8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

________

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report

April 28, 2010 (February 12, 2010)

(Date of earliest event reported)

GEOKINETICS INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33460	94-1690082
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

1500 CityWest Blvd., Suite 800

Houston, Texas, 77042

(Address of principal executive offices)

(713) 850-7600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

On February 16, 2010, Geokinetics Inc. (“Geokinetics”) filed a current report on Form 8-K to report, among other things, that Geokinetics and certain of its subsidiaries, pursuant to the terms a definitive purchase agreement with Petroleum Geo-Services ASA and certain of its subsidiaries (“PGS”), closed a transaction acquiring the onshore seismic data acquisition and multi-client data library business of PGS (“PGS Onshore”).  This Form 8-K/A amends Item 9.01 to present financial statements of PGS Onshore (as historically conducted by PGS) and to present pro forma financial information in connection with Geokinetics’ acquisition of PGS Onshore.

SECTION 1 – Registrant’s Business and Operations

Item 1.01.  Entry into a Material Definitive Agreement.

As previously reported, on December 3, 2009, Geokinetics Inc. (“Geokinetics”) and certain of its subsidiaries entered into a definitive purchase agreement with Petroleum Geo-Services ASA and certain of its subsidiaries (“PGS”) under which Geokinetics acquired the onshore seismic data acquisition and multi-client data library business of PGS (“PGS Onshore”) in a cash and stock transaction.  The transaction closed on February 12, 2010. The purchase price paid by Geokinetics at closing was $202.8 million (original estimated purchase price of $210 million), on a cash free, debt free basis, including a $2.8 million adjustment for estimated net working capital below the included amount of $37.5 million.  The purchase price is subject to certain additional working capital adjustments after closing.  Geokinetics funded the acquisition through a combination of cash and common stock.  At closing, Geokinetics issued PGS approximately 2.15 million shares, which represented 19.9% of Geokinetics’ shares outstanding prior to the signing of the purchase agreement, at fair market value of $9.02 per share on the date of acquisition, or $19.4 million.    The remainder of the purchase price, or $183.9 million, was paid in cash.  As part of this acquisition, PGS has the right to name two members of Geokinetics’ board of directors.

To fund the cash portion of the purchase price, Geokinetics Holdings USA, Inc. (f/k/a Geokinetics Holdings, Inc.) (“Geokinetics Holdings”), a wholly-owned subsidiary of Geokinetics, issued $300 million aggregate principal amount of its 9.75% senior secured notes due 2014 (the “Notes”) in a private offering.  The proceeds of this sale were held in escrow until the closing of the PGS Onshore acquisition.  In connection with the release of the proceeds from the escrow account, certain subsidiaries of Geokinetics Holdings and Geokinetics entered into a Supplemental Indenture with U.S. Bank National Association (the “Trustee” or “Collateral Trustee”) to provide additional guarantees for the Notes and to supplement the Indenture by and among Geokinetics Holdings, Geokinetics a nd the Trustee, dated as of December 23, 2009.  In addition, Geokinetics, Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., (together with Avista Capital Partners, L.P., the “Avista Holders”), Levant America S.A., (“Levant”), and PGS entered into a Second Amended and Restated Registration Rights Agreement (“2010 Registration Rights Agreement”) to provide certain registration rights to the parties to the agreement. The following is a brief summary of the material terms and conditions of the Supplemental Indenture and the 2010 Registration Rights Agreement:

Supplemental Indenture – The Supplemental Indenture extends the guarantees provided in the Indenture to all of Geokinetics’ domestic subsidiaries.  The Notes become unconditionally guaranteed, jointly and severally and on a senior secured basis, by Geokinetics and its domestic subsidiaries as if they had been parties to the Indenture.  The Indenture remains in effect as previously described.

