh	Grant Date Fair Value of Stock and Option Awards ($)(2)
Richard C. White	10/25/2012	192,679	-	-	969,175
Richard A. Degner	4/12/2012	10,000	-	-	92,300
P. Mathew Verghese	4/12/2012	5,000	-	-	46,150
Ross G. Peebles	5/2/2012	25,000	-	-	234,000
Jesse Perez, III	4/12/2012	20,000	-	-	184,600
Christopher P. Graham	4/12/2012	5,000	-	-	46,150
Christopher T. Usher	3/19/2012	30,000	-	-	321,900

___________________

(1) The stock awards granted to each of our Named Executive Officers vest with respect to 12.5% of the number of shares granted to the Named Executive Officer on the last day of the first full calendar quarter following the first anniversary of the grant date and on the last day of each of the next seven calendar quarters thereafter.

 (2) The amounts reported in this column represent the grant date fair value of the full equity awards reported in the previous columns pursuant to FASB ASC 718.

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Outstanding Equity Awards at Fiscal Year End 2012

The following table provides information regarding the value of all unexercised options and unvested restricted stock previously awarded to our Named Executive Officers:

	Option Awards					Stock Awards
Named Executive Officer	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units that have not Vested (#)	Market Value of Shares or Units of Stock that have not Vested ($)(1)
Richard C. White	-	-	-	-		192,679	741,814
Total	-	-				192,679	741,814
Richard A. Degner	10,000	-	15	6/3/2017		31,875	122,719
	10,000	-	20	6/3/2017
	20,000	-	25	6/3/2017
	20,000	-	30	6/3/2017
	7,500	2,500	15	6/29/2019
Total	67,500	2,500				31,875	122,719
P. Mathew Verghese	11,250	3,750	15	3/30/2019		13,438	51,736
	11,250	3,750	20	3/30/2019
	15,000	5,000	25	3/30/2019
	15,000	5,000	30	3/30/2019
	7,500	2,500	15	6/29/2019
Total	60,000	20,000				13,438	51,736
Ross G. Peebles	1,250	3,750	15	4/13/2021		28,750	110,688
	1,250	3,750	20	4/13/2021
	1,250	3,750	25	4/13/2021
	1,250	3,750	30	4/13/2021
Total	5,000	15,000				28,750	110,688
Jesse Perez, III	-	-	-	-		35,000	134,750
Total	-	-				35,000	134,750
Christopher P. Graham	10,000	10,000	15	1/31/2021		35,625	137,156
	5,000	5,000	20	1/31/2021
	10,000	10,000	25	1/31/2021
	10,000	10,000	30	1/31/2021
Total	35,000	35,000				35,625	137,156
Christopher T. Usher  (2)	7,500	7,500	15	11/19/2019		-	-
	5,000	5,000	20	11/19/2019
	10,000	10,000	25	11/19/2019
	10,000	10,000	30	11/19/2019
Total	32,500	32,500				-	-

___________________

(1) The values set forth in this column are based on the fair market value of our shares on December 31, 2012.

(2) The Nonstatutory Stock Options were granted to Mr. Usher on November 20, 2009, when he accepted his offer of employment.

28

Option Exercises and Stock Vested in Fiscal Year 2012

The following table provides information as of December 31, 2012, regarding options exercised and vested stock awards held by each of the Named Executive Officers:

Named Executive Officer	Option Awards		Stock Awards
	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting (#)(1)
Richard C. White	-	-	-	-
Richard A. Degner	-	-	3,125	12,031
P. Mathew Verghese	-	-	8,437	52,526
Ross G. Peebles	-	-	1,250	5,850
Jesse Perez, III	-	-	5,000	19,250
Christopher P. Graham	-	-	19,375	121,363
Christopher T. Usher	-	-	15,000	111,200

____________________

(1) The values set forth in this column are based on the fair market value of our shares on the vesting date.

Employment Agreements and Change of Control Arrangements

In 2008, our Compensation Committee determined that it was in the best interests of the Company to not renew the employment agreements for our executive officers upon the expiration of the initial terms of such agreements. With the completion of our internal Corporate Excellence initiative to reorganize the management structure of the Company, the Compensation Committee entered into new employment agreements with three of the current executive officers effective January 24, 2013. During fiscal year 2012, Mr. White and Mr. Graham are the only Named Executive Officers with employment agreements. The terms of the employment agreements are summarized below under the subheadings “Richard C. White Employment Agreement,” and “Christopher P. Graham Employment Agreement”.

Richard C. White Employment Agreement

We entered into an employment agreement with Richard C. White as President and Chief Executive Officer on October 25, 2012. The employment agreement has an initial term of two years, and renews automatically for additional one-year terms unless either party gives notice of an election not to renew at least 6 months prior to the end of the term. Mr. White is entitled to an initial base salary of $360,000, subject to review and increase by us from time to time. Mr. White's employment agreement also provides that he may receive an annual cash and stock bonus (each at the discretion of our Board of Directors). Mr. White was entitled to receive a sign-on bonus in the amount of $42,500 and an initial award of restricted stock with a grant date value of $1,000,000.  He is also entitled to five weeks of paid vacation each year and may participate in other employee benefit plans and arrangements in which executives at or above the level of senior vice president participate.

If we terminate Mr. White's employment without "Cause" (as defined) or if he terminates his employment for "Good Reason" (as defined), we will be obligated to pay him: (i) his base salary through the date of termination; (ii) any annual bonus that relates to a prior year and that is unpaid and any unpaid portion of the sign-on bonus; (iii) an amount equal to two-year's base salary; and (iv) the greater of: (x) the amount of the bonus paid to him for the prior two years, or (y) 50% of his base salary; and (v) all of his unvested restricted stock outstanding will vest. If his employment is terminated for death or disability, we will be obligated to pay him (i) his base salary through the date of termination and any annual bonus that relates to a prior year and is unpaid as of the termination date; and (ii) an amount equal to one-year base salary. In addition, he will become fully vested in all unvested restricted stock outstanding on the date of his disability or death. If he terminates his employment for other than "good reason" or we terminate his employment for "Cause", we will only be obligated to pay him his base salary through the date of termination. If we elect not to renew Mr. White's employment agreement, he will be eligible to receive the annual bonus, if any, for the year in which the non-renewal notice is provided, which amount will be pro-rated for the number of days worked.

29

Mr. White's employment agreement defines "Cause" as:

·   his failure or refusal to perform substantially his material duties, responsibilities and obligations (other than a failure resulting from his incapacity due to physical or mental illness), which failure continued for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to him specifying the manner in which he has failed substantially to perform;

·   any intentional act involving fraud, misrepresentation, theft, embezzlement, or dishonesty ("Fraud") resulting in harm to us;

·   conviction of (or a plea of nolo contendere to) an offense which is a felony or which is a misdemeanor that involves Fraud; or

·   a material breach of his employment agreement by him.

We are required provide written notice to him describing the nature of the Cause event within 30 days of any such Cause event and he has 30 days to cure the Cause event to our reasonable satisfaction.

A "Good Reason" is defined to mean any of the following (without his express written consent):

·   A diminution in his base salary;

·   A change in the location where he performs the majority of his job duties at the time he executes his employment agreement ("Base Location") to a location that is more than twenty (20) miles from the Base Location, without his written consent, except for reasonably required travel by him on our company's business;

·   A substantial and adverse diminution in his duties, authority, responsibility or position with our Company; or

·   Any breach by our company of any material provision of his employment agreement.

However, Good Reason exists with respect to an above specified matter only if the matter is not corrected, or begun to be corrected, by us within 30 days after our receipt of written notice of the matter from him.

Mr. White's employment agreement contains restrictions on the use of confidential information and 12-month post-termination non-competition and non-solicitation covenants. In addition, the agreement obligates us to indemnify him, to the maximum extent allowed by law, against proceedings brought against him arising out of his duties serving as our officer, and to reimburse or advance to him the funds necessary for the payment of his expenses arising out of any such proceedings.

Christopher P. Graham Employment Agreement

We entered into an employment agreement with Christopher P. Graham, our Former Senior Vice President and General Counsel on October 15, 2010. The employment agreement had an initial term of three years, and renewed automatically for additional one-year terms unless either party gave notice of an election not to renew at least 90 days prior to the end of the term. Mr. Graham was entitled to an initial base salary of $240,000, subject to review and increase by us from time to time. Mr. Graham's employment agreement also provided that he may receive an annual cash and stock bonus (each at the discretion of our Board of Directors). However, such annual bonus shall not be less than 1/3 of Mr. Graham's current year base salary.  He was also entitled to four weeks of paid vacation each year and was permitted participate in other employee benefit plans and arrangements in which executives at or above the level of senior vice president participate.  Mr. Graham’s employment agreement was set to expire on December 31, 2013. The provisions of such agreement are further summarized below.

If Mr. Graham's employment was terminated without "Cause" (as defined) or if he terminated his employment for "Good Reason" (as defined), (a) we were obligated to pay him: (i) his base salary through the date of termination; (ii) an amount equal to one-year's base salary; and (iii) the greater of: (x) the amount of the bonus paid to him for the prior year, or (y) the average of the bonuses paid to him for the two prior years; and (b) all of his unvested restricted stock outstanding will vest. If his employment was terminated for death or disability, we were obligated to pay him his base salary through the date of termination and he was entitled to consideration for an annual bonus with respect to the calendar year in which he died or became disabled, which amount would have been pro-rated for the number of days worked. In addition, he would have become fully vested in all unvested restricted stock outstanding on the date of his disability or death. If he terminated his employment for other than "good reason" or we terminated his employment for "Cause", we were obligated to pay him his base salary through the date of termination. Additionally, Mr. Graham was entitled to receive a prorated annual bonus of 1/3 of his current base salary upon his termination subject to the provisions of the agreement.

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Mr. Graham's employment agreement defined "Cause" as:

·   his failure or refusal to perform substantially his material duties, responsibilities and obligations (other than a failure resulting from his incapacity due to physical or mental illness), which failure continued for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to him specifying the manner in which he has failed substantially to perform;

·   any intentional act involving fraud, misrepresentation, theft, embezzlement, or dishonesty ("Fraud") resulting in harm to us;

·   conviction of (or a plea of nolo contendere to) an offense which is a felony or which is a misdemeanor that involves Fraud; or

·   a material breach of his employment agreement by him.

We were required to provide written notice to him describing the nature of the Cause event within 30 days of any such Cause event and he had 30 days to cure the Cause event to our reasonable satisfaction.

A "Good Reason" had any of the following meanings (without his express written consent):

·   A diminution in his base salary;

·   A change in the location where he performs the majority of his job duties at the time he executes his employment agreement ("Base Location") to a location that is more than twenty (20) miles from the Base Location, without his written consent, except for reasonably required travel by him on our company's business;

·   A substantial and adverse diminution in his duties, authority, responsibility or position with our Company;

·   The termination of Mr. Richard Degner; or

·   Any breach by our company of any material provision of his employment agreement.

However, Good Reason existed with respect to an above specified matter only if the matter is not corrected, or begun to be corrected, by us within 30 days after our receipt of written notice of the matter from him.

Mr. Graham's employment agreement contained restrictions on the use of confidential information and 12-month post-termination non-competition and non-solicitation covenants. In addition, the agreement obligated us to indemnify him, to the maximum extent allowed by law, against proceedings brought against him arising out of his duties serving as our officer, and to reimburse or advance to him the funds necessary for the payment of his expenses arising out of any such proceedings.

Change of Control Arrangements

The following sets forth the incremental compensation that would be payable by us to each of our Named Executive Officers in the event of (i) a change of control or (ii) each named executive officer's termination of employment with us under various scenarios, which we refer to as "Termination Events," including the Named Executive Officer's voluntary resignation, involuntary termination for "Cause," involuntary termination without "Cause," termination by the executive for "Good Reason," termination in connection with a "Change of Control," termination in the event of "Disability," termination in the event of death, and termination in the event of retirement, where each of these defined terms has the meaning ascribed to it in the respective executive's employment agreement. In accordance with applicable SEC rules, the following discussion assumes:
 

·   that the Termination Event in question or change of control occurred on December 31, 2012, the last business day of 2012; and

·   with respect to calculations based on our stock price, we used $3.85, which was the fair market value of our stock as of December 31, 2012, the last business day of 2012.

The analysis contained in this section does not consider or include payments made to a Named Executive Officer with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation, in favor of our executive officers and that are available generally to all salaried employees, such as our 401(k) Plan. The actual amounts that would be paid to a Named Executive Officer upon termination of employment can only be determined at the time of such executive officer's termination. Due to the number of factors that affect the nature and amount of any compensation or benefits provided upon the termination events, any actual amounts paid or distributed may be higher or lower than reported

31

below. Factors that could affect these amounts include the timing during the year of any such event, our stock price at such time, and the executive officer's age.

Each Named Executive Officer is (or was) party to equity award agreements relating to options or restricted stock granted under our 2006 Incentive Compensation Plan. Specifically, each stock option or restricted stock award agreement provides for accelerated vesting of all options or shares of restricted stock in the event of an executive's death or disability or in the event of a change of control. Mr. White and Mr. Graham are (or were) also parties to an individual employment agreement. The agreements and plans for Mr. White and Mr. Graham provide that each may be entitled to additional consideration in the event of a Termination Event.

Assuming a change in control (as defined in our 2006 Incentive Compensation Plan) occurred on December 31, 2012, the vesting of the unvested stock options and restricted stock granted to our Named Executive Officers pursuant to the 2006 Incentive Compensation Plan would have accelerated and all stock options would have become vested and exercisable as of that date and all restrictions on the shares of restricted stock would have lapsed as of that date. While all of our Named Executive Officers would have been entitled to accelerated vesting of their options if a change in control occurred on December 31, 2012, since the options were underwater, such acceleration would have had no value.

Richard C. White.         In addition to the amounts listed below, Mr. White is entitled to all accrued compensation and unreimbursed expenses through the date of termination. Please refer to the above discussion regarding Mr. White's employment agreement for the specific timing and payouts of severance compensation.

				Termination
			Involuntary	in Connection
			Termination	with Change
			by us without	of Control	Change of
		Involuntary	Cause or by	(without	Control	Termination	Termination
	Voluntary	Termination	Executive for	Cause or for	without	in the Event	in the Event
	Resignation	for Cause	Good Reason	Good Reason)	Termination	of Disability	of Death
Element	($)	($)	($)	($)(6)	($)	($)	($)
Cash Severance Payment(1)	-	-	720,000	720,000	-	360,000	360,000
Bonus Payment(2)	-	-	180,000	180,000	-	90,000	90,000
Stock Option Awards(3)	-	-	-	-	-	-	-
Restricted Stock Awards(4)	-	-	741,814	741,814	741,814	741,814	741,814
Continued Health Coverage(5)	-	-	-	-	-	-	-
Total	-	-	1,641,814	1,641,814	741,814	1,191,814	1,191,814

____________________

(1) In the event of termination without Cause or termination for Good Reason, Mr. White is entitled to an amount equal to two years of base salary at the rate in effect immediately before the Termination, payable in a lump sum.

(2) In the event of termination without Cause or termination for Good Reason, Mr. White is entitled to an amount equal to the greater of: (i) the amount of his annual bonus, if any, relating to the prior two calendar years, or (ii) 50% of his base salary. The amounts in this row represent 50% of Mr. White’s base salary. If his employment is terminated for death or disability, he will be entitled to consideration for an annual bonus with respect to the calendar year in which he dies or becomes disabled, which amount will be pro-rated for the number of days worked. The pro-rated amounts of the bonuses for termination of disability are estimated at one-half of the bonus.

(3) The acceleration of vesting of stock options, if any, is governed under the terms of Mr. White's various option agreements governing the grants. In general, all option grants will vest if Mr. White's employment is terminated in the event of disability or death.

(4) Mr. White's employment agreement provides that all outstanding restricted stock will vest if Mr. White's employment is terminated without Cause or for Good Reason. Mr. White's restricted stock award agreements provide that his shares of restricted stock will vest in the event of his death or disability or in the event of a change of control. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

(5) Mr. White is not entitled to continuing health coverage other than may be provided under COBRA.

(6) Amounts payable to Mr. White for termination in connection with a change of control without Cause or with Good Reason are the same as if there were no change of control.

Richard A. Degner.        Mr. Degner did not have an employment agreement.  Therefore, he was not entitled to any compensation payable or benefits upon a Termination Event except as provided in his equity awards.

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		Termination in the	Termination in the
	Change of Control	Event of Disability	Event of Death
Element	($)	($)	($)
Stock Option Awards(1)	-	-	-
Restricted Stock Awards (2)	122,719	122,719	122,719
Total	122,719	122,719	122,719

___________________

(1) The table above shows no amount of intrinsic value for unvested options as of December 31, 2012, that could have accelerated vesting upon a termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(2) Mr. Degner’s equity awards provide that they shall vest in full upon a change in control or upon his death or disability. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

P. Mathew Verghese.        Mr. Verghese did not have an employment agreement on December 31, 2012.  Therefore, he was not entitled to any compensation payable or benefits upon a Termination Event except as provided in his equity awards.

		Termination in the	Termination in the
	Change of Control	Event of Disability	Event of Death
Element	($)	($)	($)
Stock Option Awards(1)	-	-	-
Restricted Stock Awards (2)	51,736	51,736	51,736
Total	51,736	51,736	51,736

___________________

(1) The table above shows no amount of intrinsic value for unvested options as of December 31, 2012, that could have accelerated vesting upon a termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(2) Mr. Verghese’s equity awards provide that they shall vest in full upon a change in control or upon his death or disability. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

Ross G. Peebles.        Mr. Peebles did not have an employment agreement on December 31, 2012.  Therefore, he was not entitled to any compensation payable or benefits upon a Termination Event except as provided in his equity awards.

		Termination in the	Termination in the
	Change of Control	Event of Disability	Event of Death
Element	($)	($)	($)
Stock Option Awards(1)	-	-	-
Restricted Stock Awards (2)	110,688	110,688	110,688
Total	110,688	110,688	110,688

_______________

(1) The table above shows no amount of intrinsic value for unvested options as of December 31, 2012, that could have accelerated vesting upon a termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(2) Mr. Peebles’ equity awards provide that they shall vest in full upon a change in control or upon his death or disability. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

Jesse Perez, III.    Mr. Perez did not have an employment agreement. Therefore, he was not entitled to any compensation payable or benefits upon a Termination Event except as provided in his equity awards.

33

		Termination in the	Termination in the
	Change of Control	Event of Disability	Event of Death
Element	($)	($)	($)
Stock Option Awards(1)	-	-	-
Restricted Stock Awards (2)	134,750	134,750	134,750
Total	134,750	134,750	134,750

_______________

(1) The table above shows no amount of intrinsic value for unvested options as of December 31, 2012, that could have accelerated vesting upon a termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(2) Mr. Perez’s equity awards provide that they shall vest in full upon a change in control or upon his death or disability. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

Christopher P. Graham.       In addition to the amounts listed below, Mr. Graham was entitled to all accrued compensation and unreimbursed expenses through the date of termination. Please refer to the above discussion regarding Mr. Graham's employment agreement for the specific timing and payouts of severance compensation.

				Termination
			Involuntary	in Connection
			Termination	with Change
			by us without	of Control	Change of
		Involuntary	Cause or by	(without	Control	Termination	Termination
	Voluntary	Termination	Executive for	Cause or for	without	in the Event	in the Event
	Resignation	for Cause	Good Reason	Good Reason)	Termination	of Disability	of Death
Element	($)	($)	($)	($)(6)	($)	($)	($)
Cash Severance Payment(1)	-	-	249,000	240,000	-	-	-
Bonus Payment(2)	-	-	84,000	80,000	-	42,000	42,000
Stock Option Awards(3)	-	-	-	-	-	-	-
Restricted Stock Awards(4)	-	-	137,156	137,156	137,156	137,156	137,156
Continued Health Coverage(5)	-	-	-	-	-	-	-
Total	-	-	470,156	457,156	137,156	179,156	179,156

__________________

(1) In the event of termination without Cause or termination for Good Reason, Mr. Graham was entitled to an amount equal to one year of base salary at the rate in effect immediately before the Termination, payable in a lump sum.

(2) In the event of termination without Cause or termination for Good Reason, Mr. Graham was entitled to an amount equal to the greater of: (i) the amount of his annual bonus, if any, relating to the calendar year immediately preceding the year containing the termination date, or (ii) the average of the annual bonus amounts, if any, relating to the two consecutive calendar years immediately preceding the year containing the termination date. The amounts in this row represent Mr. Graham’s annual bonus paid in 2012, the prior calendar year. If his employment is terminated for death or disability, he will be entitled to consideration for an annual bonus with respect to the calendar year in which he dies or becomes disabled, which amount will be pro-rated for the number of days worked. The pro-rated amounts of the bonuses for termination of disability are estimated at one-half of the actual bonus paid for 2012. If we elect not to renew Mr. Graham's employment agreement, he will be eligible to receive the annual bonus, if any, for the year in which the non-renewal notice is provided, which amount will be pro-rated for the number of days worked.

(3) The acceleration of vesting of stock options, if any, is governed under the terms of Mr. Graham's various option agreements governing the grants. In general, all option grants will vest if Mr. Graham's employment is terminated in the event of disability or death. The table above shows no amount of intrinsic value for unvested options as of December 31, 2012 that would have accelerated vesting upon the termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(4) Mr. Graham's employment agreement provides that all outstanding restricted stock will vest if Mr. Graham's employment is terminated without Cause or for Good Reason. Mr. Graham's restricted stock award agreements provide that his shares of restricted stock will vest in the event of his death or disability or in the event of a change of control. The table above shows the amount of intrinsic value for restricted stock as of December 31, 2012 that would have accelerated vesting upon the termination event based on a value of $3.85 per share, the fair market value of our stock on December 31, 2012.

34

(5) Mr. Graham is not entitled to continuing health coverage other than may be provided under COBRA.

(6) Amounts payable to Mr. Graham for termination in connection with a change of control without Cause or with Good Reason are the same as if there were no change of control.

Christopher T. Usher.        Mr. Usher did not have an employment agreement on December 31, 2012. Therefore, he was not entitled to any compensation payable or benefits upon a Termination Event except as provided in his equity awards.

		Termination in the	Termination in the
	Change of Control	Event of Disability	Event of Death
Element	($)	($)	($)
Stock Option Awards(1)	-	-	-
Restricted Stock Awards (2)	-	-	-
Total	-	-	-

___________________

(1) The table above shows no amount of intrinsic value for unvested options as of December 31, 2012, that could have accelerated vesting upon a termination event because the exercise price of all such options is above $3.85 per share, the fair market value of our stock on December 31, 2012.

(2) Mr. Usher terminated his employment with the Company prior to December 31, 2012, at which time all unvested equity awards were forfeited.

Director Compensation

For fiscal year 2012, our independent directors were eligible to receive $35,000 in shares of the Company's common stock, as valued at the closing price effective as of the date of the Board of Directors' meeting held on March 7, 2012, the day before the grant date, and subject to the standard vesting requirements, and $35,000 in cash consideration. The Chairman of the Audit Committee was eligible to receive an additional grant of $10,000 in shares of the Company's common stock, subject to the same grant price and vesting requirements. Mr. Matelich and Mr. Osborne have declined to receive any compensation for services provided as directors of the Company.

Directors, who are also full-time officers or employees of our Company, do not receive additional compensation for serving as directors. During fiscal year 2012, both Mr. Degner and Mr. White served as executive officers of the Company. As employees, both Mr. Degner and Mr. White received a salary and certain other benefits as set forth under “Compensation Discussion and Analysis” and “Executive Compensation” above, but no additional compensation for their service as directors.

The following table sets forth the compensation paid to each of our independent directors in 2012:

	Fees Earned or Paid in Cash ($)			All Other Compensation ($)	Total ($)
		Stock Awards ($) (1)	Option Awards ($)
Name
Richard C. White	-	-	-	-	-
Richard A. Degner	-	-	-	-	-
Karl F. Kurz (2)	35,000	45,962	-	-	80,962
Damir S. Skerl	35,000	35,751	-	-	70,751
George E. Matelich	-	-	-	-	-
Joseph P. McCoy	35,000	35,751	-	-	70,751
Stanley de J. Osborne	-	-	-	-	-
Michael C. Forrest	35,000	35,751	-	-	70,751
Michael S. Bahorich	35,000	35,751	-	-	70,751

__________________

(1) The amounts in this column represent the grant date fair value of the full equity awards with respect to stock awards for the fiscal year computed in accordance with FASB ASC 718.

(2) Mr. Kurz was awarded an additional 1,000 shares of common stock in compensation for his services as Chairman of our Audit Committee.

35

Equity Compensation Plan Information

The table below sets forth the following information as of the end of December 31, 2011 for (1) all compensation plans previously approved by our stockholders and (2) all compensation plans not previously approved by our stockholders:

Plan Category	Number of securities to be issued upon exercise of outstanding options,  warrants and rights (a)	Weighted- average exercise price of outstanding options,  warrants and  rights (b)	Number of securities remaining available for future issuance under equity compensation plans(excluding securities reflected in column  (a)) (c)
Equity compensation plans approved by security holders	1,893,200	$22.87	5,440,701
Equity compensation plans not approved by security holders	-	-	-
Total	1,893,200	$22.87	5,440,701

Equity compensation plans approved by our stockholders refer to the 2006 Incentive Compensation Plan.

AUDIT COMMITTEE MATTERS AND AUDIT COMMITTEE REPORT

Audit Committee Pre-Approval Policy and Procedures

The Audit Committee’s Charter provides that, subject to stockholder ratification, the Audit Committee shall have sole responsibility for the appointment, retention, oversight, termination and replacement of our independent registered certified public accounting firm, and for the approval of all audit and engagement fees. No services to be performed by our independent registered certified public accounting firm (including audit services or non-audit services) shall be provided to the Company unless first pre-approved by the Committee and unless permitted by applicable securities laws and the rules and regulations of the SEC. The Audit Committee may delegate to one or more members of the Audit Committee, the authority to grant pre-approvals of non-audit services, remain that the decision of any member to whom such authority is delegated to pre-approve non-audit services shall be presented to the full Audit Committee for its approval at its next scheduled meeting.

In addition, the independent registered certified public accounting firm shall report directly to the Audit Committee and shall be ultimately accountable to the Committee. The Committee shall obtain an annual written statement from the independent registered certified public accounting firm confirming its accountability to the Committee.

Fees Paid to Auditors

As previously mentioned, UHY has been serving as the Company’s independent registered public accounting firm since its inception. The following table presents the aggregate fees billed by UHY to us for services rendered for the fiscal years ended December 31, 2012 and 2011:

	Year Ended December 31,
	2012	2011
Audit Fees (1)	$414,651	$382,517
Audit-Related Fees	-	-
Tax Fees	-	-
All Other Fees (2)	$49,079	$74,338
Total	$463,730	$456,855

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__________________

(1)   The Audit fees for the years ended December 31, 2012 and 2011, respectively, were for professional services rendered for the audits of Company’s consolidated financial statements, the reviews of Company’s quarterly consolidated financial statements, the review of documents filed with the SEC, and consents.

(2)   All other fees include fees for all services except those described above. For 2011, such fees included fees for the 401(k) audit, the acquisition of Paisano Lease Co., Inc., the offering memorandum, and the review of SEC form S-3. For 2012, such fees included fees for the senior notes offering, which included review of the offering memorandum, SEC form S-4, consents and the issuance of comfort letters, and fees for the 401(k) audit.

Audit Committee Report

The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2012.

Audit Committee Charter and Responsibilities

The Audit Committee assists the Board in its oversight of the quality and integrity of the Company’s financial statements and its accounting and financial reporting practices. The Audit Committee’s responsibilities are more fully set forth in its Charter, which you can view by visiting the Company’s website at www.globalgeophysical.com and selecting Investor Relations - Corporate Governance - Overview - Audit Committee Charter.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the Company’s annual audited and quarterly consolidated financial statements for the 2012 fiscal year with management and UHY, the Company’s independent auditor. The Audit Committee has discussed with UHY the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has also received the written disclosures and the letter from UHY required by the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with UHY its independence from the Company and its management.

Audit Committee Financial Expert

The Board has determined that Mr. Joseph P. McCoy is an Audit Committee Financial Expert, as the SEC defines the term. All members of the Audit Committee are independent, as such independence for Audit Committee members is defined by the NYSE, SEC, and the company’s own independence standards.

Recommendation of Financial Statements

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Respectfully submitted,

Joseph P. McCoy (Chairman)

Damir S. Skerl

Karl F. Kurz

The preceding “Audit Committee Report” shall not be deemed soliciting material or to be filed with the SEC, nor shall any information in this report be incorporated by reference into any past or future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such filing.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information with respect to the beneficial ownership of Global common stock as of December 31, 2012 by:

37

(i)   each person known by the Company to be the beneficial owners of 5% or more of Global common stock;

(ii)   named executive officers;

(iii)   directors and nominees; and

(iv)   all of our directors and executive officers as a group.

