Concentration of Credit Risk

12 Months Ended

Dec. 31, 2011

Concentration of Credit Risk

Concentration of Credit Risk

NOTE 19: Concentration of Credit Risk

The Company’s primary market risks include fluctuations in commodity prices which affect demand and pricing of services.  All of the Company’s customers are involved in the oil and natural gas industry, which exposes the Company to credit risk because our customers may be similarly affected by changes in economic and industry conditions.  Further, the Company generally provides services and extends credit to a relatively small group of key customers that account for a significant percentage of accounts receivable of the Company at any given time.  Due to the nature of the Company’s contracts and customers’ projects, the largest customers can change from year to year and the largest customers in any year may not be indicative of the largest customers in any subsequent year.  If any key customers were to terminate their contracts or fail to contract for future services due to changes in ownership or business strategy or for any other reason, the Company’s results of operations could be affected.

Accordingly, the Company performs ongoing customer credit evaluations and maintains allowances for possible losses.  Write offs charged against the allowance for bad debt have not exceeded 1.0% of total sales for 2011, 2010, and 2009.  Management believes the unreserved accounts receivables at December 31, 2011, of $160.7 million are collectible and the allowance for doubtful accounts of $2.8 million is adequate.

The Company has cash in banks and short-term investments, including restricted cash, which, at times, may exceed federally insured limits, established in the United States and foreign countries.  The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk on cash and short-term investments.

The Company conducts operations outside the United States in both its seismic data acquisition and seismic data processing and integrated reservoir geosciences reportable segments.  These operations expose the Company to market risks from changes in foreign exchange rates.  However, to date, the level of activity has not been of a material nature.