Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions

Related Party Transactions

NOTE 15: Related Party Transactions

Acquisition of PGS Onshore

In connection with the acquisition of PGS Onshore in February 2010, PGS acquired 2.2 million shares of Geokinetics’ common stock, or 12% of the then outstanding shares of common stock, and appointed two persons to the Company’s board of directors, one of whom was an employee of PGS and the other was independent of the Company as defined by the NYSE Amex rules.  Prior to the acquisition, PGS was not affiliated with the Company.  Following the acquisition, we entered into transactions that were contemplated by the purchase agreement for the acquisition of PGS Onshore, which are summarized below:

Transition Services Agreement.  In the transition services agreement, PGS agreed to provide the Company with office facilities, accounting, information, payroll and human resources services following the closing of the acquisition.  During 2010, the Company incurred fees of $3.4 million related to this agreement.  The services were provided by PGS through July 30, 2010.

Mexico Data Processing (“Mexico DP”) Agreement.  The Company’s purchase of PGS Onshore data acquisition business did not include PGS’s data processing business in Mexico.  Following the acquisition, we entered into the Mexico DP Agreement with PGS, in which the Company agreed to operate data processing contracts in Mexico for PGS’s benefit until such time as PGS could arrange for the required consents to the transfer of the contracts to a subsidiary of PGS.  PGS agreed to reimburse the Company for its costs to operate the contracts on PGS’s behalf.  The contracts were effectively transferred to a subsidiary of PGS in January 2010.  Under the Mexico DP Agreement, the Company spun-off the DP division on behalf of PGS for $2.1 million in equity, which includes $0.7 million in fixed assets and $0.1 million in cash equivalents.

Libya Agreement.  The Company entered into an agreement with PGS whereby PGS agreed to operate the Company’s seismic data acquisition business in Libya for the Company’s benefit until completion of the formation of a subsidiary in Libya and acquisition of the required licenses to own and operate the business in Libya.  The Company agreed to reimburse PGS for the costs of operating the business for the Company’s benefit.  During the fourth quarter of 2010 and the first quarter of 2011, the Company formed a subsidiary in Libya and acquired certain licenses necessary to operate its business there.  However, the civil unrest in Libya has made transfer of the business to the Company impractical, and, accordingly, the Libya agreement has been extended.

Other

On August 12, 2011 the Company entered into an amended and restated credit agreement with the Lenders for the Whitebox Revolving Credit Facility.  Mr. Gary L. Pittman, the Company’s Executive Vice President and Chief Financial Officer, is a passive investor in, and holds less than approximately 0.2% of the total assets of ECF Value Fund, L.P. and approximately 0.3% of the total assets of ECF Value Fund International, Ltd. which are two of the Lenders participating in the amended and restated credit agreement at December 31, 2011.

During the years ended December 31, 2011 and 2010, the Company paid fees of approximately $0.3 million and $0.5 million, respectively, for freight broker services provided by Total Connection, a company owned and operated by the spouse of an employee of the Company.  Additionally, during the years ended December 31, 2011 and 2010, the Company paid fees of approximately $1.2 million and $1.0 million, respectively, for permitting services provided by Complete Geo Land Services, LLC, a company owned and operated by the spouse of an employee of the Company.

During the years ended December 31, 2011, 2010 and 2009, the Company recorded revenue of approximately $0.4 million, $0.1 million and $0.1 million, respectively, for seismic data processing services provided to Carmot Seismic AS, a Norwegian company partially owned by the spouse of an employee of the Company and where the Company employee is a Director.

During 2009, the Company received food, drink, and other catering services for its crews in one of its international locations from a company that was substantially owned by certain employees and former employees of the Company.  For the year ended December 31, 2009 the Company paid approximately $3.3 million to this company.  The Company believes that all transactions were arms-length on terms at least as favorable as market rates.  The Company stopped receiving services from this company in the third quarter of 2009.