“Beneficial ownership” is determined in accordance with the SEC rules and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes and subject to community property laws where applicable, to Company’s knowledge, the persons named in the tables below have sole voting and investment power with respect to all shares of Global common stock beneficially owned. The number of shares beneficially owned by each person or group, as of December 31, 2012, includes shares of common stock that such person or group had the right to acquire on or within 60 days after December 31, 2012, including, but not limited to, upon the exercise of options to purchase common stock, or warrants held by that person that are currently exercisable or exercisable within the 60 days term mentioned above.

Unless otherwise indicated, the address for each person set forth in the table is c/o Global Geophysical Services, Inc., 13927 South Gessner Road, Missouri City, Texas 77489.

Security Ownership by Certain Beneficial Owners

This information is reported by such beneficial owners of 5% or more of Global common stock in their Schedule 13G filings with the SEC for the 2012 fiscal year.

With respect to the Kelso affiliates, the Company has relied on information supplied by such entities on the amended Schedule 13G filed with the SEC on January 31, 2012. According to such amended Schedule 13G, they reported shared voting and shared dispositive power as to all of the shares. The figures reported were based upon the number of 37,014,627 outstanding shares reported in the quarterly report on Form 10-Q filed with the SEC by the Company on November 9, 2011. No further Schedule 13G has been filed by the Kelso affiliates after January 31, 2012.

Regarding Richard A. Degner, the information below was supplied by Mr. Degner in the amended Schedule 13G filed with the SEC on February 14, 2013. According to such amended Schedule 13G, he reported sole voting and sole dispositive power as to all of the shares. The figures reported were based upon the total number of 37,617,316 outstanding shares reported for the fourth quarter ended December 31, 2012, filed by the Company with the NYSE athttps://egovdirect.nyse.com, on January 10, 2013.

	Beneficial Ownership of Common Stock
Name	Number of Shares	Percentage
Kelso Investment Associates VII, L.P. (1) KEP VI, LLC (1)	12,396,634	33.5%
Richard A. Degner (2)	2,376,168	6.3%

______________________

(1)   The aggregate number of shares beneficially owned includes (i) 9,936,243 shares of common stock held of record by Kelso Investment Associates VII, L.P. (“KIA VII”) and (ii) 2,460,391 shares of common stock held of record by KEP VI, LLC (“KEP VI”). Kelso GP VII, LLC (“GP VII LLC”) is the general partner of Kelso GP VII, L.P. (“GP VII LP”). GP VII LP is the general partner of KIA VII. KIA VII and KEP VI, due to their common control, could be deemed to beneficially own each of the other’s securities. Each of KIA VII and KEP VI disclaims such beneficial ownership. Each of GP VII LLC, GP VII LP and KIA VII, due to their common control, could be deemed to beneficially own each other’s securities. GP VII LLC disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VII LP and KIA VII, except to the extent of its pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purposes. GP VII LP disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VII LLC and KIA VII, except, in the case of KIA VII, to the extent of its pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purposes. KIA VII disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VII LLC and GP VII LP, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purposes. KEP VI and GP VII LLC due to their common control could be deemed to beneficially own each other’s securities. KEP VI disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by each of GP VII LLC, GP VII LP and KIA VII, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purposes. Each of GP VII LLC, GP VII LP and KIA VII disclaims beneficial ownership of all of the securities owned of record, or deemed beneficially owned, by KEP VI, and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all the reported securities for any purposes. Frank T. Nickell, Thomas R. Wall, IV, George E. Matelich, Michael B. Goldberg, David I. Wahrhaftig, Frank K. Bynum, Jr., Philip E. Berney, Frank J. Loverro, James J. Connors, II, Church M. Moore,  Stanley de J. Osborne, Christopher L. Collins, and Howard A. Matlin (the “Kelso Individuals”) may be deemed to share beneficial ownership of securities owned of record or beneficially owned by GP VII LLC, GP VII LP, KIA VII, and KEP VI, by virtue of their status as managing members of GP VII LLC and KEP VI, but disclaim beneficial ownership of such securities, and this report shall not be deemed an admission that any of the Kelso Individuals is the beneficial owner of these securities for any purposes. The business address for these persons is c/o Kelso & Company, 320 Park Avenue, 24th Floor, New York, NY 10022.

(2)   The number of shares beneficially owned includes options to acquire 67,500 shares of GGS common stock within 60 days after December 31, 2012.

38

Security Ownership by Executive Officers and Directors

For each individual and group included in the table below, the percentage ownership is calculated based upon the total number of 37,617,316 outstanding shares reported for the fourth quarter ended December 31, 2012, filed by the Company with the NYSE athttps://egovdirect.nyse.com, on January 10, 2013.

All executive officers and directors, with the exception of Messrs. Degner, Fleure, Weinman, Matelich, and Osborne, owned less than 1% of the outstanding shares of common stock of the Company at December 31, 2012.

Name	Common Stock		Options Exercisable in 60 days	Total Shares Beneficially Owned, Directly or Indirectly	Percentage
Named Executive Officers:
Richard C. White	217,679		-	217,679	*
Richard A. Degner (1)	-		-	-	-
P. Mathew Verghese	18,003		60,000	78,003	*
Jesse Perez, III	42,596		-	42,596	*
Christopher P. Graham	63,533		35,000	98,533	*
Ross G. Peebles	36,594		5,000	41,594	*
Christopher T. Usher (2)	-		-	-	-
Directors:
Richard C. White (3)	217,679		-	217,679	*
Richard A. Degner (1)	2,308,668		67,500	2,376,168	6.3%
Karl F. Kurz	9,087		-	9,087	*
Damir S. Skerl (4)	280,463		10,000	290,463	*
George E. Matelich (5)	12,396,634		-	12,396,634	33%
Joseph P. McCoy	5,318		-	5,318	*
Stanley de J. Osborne (5)	12,396,634		-	12,396,634	33%
Michael C. Forrest (6)	197,068		10,000	207,068	*
Michael S. Bahorich	10,318		-	10,318	*
All Executive Officers and Directors as a group (22 persons)
All Executive Officers and Directors as a group (7)		17,440,680	501,500	17,942,180	47.7%

____________________________________

*      less than 1%

(1)   Mr. Degner resigned as an executive officer in October, 2012 and as a director in January, 2013.

(2)   Mr. Usher resigned as an executive officer in November, 2012.

(3)   Mr. White was appointed as a director in December, 2012.

(4)   Includes 58,395 shares held indirectly through the four trusts for which Mr. Skerl is a Trustee, more specifically (i) 15,845 shares in the Christopher Robert Skerl Grandchild Trust; (ii) 15,100 shares in the Matthew Phillip Skerl Grandchild Trust; (iii) 12,450 shares in the Stephen Allen Skerl Grandchild Trust; and (iv) 15,000 shares in the Nikola and Erik Skerl Trust.

39

(5)   The footnote (1) inserted under the previous table, in the “Security Ownership by Certain Beneficial Owners” section, is incorporated herein by reference. Each of Messrs. Matelich and Osborne could be deemed to share beneficial ownership of shares of common stock owned by KIA VII and KEP VI.

(6)   Includes 190,000 shares owned by Bobbye C. Forrest Exempt Bypass Trust, Michael C. Forrest, Trustee.

(7)   The following persons were included in the group: (1) Richard C. White; (2) Richard A. Degner; (3) P. Mathew Verghese; (4) Jesse Perez, III; (5) Christopher P. Graham; (6) Ross G. Peebles; (7) Thomas J. Fleure; (8) Barry L. Weinman; (9) Kirk L. Girouard; (10) Jeff M. Howell: (11) Lawrence M. Scott; (12) Duncan W. Riley, Jr.; (13) Marc A. Lawrence; (14) Maurice Flynn; (15) Norman H. Pedersen, II; (16) Karl F. Kurz; (17) Damir S. Skerl; (18) George E. Matelich; (19) Joseph P. McCoy; (20) Stanley de J. Osborne; (21) Michael C. Forrest; and (22) Michael S. Bahorich.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), requires the Company’s executive officers and directors, and greater than 10% beneficial owners to file an initial report of ownership of Global common stock on Form 3 and reports of changes in ownership on Form 4 or Form 5 with the SEC. Persons subject to Section 16 are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. The Company believes, based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, that with respect to the fiscal year ended December 31, 2012, all of its executive officers and directors filed on a timely basis the reports required to be filed under Section 16(a) of the Exchange Act, except Form 4 filed on July 6, 2012 instead of July 3, 2012 on behalf of Marc A. Lawrence for the tax withholding on the portion of a restricted stock grant that vested on June 29, 2012.

ANNUAL REPORT ON FORM 10-K

A copy of the Company’s Annual Report, including audited financial statements and a description of operations for the fiscal year ended December 31, 2012, accompanies this Proxy Statement. The financial statements contained in the Annual Report are not incorporated by reference in this Proxy Statement.

The Company makes available free of charge on its website, all of its filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. These materials can be found on the Investor Relations page and then selecting Financial Information - SEC Filings.

OTHER MATTERS

Stockholder Proposals for the 2014 Annual Meeting

Per our Company’s Bylaws, nominations for election to the Board and proposals of business to be considered by the stockholders at an annual meeting of stockholders may be made only by those stockholders of the Corporation who (1) are entitled to vote at the meeting, (2) comply in a timely manner with all notice procedures set forth in Section 1.12, and (3) are stockholders of record when the required notice is delivered and at the date of the meeting. If a stockholder desires to nominate someone for election to the Board of Directors at, or to bring any other business before, the 2014 Annual Meeting of stockholders, then such stockholder must comply with the procedures set forth in Section 1.12 “Stockholder Meetings – Nominations and Other Proposals” of the Company’s Bylaws in addition to any other applicable requirements and must give timely written notice of the matter to the Corporate Secretary of the Company. To be timely, written notice must be delivered not less than 90 days nor more than 120 days prior to the anniversary of the preceding year’s annual  meeting (which  anniversary date,  in the  case  of  the 2014 Annual Meeting is deemed to be May 24, 2014); provided that if the date of the annual meeting is advanced by more than 30 days or delayed by more than 70 days from such anniversary date of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than 120 days prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made.  If the number of directors to be elected to the Board at an annual meeting is increased, and if the Corporation does not make a public announcement naming all of the nominees for director or specifying the size of the increased Board at least 70 days prior to the anniversary of the preceding year’s annual meeting (which  anniversary date,  in the  case  of  the 2014 Annual Meeting is deemed to be May 24, 2014), then any stockholder nomination in respect of the increased number of positions shall be considered timely if delivered not later than the close of business on the 10th day following the day on which a public announcement naming all nominees or specifying the size of the

40

increased Board is first made by the Company.

Any such notice to the Corporate Secretary must include all of the information specified in the Company’s Bylaws. Such notice must be received by the Corporate Secretary of the Company a reasonable time before the Company begins to print and mail its proxy materials for the 2014 Annual Meeting.

No Incorporation by Reference

In the Company’s filings with the SEC, information is sometimes “incorporated by reference.” This means that the Company is referring you to information that has previously been filed with the SEC and the information should be considered as part of the particular filing. As provided under SEC regulations, the “Audit Committee Report” and the “Compensation Committee Report” contained in this Proxy Statement are not incorporated by reference into any other filings with the SEC, except to the extent they are specifically incorporated by reference into a filing. In addition, this Proxy Statement includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this Proxy Statement.

Directions to the Annual Meeting and Additional Information Regarding the Admission

The Annual Meeting will be held at the Company’s headquarters located at 13927 S. Gessner Rd., Missouri City, Texas 77489:

From George Bush Intercontinental Airport (IAH) / Downtown Houston: - take US-59 South towards Sugar Land / Victoria - take the exit onto Beltway 8/Sam Houston Tollway South - exit US-90 Alt / S Main St / Fondren Rd  - turn Right onto US-90 Alt West/S Main St - turn Right onto S Gessner Rd The Company’s headquarters is on the right.	From Sugar Land and South West Houston: - take US-59 North towards Downtown - take the exit onto Beltway 8/Sam Houston Tollway South - exit US-90 Alt / S Main St / Fondren Rd  - turn Right onto US-90 Alt West/S Main St - turn Right onto S Gessner Rd The Company’s headquarters is on the right.
From South and South East Houston: - take Beltway 8/Sam Houston Pkwy West - exit US-90 Alt / S Main St - turn Left onto US-90 Alt West/S Main St - turn Right onto S Gessner Rd The Company’s headquarters is on the right.	From North and North West Houston: - take Beltway 8/Sam Houston Pkwy West then continue South - exit US-90 Alt / S Main St / Fondren Rd  - turn Right onto US-90 Alt West/S Main St - turn Right onto S Gessner Rd The Company’s headquarters is on the right.

Check-in begins at 8:30 a.m.

Meeting begins at 9:00 a.m.

If you plan to attend the Annual Meeting:

·   It is important that you let us know in advance by marking the appropriate box on your proxy card or, if you vote by telephone or Internet, indicating your plans when prompted.

·   Parking is limited. Please allow ample time for check-in.

·   Each stockholder should be prepared to present:

• Valid photo identification, such as a driver's license or passport; and

• Stockholders holding their shares through a broker, bank, trustee or nominee will need to bring proof of beneficial ownership as of April 4, 2013, the Record Date, such as their most recent account statement reflecting their stock ownership as of the Record Date, or a copy of the voting instruction card provided by their broker, bank, trustee or nominee or similar evidence of ownership.

41

If You Are Not Able to Attend the Annual Meeting

If you are not able to attend the Annual Meeting in person, you can access the following link http://ir.globalgeophysical.com/eventdetail.cfm?eventid=112882 to listen to the meeting via live webcast, as well as to access the archived replay after the meeting. However, please note that you cannot vote with that occasion. The Board encourages you to vote as soon as possible, before the Annual Meeting.

Any questions or comments in relation to this Proxy Statement should be addressed to the Corporate Secretary at Company’s headquarters located at 13927 S. Gessner Rd., Missouri City, Texas 77489, by phone at 713-808-7310, or by email at james.brasher@globalgeophysical.com.

By order of the Board of Directors,

James E. Brasher, Secretary

Missouri City, Texas

April 19, 2013

42

 IMPORTANT ANNUAL MEETING INFORMATION

Electronic Voting Instructions

You can vote by Internet or telephone!

Available 24 hours a day, 7 days a week!

Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.

VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.

Proxies submitted by the Internet or telephone must be received by 1:00 a.m., on May 24, 2013.

Vote by Internet

• Log on to the Internet and go to www.investorvote.com/GGS

• Follow the steps outlined on the secured website.

Vote by telephone

• Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada any time on a touch tone telephone.

• There is NO CHARGE to you for the call.

• Follow the instructions provided by the recorded message.

Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.  X

ANNUAL MEETING PROXY CARD

IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

A. Proposals — The Board recommends a vote “FOR” all Proposals described herein.

1. Elect the following three Directors:		2. Say on Pay - An advisory vote on the approval of executive compensation:	For [ ]	Against [ ]	Abstain [ ]
1. George E. Matelich	For [ ]    Withhold [ ]
2. Stanley de J. Osborne	For [ ]    Withhold [ ]

3. Karl F. Kurz For [ ]    Withhold [ ]

3. Ratify the appointment of UHY LLP as our independent registered certified public accounting firm for 2013: For [ ] Against  [ ] Abstain [ ]

B.   Non-Voting Items

Change of Address — Please print your new address below.	Comments — Please print your comments below.	Meeting Attendance
		Mark the box to the right if you plan to attend the Annual Meeting.

C. Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.	Signature 1 — Please keep signature within the box.	Signature 2 — Please keep signature within the box.
/                 /

ANNUAL MEETING ADMISSION TICKET   2013 Annual Meeting of Stockholders Global Geophysical Services, Inc.   May 24, 2013 - 9:00 a.m.   13927 S. Gessner Rd. Missouri City, Texas 77489

Upon arrival, please present this admission ticket

and photo identification at the registration desk.

IMPORTANT NOTICE regarding the INTERNET AVAILABILITY of

proxy materials for the 2013 Annual Meeting of Stockholders.

The Notice of Annual Meeting/Proxy Statement and Annual Report on Form 10K are available at:

www.edocumentview.com/GGSand http://ir.globalgeophysical.com/annual-proxy.cfm

IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

PROXY - Global Geophysical Services, Inc.

NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS

May 24, 2013 – 9:00 a.m. - 13927 S. Gessner Rd., Missouri City, TX 77489

Proxy solicited by Board of Directors for the 2013 Annual Meeting

James E. Brasher, P. Mathew Verghese, and Adriana E. Mateescu, or any of them (the “Proxies”), each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present at the 2013 Annual Meeting of Stockholders of Global Geophysical Services, Inc., or at any postponement or adjournment thereof.

Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote “FOR” all proposals described herein.

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

(Items to be voted appear on reverse side.)

EX-1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
[x]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
or
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to

Commission file number: 001-34709

GLOBAL GEOPHYSICAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	05-0574281 (I.R.S. Employer Identification No.)
13927 South Gessner Road Missouri City, Texas (Address of principal executive offices)	77489 (Zip Code)

(Telephone Number) (713) 972-9200

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value (Title of Each Class) The New York Stock Exchange (Name of Each Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]  No [x]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [  ]  No [x]

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer [  ] Accelerated filer [x] Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [  ]

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

The aggregate market value of the stock held by non-affiliates of the registrant, as of June 30, 2012, computed by reference to the closing sale price of the registrant’s common stock on the NYSE on such date, was $122.6 million.

For purposes of this disclosure, shares of common stock held by persons who hold more than 10% of the outstanding shares of common stock and shares held by executive officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily a conclusive determination for other purposes.

37,674,903 shares of common stock were outstanding as of February 28, 2013.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the registrant’s definitive Proxy Statement relating to its 2013 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

GLOBAL GEOPHYSICAL SERVICES, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risks	49
Item 8.	Financial Statements and Supplementary Data	49
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
Item 9A.	Controls and Procedures	50
Item 9B.	Other Information	50
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	50
Item 11.	Executive Compensation	50
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	50
Item 13.	Certain Relationships and Related Transactions and Director Independence	51
Item 14.	Principal Accountant Fees and Services	51
PART IV
Item 15.	Exhibits and Financial Statement Schedules	51

1

FORWARD-LOOKING STATEMENTS

The Business section and other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements that involve risks and uncertainties. Many of the forward-looking statements are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “forecasts,” “may,” “should,” “probably” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled “Risk Factors” under Part I, Item 1A of this Form 10-K, which are incorporated herein by reference. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

References in this Form 10-K to “GGS,” “Global Geophysical,” “Global,” the “Company,” “our company,” “we,” “us” or “our” refer to Global Geophysical Services, Inc. and its subsidiaries included in the consolidated financial statements, except as otherwise indicated or the context otherwise requires. Our fiscal year ends on December 31, and references herein to “fiscal 2012,” “this year” and “fiscal year 2012” refer to our fiscal year ended December 31, 2012.

PART I

Item 1.  Business

(a) General Development of Business

Our company, Global Geophysical Services, Inc. and its subsidiaries, 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, processing and interpretation services. Through these services, we deliver data that enables the creation of high resolution images of the earth’s subsurface and reveals 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.

Our seismic solutions are used by many of the world’s largest and most technically advanced oil and gas exploration and production companies, including national oil companies (“NOCs”), major integrated oil companies (“IOCs”), and large independent oil and gas companies. We provide seismic data acquisition on a worldwide basis for land, transition zone and shallow marine areas, including challenging environments such as marshes, forests, jungles, arctic climates, mountains and deserts. We also have 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.

As of December 31, 2012, we owned approximately 138,000 recording channels which are primarily comprised of our new AUTOSEIS® High Definition Recorder (“HDR”) systems. Our recording channels and systems are interoperable which provides operational scalability and efficiency. This operational scalability and efficiency enables us to execute on large and technologically complex projects.

Our company is a Delaware corporation incorporated on June 18, 2003.

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Our Strengths

We believe that the following strengths provide us with significant competitive advantages:

Our high resolution RG3D seismic solutions

As a result of our extensive experience designing and implementing seismic data acquisition programs in a variety of environments, and our use of the latest technologies available in the industry, we provide our clients with high resolution seismic data. We have an interoperable technology platform comprised of our proprietary AUTOSEIS® HDR systems along with cabled systems. The design of systems are configured in order to perform high channel count seismic data acquisition projects which increase the resolution, or “trace density”, and other advanced attributes of the data. We believe our high resolution RG3D and HDR seismic solutions can help our clients more effectively identify and develop oil and gas reserves.

International footprint with extensive experience operating in challenging environments

We operate globally in many challenging environments including marshes, forests, jungles, arctic climates, mountains and deserts. Our experience includes projects in Mexico, Colombia, Paraguay, Argentina, Chile, Peru, Georgia, Uganda, Algeria, Iraq, Oman, India, Poland and Brazil. In addition, our operations management team has experience operating in over 60 countries. To further extend our footprint and complement our skills, we selectively engage in strategic alliances with foreign partners that enhance our relationships with regional clients, offer commercial and regulatory guidance and provide access to local facilities, equipment and personnel.

Operational efficiency and flexibility

We manage our crews and projects with a focus on efficiency so that our projects may be completed in less time and at a lower cost, thereby improving our margins. The equipment we employ is an important factor in our success, as our common platform allows us to easily and efficiently allocate components and people to meet specific project objectives while also maximizing utilization. Our operational flexibility also allows us to quickly reallocate our equipment and crews across our global operations in response to our business or client needs. This can be particularly important to our clients who face lease expiration deadlines. In addition, our integrated product offering provides us with flexibility to be responsive to our clients’ specific needs.

Blue chip client base

Members of our management team have long-standing relationships with blue chip clients including many NOCs and IOCs. Our technology platform and global operating ability allows us to leverage these relationships throughout the world. Although the terms of our master service agreements with our clients do not guarantee future business, we believe that our status as an approved service provider with numerous industry participants and our past performance with these clients enhances our ability to win new business. Historically, our NOC and IOC clients have represented a significant percentage of our revenues.

Strong operations management team with extensive industry experience and relationships

Our operations management team averages more than 25 years of industry experience in a variety of roles and senior positions at other seismic companies as well as energy and petroleum companies. We believe that the knowledge base, experience and relationships that our management team has built over the years extends our operating capabilities, improves the quality of our services, facilitates access to clients and underlies our strong reputation in the industry.

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Multi-client library

As of December 31, 2012, we have grown our Multi-client library to approximately 8,800 square miles with another 1,000 square miles under commitment which we expect to record during 2013. Our library includes data available to license in the Bakken, Eagle Ford, Niobrara, Haynesville and Marcellus shale plays, and the Gulf of Mexico, among others. We recently completed approximately 1,200 miles as Phase I of a regional 2-D program onshore Brazil in the Parnaiba Basin. We commenced acquisition of Phase II during Q1 2013. Although the current focus of data licenses to these surveys are the unconventional resources previously noted, we believe the data will be of value as other prospective zones are identified within the same sedimentary column.

Our Strategies

We intend to continue to use our competitive strengths to advance our corporate strategy. The following are key elements of our strategy:

Continue to advance our high resolution RG3D seismic solutions

We intend to continue providing our clients with high resolution seismic technology and processing in order to help our clients make more informed decisions regarding their exploration and development programs. We are committed to providing our clients the most advanced technologies in the market. We have made investments in the design and development of advanced seismic technology such as our proprietary AUTOSEIS® HDR land nodal recording system. We are also using the underlying technology of HDR to develop a tethered seafloor nodal technology. Our land nodal recording systems are intended to operate autonomously and record continuously. Our tethered seafloor nodal systems, if successfully developed, are intended to operate in a wider range of water depths than has historically been possible with cabled systems.  We also expect that our tethered seafloor nodal system will provide higher quality and more cost effective data than that provided by alternative methods. In addition, we have also invested in multi-component recording equipment which provides additional information compared to standard, single component recording channels. To complement our investment in equipment technology, we will continue to develop and expand our processing and interpretation capabilities.

Enhance and expand client relationships

We intend to continue enhancing our relationships with our existing clients by seeking to perform services for them in new geographic regions, as well as by continuing to provide the latest technologies and an integrated suite of services.  Additionally, we intend to build relationships with new clients by continuing to provide high quality service, operational flexibility and higher-end integrated service offerings throughout the world.

Expand our Multi-client seismic data library

We intend to continue investing in seismic data surveys for our Multi-client seismic data library. Our focus is on oil and gas basins that our clients believe have the highest potential for development.

Expand our marine services operations

We plan to increase our use of ocean bottom cable and other seafloor recording technologies to extend the application of our high resolution RG3D seismic solutions further into the marine environment. We are currently investing in the design and development of equipment, including seafloor nodal technology, that, if successful, will combine seismic sensors and data recording technology in a manner that does not require electrical cabling or an external power source.

Attract and retain talented, experienced employees

Our senior management and employees have an established track record of successfully executing seismic data projects. Since our inception, we have focused on hiring industry experts with a broad experience base and extensive client relationships and we intend to continue this focus into the future. We believe this valuable mix of skills and relationships will continue to improve our service offerings and facilitate our continued growth.

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Industry Overview

Seismic data is acquired by introducing acoustic energy into the earth through controlled seismic energy sources. Seismic energy sources can consist of truck mounted vibration equipment in accessible terrain, explosives such as dynamite in more difficult terrain, or boat mounted air guns in shallow water and marine areas. In environments requiring the use of explosives, shot holes are drilled to the necessary depth and an explosive charge is placed securely in the hole. Vibroseis is a method used to propagate energy signals into the earth over an extended period of time as opposed to the near instantaneous energy provided by impulsive sources such as dynamite. The sound waves created by vibration equipment or dynamite are reflected back to the surface and collected by seismic sensors referred to as “geophones”, which measure ground displacement, or “hydrophones”, which measure pressure waves in marine environments. One or more strategically positioned seismic sensors are connected to a recording channel. Generally speaking, the higher the number of recording channels employed in a given survey, the richer the data set that is produced. A typical project, which in our industry is referred to as a “shoot” or a “seismic shoot”, involves the use of thousands, and sometimes tens of thousands, of channels recording simultaneously over the survey area. Seismic data is used to pinpoint and determine the locations of subsurface features favorable for the collection of hydrocarbons, as well as define the make-up of the sedimentary rock layers and their corresponding fluids.

A seismic survey is acquired with a surface geometry—a grid of seismic energy sources and receivers extending over very large areas. The size of this grid varies with and depends on the size, depth and geophysical characteristics of the target to be imaged. The lines must be accurately positioned, so the location of each source and receiver point is obtained using either GPS, inertial, or conventional optical survey methods depending upon the vegetation and environment in the prospect area. Seismic receivers are deployed on the surface of the area being surveyed at regular intervals and patterns to measure, digitize and transmit reflected seismic energy to a set of specialized recording instruments located. The transportation of cables, geophones and field recording equipment can be by truck, boat or helicopter depending upon the terrain and environment within the area to be imaged.

Two-dimensional (“2D”) seismic data is recorded using straight lines of receivers crossing the earth’s surface, and, once processed, allows geophysicists to only see a profile of the earth. Commercial development of three-dimensional (“3D”) imaging technology began in the early 1980s and was a significant milestone for the industry. 2D seismic data surveys are generally used only to identify gross structural features; 3D seismic data surveys, which provide information continuously through the subsurface volume within the bounds of a survey, have proven effective in providing detailed views of subsurface structures. The increased use of 3D seismic data by the oil and gas industry in the 1980s helped drive significant increases in drilling success rates as better data quality allowed operators to optimize well locations and results. While prior to 1980 all seismic data acquired was 2D, today the vast majority of seismic data acquired is 3D, of which high density 3D is a growing component.

More recently, the seismic industry has seen the development of four-dimensional (“4D”) imaging technology. Also known as time lapse seismic, 4D seismic data incorporates numerous 3D seismic surveys over the same reservoir at specified intervals of time. 4D seismic data is a production tool that can help determine changes in flow, pressure and saturation. By scanning a reservoir over a given period of time, the flow of the hydrocarbons within can be traced and better understood. This is beneficial because, as hydrocarbons are depleted from a field, the pressure and composition of the fluids may change. Additionally, 4D seismic data can help geologists understand how a reservoir reacts to gas injection or water flooding and can help locate untapped pockets of oil or gas within the reservoir.

Multi-component recording equipment outlines both compressional and shear waves given off by a seismic source. The additional data collected through multi-component recording equipment helps to provide geologists and geophysicists a greater understanding of the properties of subsurface structures.