2010 Registration Rights Agreement - Pursuant to the 2010 Registration Rights Agreement, Geokinetics granted PGS and the Series B Preferred Stockholders certain demand and piggyback registration rights with respect to the shares of common stock owned by PGS or the Avista Holders or such shares into which the Series B Preferred Stock is convertible.  The 2010 Registration Rights Agreement amends and restates the Registration Rights Agreement dated as of  July 28, 2008 (“2008 Registration Rights Agreement”), covering certain shares of Geokinetics’ Series B-2 Convertible Preferred Stock sold pursuant to that certain Securities Purchase Agreement, dated as of July 28, 2008, among Geokinetics and the Purchasers named therein.  All shares of Geokinetics’ Series B Senior Convertible Preferred Stock, Series C Preferred Stock and shares of common stock held by PGS are now subject to the provisions of the 2010 Registration Rights Agreement.

The foregoing summaries of the Supplemental Indenture and the 2010 Registration Rights Agreement are qualified in their entirety by the terms of such agreements, as applicable, each of which is attached hereto as Exhibits 4.2 and 4.3, respectively, and incorporated herein by reference.

Mexico and Libya DP Agreements - As part of the transaction, Geokinetics entered into an agreement with PGS, PGS Mexicana S.A. de C.V., (“Mexicana”), and PGS Administración y Servicios S.A. de C.V., (“Old ServiceCo”) whereby PGS will cause certain subject assets, including the Mexican data processing operations conducted by Old ServiceCo, and the Mexican data processing assets owned by Mexicana to be removed from Mexicana when approved by the third party for which such services are provided.  Until the third party approves the spin off, Mexicana and Old ServiceCo, as newly-acquired subsidiaries of Geokinetics, agree to continue to operate the contract for the benefit of PGS.  Geokinetics also entered into a substantially similar agree ment with PGS and PGS Exploration (UK) Ltd. whereby PGS Exploration (UK) Ltd. agrees to operate the Libyan contract, as a subsidiary of PGS, until such time as when Geokinetics or a subsidiary of Geokinetics has been established and become qualified to do business in Libya or Geokinetics decides not to do business in Libya.

Item 1.02.  Termination of a Material Definitive Agreement.

In connection with the closing of the acquisition from PGS of its onshore and multi-client library business, Geokinetics repaid its borrowings under its credit facility with PNC Bank, National Association (“PNC”), as lender, and terminated the PNC Facility.  The PNC Facility was replaced with the Loan Agreement described in Item 2.03 of this Current Report on Form 8-K.

SECTION 2 –Financial Information

Item 2.01.  Completion of Acquisition or Disposition of Assets.

The description of the PGS Onshore acquisition in Item 1.01 is incorporated herein by reference.

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On February 12, 2010, Geokinetics Holdings completed the closing of a new credit facility under the terms of a Credit Agreement (the “Loan Agreement”) with Royal Bank of Canada (“RBC”), as Administrative Agent and Collateral Agent for each lender party to the Loan Agreement.  Under the Loan Agreement, the lenders agree to provide, subject to the terms and conditions set forth in the Loan Agreement, a $50,000,000 revolving credit facility and letters of credit for the account of Geokinetics Holdings.  Geokinetics Holdings, Geokinetics and each of Geokinetics’ principal subsidiaries are liable for payment of Geokinetics Holdings’ obligations under the Loan Agreement.  The foregoing description is a summary of the material terms of the Loan Agreement and does not purport to b e complete, and is qualified in its entirety by reference to the Loan Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1.

As a condition for entering into loans or letters of credit under the Loan Agreement, Geokinetics and certain of its subsidiaries had to execute a Guaranty whereby they will provide unconditional and irrevocable guarantees of payment to the lenders.  The Guaranty is incorporated herein by reference and is attached to this Current Report on Form 8-K as Exhibit 10.2.

SECTION 3 –Securities and Trading Markets

Item 3.02.  Unregistered Sales of Equity Securities.

On February 12, 2010, Geokinetics issued 2,153,616 shares of common stock to PGS as partial consideration for the PGS Onshore acquisition.  For purposes of the transaction, the shares were originally valued at $12.11 per share; however, they were issued at fair market value on the date the Purchase Agreement was executed and did not include any provisions to make up any valuation differences between the date of the Purchase Agreement and the closing of the acquisition.  The shares of common stock were issued pursuant to the exemption from registration provided by Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). PGS represented to Geokinetics that it was an “accredited investor” as defined in Regulation D under the Securities Act and tha t the securities were acquired for its own account and without a view to the distribution of such securities.