Microseismic monitoring consists of data acquisition, processing, and analysis and interpretation services associated with the seismic energy emitted during the hydraulic fracturing stimulation of oil and natural gas wells.  Monitoring and mapping microseismic events better enables our customers to evaluate the effectiveness of their planned hydraulic fracture treatments and associated fracture generation. Continued and coordinated monitoring and mapping efforts can provide an understanding of the interdependency of stimulation effects between wells and aid field development, reservoir management and production optimization.

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Seismic data processing operations use complex mathematical algorithms to transform seismic data acquired in the field into 2D profiles, or 3D volumes of the earth’s subsurface or 4D time-lapse seismic data. These images are then interpreted by geophysicists and geologists for use by oil and gas companies in evaluating prospective areas, designing drilling programs, selecting drilling sites and managing producing reservoirs.

Seismic data acquisition can be further delineated by the environment of operation as set forth below:

Land seismic data acquisition

For land applications, geophones are buried, or partially buried, to ensure good coupling with the surface and to reduce wind noise. Burying geophones in the ground is a manual process and may involve anywhere from a few to more than 100 people depending on the size of the seismic crew and the terrain involved. Cables that connect the geophones to cabled recording systems may also be deployed manually, or in some cases, automatically from a vehicle depending on the terrain. The acoustic source for land seismic data acquisition is typically a fleet of large hydraulic vibrator trucks, but may also be explosives detonated in holes drilled for such purposes.

On a typical land seismic survey, the seismic recording crew is supported by a surveying crew and a drilling crew. The surveying crew lays out the receiver locations to be recorded and, in a survey using an explosive source, identifies the sites where the drilling crew creates the holes for the explosive charges that produce an acoustical impulse. In other surveys, a mechanical vibrating unit, such as a vibrator truck, is used as the seismic energy source. The seismic crew lays out the geophones and recording instruments, directs shooting operations and records the acoustical signal reflected from subsurface strata. A fully staffed seismic land crew typically consists of at least one party manager, one instrument operator, head linesman and crew laborers. The number of individuals on each crew is dependent upon the size and nature of the seismic survey.

Expanded usage of nodal systems is altering the traditional construct of seismic crew activity. In some instances, there are opportunities to consolidate functions and processes and drive improvements in efficiency and productivity.

Transition zone seismic data acquisition

In the transition zone area where land and water come together, elements of both land data acquisition and shallow marine data acquisition are employed. Transition zone seismic data acquisition is similar to ocean bottom cable applications in that both hydrophones and geophones are lowered to the ocean floor. However, due to the shallow water depths, only small vessels and manual labor can be used to deploy and retrieve the cables. Additionally, the source vessels and source arrays must be configured to run in shallow water. In transition zone areas consisting of swamps and marshes, explosives must be used as an acoustic source in addition to air guns. Our equipment allows us to record a seamless line from land, through the transition zone, and into the shallow marine environment.

Marine seismic data acquisition

In marine environments, large ships typically tow streamer arrays that contain the sensors used to acquire seismic data. In shallow water, the ocean bottom cable method, where cables with attached geophones and hydrophones are placed directly on the bottom, is more common due to superior data quality and the ability of the smaller ships to get into the shallow water. More recently, marine nodal recording systems have been introduced that, like our AUTOSEIS® HDR land recording nodes, no longer require cables connecting each recording instrument back to centralized recording systems. These new marine nodal systems are primarily utilized in shallow water environments. In all cases, high-pressure air gun arrays serve as the seismic energy source. Currently, we are capable of performing shallow marine surveys in water depths up to approximately 250 feet. We do not participate in towed streamer seismic data acquisition.

We believe the following industry trends should benefit our business and provide the basis for our long-term growth:

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Demand for new energy resources combined with increasing difficulty of locating and producing new oil reserves

According to the International Energy Agency, worldwide oil demand is expected to grow by approximately 14% by 2035. To meet growing world demand and to offset steep decline rates from existing proved oil resources, significant quantities of new oil reserves must be discovered. Accordingly, exploration and production companies are increasingly required to access reservoirs that are typically smaller, deeper or have other complex characteristics. In addition, existing fields which have previously been shot with older technologies are being re-shot with newer, high resolution seismic technology in an effort to increase production, identify previously bypassed reserves, and locate new prospective drilling locations.

Increased industry focus on unconventional plays, including shales and tight reservoirs in North America and internationally

Technical advances in horizontal drilling and new well completion techniques have greatly enhanced the ability of oil and gas companies to produce oil, natural gas liquids and natural gas from unconventional resource plays such as the shales and other tight reservoir plays across the U.S. As a result, domestic shale resources have become a significant contributor to recent increases in oil and natural gas production and reserves. In particular, seismic data is useful in designing drilling programs to avoid unfavorable geologic formations or zones related that may increase drilling costs. Using the experience derived from the development of domestic shales, exploration and production companies have also begun to focus on shale and tight reservoir resources on a global scale. Because many of these resources are located in areas that have not experienced significant historical oil and gas production, large amounts of new seismic data will be required as companies delineate the extent of shales and evaluate drilling inventories and leasing opportunities. High resolution 3D seismic data, such as that obtained through our RG3D seismic solutions, is also commonly used to formulate and implement completion techniques in shale reservoirs.

Significant advances in seismic data technologies

We believe that recent advances in seismic data equipment, technologies and processing capabilities, such as those that enable our high resolution RG3D seismic solutions, have improved not only the efficiency of seismic data acquisition but also the usefulness of the data provided. We believe that advances in nodal recording technologies, such as our AUTOSEIS® HDR system, are expanding the feasibility of certain seismic data acquisition programs that were heretofore not commercially viable. We believe that demand for our services will increase as clients become familiar with the benefits of more advanced seismic technologies, including higher density 3D and multi-component seismic data which uses multiple geophones or accelerometers to record all components of reflected acoustic energy. While seismic data historically has been used solely as an exploration tool, higher resolution seismic images are now used in applications such as designing drilling programs, formulating well completion techniques and for 4D reservoir monitoring.

Many large NOCs and IOCs have maintained consistent levels of exploration and production capital expenditures

Despite the industry downturn beginning in late 2008, many large and well capitalized oil and gas companies have maintained consistent levels of capital spending. Because large oil and gas development projects can take several years before a field is productive, many large companies take a longer term view of commodity prices in setting capital budgets.

(b) Financial Information about Segments

Our company is comprised of two business segments: Proprietary Services and Multi-client Services. The contribution of each business segment to net sales and operating income (loss), as well as, the identifiable assets attributable to each business segment, are set forth in Note 12of the Notes to Consolidated Financial Statements.

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(c) Narrative Description of Business

Description of Business Segments

Proprietary Services

We provide our clients seismic data acquisition, microseismic monitoring, data processing, and interpretation services on a proprietary basis where our clients ultimately own the output of our efforts. For our seismic data acquisition services, our clients typically request a bid for a seismic survey based on their survey design specifications. In some cases, we are shown a prospect area and asked to propose and bid on a survey of our own design. In other cases, we may be able to propose modifications in the process or scope of a proposed project in ways intended to create value for our customers, in which case we are able to propose and bid on an alternative survey design. Once the scope of the work is defined, either we or the client will undertake to obtain the required land access consents and permits. Once the required consents and permits are obtained, we survey the prospect area to determine where the energy sources and receivers would be best located. Our crews then place the geophones and energy sources into position, activate the energy sources, collect the data generated and deliver the data sets to the client. In some cases, data interpretation and processing is included in the total package bid, and in others it is bid separately. Where possible, we seek to combine our seismic data acquisition with processing and interpretation services. Throughout the entire process, we coordinate with our client in an effort to add value at each stage of seismic data acquisition, processing and interpretation. We believe that this integrated offering of seismic data services allows us to sell multiple or bundled services that offer our clients greater value and helps us to capture the highest available margins. During fiscal years 2012, 2011 and 2010, revenues from our Proprietary Services accounted for 54%, 54% and 47% of total revenues, respectively.

Multi-client Services

We also offer seismic data acquisition services in a Multi-client structure. Our Multi-client Services projects differ from our Proprietary Services projects in that we set the specifications of the program (with some input from our clients), generally handle all aspects of the acquisition, from permitting to processing, and maintain ownership of the seismic data and associated rights after the project is completed, including any future revenue stream. In return for their participation in a Multi-client Services project, our customers receive a non-exclusive license to a designated portion of the underlying seismic data acquired.

We include the seismic data sets that we have acquired through our Multi-client shoots in our seismic data library. The seismic data sets are then licensed to clients on a non-exclusive basis. Our seismic data licenses are typically transferable only under limited circumstances and only upon payment to us of a specified transfer fee. Substantially all costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the Multi-client surveys.

In addition to acquiring seismic data sets through our Multi-client seismic shoots, in certain cases we will grant a non-exclusive license to a specific seismic data set to a client in exchange for ownership of complementary proprietary seismic data owned by that client.

We believe that offering seismic data acquisition services in a Multi-client structure and licensing the data from our library can be an effective business strategy when risks are managed properly. The efficiencies we create by acquiring Multi-client seismic surveys allow oil and gas exploration companies to acquire seismic data at a lower cost and with less risk. Historically, we achieved pre-funding commitment (“pre-commitments”) levels of 67% of our cash investment in the portfolio. For programs commencing in 2012, we began to target pre-commitment levels of 100% or greater to further reduce our risk exposure in new Multi-client Services projects.

Description of Recent Developments

We have invested in the development of AUTOSEIS® land and marine nodal technologies and believe that such investments will benefit both our Proprietary Services and Multi-client Services segments.

The AUTOSEIS® HDR is the Company’s primary recording platform for seismic data acquisition.  The HDR is the primary recording platform for Global's microseismic frac monitoring services. Its deployment combined with a patent pending array design has enabled the recording of higher fidelity data. We leverage the continuous recording capability of the HDR to provide passive monitoring capabilities, complementing active source seismic programs. The Company continues to broaden its data processing, analysis and interpretation services offerings.

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Sources and Availability of Equipment

We have developed and source our own HDR land nodal recording instrumentation through our subsidiary, Autoseis, Inc. The AUTOSEIS® HDR system has become our primary recording platform and we expect this to continue going forward. The AUTOSEIS® HDR system is interoperable with cabled recording system. In addition, we obtain our seismic vibrator equipment from INOVA Geophysical, a joint venture between Bureau of Geophysical Prospecting Limited (“BGP”), a competitor and wholly owned subsidiary of China National Petroleum Company, and ION Geophysical Corporation (“ION”).

Patents and Trademarks

We own or have licenses under patents and registered trademarks which are used in connection with our activity in all business segments. Some of the patents or licenses cover significant processes used to provide our services. The trademarks are important to the overall marketing and branding of our business. The majority of our trademarks are registered.

Seasonal Variation in Business

In North America, we generally have our highest utilization rates in the cooler months when the weather is more favorable for seismic data acquisition. Our operations can also be impacted by the Atlantic hurricane season from the months of June through November.

In addition, our operations in the Asia-Pacific region are impacted by the monsoon season, which moves across the region between September and early March. Accordingly, the results of any one quarter are not necessarily indicative of annual results or continuing trends.

Customer Base

In fiscal year 2012, one NOC represented more than 10% of our total sales at 15%. No other customers represented more than 10% of our sales. In 2012, we had 39 customers that each represented more than $1 million in revenues. Two customers each represented more than 10% of our Proprietary Services segment revenues at 29% and 14%, respectively. Three customers represented more than 10% of Multi-client Services segment revenues at 16%, 12% and 11%, respectively. By the nature of our business, it is common for our top customers to change from year to year.

Backlog

Our backlog represents contracts for services that have been entered into but which have not yet been completed. At December 31, 2012, we had a backlog of work to be completed on contracts of approximately $101 million. Of this amount, approximately $28 million is international and $73 million is North America. Of the $101 million in backlog, approximately $35 million is for Proprietary Services and $66 million is for Multi-client Services. At December 31, 2011, we had a backlog of work to be completed on contracts of $201 million.

The decrease in backlog for fiscal year 2012 is primarily the result of the timing of award of contracts and a decrease in new Multi-client Services operations. Due to the timing of our contracts and the long-term nature of some of our projects, portions of our backlog may not be completed in the fiscal year 2013. Most projects we perform can be completed in a short period of time, typically several months. Larger projects may take a year or more to be completed. Generally, mobilization starts shortly after the signing of the contract. Additionally, contracts for services are occasionally modified by mutual consent of the parties and in some instances may be cancelled by the customer on short notice without penalty under certain circumstances. As a result, along with projects extending beyond fiscal year 2013, our backlog as of any particular date may not be indicative of our actual operating results for any succeeding fiscal period.

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Government Contracts

Not applicable.

Service Contracts

Our seismic data acquisition contracts generally provide for payment for mobilization, data acquisition and demobilization. Mobilization payments are intended to cover, or partially offset, the costs of moving equipment and personnel to a new job location. Demobilization payments are intended to cover, or partially offset, the costs of returning equipment and personnel from the job location.

Seismic data acquisition is generally paid for on a turnkey or term rate (also referred to as “day-rate”) basis or on a combination of both methods. A turnkey contract provides for a fixed fee to be paid per square mile of data acquired. Term rate contracts provide for payments based on agreed rates per units of time, which are typically expressed in number of days. Our contracts generally contain provisions that require our clients to pay a standby rate for periods during which a project is delayed. However, these provisions may not cover all instances of delay, or may be limited in duration.

Our contracts generally permit our clients to terminate a contract upon payment of a fee in some instances. Our contracts generally provide for a lesser fee if a client elects to terminate before we have mobilized.

Our international agreements generally require arbitration for contract dispute resolution. We endeavor to have these international arbitrations conducted in London under English law and in English. We have been generally successful in obtaining such provisions, except in contracts for services in Latin America which tend to require arbitration in the local country and in Spanish.

Most of our contracts provide for payment in U.S. dollars. Often we elect to receive a portion of a contract payment in the local currency for use in paying local payroll and other local expenses.

Competitive Conditions

Seismic data services for the oil and gas industry have historically been highly competitive. Success in marketing seismic services is based on several factors, including price, crew experience, equipment availability, technological expertise, reputation for quality, dependability and health, safety and environmental performance.

As of December 31,2012, we considered our principal competitors to be Bureau of Geophysical Prospecting Limited (“BGP” — a subsidiary of Chinese National Petroleum Corporation), Compagnie Générale de Géophysique-Veritas (“CGG”), Dawson Geophysical Company, Geokinetics, Inc., Seitel, Inc., TGC Industries, Inc., and WesternGeco (a business segment of Schlumberger).

Environmental Disclosures and Regulation

Our operations are subject to a variety of federal, state and local laws and regulations governing various aspects of our operations. Our use of explosives is regulated in the United States by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“BATFE”), which has issued us a license to use explosives. We are also subject to certain environmental laws regarding removal and clean-up of materials that may harm the environment. In countries outside the United States, we are subject to similar requirements, and also rely on customer requirements and industry guidelines either in addition to or in lieu of applicable legal requirements. We believe we conduct our operations in substantial compliance with applicable laws and regulations governing our business.

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We developed our Health, Safety, Environment and Quality (“HSEQ”) Management System in accordance with the guidelines of the International Association of Oil and Gas Producers (“OGP”), as set forth in OGP Report Number 210, “Guidelines for the Development and Application of Health, Safety and Environmental Management Systems”. Our HSEQ Management System describes how we manage health and safety risk, process risk, environmental matters relating to our business, including the impact our operations may have on the communities in which we operate and our relationships with customers, contractors and suppliers. We have designed our HSEQ Management System to complement our clients’ HSEQ management systems so that we may achieve a seamless structure for managing projects.

Employees

Our senior management and employees have an established track record of successfully executing seismic data projects. Since our inception, we have focused on hiring industry experts with a broad experience base and extensive client relationships and we intend to continue this focus into the future. We believe this valuable mix of skills and relationships will continue to improve our service offerings and facilitate our continued growth. As of December 31, 2012, we had approximately 1,200 employees serving in various capacities.

(d) Financial Information about Domestic and Foreign Operations

Revenues within the United States accounted for approximately 52% of our total revenues in 2012. Operations outside the  United States are generally characterized by the same conditions discussed in the description of the business above and may also be affected by additional factors including changing currency values, different rates of inflation, economic growth and political and economic uncertainties and disruptions. Revenues and assets within the United States and internationally for the fiscal years ended December 31 were as follows (in millions):

	Revenues						Assets
	2012		2011		2010		2012		2011		2010
United States	$	176.8	$	205.0	$	145.7	$	517.0	$	428.0	$	303.1
International	$	162.2	$	180.4	$	109.0	$	35.9	$	78.4	$	110.2

(e)  Available Information

We file with the Securities and Exchange Commission (“SEC”) our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all required amendments to those reports, proxy statements and registration statements. You may read and copy any material we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically.

All of our reports and materials filed with the SEC are available free of charge through our website, http://www.globalgeophysical.com, as soon as reasonably practical, after we have electronically filed such material with the SEC. Information about our Board Members, Board’s Standing Committee Charters, and Code of Business Conduct and Ethics are also available, free of charge, through our website. We reserve the right to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our Code of Business Conduct and Ethics that applies to the principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulations S-K (17 CFR 228.406(b)), by posting such amendment or waiver on our website within four business days following the date of the amendment or waiver. The contents of our website are not, however, a part of this Form 10-K.

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Item 1A.  Risk Factors

The following discussion of risk factors contains “forward-looking statements,” as discussed immediately preceding Item 1A. of this Form 10-K. These risk factors may be important to understanding any statement in this Form 10-K or elsewhere. The risk factors should also be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the consolidated financial statements and related notes incorporated by reference in this Form 10-K. Because of the following risk factors, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

Risks Related to Our Business

Our results of operations could be materially adversely affected by economic conditions.

Prices for oil and natural gas have been volatile. During the most recent period of depressed commodity prices, many oil and gas exploration and production companies significantly reduced their levels of capital spending, including amounts dedicated to the purchase of seismic data services. Historically, demand for our services has depended significantly on the level of exploration spending by oil and gas companies. A return of depressed commodity prices, or a decline in existing commodity prices or other economic factors, could materially adversely affect demand for the services we provide, and therefore affect our business, financial condition, results of operations and cash flows.

Industry spending on our services is subject to rapid and material change.

Our clients’ willingness to explore, develop and produce depends largely upon prevailing industry conditions that are influenced by numerous factors over which our management has no control, such as:

• demand for oil and natural gas, especially in the United States, China and India;

• the ability of oil and gas exploration and production companies to generate funds or otherwise obtain external capital for exploration, development, construction and production operations;

• the sale and expiration dates of leases in the United States and overseas;

• domestic and foreign tax policies;

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

• the expected rates of declining current production;

• the availability and discovery rates of new oil and gas reserves;

• technical advances affecting energy exploration, production, transportation and consumption;

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

• political instability in oil and gas producing countries;

• government and other organizational policies, including those of the Organization of the Petroleum Exporting Countries, regarding the exploration, production and development of oil and gas reserves;

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

• merger and divestiture activity among oil and gas producers.

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In addition, increases in oil and natural gas prices may not have a positive effect on our financial condition or results of operations. Although demand for our services may decrease when depressed economic conditions are present, including lower oil and natural gas prices, the reverse is not necessarily true due to the factors listed in this Form 10-K as well as other factors beyond our control.

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

Our operating results may vary in material respects from quarter to quarter and may continue to do so in the future. Factors that cause variations include the timing of the receipt and commencement of contracts for seismic data acquisition, processing or interpretation and clients’ budgetary cycles, both of which are beyond our control. Furthermore, in any given period, we could have idle crews which result in a significant portion of our revenues, cash flows and earnings coming from a relatively small number of crews. Additionally, due to location, service line or particular project, some of our individual crews may achieve results that are a significant percentage of our consolidated operating results. Should one or more of these crews experience significant changes in timing, our financial results could be subject to significant variations from period to period. Combined with our high fixed costs, these revenue fluctuations could have a material adverse effect on our results of operations in any fiscal period.

Our working capital needs are difficult to forecast and may vary significantly, which could require us to seek additional financing that we may not be able to obtain on satisfactory terms, or at all.

Our working capital needs are difficult to predict with certainty. This difficulty is due primarily to working capital requirements related to our seismic data services where our revenues vary in material respects as a result of, among other things, the timing of our projects, our clients’ budgetary cycles and our receipt of payment. We may therefore be subject to significant and rapid increases in our working capital needs that could require us to seek additional financing sources. Restrictions in our debt agreements may impair our ability to obtain other sources of financing, and access to additional sources of financing may not be available on terms acceptable to us, or at all.

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

Competition among seismic contractors historically has been, and likely will continue to be, intense. Competitive factors have in recent years included price, crew experience, equipment availability, technological expertise and reputation for quality and dependability. We also face increasing competition from nationally owned companies in various international jurisdictions that operate under less significant financial constraints than those we experience. Many of our competitors have greater financial and other resources, more clients, greater market recognition and more established relationships and alliances in the industry than we do. They and other competitors may be better positioned to withstand and adjust more quickly to volatile market conditions, such as fluctuations in oil and natural gas prices and production levels, as well as changes in government regulations. Additionally, the seismic data acquisition business is extremely price competitive and has a history of protracted periods of months or years where seismic contractors under financial duress bid jobs at unattractive pricing levels and therefore adversely affect industry pricing. Competition from these and other competitors could result in downward pricing pressure, which could adversely affect our EBITDA margins, and the loss of market share.

We have had losses and there is no assurance of our profitability for the future.

We showed a net profit of $5.7 million in 2011 and experienced a net loss of $13.3 million in 2012 and $39.7 million in 2010. We cannot assure you that we will be profitable in future periods.

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

Historically, we have purchased substantially all of our seismic data acquisition equipment from two key suppliers, Sercel and ION. Beginning in 2011, we sourced our principal seismic nodal systems from Autoseis, Inc., our wholly owned subsidiary. The systems are manufactured under an exclusive arrangement with Creation Technologies, a U.S. supplier of electronics. If our key supplier discontinues operations or otherwise refuses to honor its supply arrangements with us, we may be required to enter into agreements with alternative suppliers on terms less favorable to us, which could result in increased product costs and longer delivery lead times.

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Key suppliers or their affiliates may compete with us.

We purchase seismic vibrator equipment manufactured by a joint venture between ION and BGP, which is a competitor of ours. There are a limited number of companies which manufacture this equipment in addition to ION. If ION chooses to no longer sell this equipment to us, or to no longer sell such equipment to us on commercially reasonable terms, whether as a result of competitive pressures or otherwise, we may be required to use less suitable replacement equipment which could impair our ability to execute our business solutions for customers.

We are dependent upon a small number of significant clients. Additionally, from time to time a significant portion of our revenues are generated by a single project.

We derive a significant amount of our revenues from a small number of oil and gas exploration and development companies. During the year ended December 31, 2012, we had one client which accounted for more than 10% of our revenues. While our revenues are derived from a concentrated client base, our significant clients may vary between years. If we lose one or more major clients in the future, or if one or more clients encounter financial difficulties, our business, financial condition and results of operations could be materially and adversely affected.

Additionally, from time to time, a significant portion of our revenues are generated by a single project. Our dependence from time to time on a single project for a significant percentage of our revenues may result in significant variability of our earnings from period to period as these projects are completed.

We cannot assure you that NOC and IOC clients will continue to generate the majority, or even a significant percentage, of our revenues. Smaller or less capitalized oil and gas exploration and production companies may be forced to reduce their budgets for seismic data acquisition services in periods of depressed or declining commodity prices. Our dependence on customers other than NOCs and IOCs for the majority of our revenues could expose us to greater earnings volatility.

Historically, our NOC and IOC clients have represented a significant percentage of our revenues. Smaller or less capitalized oil and gas exploration and production companies may be required to sharply reduce their expenditures for seismic data acquisition services in periods of depressed or declining commodity prices. Our dependence on customers other than NOCs and IOCs for the majority of our revenues could expose us to greater earnings volatility.

Revenues derived from our projects may not be sufficient to cover our costs of completing those projects. As a result, our results of operations may be adversely affected.

Our revenues are determined, in part, by the price we receive for our services, the productivity of our crews and the accuracy of our cost estimates. Our crews’ productivity is partly a function of external factors, such as seasonal variations in the length of days, weather, including the onset of monsoons, difficult terrain and marine environments, and third party delays, over which we have no control. In addition, cost estimates for our projects may be inadequate due to unknown factors associated with the work to be performed and market conditions, resulting in cost over-runs. If our crews encounter operational difficulties or delays, or if we have not correctly priced our services, our results of operation may vary, and in some cases, may be adversely affected. We have in the past experienced cost over-runs that caused the costs from a particular project to exceed the revenues from that project and we cannot assure you that this will not happen again.

Many of our projects are performed on a turnkey basis where a defined amount and scope of work is provided by us for a fixed price and extra work, which is subject to client approval, is billed separately. The revenues, cost and gross profit realized on a turnkey contract can vary from our estimated amount because of changes in job conditions, variations in labor and equipment productivity from the original estimates, the performance of subcontractors, and any other similar conditions. Turnkey contracts may also cause us to bear substantially all of the risks of business interruption caused by weather delays and other hazards. These variations, delays and risks inherent in billing clients at a fixed price may result in us experiencing reduced profitability or losses on projects.

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From time to time we experience disputes with our clients relating to the amounts we invoice for our services, particularly with respect to billings relating to standby time. The exercise of remedies against clients in connection with our collection efforts could negatively affect our ability to secure future business from those clients.

Our contracts for seismic data acquisition services typically include provisions that require payment to us at a reduced rate for a limited amount of time if we are unable to record seismic data as a result of weather conditions or certain other factors outside our control, including delays caused by our clients. From time to time we experience disputes with our clients relating to the amounts we invoice for our services. For example, as of December 31, 2012, we had disputes with certain customers which relate to charges for our services. The exercise of our contractual remedies against these or other clients in connection with our collection efforts could negatively affect our relationship with these clients, and could result in the loss of future business which in turn could negatively affect our earnings in future periods.

Technological change in our business creates risks of technological obsolescence and requirements for future capital expenditures. If we are unable to continue investing in, or otherwise acquire, the latest technology, we may not be able to compete effectively.

The development of seismic data acquisition, processing and interpretation equipment has been characterized by rapid technological advancements in recent years and we expect this trend to continue. Manufacturers of seismic equipment may develop new systems that have competitive advantages relative to systems now in use that either renders the equipment we currently use obsolete or require us to make substantial capital expenditures to maintain our competitive position. Additionally, a number of seismic equipment manufacturers are affiliated with or are otherwise controlled by our competitors. If any such equipment manufacturer developed new equipment or systems and, for competitive reasons or otherwise, declined to sell such equipment or systems to us, we could be placed at a competitive disadvantage. In order to remain competitive, we must continue to invest additional capital to maintain, upgrade and expand our seismic data acquisition capabilities. In addition to our continuing investment in seismic data acquisition equipment from third party suppliers, we are also currently investing in the design and development of our own land and sea floor nodal technology. However, we may not be successful in developing and deploying this technology in a manner that is technologically or commercially viable. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Capital Expenditures.”

Seismic data acquisition equipment is expensive and our ability to operate and expand our business operations is dependent upon the availability of internally generated cash flow and financing alternatives. Such financing may consist of bank or commercial debt, equity or debt securities or any combination thereof. There can be no assurance that we will be successful in obtaining sufficient capital to upgrade and expand our current operations through cash from operations or additional financing or other transactions if and when required on terms acceptable to us.

If we do not effectively manage our transitions into new products and services, our revenues may suffer.

Products and services for the seismic industry are characterized by rapid technological advances in hardware performance, software functionality and features, frequent introduction of new products and services, and improvement in price characteristics relative to product and service performance. Among the risks associated with the introduction of new products and services are delays in development or manufacturing, variations in costs, delays in customer purchases or reductions in price of existing products in anticipation of new introductions, write-offs or write-downs of the carrying costs of assets associated with prior generation products, difficulty in predicting customer demand for new product and service offerings and effectively managing inventory levels so that they are in line with anticipated demand, risks associated with customer qualification, evaluation of new products, and the risk that new products may have quality or other defects or may not be supported adequately by application software. The introduction of new products and services by our competitors also may result in delays in customer purchases and difficulty in predicting customer demand. If we do not make an effective transition from existing products and services to future offerings, our revenues and margins may decline.

Furthermore, sales of our new products and services may replace sales, or result in discounting, of some of our current offerings, offsetting the benefit of a successful new product introduction. In addition, it may be difficult to ensure performance of new products and services in accordance with our revenues, margin, and cost estimates and to achieve operational efficiencies embedded in our estimates. Given the competitive nature of the seismic industry, if any of these risks materialize, the future demand for our products and services, and our future results of operations, may suffer.

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We are exposed to risks related to complex, highly technical products.

Our customers often require demanding specifications for product performance and reliability. Because many of our products are complex and often use unique advanced components, processes, technologies, and techniques, undetected errors and design and manufacturing flaws may occur. Even though we attempt to assure that our systems perform reliably in the field, the many technical variables related to their operations can cause a combination of factors that may, and from time to time have, caused performance and service issues with certain of our products. Product defects result in higher product service, warranty, and replacement costs and may affect our customer relationships and industry reputation, all of which may adversely impact our results of operations. Despite our testing and quality assurance programs, undetected errors may not be discovered until the product is purchased and used by a customer in a variety of field conditions. If our customers deploy our new products and they do not work correctly, our relationship with our customers may be materially and adversely affected.

We face risks related to inventory.

In addition to risks described elsewhere in this Item 1A relating to effectively managing inventory levels, we are exposed to inventory risks that may adversely affect our operating results as a result of new product launches, rapid changes in product cycles and pricing, defective merchandise, changes in customer demand and other factors. We endeavor to accurately predict these trends and avoid shortages or excess or obsolete inventory. Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale. Any one of the inventory risk factors set forth above may adversely affect our operating results.

Our backlog estimates are based on certain assumptions and are subject to unexpected adjustments and cancellations and thus may not be timely converted to revenues in any particular fiscal period, if at all, or be indicative of our actual operating results for any future period.

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.

We have invested, and expect to continue to invest, significant amounts of money in acquiring and processing seismic data for Multi-client surveys and for our seismic data library without knowing precisely how much of this seismic data we will be able to sell or when and at what price we will be able to sell such data.

Multi-client surveys and the resulting seismic data library are an increasingly important part of our business and our future investments. We invest significant amounts of money in acquiring and processing seismic data that we own. By making such investments, we are exposed to the following risks:

• We may not fully recover our costs of acquiring, processing and interpreting seismic data through future sales. The amounts of these data sales are uncertain and depend on a variety of factors, many of which are beyond our control.

• The timing of these sales is unpredictable and can vary greatly from period to period. The costs of each survey are capitalized and then amortized over the expected useful life of the data. This amortization will affect our earnings and when combined with the sporadic nature of sales, will result in increased earnings volatility.

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• Regulatory changes that affect companies’ ability to drill, either generally or in a specific location where we have acquired seismic data, could materially adversely affect the value of the seismic data contained in our library. Technology changes could also make existing data sets obsolete. Additionally, each of our individual surveys has a limited book life based on its location and oil and gas companies’ interest in prospecting for reserves in such location, so a particular survey may be subject to a significant decline in value beyond our initial estimates.

• The value of our Multi-client data could be significantly adversely affected if any material adverse change occurs in the general prospects for oil and gas exploration, development and production activities.

• The cost estimates upon which we base our pre-commitments of funding could be wrong, which could result in losses that have a material adverse effect on our financial condition and results of operations.

• Pre-commitments of funding are subject to the creditworthiness of our clients. In the event that a client refuses or is unable to pay its commitment, we could lose a material amount of money.

• If our clients significantly increase their preference toward licensing seismic data from Multi-client data libraries, we may not have the appropriate existing data library assets to be able to obtain permits and access rights to geographic areas of interest from which to record such data, or make appropriate levels of investment in the creation of new data library assets to support our business strategy.

Any reduction in the market value of such data will require us to write down its recorded value, which could have a significant material adverse effect on our results of operations.

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

Our seismic data acquisition operations could be adversely affected by our inability to timely obtain access to both public and private land included within a seismic survey. We cannot begin surveys on property without obtaining permits from certain governmental entities as well as the permission of the parties who have rights to the land being surveyed. In recent years, it has become more difficult, costly and time-consuming to obtain access rights as drilling activities have expanded into more populated areas. Additionally, while land owners generally are cooperative in granting access rights, some have become more resistant to seismic and drilling activities occurring on their property and stall or refuse to grant these rights for various reasons. In our Multi-client Services segment, we acquire data sets pertaining to large areas of land. Consequently, if we do not obtain land access rights from a specific land owner, we may not be able to provide a complete survey for that area. The failure to redact or remove the seismic information relating to mineral interests held by non-consenting third parties could result in claims against us for seismic trespass. In addition, governmental entities do not always grant permits within the time periods expected. Delays associated with obtaining such permits and significant omissions from a survey as a result of the failure to obtain consents could have a material adverse effect on our financial condition and results of operations.

We operate under hazardous conditions that subject us and our employees to risk of damage to property or personal injury and limitations on our insurance coverage may expose us to potentially significant liability costs.

Our activities are often conducted in dangerous environments and under hazardous conditions, including the detonation of dynamite. Operating in such environments and under such conditions carries with it inherent risks, such as damage to or loss of human life or equipment, as well as the risk of downtime or reduced productivity resulting from equipment failures caused by such adverse operating environment. These risks could cause us to experience equipment losses, injuries to our personnel and interruptions in our business. We cannot assure you that our insurance will be sufficient or adequate to cover all losses or liabilities or that insurance will continue to be available to us or available to us on acceptable terms. A successful claim for which we are not fully insured, or which exceeds the policy limits of our applicable insurance could have a material adverse effect on our financial condition. Moreover, we do not carry business interruption insurance with respect to our operations.

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Our agreements with our clients may not adequately protect us from unforeseen events or address all issues that could arise with our clients. The occurrence of unforeseen events not adequately addressed in the contracts could result in increased liability, costs and expenses associated with any given project.

With many of our clients we enter into master service agreements which allocate certain operational risks. Despite the inclusion of risk allocation provisions in our agreements, our operations may be affected by a number of events that are unforeseen or not within our control. We cannot assure you that our agreements will adequately protect us from each possible event. If an event occurs which we have not contemplated or otherwise addressed in our agreement, we, and not our client, will likely bear the increased cost or liability. To the extent our agreements do not adequately address these and other issues, or we are not able to successfully resolve resulting disputes, we may incur increased liability, costs and expenses.

Weather may adversely affect our ability to conduct business.

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

We may be held liable for the actions of our subcontractors.

We often work as the general contractor on seismic data acquisition surveys and consequently engage a number of subcontractors to perform services and provide products. There can be no assurance we will not be held liable for the actions of these subcontractors. In addition, subcontractors may cause damage or injury to our personnel and property that is not fully covered by insurance.

Current or future distressed financial conditions of clients could have an adverse effect on us in the event these clients are unable to pay us for our services.

Some of our clients are experiencing, or may experience in the future, severe financial problems that have had or may have a significant effect on their creditworthiness. We generally do not require that our clients make advance payments or otherwise collateralize their payment obligations. We cannot provide assurance that one or more of our financially distressed clients will not default on their payment obligations to us or that such a default or defaults will not have a material adverse effect on our business, financial position, results of operations or cash flows. Furthermore, the bankruptcy of one or more of our clients, or other similar proceeding or liquidity constraint, will reduce the amounts we can expect to recover, if any, with respect to amounts owed to us by such party. In addition, such events might force those clients to reduce or curtail their future use of our products and services, which could have a material adverse effect on our results of operations and financial condition.

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

We are subject to high fixed costs which primarily consist of depreciation, maintenance expenses associated with our seismic data acquisition, processing and interpretation equipment and certain crew costs. Because some of our equipment is new or nearly new, we believe that our depreciation expense relative to our revenues could be higher than that of many of our competitors. Extended periods of significant downtime or low productivity caused by reduced demand, weather interruptions, equipment failures, permit delays or other causes could reduce our profitability and have a material adverse effect on our financial condition and results of operations because we will not be able to reduce our fixed costs as fast as revenues decline.

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Our results of operations could be adversely affected by goodwill or long-lived asset impairments.

We periodically review our portfolio of equipment for impairment. A prolonged downturn could affect the carrying value of our goodwill and require us to recognize a loss. If we expect significant sustained decreases in oil and natural gas prices in the future, we may be required to write down the value of our equipment if the future cash flows anticipated to be generated from the related equipment falls below net book value. A decline in oil and natural gas prices, if sustained, can result in future impairments. In addition, changes in industry conditions, such as changes in applicable laws and regulations, could affect the usefulness of our Multi-client seismic data library to oil and gas companies, thereby requiring us to write down the value of our seismic data library. If we are forced to write down the value of our assets, these non-cash asset impairments could negatively affect our results of operations in the period in which they are recorded. See discussions of “Asset Impairment” and “Goodwill” included in Note 2 “Summary of Significant Accounting Policies.”

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

Our operations are subject to stringent federal, provincial, state and local environmental laws and regulations in the United States and foreign jurisdictions relating to environmental protection. In our business, we use explosives and certain other regulated hazardous materials that are subject to such regulation. These laws and regulations may impose numerous obligations that are applicable to our operations including:

• the acquisition of permits before commencing regulated activities;

• the limitation or prohibition of seismic activities in environmentally sensitive or protected areas such as wetlands or wilderness areas;

• restrictions pertaining to the management and operation of our vehicles and equipment; and

• licensing requirements for our personnel handling explosives and other regulated hazardous materials.

Numerous governmental authorities, such as the U.S. Environmental Protection Agency (“EPA”), BATFE, the Bureau of Land Management (“BLM”) and analogous state agencies in the United States and governmental bodies with control over environmental matters in foreign jurisdictions, have the power to enforce compliance with these laws and regulations and any licenses and permits issued under them, oftentimes requiring difficult and costly actions. In addition, failure to comply with these laws, regulations and permits may result in the assessment of administrative, civil and criminal penalties, the imposition of obligations to investigate and/or remediate contaminations, and the issuance of injunctions limiting or preventing some or all of our operations.

We invest extensive financial and management resources to comply with these laws and related licensing and permitting requirements, and we believe that the regulatory environment for the oil and natural gas industry and related service providers is likely to become more burdensome and time consuming than it ever has been before. Over the last year, permitting authorities have begun requiring us to comply with standards that have never before applied to seismic companies. As further discussed below, some proposed regulations would inhibit the use of hydraulic fracturing in connection with the drilling of wells, which is a crucial part in recovering economic amounts of hydrocarbons from shale plays, which represent a significant opportunity for us. If oil and natural gas companies face regulation that makes drilling for resources uneconomic, the demand for our services may be adversely affected. In addition, the ongoing revision of such environmental laws and regulations, sometimes as a direct result of particular economic, political, or social events, makes it difficult for seismic data acquisition companies to predict future costs or the impact of such laws and regulations on future projects. As a result, we could incur capital and operating expenses, as well as compliance costs, beyond those anticipated which could adversely affect our future operations.

There is inherent risk of incurring significant environmental costs and liabilities in our operations due to our controlled storage, use and disposal of explosives. In the event of an accident, we could be held liable for any damages that result or we could be penalized with fines, and any liability could exceed the limits of or fall outside our insurance coverage.

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Current and future legislation relating to climate change and hydraulic fracturing may negatively impact the exploration and production of oil and gas, and implicitly the demand for our products and services.

Our company along with other seismic data acquisition companies may be affected by new environmental legislation intended to limit or reduce increased emissions of gases, such as carbon dioxide and methane from the burning of fossil fuels (oil, gas and coal), which may be a contributing factor to climate change. The European Union has already established greenhouse gas (“GHGs”) regulations, and many other countries, including the United States, are in the process of enacting similar regulations. This could cause us to incur additional direct and indirect compliance costs in relation to any new climate change laws and regulations. Moreover, passage of climate change legislation or other regulatory initiatives that target emissions of GHGs may impair exploration and production of hydrocarbons and thus adversely affect future demand for our products and services. Reductions in our revenues or increases in our expenses as a result of climate control legislative initiatives could have negative impact on our business, financial position, results of operations and prospects. Although various climate change legislative measures have been under consideration by the U.S. Congress, it is not possible at this time to predict whether or when Congress may act on climate change legislation.

In addition, the “Fracturing Responsibility and Awareness of Chemicals Act” (the “FRAC Act”) was introduced to both houses of the 111th U.S. Congress on June 9, 2009, aiming to amend the “Safe Drinking Water Act” (the “SDWA”) by repealing an exemption from regulation for hydraulic fracturing. The 111th U.S. Congress adjourned on January 3, 2011, without taking any significant action on the FRAC Act; however it was reintroduced in both houses of the 112th U.S. Congress. If enacted, the FRAC Act would amend the definition of “underground injection” in the SDWA to encompass hydraulic fracturing activities. Such a provision could require hydraulic fracturing operations to meet permitting and financial assurance requirements, adhere to certain construction specifications, fulfill monitoring, reporting, and recordkeeping obligations, and meet plugging and abandonment requirements. The FRAC Act also proposes to require the reporting and public disclosure by the energy industry of the chemicals mixed with the water and sand it pumps underground in the hydraulic fracturing process (also known as “fracking”), information that has largely been protected as trade secrets. This reporting would make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater. The adoption of any future federal or state laws or implementing regulations imposing reporting obligations on, or otherwise limiting, the hydraulic fracturing process could make it more difficult to complete natural gas wells. Shale gas cannot be economically produced without extensive fracturing. While proposed legislation is still pending in Congress, the EPA has also reviewed its existing authority under the SDWA and asserted its intent to regulate hydraulic fracturing operations involving diesel additives. In the event this legislation is enacted, demand for seismic acquisition services may be adversely affected.

Most recently, representing shareholders, investor groups are increasingly pressing U.S. oil and gas companies to take stronger actions and increase public disclosure of information on fracking, climate change, and environment changes. In their resolutions, these groups request detailed accounting of how oil and gas companies are addressing the risks of fracking associated with threats to environment, communities, labor, regulatory changes and drilling moratoriums. If successful, these actions may result in substantial cost increases, delays, suspensions or even cancellations of existing or new exploration projects, with a direct adverse effect on our financial condition and results of operation.

Historically our operational expenses incurred in connection with international seismic data projects have been higher, as a percentage of revenues, than the operational expenses incurred in connection with seismic data projects undertaken in the United States. The profitability of our future international operations will depend significantly on our ability to control these expenses.

The expense of mobilizing personnel and equipment to various foreign locations, as well as the cost of obtaining and complying with local regulatory requirements historically have been significantly higher than the expenses incurred in connection with seismic data projects undertaken in the United States. If we are unable to reduce the expenses incurred in connection with an international seismic data project, or to obtain better pricing for such services, our results of operations could be materially and adversely affected.

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Operating internationally subjects us to significant risks and regulation inherent in operating in foreign countries.

We conduct operations on a global scale. As of December 31, 2012, approximately 27% of our property, plant and equipment and approximately 11% of our employees were located outside of the U.S. and, for the year ended December 31, 2012, approximately 48% of our revenues were attributable to operations in foreign countries.

Our international operations are subject to a number of risks inherent to any business operating in foreign countries, and especially those with emerging markets. As we continue to increase our presence in such countries, our operations will encounter the following risks, among others:

• government instability, which can cause investment in capital projects by our potential clients to be withdrawn or delayed, reducing or eliminating the viability of some markets for our services;

• potential expropriation, seizure, nationalization or detention of assets;

• difficulty in repatriating foreign currency received in excess of local currency requirements;

• import/export quotas;

• civil uprisings, riots and war, which can make it unsafe to continue operations, adversely affect both budgets and schedules and expose us to losses;

• availability of suitable personnel and equipment, which can be affected by government policy, or changes in policy, which limit the importation of qualified crewmembers or specialized equipment in areas where local resources are insufficient;

• decrees, laws, regulations, interpretation and court decisions under legal systems, which are not always fully developed and which may be retroactively applied and cause us to incur unanticipated and/or unrecoverable costs as well as delays which may result in real or opportunity costs; and

• terrorist attacks, including kidnappings of our personnel.

We cannot predict the nature and the likelihood of any such events. However, if any of these or other similar events should occur, it could have a material adverse effect on our financial condition and results of operation.

Certain of the seismic equipment that we use in certain foreign countries may require prior U.S. government approval in the form of an export license and may otherwise be subject to tariffs and import/export restrictions. The delay in obtaining required governmental approvals could affect our ability to timely commence a project, and the failure to comply with all such controls could result in fines and other penalties.

We are subject to taxation in many foreign jurisdictions and the final determination of our tax liabilities involves the interpretation of the statutes and requirements of taxing authorities worldwide. Our tax returns are subject to routine examination by taxing authorities, and these examinations may result in assessments of additional taxes, penalties and/or interest.

Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, which could negatively affect our profitability.

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As a company subject to compliance with the Foreign Corrupt Practices Act (the “FCPA”), our business may suffer because our efforts to comply with U.S. laws could restrict our ability to do business in foreign markets relative to our competitors who are not subject to U.S. law. Additionally, our business plan involves establishing joint ventures with partners in certain foreign markets. Any determination that we or our foreign agents or joint venture partners have violated the FCPA may adversely affect our business and operations.

We and our local partners operate in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. We may be subject to competitive disadvantages to the extent that our competitors are able to secure business, licenses or other preferential treatment by making payments to government officials and others in positions of influence or using other methods that U.S. law and regulations prohibit us from using.

As a U.S. corporation, we are subject to the regulations imposed by the FCPA, which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. In particular, we may be held liable for actions taken by our strategic or local partners even though our partners are not subject to the FCPA. Any such violations could result in substantial civil and/or criminal penalties and might adversely affect our business, results of operations or financial condition. In addition, our ability to continue to work in the countries discussed above could be adversely affected if we were found to have violated certain U.S. laws, including the FCPA.

Our results of operations can be significantly affected by currency fluctuations.

A portion of our revenues is derived in the local currencies of the foreign jurisdictions in which we operate. Accordingly, we are subject to risks relating to fluctuations in currency exchange rates. In the future, and especially as we expand our sales in international markets, our clients may increasingly make payments in non-U.S. currencies. Fluctuations in foreign currency exchange rates could affect our sales, cost of sales and operating margins. In addition, currency devaluation can result in a loss to us if we hold deposits of that currency. Hedging foreign currencies can be difficult, especially if the currency is not actively traded. We cannot predict the effect of future exchange rate fluctuations on our operating results.

A terrorist attack or armed conflict could harm our business.

Some seismic surveys are located in unstable political jurisdictions, including North Africa and the Middle East. Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States or other countries may adversely affect our ability to work in these markets which could prevent us from meeting our financial and other obligations. These activities could have a direct negative effect on our business in those areas, including loss of life, equipment and data. Costs for insurance and security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

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

The company has undergone reorganization of its senior level management.  Additional reorganization or the loss of services of additional members of our senior level executives or key personnel could disrupt our operations which in turn could materially and adversely affect our results of operations.

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

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

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

If the demand for seismic services increases, we may not be able to acquire equipment to replace our existing equipment or add additional equipment. From time to time, the high demand for seismic services has decreased the availability of geophysical equipment, resulting in extended delivery dates on orders of new equipment. If that happens again, any delay in obtaining equipment could delay our implementation of additional or larger crews and restrict the productivity of our existing crews. Our required equipment may not continue to be available to us at costs which allow us to be profitable. A delay in obtaining equipment essential to our operations could have a material adverse effect on our financial condition and results of operations.

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely consolidated financial statements could be impaired, which could harm our operating results, our ability to operate our business and investor views of us.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate consolidated financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles. Both we and our independent auditors have tested our internal controls in connection with the audit of our consolidated financial statements for the year ending December 31, 2012 and, as part of the testing, identifying areas for further attention and improvement. If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely consolidated financial statements could be impaired, which could harm our operating results, harm our ability to operate our business and reduce the trading price of our stock.

Risks Related to our Indebtedness

Our substantial debt could adversely affect our financial health and prevent us from fulfilling our obligations.

We have a significant amount of debt and may incur substantial additional debt (including secured debt) in the future. The terms of our existing debt agreements limit, but do not prohibit, us from doing so. As of December 31, 2012, we had approximately $311 million of total long-term indebtedness, net of current portion and unamortized discount (comprised primarily of $243 million of our 10.5% senior notes, net of unamortized discount and $68 million of borrowings under our Revolving Credit Facility), as described in our “Management’s Discussion and Analysis—Liquidity and Capital Resources” section of this Form 10-K. We cannot assure you that we will be able to generate sufficient cash to service our debt or sufficient earnings to cover fixed charges in future years. Increases in outstanding debt above this level will intensify the related risks.

Our substantial debt could have important consequences. In particular, it could:

• increase our vulnerability to general adverse economic and industry conditions;

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

• limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit, along with the financial and other restrictive covenants of our indebtedness, among other things, our ability to borrow additional funds.

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Our debt agreements contain restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities.

The terms of the indenture governing our new notes and our Revolving Credit Facility contain restrictive covenants that limit our ability to, among other things:

• incur or guarantee additional debt;

• pay dividends;

• repay subordinated debt prior to its maturity;

• grant additional liens on our assets;

• enter into transactions with our affiliates;

• repurchase stock;

• make certain investments or acquisitions of substantially all or a portion of another entity’s business assets; and

• merge with another entity or dispose of our assets.

For example, our Revolving Credit Facility limits the amount of our capital expenditures, including amounts we may spend on our Multi-client library. These capital expenditure limitations may limit our ability to add to our Multi-client library.

In addition, our Revolving Credit Facility requires us, to maintain certain financial ratios and tests. The requirement that we comply with these provisions may materially adversely affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures or withstand a continuing or future downturn in our business.

If our lenders foreclose on their security interests in our assets, they will have the right to sell those assets in order to satisfy our obligations to them.

Our obligations under our Revolving Credit Facility are secured by a lien on substantially all of our assets including the equity interests in our material subsidiaries. In the event of foreclosure, liquidation, bankruptcy or other insolvency proceeding relating to us or our subsidiaries that have guaranteed our debt, holders of this secured indebtedness will have prior claims with respect to substantially all of our assets. There can be no assurance that we would receive any proceeds from a foreclosure sale of our assets that constitute collateral following the satisfaction of the secured lenders’ priority claims.

If we are unable to comply with the restrictions and covenants in our existing debt agreements and other current and future debt agreements, there could be a default under the terms of such agreements, which could result in an acceleration of repayment.

If we are unable to comply with the restrictions and covenants in our existing debt agreements or in future debt agreements, there could be a default under the terms of these agreements. Our ability to comply with these restrictions and covenants, including meeting financial ratios and tests, may be affected by events beyond our control. As a result, we cannot assure you that we will be able to comply with these restrictions and covenants or meet such financial ratios and tests. In the event of a default under these agreements, lenders could terminate their commitments to lend or accelerate the loans and declare all amounts borrowed due and payable. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions may also be accelerated and become due and payable. If any of these events occur, our assets might not be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us. Additionally, we may not be able to amend our debt agreements or obtain needed waivers on satisfactory terms.

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To service our indebtedness, we require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures depends in part on our ability to generate cash in the future. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We cannot assure that we will generate sufficient cash flow from operations, which we will realize operating improvements on schedule or that future borrowing will be available to us in an amount sufficient to enable us to service and repay our indebtedness or to fund our other liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure that any refinancing or debt restructuring would be possible or, if possible, would be completed on favorable or acceptable terms, that any assets could be sold or that, if sold, the timing of the sales and the amount of proceeds realized from those sales would be favorable to us or that additional financing could be obtained on acceptable terms. Disruptions in the capital and credit markets, such as those experienced since 2008, could adversely affect our ability to meet our liquidity needs or to refinance our indebtedness, including our ability to borrow under our Revolving Credit Facility. Banks that are party to our Revolving Credit Facility may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time.

Increases in interest rates would adversely affect our results of operations.

Our Revolving Credit Facility is subject to floating interest rates which vary in line with movements in short-term interest rates. As a result, our interest expenses may increase significantly if short-term interest rates increase.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We own a building complex in the greater metropolitan Houston, Texas area that we use as our corporate headquarters. Our headquarters consists of office and warehouse space totaling approximately 104,000 square feet.

In addition, at the end of 2012, we were registered to do business and, in certain locations, leased administrative offices, sales offices, data processing centers, research centers, warehouses or equipment repairing centers , more specifically (i) in the United States, the most important, in cities such as Dallas, Missouri City, Stafford, Carrollton (all the above mentioned cities in Texas), and Denver (Colorado) as well as (ii) throughout the world, in countries such as Algeria, Argentina, Belize, Brazil, Brunei, Canada, Cayman Islands, Chile, Colombia, Cook Islands, Dubai, Ecuador, Georgia, India, Iraq, Isle of Man, Kurdistan, Libya, Mexico, Nigeria, Oman, Peru, Poland, Russia, Saudi Arabia, Trinidad and Tobago, Tunisia, United Kingdom, and Venezuela.

We believe that our existing facilities are well maintained, suitable for their intended use, and adequate to meet our current and future operating requirements, but we may also seek to expand our facilities from time to time.

Item 3. Legal Proceedings

We are subject to periodic lawsuits, arbitrations, investigations, disputes and claims, including environmental claims and employee related matters, arising in the ordinary conduct of our business. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we do not believe that any currently pending legal proceedings to which we are a party will have a material adverse effect on our business, results of operations, cash flows or financial condition.

We sometimes experience disagreements or disputes with our customers relating to our charges. As of December 31, 2012, we had no disputes related to our charges for our services with customers.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

As of February 28, 2013, there were 37,674,903 shares of common stock of Global Geophysical Services, Inc. outstanding and 341 stockholders of record. Our common stock is listed on the NYSE, where it is traded under the symbol “GGS”. The closing market price of our common stock on February 28, 2013 was $2.34 per share.

The following table sets forth the high and low closing prices for the common stock of Global Geophysical Services, Inc. during the most recent two fiscal years, as reported by the NYSE for the period shown. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Quarter Ended	High		Low
March 31, 2011	$	14.90	$	9.98
June 30, 2011	$	18.99	$	14.64
September 30, 2011	$	17.98	$	7.35
December 31, 2011	$	10.24	$	6.23
March 31, 2012	$	11.76	$	7.02
June 30, 2012	$	10.41	$	5.19
September 30, 2012	$	6.40	$	4.24
December 31, 2012	$	5.64	$	3.71

We have never paid cash dividends on our common stock, and the Board of Directors intends to retain all of our earnings, if any, to finance the development and expansion of our business. There can be no assurance that our operations will prove profitable to the extent necessary to pay cash dividends. Moreover, even if such profits are achieved, the future dividend policy will depend upon our earnings, capital requirements, financial condition, debt covenants and other factors considered relevant by our Board of Directors.

Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes certain information regarding securities authorized for issuance under our equity compensation plans as of December 31, 2012. In July 2006, our Board of Directors and Stockholders adopted the Global Geophysical Services, Inc. 2006 Incentive Compensation Plan. See information regarding material features of the plan in Note 11, “Stock-Based Compensation” to the Consolidated Financial Statements included herein.

	Number of Securities to be Issued Upon Exercise of Outstanding Options		Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category	(a)		(b)		(c)
Equity compensation plans approved by security holders		1,893,200	$	22.87		5,440,701
Equity compensation plans not approved by security holders		-		-		-
Total		1,893,200	$	22.87		5,440,701

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Stock Performance Graph

The following graph compares the cumulative eleven-quarter total return provided stockholders on Global Geophysical Services, Inc.’s common stock relative to the cumulative total returns of the S&P 500 Index and a peer group made up of companies in the PHLX Oil Service Sector Index. The PHLX Oil Service Sector Index consists of far larger companies that perform a variety of services as compared to land and marine based acquisition and processing of seismic data performed by us.

The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Global Geophysical Services, Inc. specifically incorporates it by reference into such filing. 

Comparison of Eleven-Quarter Cumulative Total Return*

Among Global Geophysical Services, Inc., the S&P 500 Index and the PHLX Oil Service Sector Index

_____________________

*           Assumes $100 was invested on April 22, 2010 in stock or index, including reinvestment of dividends.  The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Sales of Unregistered Securities and Stock Repurchases

During the year ended December 31, 2012, we did not make any purchases of our common stock, which is registered pursuant to Section 12(b) of the Exchange Act of 1934.

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Item 6.  Selected Financial Data

SELECTED FINANCIAL INFORMATION

The following table presents our summary historical financial data for the periods indicated. The data for the years ended December 31, 2012, 2011, 2010, 2009 and 2008 have been derived from our audited financial statements. The financial data for the years ended December 31, 2012, 2011 and 2010 are included elsewhere in this filing. For further information that will help you better understand the summary data, you should read this financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes and other financial information included elsewhere in this Form 10-K. These historical results are not necessarily indicative of results to be expected for any future periods.