SECTION 5 – Corporate Governance and Management

Item 5.03.  Amendment to Articles of Incorporation or Bylaws.

In connection with the consummation of the PGS Onshore acquisition, as described in Item 1.01, Geokinetics amended its Certificate of Incorporation (i) to reflect changes in the interest rate stated within the First Amended Certificate of Designation of Series C Senior Preferred Stock attached as Exhibit 4.4 hereto and incorporated herein by reference, and (ii) to reflect changes required by the amendment of the rights, preferences and privileges of the Series B Senior Convertible Preferred Stock, as stated within the Fourth Amended Certificate of Designation of Series B Senior Convertible Preferred Stock attached as Exhibit 4.5 hereto and incorporated herein by reference.

SECTION 7 – Regulation FD

Item 7.01.  Regulation FD Disclosure.

On February 15, 2010, Geokinetics issued a press release announcing the completion of its acquisition of PGS Onshore.  A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SECTION 9 – Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits.

(a)   Financial statements of businesses acquired.

Financial statements of the acquired business are incorporated herein by reference to Exhibits 99.2 and 99.3 of this Form 8-K/A.

(b)   Pro forma financial information.

Pro forma financial information is incorporated herein by reference to Exhibit 99.4 of this Form 8-K/A.

(d)	Exhibits.
4.1	Indenture dated as of December 23, 2009 relating to the Notes, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed December 28, 2009.
4.2*	Supplemental Indenture dated as of February 12, 2010.
4.3*	Second Amended and Restated Registration Rights Agreement dated as of February 12, 2010.
4.4*	First Amended Certificate of Designation of Series C Senior Preferred Stock.
4.5*	Fourth Amended Certificate of Designation of Series B Senior Convertible Preferred Stock.
10.1*	Credit Agreement dated as of February 12, 2010 by and among Geokinetics Holdings and Royal Bank of Canada as administrative and collateral agent to the certain lenders named therein.

10.2*	Guaranty dated as of February 12, 2010.
99.1*	Press Release dated February 15, 2010, announcing the completion of the acquisition of the onshore seismic data acquisition and multi-client data library business of Petroleum Geo-Services ASA.
99.2	PGS Onshore—Audited Combined Financial Statements as of December 31, 2008 and 2007 and for the three years ended December 31, 2008, incorporated herein by reference to Exhibit 99.2 to the Current Report on Form 8-K filed December 8, 2009.
99.3	PGS Onshore—Unaudited Condensed Combined Financial Statements as of September 30, 2009 and for the nine months ended September 30, 2009 and 2008, incorporated herein by reference to Exhibit 99.3 to the Current Report on Form 8-K filed December 8, 2009.
99.4	Geokinetics—Unaudited Condensed Pro Forma Combined Financial Information as of September 30, 2009, for the year ended December 31, 2008 and for the nine months ended September 30, 2009 and 2008.

________

*  Previously filed.

SIGNATURE

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

	GEOKINETICS INC.
April 28, 2010	By:	/s/ Scott A. McCurdy
		Scott A. McCurdy
		Senior Vice President and Chief Financial Officer

Exhibit Index

Exhibit Number Title of Document

(d)	Exhibits:
4.1	Indenture dated as of December 23, 2009 relating to the Notes, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed December 28, 2009.
4.2*	Supplemental Indenture dated as of February 12, 2010.
4.3*	Second Amended and Restated Registration Rights Agreement dated as of February 12, 2010.
4.4*	First Amended Certificate of Designation of Series C Senior Preferred Stock.
4.5*	Fourth Amended Certificate of Designation of Series B Senior Convertible Preferred Stock.
10.1*	Credit Agreement dated as of February 12, 2010 by and among Geokinetics Holdings and Royal Bank of Canada as administrative and collateral agent to the certain lenders named therein.
10.2*	Guaranty dated as of February 12, 2010.
99.1*	Press Release dated February 15, 2010, announcing the completion of the acquisition of the onshore seismic data acquisition and multi-client data library business of Petroleum Geo-Services ASA.
99.2	PGS Onshore—Audited Combined Financial Statements as of December 31, 2008 and 2007 and for the three years ended December 31, 2008, incorporated herein by reference to Exhibit 99.2 to the Current Report on Form 8-K filed December 8, 2009.
99.3	PGS Onshore—Unaudited Condensed Combined Financial Statements as of September 30, 2009 and for the nine months ended September 30, 2009 and 2008, incorporated herein by reference to Exhibit 99.3 to the Current Report on Form 8-K filed December 8, 2009.
99.4	Geokinetics—Unaudited Condensed Pro Forma Combined Financial Information as of September 30, 2009, for the year ended December 31, 2008 and for the nine months ended September 30, 2009 and 2008.