	Year Ended December 31,
	2012			2011			2010			2009			2008
Statement of Operations Data:
Revenues(1)	$	338,984		$	385,355		$	254,705		$	312,796		$	376,256
Operating expenses		239,783			293,865			225,327			262,168			319,451
Gross profit		99,201			91,490			29,378			50,628			56,805
Selling, general and administrative expenses		56,750			46,582			40,387			32,300			30,190
Income (loss) from operations		42,451			44,908			(11,009	)		18,328			26,615
Interest expense, net		(31,666	)		(25,259	)		(21,269	)		(18,613	)		(22,384	)
Other income (expense), net(2)		(4,160	)		(529	)		(6,676	)		1,023			(6,250	)
Income (loss) before income taxes		6,625			19,120			(38,954	)		738			(2,019	)
Income tax expense		20,428			13,480			600			293			6,027
Income (loss) after taxes		(13,803	)		5,640			(39,554	)		445			(8,046	)
Net income (loss), attributable to non-controlling interests		(472	)		(22	)		162			-			-
Net income (loss), attributable to common shareholders	$	(13,331	)	$	5,662		$	(39,716	)	$	445		$	(8,046	)
Basic	$	(0.36	)	$	0.15		$	(1.44	)	$	0.05		$	(0.98	)
Diluted(3)	$	(0.36	)	$	0.15		$	(1.44	)	$	0.02		$	(0.98	)
Weighted average shares outstanding
Basic		37,319			36,666			27,517			8,188			8,174
Diluted(3)		37,319			36,666			27,517			28,788			8,174
Ratio of earnings to fixed charges(4)		1.15			1.52			-			1.03			-
Cash Flows Data:
Cash flows provided by operating activities		117,280			137,010			121,195			83,211			46,234
Cash flows used in investing activities		(162,606	)		(202,482	)		(218,086	)		(56,095	)		(89,820	)
Cash flows provided by (used in) financing activities		47,161			58,760			108,101			(40,533	)		57,110
Balance Sheet Data:
Cash and cash equivalents(5)		23,359			21,525			28,237			17,027			30,444
Total assets		552,875			506,373			413,266			316,620			329,652
Total debt, including capital leases and current portion(6)		350,885			292,085			218,344			171,953			213,990
Total liabilities		445,327			392,811			311,409			252,691			267,042
Total stockholders’ equity		107,548			113,562			101,857			63,928			62,610

____________________

(1) Includes $156.5 million, $177.4 million and $134.9 million in recognized revenues generated from Multi-client Services in the years ended December 31, 2012, 2011 and 2010, respectively.

(2) Includes unrealized gain (loss) on derivative instruments, foreign exchange gain (loss), loss on extinguishment of debt, other income (expense) and gain (loss) on sale of assets.

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(3) For the year 2011, there were no diluted shares; For the years 2012, 2010 and 2008, diluted and basic are the same due to the net loss for those years.

(4)The ratio of earnings to fixed charges was computed by dividing the sum of our earnings before income taxes and fixed charges by fixed charges. Fixed charges consist of all interest and one third of the total of rent, marketing data services, maintenance and equipment rental expenses (considered representative of the interest factor).

(5) Cash and cash equivalents do not include restricted cash investments of approximately $1.8 million, $5.6 million, $2.4 million, $5.3 million and $7.6 million at December 31, 2012, 2011, 2010, 2009 and 2008, respectively.

(6) Excludes unamortized original issue discount of approximately $6.9 million, $4.9 million, $5.6 million, $2.1 million and $2.4 million at December 31, 2012, 2011, 2010, 2009 and 2008.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Selected Financial Information” section of this Form 10-K and our consolidated financial statements and the related notes and other financial information included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Form 10-K, which are incorporated herein by reference.

Overview

We provide an integrated suite of seismic data solutions to the global oil and gas industry, including our high resolution 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 enables the creation of high resolution images of the earth’s subsurface and reveals 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 and tight reservoir plays, including the Haynesville, Barnett, Bakken, Fayetteville, Eagle Ford and Woodford, where we believe our high resolution RG3D seismic solutions are particularly well-suited.

Our seismic solutions are used by many of the world’s largest and most technically advanced oil and gas exploration and production companies, including national oil companies (“NOCs”), major integrated oil companies (“IOCs”), and large independent oil and gas companies. We provide seismic data acquisition on a worldwide basis for land, transition zone and shallow marine areas, including challenging environments such as marshes, forests, jungles, arctic climates, mountains and deserts. We also have significant operational experience in most of the major U.S. shale plays, including the Haynesville, Barnett, Bakken, Fayetteville, Eagle Ford and Woodford, and tight reservoir plays. We believe this experience positions us well to serve our customers as they expand their involvement in these plays outside the U.S.

As of December 31, 2012, we owned approximately 138,000 recording channels. Our recording channels and systems are interoperable providing operational scalability and efficiency, enabling us to execute on large and technologically complex projects.

We generate revenues primarily 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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Key Accomplishments

We have grown at a rapid pace since commercial operations began in May 2005, finishing 2012 with $339.0 million in revenues. During this period, we continued to expand not only our operational capabilities but also our service offerings to include land, transition zone and shallow marine seismic data acquisition, processing and interpretation services and Multi-client Services. Other recent highlights include:

•   Operating income for the year ended December 31, 2012 was 12.5% of revenues, compared to 11.7% for the same period of 2011.

•   Net book value of the Multi-client library was $309.1 million at December 31, 2012 compared to $232.2 million at December 31, 2011.

•   Increasing our Seismic Data Library to approximately 8,800 square miles as of December 31, 2012 compared with approximately 6,700 square miles as of December 31, 2011.

The following table summarizes gross margin by segment (in thousands):

Year Ended December 31, 2012:	Proprietary Services			Multi-client Services			Corporate			Total
Revenues	$	182,476		$	156,508		$	-		$	338,984
Operating expenses (1) (2)		152,223			103,266			(15,706	)		239,783
Gross margin	$	30,253		$	53,242		$	15,706		$	99,201
SG&A		-			-			56,750			56,750
Operating income	$	30,253		$	53,242		$	(41,044	)	$	42,451
Gross margin %		16.6	%		34.0	%		-			29.3	%
Year Ended December 31, 2011:
Revenues	$	207,921		$	177,434		$	-		$	385,355
Operating expenses (1) (2)		182,880			112,668			(1,683	)		293,865
Gross margin	$	25,041		$	64,766		$	1,683		$	91,490
SG&A		-			-			46,582			46,582
Operating income	$	25,041		$	64,766		$	(44,899	)	$	44,908
Gross margin %		12.0	%		36.5	%		-			23.7	%

(1) Corporate operating expenses represent (gain) loss on sale of assets.

(2) Multi-client Services operating expenses represent Multi-client amortization expense.

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How We Generate Our Revenues

We generate revenues by providing Proprietary Services and Multi-client Services to our clients. Proprietary Services revenues represented 54% and 54% of our revenues for the years ended December 31, 2012 and 2011, respectively. Multi-client Services revenues represented 46% and 46% of our revenues for the years ended December 31, 2012 and 2011, respectively.

Proprietary Services.  We 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 on a similar basis.

Most of our Proprietary Services, microseismic monitoring, data processing and interpretation services business is obtained through competitive bidding. We generally require approximately 30 days of preparation and diligence in order to prepare and submit a bid in response to a request for proposal. In certain circumstances, various factors, such as the difficulty of the terrain involved or remoteness of the survey area, may require considerably more time to prepare and submit a bid. Our clients usually ask us to quote a “turnkey” rate for each completed unit of recorded data, or less frequently, they may ask for a “term rate” bid. When we perform work on a turnkey basis a defined amount and scope of work is provided by us for a fixed price and extra work, which is subject to client approval, is billed separately, whereas when we perform work on a term rate basis, one of our seismic crews is hired for a fixed fee per day. Current market conditions drive our portfolio of outstanding contracts in terms of pricing (turnkey, term rate or a combination of the two). We also enter into contracts that combine different pricing elements, such as a term rate contract with bonus incentives for early completion or achievement of certain performance metrics to maximize the economic incentives for both us and our client.

We have entered into master service agreements with many of our clients. These agreements specify payment terms, establish standards of performance and allocate certain operational risks through indemnity and related provisions and are supplemented on a project-by-project basis with pricing terms and other project-specific terms. Revenues from our Proprietary Services segment are recognized when they are realizable and earned as services are performed based on the proportionate performance method. We defer unearned revenues until earned, and recognize losses in full when they occur.

Our contracts typically provide that we remain responsible for the majority of costs and expenses associated with a particular project. We seek to manage the risk of delays through the inclusion of “standby rate” provisions. These provisions are included in most of our contracts and require payment to us of a reduced rate for a limited amount of time if we are unable to record seismic data as a result of weather conditions or certain other factors outside our control. The pricing for any Proprietary Services, microseismic monitoring, data processing or interpretation services project is primarily determined by the data quality requirement, resolution, program parameters, complexity and conditions including the timing, location and terrain and equipment required to complete the project.

Multi-client Services.  We generate Multi-client revenues by granting a license to seismic data. This allows our clients to have access to seismic data at a cost that is generally less than acquiring data on a proprietary basis. Our Multi-client Services differ from our Proprietary Services projects in that we set the specifications of the program, generally handle all aspects of the seismic data acquisition and maintain ownership of the seismic data and its corresponding revenue stream. The seismic data sets that we have acquired through our Multi-client Services are included in our seismic data library.

Revenues under our arrangements are generated as pre-commitments, late sales and/or data swaps, or a combination thereof, from the licensing of Multi-client data. The terms of the license typically set pricing on a per square mile basis, specify a defined survey area, and include limitations on transferability of the underlying data. We retain ownership of the seismic data acquired and licensed in Multi-client Services which remains available for late sales. Historically, we achieved pre-commitments levels of 67% of our cash investment in the portfolio. For programs commencing in 2012, we began to target pre-commitment levels of 100% or greater to further reduce our risk exposure in new Multi-client Services projects. We may receive additional cash amounts as certain project milestones are reached. The cash inflows from these pre-commitments generally correspond to the timing of our cash expenses on a project.

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The following table summarizes data for our Multi-client Services (in millions):

	Year Ended December 31,
	2012		2011		2010
Multi-client Services revenues	$	156.5	$	177.4	$	134.9
Cash investment in Multi-client library assets	$	165.1	$	177.7	$	170.8
Capitalized depreciation (1)		11.3		16.9		20.4
Non-cash data exchange		3.7		4.4		10.0
Total investment in Multi-client library assets	$	180.1	$	199.0	$	201.2
	Year Ended December 31,
		2012		2011		2010
Cumulative total investment in Multi-client library assets	$	655.5	$	475.4	$	276.4
Less: accumulated amortization of Multi-client library assets		346.4		243.1		130.5
Multi-client net book value (at period end)	$	309.1	$	232.3	$	145.9

_________

(1)  Represents capitalized cost of the equipment owned or leased under capital leases and utilized in connection with a Multi-client seismic shoot.

How We Evaluate Our Operations

We evaluate our land, transition zone and shallow marine projects on a project basis and as a whole using similar performance metrics. In addition, our management utilizes a variety of financial and productivity metrics to analyze and monitor our performance. These metrics include, but are not limited to, the following:

•   safety performance rates;

•   miles or kilometers of acquired data;

•   EBITDA;

•   cash flow from operations;

•   cash flow after investments;

•   selling, general and administrative expenses (“SG&A”) as a percentage of revenues;

•   our EBIT in absolute terms and as a percentage of revenues; and

•   the level of pre-commitment funding and late sales for our Multi-client projects.

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The information generated using the foregoing metrics is an important part of our operational analysis. We apply these metrics to monitor operations separately for each of our projects and analyze trends to determine the relative performance of each. We seek to have strong centralized financial analysis and controls to allocate our crews, combined with local decision-making and flexibility in the delivery of services to maximize client satisfaction.

Recent Trends Affecting Our Business

The seismic data services industry historically has been cyclical. Volatility in oil and gas prices can produce significant changes in the demand for seismic services and the prices seismic contractors can negotiate for their services. Oil and gas exploration, development, exploitation and production spending levels traditionally have been heavily influenced by expected future prices of oil and natural gas.

In connection with increases in crude price levels, there have been planned increases in capital expenditures by oil and gas companies throughout the world. We expect the increases in capital expenditure spending to result in increased demand for seismic services. The seismic industry is transitioning from legacy cabled recording systems to autonomous nodal technologies. We have benefited from this transition through improved operating efficiency and expanded seismic offerings.

We are also observing the continued emergence of microseismic recording technologies and services. We expect to utilize our capabilities and technologies to provide offerings for this emerging field.

Financial Operations Overview

Revenues.  A portion of our revenues are generated from either large projects or multiple projects from a limited number of clients. As a result, a small number of clients typically represent a significant amount of our revenues in any particular period. For the year ended December 31, 2012, we hadoneclient which represented more than 10% of our revenues. Because we work on different projects for various clients on a regular basis, it is not uncommon for our top clients to change from year to year.

The table below presents the concentration of revenues among our clients representing 10% or more of our revenues for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
% of Total Revenues	2012			2011			2010
Largest client		15	%		17	%		16	%
Second largest client(1)		7	%		13	%		9	%
Third largest client(2)		7	%		8	%		9	%
Top three clients		29	%		38	%		34	%

_____________________________

(1)(2) Less than 10% presented for comparison purposes in this table.

Revenues generated from our international operations are primarily attributable to providing Proprietary Services. The percentage of revenues that we derive from international operations has increased from 47% for the year ended December 31, 2011 to 48% for the year ended December 31, 2012. We believe the international seismic data services market continues to provide significant growth opportunities in the markets we choose to serve.

Operating Expenses.      Our operating expenses are primarily a function of our seismic data recording crew count, make-up and utilization levels on a project-by-project basis. Our productivity depends largely on the equipment utilized, seismic survey design, operating efficiency and external factors such as weather and third party delays. Our seismic data acquisition services are performed outdoors and are therefore subject to seasonality. Shorter winter days, competing uses of land and adverse weather negatively affects our ability to provide services in certain regions. In order to minimize the effect of seasonality on our assets, we have diversified our operations in a manner such that our equipment is mobile between regions and countries and our common-platform of equipment also works to improve crew productivity by allowing us to move equipment and people between crews as needed with minimal compatibility issues. Certain costs, such as equipment rentals and leases, depreciation, certain labor, some repair and maintenance, and interest payments, are fixed and are incurred regardless of utilization, and account for a significant percentage of our costs and expenses. Accordingly, downtime or low productivity resulting from weather interruptions, reduced demand, equipment failures or other causes can result in significant operating losses.

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SG&A.  SG&A expenses during 2012 increased as a result of higher headcount and compensation expenses and from provisions related to bad debt. The SG&A expenses for the year ended December 31, 2012, 2011 and 2010 were $56.8 million, $46.6 million and $40.4 million respectively.

Taxes.  Our effective tax rate has varied widely, and has trended significantly higher than the U.S. federal statutory tax rate of 35% for a number of reasons, including U.S. foreign tax credit limitations, state income tax liabilities, the disallowance of certain per-diem payments and other expenses for tax purposes, and valuation allowances provided for losses and foreign tax credits related to our international operations. In addition, as a result of our operations in various foreign jurisdictions, we are subject to a number of different tax regimes that have significantly affected our effective tax rates in some cases. For example, in some countries we are subject to a withholding tax on our revenues regardless of our profits.

We expect that our overall effective tax rate in future periods will generally trend higher than the U.S. federal statutory rate. In late 2011, the Company restructured some foreign entities for tax purposes. However, we cannot assure you that our effective tax rate will decline. We could experience significantly higher effective rates in different periods as a result of the factors described above.

Gross Profit Margin.  Our gross profit margins for the years ended December 31, 2012, 2011 and 2010, were 29%, 24% and 12%, respectively. The gross profit margin increase in 2012 as compared to 2011 is attributable to the decrease in operating expenses. Operating expenses decreased primarily as a result of increased gains on sale of assets and decreased Multi-client amortization expense.

Backlog.Our backlog consists of contracted seismic data acquisition and Multi-client unrecognized pre-commitments. Our estimated backlog as of December 31, 2012 was approximately $101 million as compared to $201 million as of December 31, 2011. 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 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 the circumstances described in “Business—Narrative Description of Business—Service Contracts.” Consequently, backlog as of any particular date may not be indicative of actual operating results for any future period. See “Risk Factors—Our backlog estimates are based on certain assumptions and are subject to unexpected adjustments and cancellations and thus may not be timely converted to revenues in any particular fiscal period, if at all, or be indicative of our actual operating results for any future period.”

Critical Accounting Policies and Estimates

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

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Revenue Recognition

Proprietary Services.   Our Proprietary Services are provided under cancelable service contracts, which vary in terms and conditions. We recognize revenues in accordance with the terms of the contract. These contracts are “turnkey” or “term” agreements or a combination of the two. Under turnkey agreements or the turnkey portions thereof, we recognize revenues based upon quantifiable measures of progress, such as square miles or linear kilometers of data acquired. Under term agreements or the term portions thereof, period revenues are recognized on a day-rate basis. Under certain contracts where the client pays separately for the mobilization of equipment to the project site, we recognize these mobilization fees as revenues during the performance of the seismic acquisition, using the same quantifiable measures of progress as for the acquisition work. We also receive reimbursements for certain other out-of-pocket expenses under the terms of our service contracts. We record amounts billed to clients in revenues as the gross amount including out-of-pocket expenses that are reimbursed by the client. In some instances, customers are billed in advance of services performed which we record as deferred revenue.

Multi-client Services.  Revenues are recorded under our arrangements from the licensing of our Multi-client data as pre-commitments, late sales and/or data swap transactions. Once a contract is signed, it is either classified as a pre-commitment, or a late sale and the entire contract will follow revenue recognition as described below.

Revenues from the creation of our Multi-client projects are recognized when (i) we have a licensing arrangement with the customer that is validated by a signed contract, (ii) the sales price is fixed and determinable, (iii) collection is reasonably assured, and (iv) delivery, as defined in the paragraph below, has occurred. When the above criteria have been satisfied, we recognize revenues using the proportionate performance method based upon quantifiable measures of progress such as square mile or linear kilometer of data acquired.

Revenues associated from a data swap transaction are recognized when (i) we have an arrangement with the customer that is validated by a signed contract, (ii) the value is determined based on the value which is more readily determinable between the two data sets, and (iii) the asset exchanged for has been received. Delivery is defined as “data is made available to the customer to view”.

If the data is subject to any incremental processing, we hold back a portion of the revenues to be recognized upon the delivery of the processed data to the customer. This hold back is calculated as a percentage of the data processing cost remaining to complete over the entire cost of the project.

Pre-commitment Revenues.  Pre-commitments represent one classification of revenues. Pre-commitment revenues are contractual obligations whereby a client commits funds in advance of our acquisition of seismic data. In return for these pre-commitments, our clients typically have some input with respect to project specifications and receive preferential pricing. We record pre-commitment payments as deferred revenue when they are received and record them as revenues on the basis of proportionate performance.

Late Sale Revenues.  Late Sales represent another classification of Multi-client revenues. For any contract, if all or any portion of the data has been acquired by the Company and it can be made available to view by the customer, it will be classified as a late sale. For late sale contracts, any portion associated with data which has not been acquired will be deferred and recognized as revenues on the basis of proportionate performance.

We establish amortization rates based on the estimated future revenues (both from pre-commitments and late sales) on an individual survey basis. The underlying estimates that form the basis for the sales forecast depend on historical and recent revenue trends, oil and gas prospects in particular regions, current and future expectations about commodity prices for oil and gas, general economic conditions affecting our customer base, expected changes in technology and other factors. The estimation of future cash flows and fair value is highly subjective and inherently imprecise. Estimates can change materially from period to period based on many factors, including those described in the preceding paragraph. Accordingly, if conditions change in the future, an impairment loss may be recorded relative to the seismic data library, which could be material to any particular reporting period. However, under no circumstance will an individual survey carry a net book value greater than a four-year straight-line amortized value. This is accomplished by comparing the cumulative amortization recorded for each survey to the cumulative straight-line amortization. If the cumulative straight-line amortization is higher for any specific survey, additional amortization expense is recorded, resulting in accumulated amortization being equal to the cumulative straight-line amortization for such survey.

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

Impairment of Long-lived Assets.  In accordance with Accounting Standards Codification (ASC) Topic 360-10-35 “Impairment or Disposal of Long-lived Assets”, we evaluate the recoverability of property and equipment and our Multi-client data library if facts and circumstances indicate that any of those assets might be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying amount to determine if an impairment of such property and Multi-client data library is necessary. The effect of any impairment would be to expense the difference between the fair value of such property and its carrying value.

For the Multi-client data library, the impairment evaluation is based first on a comparison of the undiscounted future cash flows over each project’s remaining estimated useful life with the carrying value of each project. If the undiscounted cash flows are equal to or greater than the carrying value of such project, no impairment is recorded. If undiscounted cash flows are less than the carrying value of any project, the forecast of future cash flows related to such project is discounted to fair value and compared with such project’s carrying amount. The difference between the project’s carrying amount and the discounted future value of the expected revenue stream is recorded as an impairment charge. There were no impairment charges recognized in our Statements of Operations during the years ended December 31, 2012, 2011 and 2010.

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

Tax Accounting.  The Company follows ASC 740 "Income Taxes". Under the asset and liability method required by this guidance, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A deferred tax asset will be reduced by a valuation allowance when, based on the Company’s estimates, it is more likely than not that a portion of those assets will not be realized in a future period.

The realization of our deferred tax assets depends on recognition of sufficient future taxable income in specific tax jurisdictions during periods in which those temporary differences are deductible. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts the Company believes are more likely than not to be recovered. In evaluating our valuation allowance, the Company considers the reversal of existing temporary differences, the existence of taxable income in prior carryback years, tax planning strategies and future taxable income for each of our taxable jurisdictions, the latter two of which involve the exercise of significant judgment. Changes to our valuation allowance have significantly impacted current year results of operations and could significantly impact future results of operations.

We have liabilities for unrecognized tax benefits related to uncertain tax positions connected with ongoing examinations and open tax years. Changes in our assessment of these liabilities may require us to increase the liability and record additional tax expense or reverse the liability and recognize a tax benefit which would negatively or positively, respectively, impact our effective tax rate.

Stock-Based Compensation.  We account for stock-based compensation in accordance ASC 718 “Compensation – Stock Compensation”, which requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. In so doing, we use the Black-Scholes-Merton option-pricing model, which requires various assumptions as to interest rates, volatility, dividend yields and expected lives of stock-based awards.

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Year Ended December 31, 2012 Compared to Year Ended December 31, 2011

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

Revenues by Service	Year Ended December 31,
	2012					2011
	Amount		%			Amount		%
Proprietary Services	$	182.5		54	%	$	208.0		54	%
Multi-client Services		156.5		46	%		177.4		46	%
Total	$	339.0		100	%	$	385.4		100	%

Revenues by Area	Year Ended December 31,
		2012					2011
	Amount		%			Amount		%
United States	$	176.8		52	%	$	205.0		53	%
International		162.2		48	%		180.4		47	%
Total	$	339.0		100	%	$	385.4		100	%

We recorded revenues of $339.0 million for the year ended December 31, 2012 compared to $385.4 million for the year ended December 31, 2011, a decrease of $46.4 million, or 12%. The decrease is primarily due to decreased Proprietary activities in Colombia in 2012 as compared to 2011.

We recorded revenues from Proprietary Services of $182.5 million for the year ended December 31, 2012 compared to $208.0 million for the year ended December 31, 2011, a decrease of $25.5 million, or 12%. Of this amount, the decrease related to Latin America Proprietary operations was $44.0 million, largely driven by a decrease in our crew activities in Colombia in 2012 as compared to 2011. In Europe, Africa, and Middle East (“EAME”), during the years ended December 31, 2012 and 2011, we recorded revenues of $33.7 million and $32.0 million, respectively. In North America, we had $48.7 million in revenues from Proprietary Services for the year ended December 31, 2012 compared to $32.0 million for the year ended December 31, 2011.

We recorded revenues from Multi-client Services of $156.5 million for the year ended December 31, 2012 compared to $177.4 million for the year ended December 31, 2011, a decrease of $20.9 million, or 12%. The $156.5 million in Multi-client revenues included $41.6 million of late sales revenues, $109.5 million of pre-commitment revenues, and $5.4 million in data swap transactions. Total pre-commitments that had not been recognized as revenues were $20.0 million and $35.7 million as of December 31, 2012 and 2011, respectively. The following table sets forth our consolidated Multi-client Services revenues for the period indicated (in millions):

	Year Ended December 31,
	2012		2011
Multi-client revenues
Pre-commitments	$	109.5	$	126.0
Late sales		41.6		48.3
Subtotal		151.1		174.3
Non-cash data swaps		5.4		3.1
Total revenues	$	156.5	$	177.4

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Operating Expenses.  Operating expenses, excluding depreciation and amortization, decreased by $40.6 million, or 30%, to $96.5 million for the year ended December 31, 2012 from $137.1 million for the year ended December 31, 2011. Substantially all of the decrease in the year ended December 31, 2012 in dollar terms was the result of less crew activities and increased gains on sale of assets.

Selling, General and Administrative Expenses.  SG&A, excluding depreciation and amortization, increased by $9.3 million, or 21%, to $53.1 million for the year ended December 31, 2012, from $43.8 million for the year ended December 31, 2011. This increase is primarily due to higher headcount and compensation expenses and from provisions related to bad debt.

Depreciation and Amortization Expense.  Gross depreciation charges were $40.5 million for the period ending December 31, 2012 compared to $44.9 million for the same period of 2011. Of these amounts $11.3 million and $16.9 million were capitalized in connection with our Multi-client projects for 2012 and 2011, respectively. As a result of the amounts capitalized for Multi-client, the net depreciation expense reflected in operating expenses are $29.2 million and $28.0 million for 2012 and 2011, respectively. The following table summarizes our depreciation and amortization for the period indicated (in millions):

	Year Ended December 31,
	2012			2011
Gross depreciation expense	$	40.5		$	44.9
Less: capitalized depreciation for Multi-client library		11.3			16.9
Depreciation (net)		29.2			28.0
Amortization expense of intangible assets		3.1			1.9
Multi-client amortization expense		103.3			112.7
Depreciation (net) and amortization expense	$	135.6		$	142.6
Average Multi-client amortization rate for the period		66	%		64	%

Gross depreciation charges decreased by $4.4 million, to $40.5 million during 2012 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 expense was $103.3 million for the year ended December 31, 2012, compared to Multi-client amortization of $112.7 million for the same period of 2011. Multi-client amortization decreased by $9.4 million, or 8%, as a result of the decrease in Multi-client Services revenues.

Interest Expense, Net.  Interest expense, net, increased by $6.4 million, or 25%, to $31.7 million for the year ended December 31, 2012, from $25.3 million for the year ended December 31, 2011. This increase in interest expense was primarily due to the issuance of the New Notes (see Note 8) and the increased borrowing under our Revolving Credit Facility.

Other Income (Expense), Net.  Other expense, net, increased by $3.7 million to $4.2 million for the year ended December 31, 2012 from $0.5 million for the year ended December 31, 2011. The primary reasons for the increase were $1.7 million of foreign exchange loss and a loss of $1.8 million on the write-off of an investment in an unconsolidated subsidiary.

Income Tax.    For the year ended December 31, 2012 we had income tax expense of $20.4 million compared to an expense of $13.5 million for the year ended December 31, 2011. During the year ended December 31, 2012, an income tax charge of $14.3 million was recorded related to foreign tax credits in the U.S. and the limitations on utilizing those tax credits.

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EBITDA.   We define EBITDA as earnings 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):

	Year Ended December 31,
	2012						2011
	(in thousands, except per share amounts)
	Amount			Per Share (3)			Amount			Per Share (3)
Net income (loss), attributable to common shareholders	$	(13,331	)	$	(0.36	)	$	5,662		$	0.15
Net loss, attributable to non-controlling interests		(472	)					(22	)
Income tax expense		20,428						13,480
Interest expense, net		31,666						25,259
EBIT(1)		38,291		$	1.03			44,379		$	1.21
Add: Multi-client amortization		103,266						112,668
Add: Depreciation (net) and other amortization (2)		32,336						29,898
EBITDA(1)	$	173,893		$	4.66		$	186,945		$	5.10

(1) EBIT, EBITDA, EBIT per share and EBITDA per share (as defined in the calculations above) are non-GAAP measurements.

(2) Includes amortization of intangibles.

(3) Calculated using diluted weighted average shares outstanding.

Our management team 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.

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Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

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

Revenues by Service	Year Ended December 31,
	2011					2010
	Amount		%			Amount		%
Proprietary Services	$	208.0		54	%	$	119.8		47	%
Multi-client Services		177.4		46	%		134.9		53	%
Total	$	385.4		100	%	$	254.7		100	%

Revenues by Area	Year Ended December 31,
		2011					2010
	Amount		%			Amount		%
United States	$	205.0		53	%	$	145.7		57	%
International		180.4		47	%		109.0		43	%
Total	$	385.4		100	%	$	254.7		100	%

We recorded revenues of $385.4 million for the year ended December 31, 2011 compared to $254.7 million for the year ended December 31, 2010, an increase of $130.7 million, or 51%. The majority of this increase is attributable to an expansion in demand for our seismic data services caused by generally increased exploration and production spending by our clients.

We recorded revenues from Proprietary Services of $208.0 million for the year ended December 31, 2011 compared to $119.8 million for the year ended December 31, 2010, an increase of $88.2 million, or 74%. Of this amount, the increase related to our U.S. Proprietary operations was $16.7 million. In Latin America, we had $143.9 million in revenues for the year ended December 31, 2011 compared to $76.7 million for the year ended December 31, 2010, an increase of $67.2 million, largely driven by an increase in our crew activities in Brazil and Colombia in 2011. In Europe, Africa, and Middle East (“EAME”), during the years ended December 31, 2011 and 2010, we recorded revenues of $32.0 million and $7.5 million, respectively, an increase of $24.5 million driven by an increase in our crew activities in Algeria and Poland during 2011. In the Asia Pacific market, revenues decreased to $0.1 million for the year ended December 31, 2011 from $24.8 million for the year ended December 31, 2010, a decrease of $24.7 million. The decrease was the result of reduced crew activities in India during 2011.

We recorded revenues from Multi-client Services of $177.4 million for the year ended December 31, 2011 compared to $134.9 million for the year ended December 31, 2010, an increase of $42.5 million, or 32%. The $177.4 million in Multi-client revenues included $48.3 million of late sales revenues, $126.0 million of pre-commitment revenues, and $3.1 million in data swap transactions. Total pre-commitments that had not been recognized as revenues were $35.7 million and $137.4 million as of   December 31, 2011 and 2010, respectively. The following table sets forth our consolidated Multi-client Services revenues for the period indicated (in millions):

	Year Ended December 31,
	2011		2010
Multi-client revenues
Pre-commitments	$	126.0	$	109.1
Late sales		48.3		16.4
Subtotal		174.3		125.5
Non-cash data swaps		3.1		9.4
Total revenue	$	177.4	$	134.9

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Operating Expenses.  Operating expenses, excluding depreciation and amortization, increased by $59.9 million, or 77%, to $137.1 million for the year ended December 31, 2011 from $77.2 million for the year ended December 31, 2010. Substantially all of the increase in the year ended December 31, 2011 in dollar terms was the result of additional crew activities.

Selling, General and Administrative Expenses.  SG&A, excluding depreciation and amortization, increased by $4.9 million, or 13%, to $43.8 million for the year ended December 31, 2011, from $38.9 million for the year ended December 31, 2010. Overall compensation and employee benefits increased by $5.0 million during 2011 compared to 2010, mainly attributable to our increased effort in our Multi-client sales and marketing staff, coupled with certain added costs related to being a public company.

Depreciation and Amortization Expense.  Gross depreciation charges were $44.9 million for the period ending December 31, 2011 compared to $56.3 million for the same period of 2010. Of these amounts $16.9 million and $20.4 million were capitalized in connection with our Multi-client projects for 2011 and 2010, respectively. As a result of the amounts capitalized for Multi-client, the net depreciation expense reflected in operating expenses are $28.0 million and $35.9 million for 2011 and 2010, respectively. The following table summarizes our depreciation and amortization for the period indicated (in millions):

	Year Ended December 31,
	2011			2010
Gross depreciation expense	$	44.9		$	56.3
Less: capitalized depreciation for Multi-client library		16.9			20.4
Depreciation (net)		28.0			35.9
Amortization expense of intangible assets		1.9			0.6
Multi-client amortization expense		112.7			92.7
Depreciation (net) and amortization expense	$	142.6		$	129.2
Average Multi-client amortization rate for the period		64	%		69	%

              Gross depreciation charges decreased by $11.4 million, to $44.9 million during 2011 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 expense was $112.7 million for the year ended December 31, 2011, compared to Multi-client amortization of $92.7 million for the same period of 2010. Multi-client amortization increased by $20.0 million, or 22%, as a result of the increase in Multi-client Services revenues.

Interest Expense, Net.  Interest expense, net, increased by $4.0 million, or 19%, to $25.3 million for the year ended December 31, 2011, from $21.3 million for the year ended December 31, 2010. This increase in interest expense is due to the increased borrowing from Revolving Credit Facility and the full year interest under the $200 million, 10.5% senior notes.

Other Income (Expense), Net.  Other expense, net, decreased by $6.1 million to $0.5 million for the year ended December 31, 2011 from $6.7 million for the year ended December 31, 2010. The main item driving the decrease was a $6.0 million expense attributable to the extinguishment of debt from the previous credit facility during 2010.

Income Tax.    For the year ended December 31, 2011 we had an income tax expense of $13.5 million compared to an expense of $0.6 million for the year ended December 31, 2010.

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EBITDA.   We define EBITDA as earnings 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):

	Year Ended December 31,
	2011					2010
	(in thousands, except per share amounts)
	Amount			Per Share (3)		Amount			Per Share (3)
Net income (loss), attributable to common shareholders	$	5,662		$	0.15	$	(39,716	)	$	(1.44	)
Net income (loss), attributable to non-controlling interests		(22	)				162
Income tax expense		13,480					600
Interest expense, net		25,259					21,269
EBIT(1)		44,379		$	1.21		(17,685	)	$	(0.64	)
Add: Multi-client amortization		112,668					92,702
Add: Depreciation (net) and other amortization (2)		29,898					36,491
EBITDA(1)	$	186,945		$	5.10	$	111,508		$	4.05

(1) EBIT, EBITDA, EBIT per share and EBITDA per share (as defined in the calculations above) are non-GAAP measurements.

(2) Includes amortization of intangibles.

(3) Calculated using diluted weighted average shares outstanding.

43

Results of Operations

Consolidated Results of Operations

The following table sets forth our consolidated results of operations for the periods indicated (in millions):

	Year Ended December 31,
	2012			2011			2010
Statement of Operations Information:
Revenues	$	339.0		$	385.4		$	254.7
Expenses:
Operating expenses		239.8			293.9			225.3
Selling, general and administrative expenses		56.8			46.6			40.4
Interest expense, net		(31.7	)		(25.3	)		(21.3	)
Other income (expense), net(1)		(4.2	)		(0.5	)		(6.7	)
Income tax expense		20.4			13.5			0.6

_________________________

(1)  Includes unrealized gain (loss) on derivative instruments, foreign exchange gain (loss), loss on extinguishment of debt, and other income (expense) and gain (loss) on sale of assets.

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. Any further reductions in our liquidity, from delayed collections from clients or otherwise, may result in scaling back our operations or reductions in capital expenditures.

For the periods indicated, we had available liquidity as follows (in millions):

	Year Ended December 31,
	2012		2011
Available cash	$	23.4	$	21.5
Undrawn borrowing capacity under Revolving Credit Facility (1)		5.9		-
Total available liquidity	$	29.3	$	21.5

(1) Borrowings under the Revolving Credit Facility are subject to certain limitations under provisions of the Senior Notes Indenture. As of December 31, 2012, undrawn borrowing capacity was limited by $2.1 million resulting in net availability of $3.8 million.

44

We are also required to post letters of credit or performance bonds in connection with a number of our international seismic data acquisition contracts as security for the performance of our obligations under those contracts. As of December 31, 2012, we had no outstanding letters of credit issued under our Revolving Letter of Credit Facility. Other letters of credit totaling $1.8 million were secured with the cash identified as “Restricted cash investments” on our balance sheet as of December 31, 2012.

For purposes of local payroll and other operating expenses we typically maintain cash balances with local banks in many of the foreign jurisdictions in which we operate. In some jurisdictions, our ability to transfer such cash balances to our U.S. based banks can require a period of weeks, or even months, due to local banking and other regulatory requirements. We do not consider the cash balances maintained in such accounts to be material.

The following table summarizes the net cash provided by (used in) operating, investing and financing activities for the years ended December 31, 2012, 2011 and 2010 (in millions):

	Year Ended December 31,
	2012			2011			2010
Adjustments to reconcile net income (loss) to net cash	$	121.1		$	154.3		$	87.0
Effects of changes in operating assets and liabilities		(3.8	)		(17.3	)		34.2
Operating activities	$	117.3		$	137.0		$	121.2
Investing activities	$	(162.6	)	$	(202.5	)	$	(218.1	)
Financing activities	$	47.2		$	58.8		$	108.1

Operating Activities.   We rely primarily on cash flows from operations to fund working capital for current and future operations. Net cash provided by operating activities totaled $117.3 million, $137.0 million and $121.2 million for the years ended December 31, 2012, 2011 and 2010, respectively. This represented a decrease in operating cash flows of $19.7 million for the year ended December 31, 2012 compared to ­­­­the year ended December 31, 2011. The decrease in operational cash flow in 2012 was primarily driven by the decrease in operating income during the period, partially offset by the increase in working capital.

Investing Activities.   Cash used in investing activities totaled $162.6 million, $202.5 million and $218.1 million for the years ended December 31, 2012, 2011 and 2010, respectively. The $39.9 million decrease in cash used in investing activities in 2012, as compared to 2011, was primarily the result of reduced expenditure for property and equipment, reduced investment in Multi-client library, and the increased sales of assets in 2012.

Investing activities in the years ended December 31, 2012, 2011, and 2010 consisted primarily of the acquisition of new seismic data recording equipment, seismic energy sources, vehicles and vessels, and other equipment needed to outfit new and existing crews. Investments in our Multi-client seismic data library totaled $165.1 million and $177.7 million for the years ended December 31, 2012 and 2011, respectively. In addition, we financed $7.6 million, $14.2 million and zero of our equipment purchased through capital leases in the years ended December 31, 2012, 2011, and 2010, respectively. These are included on our Statements of Cash Flows and the Notes to our Consolidated Financial Statements under the heading “Note 15 - Supplemental Cash Flow Information.” Investing activities in 2013 are expected to consist primarily of investments in our Multi-client seismic data library and equipment purchases. The following table sets forth our investment in our Multi-client library for the periods indicated (in millions):

45

	Year Ended December 31,
	2012		2011
Multi-client investment (period)
Cash	$	165.1	$	177.7
Capitalized depreciation (1)		11.3		16.9
Non-cash data swaps (2)		3.7		4.4
Total	$	180.1	$	199.0
Investment (cumulative)
Cash	$	573.1	$	408.0
Capitalized depreciation (1)		55.3		44.0
Non-cash data swaps (2)		27.1		23.4
Total		655.5		475.4
Cumulative amortization		346.4		243.1
Multi-client net book value	$	309.1	$	232.3

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

(2) Includes non-cash data swap investment recorded as deferred revenue.

Financing Activities.   Financing activities decreased by $11.6 million in cash in the year ended December 31, 2012. In the years ended December 31, 2012 and 2011, financing activities generated $47.2 million and $58.8 million in cash, respectively. In 2012, we received the proceeds from the issuance of our $50 million, 10.5% senior notes.

Please see our consolidated financial statements presented elsewhere in this annual report on Form 10-K for more information on our operating, investing, and financing cash flows.

Capital Resources.

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.

The Company used the proceeds from the offering and sale of the Notes to repay outstanding indebtedness and the remainder was used for 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.

46

On March 23, 2012, the Company entered into a Purchase Agreement (the “New Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers (the “New Initial Purchasers”), relating to the offer and sale by the Company of $50.0 million aggregate principal amount of its 10.5% senior notes due 2017 (the “New Notes”). The Company’s net proceeds from the offering were approximately $47.0 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the New Notes occurred on March 28, 2012. The New 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, and in offshore transactions in reliance on Regulation S under the Securities Act. On September 5, 2012, the Company offered to exchange up to $50.0 million in aggregate principal amount of the 10.5% senior notes due 2017, which have been registered under the Securities Act of 1933, for any and all of our outstanding unregistered 10.5% senior notes due 2017 issued on March 28, 2012. 

The New Notes are a general unsecured, senior obligation of the Company. The New 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 New Notes to repay outstanding indebtedness under its existing Bank of America Revolving Credit Facility.

The New Notes are covered under the terms of the Indenture dated March 28, 2012. The Notes and the New Notes are hereinafter referred to as the “Senior Notes”.

Bank of America Revolving Credit Facility:   On April 30, 2010, we completed the closing of a 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. On July 20, 2012, the Company entered into Amendment No. 3 to the Credit Agreement (the “Third Amendment”), with BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Syndication Agent and a Lender, BARCLAYS BANK PLC, and CITIBANK, N.A (collectively, the “Lenders” and individually, a “Lender”). The Company has requested and certain of the Lenders have agreed to increase such Lenders’ respective Commitments and/or extend the expiration thereof on the terms and conditions set forth in the Third Amendment.  Under the Third Amendment, the amount of the maximum permitted borrowings under the Credit Agreement was increased to $85.0 million until the initial Maturity Date of April 30, 2013, at which point the amount of the maximum permitted borrowings goes to $67.5 million and the Maturity Date of the Revolving Credit Facility is extended to April 30, 2014 (the “Extended Maturity Date”). Under the Third Amendment, the Company, as Borrower, has the ability until the Extended Maturity Date to request an increase in lending commitments by an additional $10.0 million subject to the requirements of the Credit Agreement. Amendment No. 3 also increased the maximum permitted Senior Notes of the Company issued under the Senior Note Indenture dated as of April 27, 2010 from $75.0 million to $100.0 million.

Promissory Notes: From time to time, the Company issues short term promissory notes to various foreign financial institutions to finance equipment purchases and working capital needs for our foreign operations.  The balance outstanding under these promissory notes as of December 31, 2012 and 2011 was $10.4 million and $10.7 million, respectively, at weighted average interest rates of 9.1% and 10.1%, respectively.

In January 2011, the Company issued a non-interest bearing promissory note related to the acquisition of STRM LLC. The balance outstanding under the promissory note as of December 31, 2012 and 2011 was $0.8 million and $1.0 million, respectively.

47

Capital Leases: From time to time, the Company enters into leases and sale and leaseback transactions to acquire certain seismic equipment, computer equipment and vehicles that are accounted for as capital leases. The balance outstanding under these capital leases as of December 31, 2012 and 2011 was $9.8 million and $9.9 million, respectively, at weighted average interest rates of 5.3% and 5.6%, respectively.

Letter of Credit Facility:  In February 2007, the Company entered into a $10.0 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 December 31, 2012 and 2011, the letters of credit outstanding were $1.8 million and $5.6 million, respectively.

Capital Expenditures.   Capital expenditures for the years ended December 31, 2012, 2011 and 2010 were $228.0 million, $248.7 million and $246.5 million, respectively. The $228.0 million capital expenditures in 2012 consisted of $40.2 million of cash and non-cash investments of property and equipment, $7.7 million of expenditures related to the like-kind equipment exchanges and $180.1 million invested in our Multi-client Services library, comprised of a cash investment of $165.1 million, $11.3 million in capitalized depreciation, and $3.7 million in non-cash data exchange. In 2011, we invested $199.0 million in our Multi-client library, comprised of $177.7 million in cash investment, $16.9 million in capitalized depreciation and $4.4 million of non-cash data exchange.

We expect to spend approximately $10 million to $15 million on capital expenditures, (excluding capital expenditures related to our Multi-client Services) for property, plant and equipment in 2013. We expect to invest approximately $75 million for our Multi-client library (excluding capitalized depreciation and non-cash data swaps) during 2013.

We continuously reevaluate our capital budget based on market conditions and other factors and may defer or accelerate capital expenditures depending on market conditions or our ability to obtain capital on attractive terms. Depending on the market demand for seismic services or other growth opportunities that may arise, we may require additional debt or equity financing.

We believe that our current working capital, projected cash flow from operations will be sufficient to meet our capital requirements for our existing operations for the next 12 months. Although we expect to continue generating positive cash flow from our operations, events beyond our control may affect our financial condition or results of operations. These events include, but are not limited to, a significant drop in prices for oil and natural gas and a corresponding drop in demand for our services.

Off Balance Sheet Arrangements

We had no off-balance sheet arrangements for the year ended December 31, 2012.

Contractual Obligations

The following table summarizes the payments due in specific periods related to our contractual obligations as of December 31, 2012 (in thousands):

	Total		Within 1 Year		1-3 Years		3-5 Years		After 5 Years
Debt obligations (1)	$	341,070	$	22,970	$	67,900	$	250,200	$	-
Capital lease obligations		9,815		5,639		4,125		51		-
Operating lease obligations		2,350		1,025		1,295		30		-
	$	353,235	$	29,634	$	73,320	$	250,281	$	-

(1) Includes unamortized discount.

48

Item 7A.   Quantitative and Qualitative Disclosures About Market Risks

In the normal course of operations, we are exposed to market risks primarily from credit risk, changes in interest rates and foreign currency exchange rate risks.

Credit Risk

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 customers. Accordingly, we perform ongoing credit evaluations of our customers and maintain allowances for possible losses which, when realized, have been within the range of our expectations. We believe that our unreserved trade receivables at December 31, 2012, are collectible and our allowance for doubtful accounts is adequate.

We generally provide services to a relatively small group of key customers that account for a significant percentage of our accounts receivable at any given time. Our key customers vary over time. We extend credit to various companies in the oil and natural gas industry, including our key customers, for the acquisition of seismic data, which results in a concentration of credit risk. This concentration of credit risk may be affected by changes in the economic or other conditions of our key customers and may accordingly impact our overall credit risk.

Our cash bank balance may exceed federally insured limits.

Interest Rate Risk

Fluctuations in the general level of interest rates on our current and future fixed and variable debt obligations expose us to market risk. We are vulnerable to significant fluctuations in interest rates affecting our adjustable rate debt, and any future refinancing of our fixed rate debt and our future debt. At December 31, 2012, we were exposed to interest rate fluctuations on our credit facilities carrying variable interest rates.

Foreign Currency Exchange Rate Risk

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 year ended December 31, 2012, approximately 33% of our revenues were recorded in foreign currencies, and we recorded net foreign exchange loss of $1.7 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.

Inflation Risk

We do not believe that inflation has had a significant impact on our business, financial condition, or results of operations during the most recent three years.

Item 8.   Financial Statements and Supplementary Data

Our Annual Consolidated Financial Statements, Notes to Consolidated Financial Statements and the reports of UHY LLP (“UHY”), our independent registered public accounting firm, with respect thereto, referred to in the Table of Contents to Consolidated Financial Statements, appear beginning on page F-1 of this document and are incorporated herein by reference.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

49

Item 9A.   Controls and Procedures

Disclosure controls and procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Report of management on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company’s assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based oncriteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2012. UHY LLP has audited our internal control over financial reporting as of December 31, 2012; their report is included in the “Report of Independent Registered Public Accounting Firm” on page F-3.

Item 9B.   Other Information

None.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

The information required by this Item is set forth under the heading “Directors, Executive Officers and Corporate Governance” in our 2013 Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies for our 2013 Annual Meeting of Shareholders (“2013 Proxy Statement”) and is incorporated herein by reference. Such 2013 Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates.

Item 11.   Executive Compensation

The information required by this Item is set forth under the headings “Executive Compensation” and “Compensation Discussion and Analysis” in our 2013 Proxy Statement and is incorporated herein by reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is set forth under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our 2013 Proxy Statement and is incorporated herein by reference.

50

Item 13.   Certain Relationships and Related Transactions and Director Independence

The information required by this Item is set forth under the heading “Review, Approval or Ratification of Transactions with Related Persons” in our 2013 Proxy Statement and is incorporated herein by reference.

Item 14.   Principal Accountant Fees and Services

The information required by this Item is set forth under the heading “Fees Paid to Auditors” in our 2013 Proxy Statement and is incorporated herein by reference.

PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) List of documents filed as part of this Report

(1) Consolidated Financial Statements: See Index to Consolidated Financial Statements on page F-1

(2) Financial Statement Schedules

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.

(b) Exhibits required by Item 601 of Regulation S-K

The information required by this Item is set forth on the Exhibit Index that follows the signature page of this Report.

51

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: March 5, 2013	By:	/s/ Richard C. White
		Richard C. WHITE President and Chief Executive Officer
Date: March 5, 2013	By:	/s/ P. Mathew Verghese
		P. Mathew Verghese Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Richard C. White	President and Director (Chief Executive	March 5, 2013
Richard C. White	Officer and Principal Executive Officer)
/s/ P. Mathew Verghese	Senior Vice President (Chief Financial	March 5, 2013
P. Mathew Verghese	Officer, Principal Financial Officer and Principal
	Accounting Officer)
/s/ Damir S. Skerl	Director	March 5, 2013
Damir S. Skerl
/s/ Michael C. Forrest	Director	March 5, 2013
Michael C. Forrest
/s/ George E. Matelich	Director	March 5, 2013
George E. Matelich
/s/ Stanley de Jongh Osborne	Director	March 5, 2013
Stanley de Jongh Osborne
/s/ Karl F. Kurz	Director	March 5, 2013
Karl F. Kurz
/s/ Michael S. Bahorich	Director	March 5, 2013
Michael S. Bahorich
/s/ joseph p. mccoy	Director	March 5, 2013
Joseph P. McCoy

52

EXHIBIT INDEX

			Incorporated by Reference
EXHIBIT NO.		DESCRIPTION	Form File Date	Exhibit No. SEC File No.
3.1†		Third Amended and Restated Certificate of Incorporation dated April 26, 2010	8-K 4/27/10	3.1
3.2†		Amended and Restated Bylaws dated April 27, 2010	8-K 4/27/10	3.2
4.1†		Form of Specimen Certificate of Global Geophysical Services, Inc.	S-1 10/16/09	4.1 333-163540
4.2†		Warrant Agreement, dated as of March 29, 2007, by and among Global Geophysical Services, Inc., Kelso Investment Associates VII, L.P. and KEP VI, LLC	S-1 10/16/09	4.2 333-163540
4.3†		Plan of Recapitalization of Global Geophysical Services, Inc., dated December 18, 2009	S-1 10/16/09	4.3 333-163540
4.4†		Indenture dated as of April 27, 2010, among the Company, The Bank of New York Mellon Trust Company, N.A., as trustee, and the Guarantors	8-K 4/27/10	4.1
4.5†		Registration Rights Agreement dated as of April 27, 2010, among the Company, the Guarantors and Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers	8-K 4/27/10	4.2
4.6†		First Supplemental Indenture, dated as of September 10, 2010, among Global Microseismic, Inc. (n/k/a Global Microseismic Services, Inc.) (the “Guaranteeing Subsidiary”); Global Geophysical Services, Inc.; the other Guarantors (as defined in the Indenture) and The Bank of New York Mellon Trust Company, N.A., as trustee	10-K 3/18/11	4.6 001-34709
4.7†		Second Supplemental Indenture, dated as of November 10, 2010, among Paisano Lease Co., Inc. and Global Eurasia, LLC (the “Guaranteeing Subsidiaries”); Global Geophysical Services, Inc.; the other Guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee	10-K 3/18/11	4.7 001-34709
4.8†		Third Supplemental Indenture, dated as of December 9, 2010, among Autoseis Development Company (the “Guaranteeing Subsidiary”) a wholly-owned subsidiary of AutoSeis, Inc., a wholly-owned subsidiary of Global Geophysical Services, Inc. respectively; Global Geophysical Services, Inc.; the other Guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee	10-K 3/18/11	4.8 001-34709
4.9†	†	Fourth Supplemental Indenture, dated as of March 16, 2012, among STRM, LLC (the “Guaranteeing Subsidiary”) an indirect subsidiary of Global Geophysical Services, Inc.; Global Geophysical Services, Inc.; the other Guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee
4.10†		Indenture dated as of March 28, 2012, among the Company, The Bank of New York Mellon Trust Company, N.A., as trustee, and the Guarantors	8-K 03/30/12	4.1 001-34709

53

			Incorporated by Reference
EXHIBIT NO.		DESCRIPTION	Form File Date	Exhibit No. SEC File No.
4.11†		Registration Rights Agreement dated as of March 28, 2012, among Global Geophysical Services, Inc., the Guarantors and Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers	8-K 03/30/12	4.2 001-34709
10.1†		Stockholders Agreement dated as of November 30, 2006 among Global Geophysical Services, Inc., Kelso Investment Associates VI, L.P., KEP VI, LLC, and those other parties identified therein	S-1 10/16/09	10.14 333-163540
10.2†		First Amendment to Stockholders Agreement between Global Geophysical Services, Inc. and certain stockholders dated November 30, 2006, as of January 13, 2010	S-1 10/16/09	10.33 333-163540
10.3†		Form of Indemnification Agreement between Global Geophysical Services, Inc. and its directors.	S-1 10/16/09	10.25 333-163540
10.4†		Letter Agreement dated December 1, 2006, between Kelso & Company, L.P. and Global Geophysical, Inc.	S-1 10/16/09	10.28 333-163540
10.5†		Form of Incentive Stock Option Agreement	S-1 10/16/09	10.29 333-163540
10.6†		Form of Grant of Restricted Stock	S-1 10/16/09	10.30 333-163540
10.7†	*	First Amendment amending Amended and Restated Cooperation Agreement dated May 1, 2007, between Global Geophysical Services, Inc. and Sercel, Inc., as of January 13, 2010	S-1 10/16/09	10.32 333-163540
10.8†	*	Second Amendment amending the First Amendment to the Amended and Restated Cooperation Agreement dated January 13, 2010, between Global Geophysical Services, Inc. and Sercel, Inc., as of March 5, 2010	S-1 10/16/09	10.35 333-163540
10.9†		Global Geophysical Services, Inc. Amended and Restated 2006 Incentive Compensation Plan, effective as of February 5, 2010	10-K 3/18/11	10.34 001-34709
10.10†		Note Purchase Agreement dated as of April 22, 2010, among the Company, the Guarantors and Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers	8-K 8/27/10	10.1 001-34709
10.11†		Credit Agreement dated as of April 30, 2010 by and among Global Geophysical Services, Inc. and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender from time to time party thereto	8-K 5/3/10	10.1 001-34709
10.12 †		Amendment No. 1 to Credit Agreement, dated as of June 9, 2011, by and among Global Geophysical Services, Inc., the lenders party to the Credit Agreement, and Bank Of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer	8-K 06/14/11	10.1 001-34709
10.13 †		Amendment No. 2 to Credit Agreement and Waiver, dated as of October 19, 2011, by and among Global Geophysical Services, Inc., the lenders party to the Credit Agreement, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer	10-K 03/22/12	10.13 001-34709
10.14 †		Amendment No. 3 to the Credit Agreement, dated as of July 20, 2012, by and between Global Geophysical Services, Inc., and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Credit Suisse AG, Cayman Islands Branch, as Syndication Agent and a Lender, Barclays Bank Plc., and Citibank, N.A.	8-K 07/23/12	10.1 001-34709

54

			Incorporated by Reference
EXHIBIT NO.		DESCRIPTION	Form File Date	Exhibit No. SEC File No.
10.15†		Security Agreement dated as of April 30, 2010 by and among Global Geophysical Services, Inc. and other Debtors parties in favor of Bank of America, N.A., as Administrative Agent	10-K 3/18/11	10.38 001-34709
10.16†		Supplemental No.1 dated as of September 8, 2010 to the Security Agreement dated as of April 30, 2010, among Global Geophysical Services, Inc., Global Microseismic, Inc. (n/k/a Global Microseismic Services, Inc.), and Bank of America, N.A., as administrative agent	10-K 3/18/11	10.39 001-34709
10.17†		Supplemental No.2 dated as of November 12, 2010 to the Security Agreement dated as of April 30, 2010, among Global Geophysical Services, Inc., Paisano Lease Co. Inc., Global Eurasia, LLC, and Bank of America, N.A., as administrative agent	10-K 3/18/11	10.40 001-34709
10.18†		Supplemental No.3 dated as of December 7, 2010 to the Security Agreement dated as of April 30, 2010, among Global Geophysical Services, Inc., Autoseis Development Company, and Bank of America, N.A., as administrative agent	10-K 3/18/11	10.41 001-34709
10.19†		Assignment of Insurance among Global Geophysical Services, Inc. and Bank of America, N.A. dated April 30, 2010	10-K 3/18/11	10.42 001-34709
10.20†		Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Texas) by and from Global Geophysical Services, Inc. to Aaron Roffwarg for the benefit of Bank of America, N.A., as Administrative Agent, dated April 30, 2010	10-K 3/18/11	10.43 001-34709
10.21†	†	Amendment No.1 to Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing,dated as of April 30, 2012, by and between Global Geophysical Services, Inc., and Bank Of America, N.A., as Administrative Agent, for the benefit of the Administrative Agent for the holders of the Secured Obligations (as defined in the Deed of Trust)
10.22†		First Preferred Fleet Mortgage by Global Geophysical Services, Inc. to Bank of America, N.A. dated April 30, 2010	10-K 3/18/11	10.44 001-34709
10.23†		Amendment No. 1 to First Preferred Fleet Mortgage dated as of June 8, 2011 and effective as of June 9, 2011, among Global Geophysical Services, Inc., and Bank of America, N.A., a national banking association, as administrative agent, as mortgagee	8-K 06/14/11	10.2 001-34709
10.24†	†	Amendment No.2 and Supplement to First Preferred Fleet Mortgage dated as of April 30, 2012 and effective as of April 30, 2012, amongGlobal Geophysical Services, Inc., and Bank of America, N.A., a national banking association, as administrative agent, as mortgagee
10.25†		Amendment No. 3 to First Preferred Fleet Mortgage dated as of July 20, 2012 and effective as of July 20, 2012, among Global Geophysical Services, Inc., and Bank of America, N.A., a national banking association, as administrative agent, as mortgagee	8-K 07/23/12	10.2
10.26†		Guaranty to Bank of America, N.A. dated April 30, 2010	10-K 3/18/11	10.45 001-34709
10.27†		Note payable to Citibank, N.A. dated April 30, 2010	10-K 3/18/11	10.46 001-34709
10.28†		Employment Agreement dated as of October 15, 2010 between Global Geophysical Services, Inc. and Christopher P. Graham	8-K 10/21/10	10.1

55

			Incorporated by Reference
EXHIBIT NO.		DESCRIPTION	Form File Date	Exhibit No. SEC File No.
10.29†		Purchase Agreement dated as of March 23, 2012, among Global Geophysical Services, Inc., the Guarantors and Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers.	8-K 03/30/12	10.1 001-34709
10.30†		Employment Agreement dated as of October 25, 2012 between Global Geophysical Services, Inc. and Richard C. White	8-K 10/26/12	10.1 001-34709
12.1†	†	Statement Regarding Computation of Ratio of Earnings to Fixed Charges
14.1†		Global Geophysical Services, Inc. Code of Business Conduct and Ethics as revised November 26, 2012	8-K 11/29/12	14.1 001-34709
21.1†	†	List of Subsidiaries of Global Geophysical Services, Inc.
23.1†	†	Consent of UHY LLP
31.1†	†	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2†	†	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1†	†	Certification of Chief Executive Officer pursuant to 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 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS †	†	XBRL Instance Document.
101.SCH†	†	XBRL Taxonomy Extension Schema Document
101.CAL†	†	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF†	†	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB†	†	XBRL Taxonomy Extension Label Linkbase Document
101.PRE†	†	XBRL Taxonomy Extension Presentation Linkbase Document

__________________________

† Previously filed.

†† Filed herewith.

* Confidential portions have been filed separately with the Commission.

** To be filed by amendment.

56

GLOBAL GEOPHYSICAL SERVICES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-6
Consolidated Statements of Cash Flows	F-7
Consolidated Statements of Stockholders’ Equity	F-8
Notes to Consolidated Financial Statements	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Global Geophysical Services, Inc. and Subsidiaries

Houston, Texas

We have audited the accompanying consolidated balance sheets of Global Geophysical Services, Inc. and Subsidiaries (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2012.  The Company’s management is responsible for these consolidated financial statements.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Global Geophysical Services, Inc. and Subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 4, 2013 expressed an unqualified opinion.

/s/ UHY LLP

Houston, Texas

March 4, 2013

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Global Geophysical Services, Inc. and Subsidiaries

Houston, Texas

We have audited the internal control over financial reporting of Global Geophysical Services, Inc. and Subsidiaries (the “Company”) as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Part II, Item 9A of this Form 10-K.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audit also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Global Geophysical Services, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated March 4, 2013 expressed an unqualified opinion.

/s/ UHY LLP

Houston, Texas

March 4, 2013

F-3

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31,
	2012		2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	23,359	$	21,525
Restricted cash investments		1,830		5,639
Accounts receivable, net		51,766		86,889
Inventory		11,864		-
Income and other taxes receivable		1,472		7,060
Prepaid expenses and other current assets		21,480		6,050
TOTAL CURRENT ASSETS		111,771		127,163
MULTI-CLIENT LIBRARY, net		309,067		232,235
PROPERTY AND EQUIPMENT, net		100,172		118,420
GOODWILL		12,381		12,381
INTANGIBLE ASSETS, net		13,083		9,929
OTHER ASSETS		6,401		6,245
TOTAL ASSETS	$	552,875	$	506,373

See accompanying notes to consolidated financial statements.

F-4

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands, except share amounts)

	December 31,
	2012			2011
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	42,597		$	55,764
Current portion of long-term debt		22,970			11,416
Current portion of capital lease obligations		5,639			7,256
Income and other taxes payable		3,563			5,169
Deferred revenue		22,498			39,560
Other payables		3,059			821
TOTAL CURRENT LIABILITIES		100,326			119,986
DEFERRED INCOME TAXES, net		27,073			2,120
LONG-TERM DEBT, net of current portion and unamortized discount		311,250			265,873
CAPITAL LEASE OBLIGATIONS, net of current portion		4,176			2,613
NON-CONTROLLING INTERESTS		997			1,469
OTHER LIABILITIES		1,505			750
TOTAL LIABILITIES		445,327			392,811
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common Stock, $0.01 par value, 100.0 million shares authorized, 47.6 million shares and 46.7 million shares issued and 37.6 million shares and 37.0 million shares outstanding at December 31, 2012 and 2011, respectively		476			467
Additional paid-in capital		253,415			246,104
Accumulated deficit		(49,815	)		(36,484	)
		204,076			210,087
Less: treasury stock, at cost, 10.0 million shares and 9.7 million shares at December 31, 2012 and 2011, respectively		96,528			96,525
TOTAL STOCKHOLDERS’ EQUITY		107,548			113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	552,875		$	506,373

See accompanying notes to consolidated financial statements.

F-5

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Year Ended December 31,
	2012			2011			2010
REVENUES	$	338,984		$	385,355		$	254,705
OPERATING EXPENSES		239,783			293,865			225,327
GROSS PROFIT		99,201			91,490			29,378
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		56,750			46,582			40,387
INCOME (LOSS) FROM OPERATIONS		42,451			44,908			(11,009	)
OTHER EXPENSE
Interest expense, net		(31,666	)		(25,259	)		(21,269	)
Foreign exchange loss		(1,688	)		(311	)		(947	)
Other expense		(2,472	)		(218	)		(5,729	)
TOTAL OTHER EXPENSE		(35,826	)		(25,788	)		(27,945	)
INCOME (LOSS) BEFORE INCOME TAXES		6,625			19,120			(38,954	)
INCOME TAX EXPENSE (BENEFIT)
Current		8,148			9,329			6,457
Deferred		12,280			4,151			(5,857	)
TOTAL INCOME TAX EXPENSE		20,428			13,480			600
INCOME (LOSS) AFTER INCOME TAXES		(13,803	)		5,640			(39,554	)
NET INCOME (LOSS), attributable to non-controlling interests		(472	)		(22	)		162
NET INCOME (LOSS), attributable to common shareholders	$	(13,331	)	$	5,662		$	(39,716	)
INCOME (LOSS) PER COMMON SHARE
Basic	$	(0.36	)	$	0.15		$	(1.44	)
Diluted	$	(0.36	)	$	0.15		$	(1.44	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		37,319			36,666			27,517
Diluted		37,319			36,666			27,517

See accompanying notes to consolidated financial statements.

F-6

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2012			2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss), attributable to common shareholders	$	(13,331	)	$	5,662		$	(39,716	)
Adjustments to reconcile net income (loss) to net cash  provided by operating activities:
Depreciation (net) and amortization expense		135,601			142,565			129,193
Non-cash revenues from Multi-client data exchange		(5,328	)		(3,113	)		(9,382	)
Deferred tax expense (benefit)		12,280			4,151			(5,857	)
(Gain) loss on sale of assets		(15,706	)		(1,683	)		2,629
Other		7,583			6,716			10,140
Effects of changes in operating assets and liabilities
Accounts receivable, net		35,124			(17,380	)		4,059
Inventory		(11,864	)		-			-
Prepaid expenses and other current assets		(2,482	)		(1,480	)		8,333
Accounts payable and accrued expenses		(13,166	)		11,705			9,083
Deferred revenue		(17,126	)		(10,142	)		3,255
Other		5,694			9			9,458
NET CASH PROVIDED BY OPERATING ACTIVITIES		117,279			137,010			121,195
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(25,977	)		(35,463	)		(45,341	)
Investment in Multi-client library		(165,127	)		(177,746	)		(170,755	)
Investment in unconsolidated subsidiary		(670	)		-			-
Change in restricted cash investments		3,809			(3,195	)		2,902
Purchase of intangibles		(3,397	)		(1,150	)		(5,389	)
Proceeds from sale of assets		28,756			15,072			497
NET CASH USED IN INVESTING ACTIVITIES		(162,606	)		(202,482	)		(218,086	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from long-term debt		46,794			7,871			25,972
Net proceeds from revolving credit facility		9,060			55,000			15,000
Debt issuance costs		(1,804	)		-			(5,922	)
Principal payments on capital lease obligations		(7,694	)		(4,370	)		(2,063	)
Purchase of treasury stock		(3	)		(823	)		(1,317	)
Issuances of stock, net		808			1,082			76,431
NET CASH PROVIDED BY FINANCING ACTIVITIES		47,161			58,760			108,101
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,834			(6,712	)		11,210
CASH AND CASH EQUIVALENTS, beginning of period		21,525			28,237			17,027
CASH AND CASH EQUIVALENTS, end of period	$	23,359		$	21,525		$	28,237

See accompanying notes to consolidated financial statements.

F-7

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

DECEMBER 31, 2012, 2011 AND 2010

(In thousands)

												Additional									Total
	Preferred			Common Stock						Common		Paid-in			Treasury			Accumulated			Stockholders'
	Stock			Class A			Class B			Stock		Capital			Stock			Deficit			Equity
Balances at January 1, 2010	$	284		$	40		$	57		$	-	$	160,362		$	(94,385	)	$	(2,430	)	$	63,928
Issuance of common stock, net of costs of issuance of $7,574		-			-			1			74		76,356			-			-			76,431
Conversion to common stock		(284	)		(40	)		(58	)		382		-			-			-			-
Compensation expense associated with stock grants		-			-			-			-		3,129			-			-			3,129
Charitable contribution expense associated with stock grant		-			-			-			-		104			-			-			104
Put option liability		-			-			-			-		(702	)		-			-			(702	)
Purchase of treasury stock		-			-			-			-		-			(1,317	)		-			(1,317	)
Net loss		-			-			-			-		-			-			(39,716	)		(39,716	)
Balances at December 31, 2010		-			-			-			456		239,249			(95,702	)		(42,146	)		101,857
Issuance of common stock		-			-			-			11		719			-			-			730
Compensation expense associated with stock grants		-			-			-			-		5,228			-			-			5,228
Charitable contribution expense associated with stock grant		-			-			-			-		206			-			-			206
Put option liability		-			-			-			-		702			-			-			702
Purchase of treasury stock		-			-			-			-		-			(823	)		-			(823	)
Net income		-			-			-			-		-			-			5,662			5,662
Balances at December 31, 2011		-			-			-			467		246,104			(96,525	)		(36,484	)		113,562
Issuance of common stock		-			-			-			9		1,324			-			-			1,333
Compensation expense associated with stock grants		-			-			-			-		5,883			-			-			5,883
Charitable contribution expense associated with stock grant		-			-			-			-		104			-			-			104
Purchase of treasury stock		-			-			-			-		-			(3	)		-			(3	)
Net loss		-			-			-			-		-			-			(13,331	)		(13,331	)
Balances at December 31, 2012	$	-		$	-		$	-		$	476	$	253,415		$	(96,528	)	$	(49,815	)	$	107,548

See accompanying notes to consolidated financial statements.

F-8

NOTE 1—ORGANIZATION AND NATURE OF OPERATIONS

Global Geophysical Services, Inc., a Delaware corporation, and its subsidiaries (collectively referred to as the “Company”) are headquartered in Houston, Texas. The Company provides an integrated suite of seismic data solutions to the global oil and gas industry, including the Company’s high resolution RG-3D Reservoir Grade® (“RG3D”) seismic service. The Company’s seismic data solutions consist primarily of seismic data acquisition, processing and interpretation services. Through these services, the Company delivers data that enables the creation of high quality images of the Earth’s subsurface that reveal complex structural and stratigraphic details. These images are used primarily by oil and gas companies to reduce risk associated with oil and gas exploration, to optimize well completion techniques and to monitor changes in hydrocarbon reservoirs. The Company integrates seismic survey design, data acquisition, processing and interpretation to deliver an enhanced product to clients. In addition, the Company owns and markets a growing seismic data library and licenses this data to clients on a non-exclusive basis.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition:

Proprietary Services

The Company’s seismic services are provided under cancelable service contracts, which vary in terms and conditions. The Company recognizes revenues in accordance with the terms of the contract. These contracts are either “turnkey” or “term” agreements or a combination of the two. Under turnkey agreements or the turnkey portions thereof, the Company recognizes revenues based upon quantifiable measures of progress, such as square miles or linear kilometers of data acquired. Under term agreements or the term portions thereof, period revenues are recognized on a day-rate basis. Under certain contracts where the client pays separately for the mobilization of equipment, the Company recognizes such mobilization fees as revenues during the performance of the seismic acquisition, using the same quantifiable measures of progress as for the acquisition work. The Company also receives reimbursements for certain other out-of-pocket expenses under the terms of its service contracts. The Company records amounts billed to clients in revenues at the gross amount including out-of-pocket expenses that are reimbursed by the client. In some instances, customers are billed in advance of services performed which the Company records as deferred revenue.

Multi-client Services

The Company generates Multi-client revenues by granting a license to seismic data. This allows clients to have access to seismic data at a cost that is generally less than acquiring data on a proprietary basis. The Company’s Multi-client projects differ from seismic data services projects in that the Company sets the specifications of the program, generally handles all aspects of the seismic data acquisition, and maintains ownership of the seismic data and its corresponding revenue stream.

Revenues are recorded under arrangements from the licensing of Multi-client data as pre-commitments, late sales and / or data swap transactions. Once a contract is signed, it is either classified as a pre-commitment, or a late sale and the entire contract will follow revenue recognition as described below.

Revenues from the creation of Multi-client projects are recognized when (i) the Company has a licensing arrangement with the customer that is validated by a signed contract, (ii) the sales price is fixed and determinable, (iii) collection is reasonably assured, and (iv) delivery, ‘as defined below’ has occurred. When the above criteria have been satisfied, the Company recognizes revenues using the proportionate performance method based upon quantifiable measures of progress such as square mile or linear kilometer of data acquired.

Revenues associated from a data swap transaction are recognized as a pre-commitment or late sale when (i) the Company has an arrangement with the customer that is validated by a signed contract, (ii) the value is determined based on the value which is more readily determinable, and (iii) the asset exchanged for has been received. Delivery is defined as ‘data is made available to the customer to view’.

F-9

If the data is subject to any incremental processing, the Company holds back a portion of the revenues to be recognized upon the delivery of the processed data to the customer. This hold back is calculated as a percentage of the data processing cost remaining to complete over the entire cost of the project.

Pre-commitment Revenues

Pre-commitments represent one classification of Multi-client revenues. Pre-commitment revenues are contractual obligations whereby a client commits funds in advance of the Company’s acquisition of seismic data. In return for these pre-commitments, clients typically have some input with respect to project specifications and receive preferential pricing. The Company records pre-commitment payments as deferred revenue when they are received and records them as revenues on the basis of proportionate performance.

Late Sale Revenues

Late Sales represent another classification of Multi-client revenues. For any contract, if all or any portion of the data has been acquired by the Company and it can be made available to view by the customer, it will be classified as a late sale. For late sale contracts any portion associated with data which has not been acquired will be deferred and recognized as revenues on the basis of proportionate performance.

Multi-client Library

All costs directly incurred in acquiring, processing and otherwise completing a seismic survey are capitalized into the Multi-client library. The Company establishes amortization rates based on the estimated future revenues (both from pre-commitments and late sales) on an individual survey basis. The underlying estimates that form the basis for the sales forecast depend on historical and recent revenue trends, oil and gas prospective in particular regions, general economic conditions affecting the customer base, expected changes in technology and other factors. The estimation of future cash flows and fair value is highly subjective and inherently imprecise. Estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, an impairment loss may be recorded relative to the seismic data library, which could be material to any particular reporting period. However, under no circumstance will an individual survey carry a net book value greater than a four-year straight-line amortized value. This is accomplished by comparing the cumulative amortization recorded for each survey to the cumulative straight-line amortization. If the cumulative straight-line amortization is higher for any specific survey, additional amortization expense is recorded, resulting in accumulated amortization being equal to the cumulative straight-line amortization for such survey. Amortization expense of the Multi-client seismic data was $103.3 million, $112.7 million and $92.7 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Non-Monetary Transactions

The Company participates in certain non-cash data exchange transactions, in which the Company takes ownership of a customer’s seismic data in exchange for a non-exclusive license to selected seismic data from the Multi-client library. In these non-cash data exchange transactions, the Company records a data library asset for the data received and recognizes revenues on the transaction in accordance with its revenue recognition policy. These transactions are valued at the fair value of the data received or delivered, whichever is more readily determinable. For the years ended December 31, 2012, 2011, and 2010, the Company has recognized $5.4 million, $3.1 million, and $9.4 million respectively, as revenues related to non-cash data transactions.

Mobilization Costs:   Transportation and other expenses incurred prior to the commencement of geophysical operations are deferred and amortized over the term of the related contract.

Financial Instruments:   Financial instruments consist of cash and cash equivalents, accounts receivable and payables, and debt. The carrying value of cash and cash equivalents and accounts receivable and payables approximate fair value due to their short-term nature. The Company believes the fair value and the carrying value of all other debt would not be materially different due to the instruments’ interest rates approximating market rates for similar borrowings at December 31, 2012 and 2011. See Note 9 for the fair value of the Company’s 10.5% senior notes.

Cash and Cash Equivalents:   The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

F-10

Accounts Receivable:   Trade accounts receivables are recorded in accordance with terms and amounts specified in the related contracts on an ongoing basis. Amounts recorded as unbilled represent work done for customers but not billed at period end in accordance with contract provisions and generally are expected to be billed within a relatively short period of time. Management of the Company continually monitors accounts receivable for collectability issues. The Company evaluates the collectability of accounts receivable on a specific account basis using a combination of factors, including the age of the outstanding balances, evaluation of the customer’s financial condition, and discussions with relevant Company personnel and with the customers directly. The allowance for doubtful accounts was $3.1 million and $3.5 million at December 31, 2012 and 2011, respectively.

The Company sometimes experiences disagreements or disputes with customers relating to the Company’s charges. At December 31, 2011, the Company had disputes of approximately $4.8 million in net receivables which related to charges for the Company's services with certain customers. As of December 31, 2012, these disputes were settled. Bad debt expense for the years ended December 31, 2012 and 2011 was $5.6 million and zero, respectively.

Inventory:   The Company identified certain recording systems as inventory to be sold to third parties during the year ended December 31, 2012. Inventory consists primarily of finished products and is stated at the lower of cost or market. Cost is determined by using the first-in, first-out method. The Company periodically reviews its inventory and makes provisions for damaged or obsolete inventory. There were no such provisions made during the year ended December 31, 2012.

Property and Equipment:   Property and equipment are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:

Boats	10 years
Computers and software	3 years
Furniture and fixtures	1-2 years
Machinery and equipment	3-7 years

Management’s estimation of useful life is based on circumstances that exist in the seismic industry and information available at the time of the asset purchase. As circumstances change and new information becomes available these estimates could change.

Disposals are removed at cost less accumulated depreciation with any resulting gain or loss reflected in income (loss) from operations within the Statements of Operations during the reporting period. During the years ended December 31, 2012, 2011 and 2010, the Company disposed of property and equipment, recognizing a gain of $15.7 million, a gain of $1.7 million and a loss of $2.6 million, respectively, which is included in operating expenses. Substantially all of the Company’s assets are pledged as collateral to secure debt.

Goodwill:   Goodwill represents the excess of costs over the fair value of net assets of acquired businesses. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually or when indicators of impairment are present. Under this goodwill impairment test, if the fair value of a reporting unit does not exceed its carrying value, the excess of fair value of the reporting unit over the fair value of its net assets is considered to be the implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the difference is recognized as a loss on impairment of goodwill. Goodwill was evaluated for impairment at December 31, 2012 and 2011 and was not deemed to be impaired.

F-11

Internal use Software:  In accordance with ASC 350-40 “Internal-Use Software”, the Company capitalizes costs related to the development of internal use software.  When capitalized, the Company amortizes the costs of computer software developed for internal use on a straight-line basis or appropriate usage basis over the estimated useful life of the software.  Currently, the Company is in the application development stage of its computer software development and, appropriately, has capitalized certain costs in the accumulative amounts of $1.8 million and $0.9 million as of December 31, 2012 and 2011, respectively.

Asset Impairment:   In accordance with ASC 360-10-35 “Impairment or Disposal of Long-Lived Assets”, the Company evaluates the recoverability of property and equipment and its Multi-client data library if facts and circumstances indicate that any of those assets might be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying amount to determine if an impairment of such property and Multi-client data library is necessary. The effect of any impairment would be to expense the difference between the fair value of such property and its carrying value. There were no impairment charges in the Statements of Operations during the years ended December 31, 2012, 2011 and 2010, respectively.

For the Multi-client data library, the impairment evaluation is based first on a comparison of the undiscounted future cash flows over each project’s remaining estimated useful life with the carrying value of each project. If the undiscounted cash flows are equal to or greater than the carrying value of such project, no impairment is recorded. If undiscounted cash flows are less than the carrying value of any project, the forecast of future cash flows related to such project is discounted to fair value and compared with such project’s carrying amount. The difference between the project’s carrying amount and the discounted future value of the expected revenue stream is recorded as an impairment charge. There were no impairment charges recognized for the Multi-client data library in the Statements of Operations during the years ended December 31, 2012, 2011 and 2010.

Deferred Revenue:   Deferred revenue consists primarily of amounts contractually billable or client payments made in advance of work done and deferred fees related to the mobilization period. These amounts are recognized as earned under the term of the related contract.

Treasury Stock:   The Company utilizes the cost method for accounting for its treasury stock acquisitions and dispositions.

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 was $2.0 million and $1.0 million at December 31, 2012 and 2011, respectively.

­­­­­­Concentrations of Credit Risk:   The Company maintains its cash in bank deposits with a financial institution. These deposits, at times, exceed federally insured limits. The Company monitors the financial condition of the financial institution and has not experienced any losses on such accounts. The Company is not party to any financial instruments which would have off-balance sheet credit or interest rate risk.

Advertising:   Advertising costs are expensed as incurred and were $0.5 million, $0.7 million and $0.6 million for the years ended December 2012, 2011 and 2010, respectively.

Income Taxes:   The Company follows ASC 740 “Income Taxes” regarding the accounting for deferred tax assets and liabilities. Under the asset and liability method required by this guidance, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A deferred tax asset will be reduced by a valuation allowance when, based on the Company’s estimates, it is more likely than not that a portion of those assets will not be realized in a future period.

F-12

The Company follows ASC 740 “Income Taxes” regarding the accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold that an income tax position is required to meet before recognizing in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. Additionally, the Company continues to recognize income tax related penalties and interest in the provision for income taxes.

Earnings Per Share:   The Company accounts for earnings per share in accordance with ASC 260 “Earnings Per Share”. Basic earnings per share amounts are calculated by dividing net income (loss) by the weighted average number of common shares outstanding during each period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the periods, including the dilutive effect of restricted stock, options and warrants granted. Dilutive restricted stock, options, and warrants that are issued during a period or that expire or are canceled during a period are reflected in the computations for the time they were outstanding during the periods being reported. Restricted stock, options and warrants, where the exercise price exceeds the average stock price for the period, are considered anti-dilutive and therefore are not included in the calculation of dilutive shares.

Foreign Operations:   The Company’s future revenues, in part, depend on operating results from its operations in foreign countries. The success of the Company’s operations is subject to various contingencies beyond management’s control. These contingencies include general and regional economic conditions, prices for crude oil and natural gas, competition and changes in regulation.

The Company enters into transactions that are not denominated in U.S. dollars. The transactions are re-measured to U.S. dollars and the exchange gains and losses are reported in other expense within the Consolidated Statements of Operations.

Use of Estimates:   The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications:   Certain amounts in the 2011 and 2010 consolidated financial statements have been reclassified to conform to the classifications in the 2012 consolidated financial statements. On the consolidated statements of cash flows, we consolidated certain lines: within “Adjustments to reconcile net income (loss) to net cash”, Amortization of debt issuance costs, Loss on extinguishment of debt, Stock-based compensation, Non-cash charitable contribution, and Unrealized gain on derivative instrument were consolidated into one line called Other; and within “Effects of changes in operating assets and liabilities”, Other assets, Income and other taxes receivable, and Income and other taxes payable were consolidated into one line called Other.

F-13

NOTE 3—SELECTED BALANCE SHEET ACCOUNTS

Prepaid expenses and other current assets included the following (in thousands):

	December 31,
	2012		2011
Assets held for sale	$	4,878	$	-
Prepaid expenses		1,181		862
Mobilization costs, net		998		4,220
Note receivable, current portion		1,750		968
Current deferred tax asset		12,673		-
Prepaid expenses and other current assets	$	21,480	$	6,050

Accounts receivable, net included the following (in thousands):

	December 31,
		2012			2011
Accounts receivable, trade	$	38,511		$	65,019
Unbilled		16,321			25,355
Allowance for doubtful accounts		(3,066	)		(3,485	)
Accounts receivable, net	$	51,766		$	86,889

Other assets included the following (in thousands):

	December 31,
	2012		2011
Debt issuance costs, net	$	5,689	$	4,877
Investment in unconsolidated subsidiary		441		741
Other		271		627
Other assets	$	6,401	$	6,245

NOTE 4—MULTI-CLIENT LIBRARY

Multi-client library consisted of the following (in thousands):

	December 31,
	2012		2011
Multi-client library, at cost	$	655,477	$	475,379
Less: accumulated Multi-client library amortization		346,410		243,144
Multi-client library, net	$	309,067	$	232,235

F-14

NOTE 5—PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):

	December 31,
	2012		2011
Machinery and equipment	$	308,039	$	321,342
Computers and software		19,661		17,077
Buildings		13,601		13,601
Boats		7,634		7,174
Land		2,157		2,157
Furniture and fixtures		103		216
		351,195		361,567
Less: accumulated depreciation		258,248		252,517
		92,947		109,050
Construction in process		7,225		9,370
Property and equipment, net	$	100,172	$	118,420

F-15

The following table represents an analysis of depreciation expense (in thousands):

	Year Ended December 31,
	2012		2011		2010
Gross depreciation expense	$	40,566	$	44,856	$	56,265
Less: capitalized depreciation for Multi-client library		11,329		16,901		20,369
Depreciation (net)	$	29,237	$	27,955	$	35,896

NOTE 6—GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles included the following (in thousands):

	December 31,
	2012		2011
Customer list	$	3,984	$	3,984
Trademark		1,759		1,679
Patents		3,913		3,913
Non-compete agreements		1,057		866
Intellectual property		8,883		2,901
		19,596		13,343
Less: accumulated amortization		6,513		3,414
Intangible assets, net		13,083		9,929
Goodwill		12,381		12,381
Goodwill and other intangibles, net	$	25,464	$	22,310

Intangible assets subject to amortization are amortized over their estimated useful lives which are between two and fifteen years. Amortization expense for the years ended December 31, 2012, 2011 and 2010 was $3.1 million, $1.9 million and $0.6 million, respectively. Amortization expense is projected to be $3.2 million, $2.0 million, $2.0 million, $2.0 million, and $0.9 million for the twelve months ended December 31, 2013 through 2017, respectively and $3.0 million thereafter.

F-16

NOTE 7—INCOME TAXES

Pretax Income (Loss) and Income Tax Expense (Benefit). The tables below show our pretax income (loss) from continuing operations and the components of income tax expense (benefit) for each of the years ended December 31:

Pretax income (loss) was as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
U.S.	$	19,904		$	19,320		$	(21,712	)
Foreign		(13,279	)		(200	)		(17,242	)
Pretax income (loss)	$	6,625		$	19,120		$	(38,954	)

The components of income tax expense were as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Current
Federal	$	-		$	-		$	90
State		(982	)		347			206
Foreign		9,130			8,982			6,161
		8,148			9,329			6,457
Deferred
Federal		11,702			4,613			(9,698	)
State		303			(692	)		1,508
Foreign		275			230			2,333
		12,280			4,151			(5,857	)
Income tax expense	$	20,428		$	13,480		$	600

The provision for income taxes differed from the amount of income tax determined by applying the U.S. statutory rate to the income (loss) before income taxes as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Income tax at statutory rate	$	2,319		$	6,692		$	(13,634	)
U.S. state income taxes		(1,062	)		675			777
Non-U.S. effective rate different than statutory		1,158			(786	)		5,161
Effect of non-deductible expenses		2,846			2,269			2,275
U.S. limit on foreign tax credits		13,324			-			-
Change in valuation allowance		1,231			2,988			3,667
Liabilities for uncertain tax matters		-			800			1,900
Other		612			842			454
Income tax expense	$	20,428		$	13,480		$	600

F-17

In 2012, the Company’s effective tax rate differed from the statutory rate primarily due to taxes paid in Non-U.S. jurisdictions, current year increases to the valuation allowance, and non-deductible expenses.  The effective tax rate for 2012 was also impacted by the decision to elect to deduct foreign taxes on the U.S. return both in the current year as well as certain prior years instead of taking a foreign tax credit as it was determined the credits would be limited.  In 2011, the Company’s effective tax rate differed from the statutory rate primarily due to taxes paid in Non-U.S. jurisdictions, current year increases to the valuation allowance, and non-deductible expenses. In 2010, the Company’s effective tax rate differed from the statutory rate, primarily due to taxes paid in Non-U.S. jurisdictions, current year increases to the valuation allowance, increases to uncertain tax positions and non-deductible expenses.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts reported for income tax purposes at the enacted tax rates in effect when the differences are anticipated to reverse. A deferred tax asset will be reduced by a valuation allowance when, based on the Company’s estimates, it is more likely than not that a portion of those assets will not be realized in a future period. In evaluating our valuation allowance, the Company considers the reversal of existing temporary differences, the existence of taxable income in prior carryback years, tax planning strategies and future taxable income for each of our taxable jurisdictions, the latter two of which involve the exercise of significant judgment.  A significant piece of objective negative evidence evaluated was the inability to utilize foreign tax credits during the year ended December 31, 2012. Such objective evidence and other subjective evidence caused the Company to evaluate foreign tax credits. Instead of recording a valuation allowance on these tax credits, the Company will claim a deduction for them on the U.S. tax return.

Based on the net operating losses incurred by the Company in different taxing jurisdictions, the Company recorded valuation allowances primarily related to foreign net operating loss carry forwards. The allowance decreased by $1.2 million and increased by $5.3 million in 2012 and 2011, respectively.

The components of deferred tax assets and liabilities were as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	90,519		$	97,172
Foreign tax credits		956			13,133
Other		1,409			1,090
Total gross deferred tax asset		92,884			111,395
Less:  valuation allowance		18,120			19,336
Total deferred tax asset		74,764			92,059
Deferred tax liability:
Property and equipment		(13,470	)		(19,765	)
Multi-client library		(72,981	)		(74,414	)
Other		(2,713	)		-
Total gross deferred tax liability		(89,164	)		(94,179	)
Deferred tax asset (liability), net	$	(14,400	)	$	(2,120	)

F-18

As of December 31, 2012, the Company had approximately $204.3 million in U.S. net operating loss carryforwards that expire beginning in 2026 and $71.9 million in non-U.S. net operating loss carryforwards and $37.2 million state loss carryforwards with various expiration periods. At December 31, 2012, the Company also had approximately $1.0 million in foreign tax credit carryforwards that expire beginning in 2016.

In the Consolidated Balance Sheet at December 31, deferred tax assets and liabilities from the preceding table were recorded in the following balance sheet captions (in thousands):

	December 31,
	2012			2011
Deferred income taxes, net	$	(27,073	)	$	(2,120	)
Prepaid expenses and other current assets		12,673			-
Deferred tax asset (liability), net	$	(14,400	)	$	(2,120	)

As of December 31, 2012, the Company had unremitted earnings of $8.7 million in certain foreign subsidiaries. Management intends to permanently reinvest those earnings. Consistent with management’s intention to permanently reinvest earnings from its non-U.S. operations, U.S. Federal and State Income taxes have not been recognized on such earnings, as the Company does not intend to repatriate such earnings. At such time the Company determines that such earnings will be remitted, appropriate U.S. Federal and State taxes, as applicable, will be recorded in the consolidated financial statements.

Unrecognized Tax Benefits (Liabilities for Uncertain Tax Matters):

The following table showed the change in the Company’s unrecognized tax benefits (in thousands):

	Year Ended December 31,
	2012			2011
Beginning unrecognized tax benefits	$	2,323		$	1,523
Additions based on tax positions taken in current year		-			-
Additions based on tax positions of prior years		-			800
Reductions due to settlements with taxing authorities		(770	)		-
Reductions due to lapse of statutes of limitation		-			-
Ending unrecognized tax benefits	$	1,553		$	2,323

As of December 31, 2012 and 2011, $1.6 million and $2.3 million of unrecognized tax benefits would affect the Company’s income tax expense and effective income tax rate if recognized in future periods. It is reasonably possible that the total amount of unrecognized tax benefits could change in the next twelve months.

The Company recognizes accrued interest related to unrecognized tax benefits and penalties as income tax expense. During 2012, the Company recognized no additional interest and penalties related to the unrecognized tax benefits noted above. The Company had $0.3 million and $0.4 million accrued for the payment of interest and penalties as of December 31, 2012 and 2011.

The Company and its subsidiaries file income tax returns in the United States and various foreign jurisdictions. The Company is no longer subject to examinations by income tax authorities in most jurisdictions for years prior to 2008.

F-19

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 $200.0 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 19).

The Company used the proceeds from the offering and sale of the Notes to repay outstanding indebtedness and used the remaining proceeds for 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.

On March 23, 2012, the Company entered into a Purchase Agreement (the “New Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers (the “New Initial Purchasers”), relating to the offer and sale by the Company of $50.0 million aggregate principal amount of its 10.5% senior notes due 2017 (the “New Notes”). The Company’s net proceeds from the offering were approximately $47.0 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the New Notes occurred on March 28, 2012. The New 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, and in offshore transactions in reliance on Regulation S under the Securities Act. On September 5, 2012, the Company offered to exchange up to $50.0 million in aggregate principal amount of the 10.5% senior notes due 2017, which have been registered under the Securities Act of 1933, for any and all of our outstanding unregistered 10.5% senior notes due 2017 issued on March 28, 2012. 

The New Notes are a general unsecured, senior obligation of the Company. The New 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 New Notes to repay outstanding indebtedness under its existing Bank of America Revolving Credit Facility.

The New Notes are covered under the terms of the Indenture dated March 28, 2012. The Notes and the New Notes are hereinafter referred to as the “Senior Notes”.

Interest — The Notes and the New Notes will bear interest from April 27, 2010 and from March 28, 2012, respectively, at a rate of 10.5% per annum. The Company will pay interest on the Notes and the New Notes semi-annually, in arrears, on May 1 and November 1 of each year, beginning November 1, 2010 and May 1, 2012, respectively.

Principal and Maturity — The Senior Notes were issued with a $250.0 million aggregate principal amount and will mature on May 1, 2017.

F-20

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 Senior Notes with the net cash proceeds of certain equity offerings at a redemption price of 110.500% of the aggregate principal amount of the Senior Notes redeemed if at least 65% of the aggregate principal amount of the Senior 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 Senior 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 Senior Notes may require the Company to purchase their Senior 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 Senior Notes or the Trustee may declare the Senior Notes due and immediately payable. As of December 31, 2012, the Company was 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 was $2.0 million and $1.0 million at December 31, 2012 and 2011, 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 with a maturity date of April 30, 2013. 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.

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 December 31, 2012, the Company was in compliance with all respective covenants.

F-21

On July 20, 2012, the Company entered into Amendment No. 3 to the Credit Agreement (the “Third Amendment”), with BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Syndication Agent and a Lender, BARCLAYS BANK PLC, and CITIBANK, N.A (collectively, the “Lenders” and individually, a “Lender”). The Company has requested and certain of the Lenders have agreed to increase such Lenders’ respective Commitments and/or extend the expiration thereof on the terms and conditions set forth in the Third Amendment.  Under the Third Amendment, the amount of the maximum permitted borrowings under the Credit Agreement was increased to $85.0 million until the initial Maturity Date of April 30, 2013, at which point the amount of the maximum permitted borrowings goes to $67.5 million and the Maturity Date of the Revolving Credit Facility is extended to April 30, 2014 (the “Extended Maturity Date”). Under the Third Amendment, the Company, as Borrower, has the ability until the Extended Maturity Date to request an increase in lending commitments by an additional $10.0 million subject to the requirements of the Credit Agreement. Amendment No. 3 also increased the maximum permitted Senior Notes of the Company issued under the Senior Note Indenture dated as of April 27, 2010 from $75.0 million to $100.0 million.

Promissory Notes: From time to time, the Company issues short term promissory notes to various foreign financial institutions to finance equipment purchases and working capital needs for our foreign operations.  The balance outstanding under these promissory notes as of December 31, 2012 and 2011 was $10.4 million and $10.7 million, respectively, at weighted average interest rates of 9.1% and 10.1%, respectively.

Notes payable - insurance:  In exchange for insurance services provided, the Company from time to time issues negotiable promissory notes. The balance outstanding under these promissory notes as of December 31, 2012 and 2011 was $0.8 million and $0.5 million, respectively, at weighted average interest rates of 3.4% and 3.1%, respectively.

Letter of Credit Facility:  In February 2007, the Company entered into a $10.0 million revolving line of credit which was 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 December 31, 2012 and 2011, the letters of credit outstanding were $1.8 million and $5.6 million, respectively.

Long-term debt consisted of the following (in thousands):

	December 31,
	2012		2011
Senior notes	$	250,000	$	200,000
Revolving credit facility		79,060		70,000
Promissory notes		11,204		11,678
Notes payable - insurance		806		538
		341,070		282,216
Less:unamortized discount		6,850		4,927
		334,220		277,289
Less:  current portion		22,970		11,416
Long-term debt, net of current portion and unamortized discount	$	311,250	$	265,873

F-22

Future maturities of notes payable and line of credit for each of the next five years and thereafter are as follows (in thousands):

Year Ended December 31,
2013	$	22,970
2014		67,700
2015		200
2016		200
2017		250,000
Thereafter		-
	$	341,070

NOTE 9—FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company follows ASU 2011-04 “Fair Value Measurement” 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 December 31, 2012 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 or variable rates of interest. Accordingly, they 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 level 1 fair value of the Company’s financial assets and liabilities as of December 31, 2012 and 2011 (in thousands):

	December 31,
	2012				2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
$200.0 million senior notes	$	195,801	$	178,000	$	195,073	$	187,250
$50.0 million senior notes	$	47,349	$	44,500		N/A		N/A

F-23

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—EARNINGS PER SHARE

The Company follows ASC 260 “Earnings Per Share” for share-based payments which are considered as participating securities. 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 (in thousands, except per share amounts):

	Year Ended December 31,
	2012			2011		2010
Net income, attributable to common shareholders	$	(13,331	)	$	5,662	$	(39,716	)
Weighted average shares outstanding:
Basic		37,319			36,666		27,517
Diluted		-			-		-
Total		37,319			36,666		27,517
Basic (loss) income per share	$	(0.36	)	$	0.15	$	(1.44	)
Diluted income per share	$	(0.36	)	$	0.15	$	(1.44	)

For the years ended December 31, 2012, 2011 and 2010, 1,893,200, 2,386,700, and 2,884,100 out-of-the-money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive, respectively.

For the years ended December 31, 2012, 2011 and 2010, zero, zero and 390,000 stock warrants have been excluded from diluted earnings per share because they are considered anti-dilutive, respectively.

F-24

NOTE 11—STOCK-BASED COMPENSATION

The Company follows ASC 718 “Compensation – Stock Compensation” 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 (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 December 31, 2012, 4,830,400 options have been granted and 2,937,200 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 Company did not grant any stock options during the year ended December 31, 2012. The following assumptions were used for the years ended December 31, 2011 and 2010:

	Year Ended December 31,
	2011			2010
Risk-free interest rates		2.68	%		2.62	%
Expected lives (in years)		7			7
Expected dividend yield		-			-
Expected volatility		59.08	%		60.93	%

The computation of expected volatility during the year ended December 31, 2011 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.

F-25

A summary of the activity of the Company’s stock option plans for the years ended December 31, 2012, 2011 and 2010 is presented below:

	Number of Optioned Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Weighted Average Optioned Grant Date Fair Value
Balance as of December 31, 2009		2,642,200		$	22.95			$	4.97
Expired		-			-				-
Granted		562,900			22.71				11.38
Exercised		-			-				-
Forfeited		(321,000	)		22.69				6.57
Balance as of December 31, 2010		2,884,100			22.93				6.04
Expired		-			-				-
Granted		65,000			21.92				13.49
Exercised		-			-				-
Forfeited		(562,400	)		23.11				8.02
Balance as of December 31, 2011		2,386,700			22.86				5.78
Expired		-			-				-
Granted		-			-				-
Exercised		-			-				-
Forfeited		(493,500	)		22.85				7.61
Balance at December 31, 2012		1,893,200		$	22.87		5.59	$	5.30
Exercisable as of December 31, 2012		1,619,550		$	22.79		5.59	$	4.79

Outstanding options at December 31, 2012 expire during the period April 2017 to June 2021 and have exercise prices ranging from $12.50 to $30.00.

Compensation expense associated with stock options of $1.4 million, $1.7 million and $1.6 million for the years ended December 31, 2012, 2011 and 2010, respectively, was included in selling, general and administrative expenses in the Statements of Operations. At December 31, 2012, the Company had approximately 273,650 shares of nonvested stock option awards. The total cost of nonvested stock option awards which the Company had not yet recognized was approximately $1.4 million at December 31, 2012. Such amounts are expected to be recognized over a period of 2.5 years, beginning January 1, 2013.

F-26

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. Generally, the stock vests over a 3 year period. A summary of the activity of the Company’s restricted stock awards for the years ended December 31, 2012, 2011 and 2010 is presented below:

	Number of Nonvested Restricted Share Awards			Weighted Average Grant Date Fair Value
Balance at December 31, 2009		281,289		$	7.88
Granted		488,714			9.75
Vested		(116,260	)		6.09
Forfeited		(58,690	)		6.51
Balance at December 31, 2010		595,053			9.90
Granted		755,100			11.40
Vested		(185,698	)		9.25
Forfeited		(169,619	)		11.42
Balance as of December 31, 2011		994,836			10.84
Granted		636,338			5.09
Vested		(375,741	)		11.78
Forfeited		(278,457	)		10.91
Nonvested Restricted Shares Outstanding December 31, 2012		976,976		$	6.72

Compensation / charitable contribution expense associated with restricted stock of $4.6 million, $3.7 million and $1.6 million for the years ended December 31, 2012, 2011 and 2010, respectively, was included in selling, general and administrative expenses in the Statements of Operations. The total cost of nonvested stock awards which the Company had not yet recognized at December 31, 2012 was approximately $6.2 million. This amount is expected to be recognized over the next 3 years.

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. The expense related to the ESPP for the year ended December 31, 2012 was immaterial to our consolidated financial statements.

F-27

NOTE 12—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 years ended December 31, 2012, 2011 and 2010 (in thousands). Proprietary Services accounted for 54%, 54%, and 47% of total revenues for the years ended December 31, 2012, 2011 and 2010, respectively, and Multi-client Services accounted for 46%, 46%, and 53% of total revenues for the years ended December 31, 2012, 2011 and 2010, respectively.

	As of and for the Year Ended December 31, 2012
	Proprietary Services			Multi-client Services		Corporate			Total
Revenues	$	182,476		$	156,508	$	-		$	338,984
Segment income (loss)	$	(219	)	$	30,192	$	(43,304	)	$	(13,331	)
Segment assets	$	27,047		$	336,765	$	189,063		$	552,875

	As of and for the Year Ended December 31, 2011
	Proprietary Services		Multi-client Services		Corporate			Total
Revenues	$	207,921	$	177,434	$	-		$	385,355
Segment income (loss)	$	4	$	46,888	$	(41,230	)	$	5,662
Segment assets	$	54,552	$	276,110	$	175,711		$	506,373

	As of and for the Year Ended December 31, 2010
	Proprietary Services			Multi-client Services		Corporate			Total
Revenues	$	119,837		$	134,868	$	-		$	254,705
Segment income (loss)	$	(31,185	)	$	24,878	$	(33,409	)	$	(39,716	)
Segment assets	$	43,288		$	181,365	$	188,613		$	413,266

NOTE 13—EMPLOYEE BENEFIT PLANS

The Company provides a 401(k) plan as part of its employee benefits package in order to retain quality personnel. During 2012, 2011 and 2010, the Company made matching contributions equal to 100% of the first 3% and 50% of the next 2% of eligible compensation contributed by participating personnel. The Company’s matching contributions for the years ended December 31, 2012, 2011 and 2010 were approximately $1.0 million, $0.8 million and $0.6 million, respectively.

NOTE 14—COMMITMENTS AND CONTINGENCIES

Capital Leases: From time to time, the Company enters into leases and sale and leaseback transactions to acquire certain seismic equipment, computer equipment and vehicles that are accounted for as capital leases. The balance outstanding under these capital leases as of December 31, 2012 and 2011 was $9.8 million and $9.9 million, respectively, at weighted average interest rates of 5.3% and 5.6%, respectively.

Operating Leases:   The Company leases certain office space under non-cancelable operating lease agreements, which expire at various dates and require various minimum annual rentals.

F-28

The following table summarizes future commitment under these operating and capital leases which have initial or remaining terms in excess of one year as of December 31, 2012, for each of the years remaining and in the aggregate (in thousands):

Year Ended December 31,	Operating Leases		Capital Leases
2013	$	1,025	$	5,971
2014		849		2,959
2015		446		1,362
2016		30		35
2017		-		17
Thereafter		-		-
Total future minimum lease payments	$	2,350		10,344
Less:  amounts representing interest				529
Present value of net minimum lease payments				9,815
Less:  current portion				5,639
Long-term portion			$	4,176

The Company has included the assets associated with the capital leases in property and equipment. At December 31, 2012 and 2011, the original cost of the assets was $22.4 million and $14.5 million, respectively, and accumulated depreciation of the assets was $5.4 million and $1.6 million, respectively.

Rental expense for short-term and long-term operating leases for the years ended December 31, 2012, 2011 and 2010 was approximately $23.1 million, $22.3 million and $23.6 million, respectively.

The Company is involved in litigation in the normal course of business. Management does not expect the eventual outcome to have a material impact on the financial condition of the Company.

NOTE 15—SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information (in thousands):

	Year Ended December 31,
	2012		2011		2010
Interest paid	$	29,235	$	23,435	$	16,738
Income taxes paid	$	7,570	$	8,922	$	4,519

F-29

The following is supplemental disclosure of non-cash investing and financing activities (in thousands):

	Year Ended December 31,
	2012		2011		2010
Option payable recorded against additional paid in capital	$	-	$	-	$	702
Non-cash Multi-client asset recorded as deferred revenue	$	64	$	2,205	$	697
Note payable related to purchase of business	$	-	$	1,000	$	1,500
Original issue discount on notes payable	$	3,000	$	-	$	5,982
Non-cash property and equipment additions associated with swap of property and equipment	$	7,677	$	-	$	-
Non-cash property and equipment additions associated with data swap	$	1,751	$	-	$	-
Property and equipment sale financed through note receivable	$	-	$	968	$	2,550
Property and equipment additions financed through capital leases	$	7,640	$	14,238	$	-
Purchase price not paid at close of acquisition	$	2,993	$	1,850	$	-
Investment in unconsolidated subsidiaries	$	-	$	958	$	-

F-30

NOTE 16—CUSTOMER CONCENTRATIONS

The Company’s sales are to clients whose activities relate to oil and gas exploration and production. In general, the Company does not require collateral from its customers. Therefore, the collection of receivables may be affected by the economy surrounding the oil and gas industry. For the years ended December 31, 2012, 2011 and 2010, customers representing more than 10% of the Company’s revenue and accounts receivable at the balance sheet dates are listed in the table below (in millions):

	Year Ended December 31,
	2012					2011					2010
	Revenues		% of Total			Revenues		% of Total			Revenues		% of Total
Largest client	$	52.5		15	%	$	64.7		17	%	$	41.0		16	%
Second largest client		-		-			51.4		13	%		-		-
Total	$	52.5		15	%	$	116.1		30	%	$	41.0		16	%

	December 31,
		2012					2011					2010
	Accounts Receivable		% of Total			Accounts Receivable		% of Total			Accounts Receivable		% of Total
Largest client	$	0.5		1	%	$	10.8		12	%	$	-		-
Second largest client		-		-			6.7		8	%		2.7		4	%
Total	$	0.5		1	%	$	17.5		20	%	$	2.7		4	%

For the years ended December 31, 2012, 2011 and 2010, revenues from all geographic areas outside of the United States were $162.2 million, $180.4 million and $109.0 million, representing 48%, 47% and 43% of total revenues, respectively.

F-31

NOTE 17— UNAUDITED QUARTERLY FINANCIAL DATA (in thousands, except per share amounts)

	Quarter Ended
	December 31,			September 30,			June 30,			March 31,
2012
Revenues	$	55,287		$	90,214		$	97,372		$	96,111
Income from operations	$	(12,012	)	$	21,275		$	13,311		$	19,877
Other expense	$	(8,856	)	$	(10,453	)	$	(9,109	)	$	(7,408	)
Net income attributable to common shareholders	$	(28,614	)	$	5,807		$	2,546		$	6,930
Net income per common share:
Basic	$	(0.76	)	$	0.16		$	0.07		$	0.19
Diluted	$	(0.76	)	$	0.16		$	0.07		$	0.19

	Quarter Ended
	December 31,			September 30,			June 30,			March 31,
2011
Revenues	$	113,091		$	110,128		$	85,301		$	76,835
Income from operations	$	15,316		$	10,767		$	8,077		$	10,748
Other expense	$	(7,700	)	$	(7,698	)	$	(5,400	)	$	(4,990	)
Net income attributable to common shareholders	$	1,405		$	883		$	585		$	2,789
Net income per common share:
Basic	$	0.04		$	0.02		$	0.02		$	0.08
Diluted	$	0.04		$	0.02		$	0.02		$	0.08

NOTE 18 – RECENTLY ISSUED ACCOUNTING STANDARDS

During the year ended December 31, 2012, there were no accounting standards issued that have material impact on our consolidated financial position, results of operations, or cash flows.

NOTE 19—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 $200.0 million of its publicly registered 10.5% senior notes due 2017 for a like amount of its privately placed 10.5% 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.

On July 26, 2012, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission. Under this registration statement, the Company exchanged $50.0 million in aggregate principal amount of its 10.5% Senior Notes due 2017 that have been registered under the Securities Act of 1933, as amended, for an identical principal amount of existing 10.5% Senior Notes due 2017 that were sold in a private offering completed on March 28, 2012. 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.

Separate condensed consolidating financial statement information for the guarantor subsidiaries and non-guarantor subsidiaries as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands):

F-32

	As of December 31, 2012
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	150,864	$	21,761		$	(60,854	)	$	111,771
Multi-client library, net		309,031		36			-			309,067
Property and equipment, net		97,129		3,043			-			100,172
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		20,589		(20,589	)		-			-
Other non-current assets		31,728		137			-			31,865
TOTAL ASSETS	$	609,342	$	4,388		$	(60,855	)	$	552,875
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	102,568	$	58,612		$	(60,854	)	$	100,326
Long-term debt and capital lease obligations, net of current portion and unamortized discount		315,426		-			-			315,426
Deferred income tax and other non-current liabilities		29,575		-			-			29,575
TOTAL LIABILITIES		447,569		58,612			(60,854	)		445,327
Stockholders' equity		161,773		(54,224	)		(1	)		107,548
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	609,342	$	4,388		$	(60,855	)	$	552,875

	As of December 31, 2011
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	139,352	$	47,449		$	(59,638	)	$	127,163
Multi-client library, net		232,235		-			-			232,235
Property and equipment, net		113,041		5,379			-			118,420
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		30,807		(30,807	)		-			-
Other non-current assets		28,340		215			-			28,555
TOTAL ASSETS	$	543,776	$	22,236		$	(59,639	)	$	506,373
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	116,882	$	62,742		$	(59,638	)	$	119,986
Long-term debt and capital lease obligations, net of current portion and unamortized discount		268,486		-			-			268,486
Deferred income tax and other non-current liabilities		4,339		-			-			4,339
TOTAL LIABILITIES		389,707		62,742			(59,638	)		392,811
Stockholders' equity		154,069		(40,506	)		(1	)		113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	543,776	$	22,236		$	(59,639	)	$	506,373

F-33

	Year Ended December 31, 2012
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	221,721		$	127,402		$	(10,139	)	$	338,984
Operating expenses		140,608			108,125			(8,950	)		239,783
Selling, general and administrative expenses		32,068			25,871			(1,189	)		56,750
Income (loss) from operations		49,045			(6,594	)		-			42,451
Interest income (expense), net		(31,680	)		14			-			(31,666	)
Other expense, net		(2,255	)		(1,905	)		-			(4,160	)
Income (loss) before income taxes		15,110			(8,485	)		-			6,625
Income tax expense		15,195			5,233			-			20,428
Loss after income taxes		(85	)		(13,718	)		-			(13,803	)
Net loss, attributable to non-controlling interests		(472	)		-			-			(472	)
Net income (loss), attributable to common shareholders	$	387		$	(13,718	)	$	-		$	(13,331	)

	Year Ended December 31, 2011
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	305,665		$	89,133		$	(9,443	)	$	385,355
Operating expenses		212,164			90,089			(8,388	)		293,865
Selling, general and administrative expenses		35,306			12,331			(1,055	)		46,582
Income (loss) from operations		58,195			(13,287	)		-			44,908
Interest income (expense), net		(25,277	)		18			-			(25,259	)
Other income (expense), net		910			(1,439	)		-			(529	)
Income (loss) before income taxes		33,828			(14,708	)		-			19,120
Income tax expense		10,100			3,380			-			13,480
Income (loss) after income taxes		23,728			(18,088	)		-			5,640
Net loss, attributable to non-controlling interests		(22	)		-			-			(22	)
Net income (loss), attributable to common shareholders	$	23,750		$	(18,088	)	$	-		$	5,662

	Year Ended December 31, 2010
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	238,177		$	30,342		$	(13,814	)	$	254,705
Operating expenses		200,230			37,749			(12,652	)		225,327
Selling, general and administrative expenses		33,490			8,059			(1,162	)		40,387
Income (loss) from operations		4,457			(15,466	)		-			(11,009	)
Interest expense, net		(21,269	)		-			-			(21,269	)
Other expense, net		(6,612	)		(64	)		-			(6,676	)
Loss before income taxes		(23,424	)		(15,530	)		-			(38,954	)
Income tax expense (benefit)		(2,379	)		2,979			-			600
Loss after income taxes		(21,045	)		(18,509	)		-			(39,554	)
Net income, attributable to non-controlling interests		162			-			-			162
Net loss, attributable to common shareholders	$	(21,207	)	$	(18,509	)	$	-		$	(39,716	)

F-34

	Year Ended December 31, 2012
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by operating activities	$	112,311		$	4,968		$	-	$	117,279
Net cash used in investing activities		(154,504	)		(8,102	)		-		(162,606	)
Net cash provided by (used in) financing activities		49,415			(2,254	)		-		47,161
Net increase (decrease) in cash and cash equivalents	$	7,222		$	(5,388	)	$	-	$	1,834

	Year Ended December 31, 2011
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	129,218		$	7,792		$	-	$	137,010
Net cash used in investing activities		(198,266	)		(4,216	)		-		(202,482	)
Net cash provided by financing activities		56,330			2,430			-		58,760
Net increase (decrease) in cash and cash equivalents	$	(12,718	)	$	6,006		$	-	$	(6,712	)

	Year Ended December 31, 2010
	Guarantors			Non-guarantors		Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by operating activities	$	118,425		$	2,770	$	-	$	121,195
Net cash provided by (used in) investing activities		(219,031	)		945		-		(218,086	)
Net cash provided by financing activities		108,101			-		-		108,101
Net increase in cash and cash equivalents	$	7,495		$	3,715	$	-	$	11,210

NOTE 20—SUBSEQUENT EVENT

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.

F-35