________

*  Previously filed

EX-99.4

Exhibit 99.4

Unaudited Condensed Pro Forma Combined Balance Sheet

As of September 30, 2009

	Historical
	Geokinetics			PGS Onshore		Pro Forma Adjustments				Pro Forma Combined
	(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	19,395		$	11,393	$	(11,393	)	(B)
							55,267		(A)	$	74,662
Restricted cash		2,014			335		(335	)	(B)		2,014
Accounts receivable		117,630			49,924		—				167,554
Deferred costs		19,814			—		—				19,814
Prepaid expenses and other current assets		14,921			22,617		(4,539	)	(B)		32,999
Total current assets		173,774			84,269		39,000				297,043
Property and equipment, net		194,933			51,688		—				246,621
Multi-client data library, net		7,934			59,464		—				67,398
Goodwill		73,414			—		45,819		(C)		119,233
Other assets		9,474			16,106		(15,384	)	(B)
							10,079		(D)		20,275
Total assets	$	459,529		$	211,527	$	79,514			$	750,570
LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt and capital leases	$	23,799		$	—	$	(22,584	)	(E)	$	1,215
Accounts payable		36,176			4,938		—				41,114
Accrued liabilities		59,644			22,844		(7,086	)	(B)		75,402
Unearned revenue		29,396			—		—				29,396
Federal income taxes payable		12,565			6,998		(6,998	)	(B)		12,565
Total current liabilities		161,580			34,780		(36,668	)			159,692
Long-term debt and capital lease obligations, net of current		51,594			—		(48,698	)	(E)
							294,279		(F)		297,175
Deferred income taxes and other non-current liabilities		13,716			2,162		—				15,878
Mandatorily redeemable preferred stock		—			—		32,104		(K)		32,104
Total liabilities		226,890			36,942		241,017				504,849
Mezzanine equity		101,054			—		(31,948	)	(L)		69,106
Stockholders’ equity
Common stock		106			—		71		(G)		177
Additional paid-in capital		184,214			—		62,352		(H)		246,566
Accumulated deficit							(174,585	)	(C)
							(8,066	)	(I)
		(52,755	)		174,585		(9,327	)	(J)		(70,148	)
Accumulated other comprehensive income		20			—		—				20
Total stockholders’ equity		131,585			174,585		(129,555	)			176,615
Total liabilities, mezzanine and stockholders’ equity	$	459,529		$	211,527	$	79,514			$	750,570

See accompanying footnotes.

Exhibit 99.4

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Year Ended December 31, 2008

	Historical
	Geokinetics			PGS Onshore			Pro Forma Adjustments				Pro Forma Combined
	(in thousands, except per share data)
Revenues:
Seismic acquisition	$	462,416		$	210,166		$	—			$	672,582
Data processing		12,022			—			—				12,022
Multi-client library		160			68,611			—				68,771
Total revenue		474,598			278,777			—				753,375
Expenses:
Cost of sales		370,238			192,966			—				563,204
Selling and administrative costs		39,341			13,935			2,800		(M)		56,076
Multi-client library amortization		474			45,927			—				46,401
Depreciation and amortization		48,516			14,913			—				63,429
Total expenses		458,569			267,741			2,800				729,110
Loss on disposal of property and equipment		(1,255	)		—			—				(1,255	)
Gain on insurance claim		1,125			—			—				1,125
Operating income		15,899			11,036			(2,800	)			24,135
Other income (expense):
Interest income		815			122			—				937
Interest expense		(6,991	)		(13,479	)		(15,619	)	(N)		(36,089	)
Mandatorily redeemable preferred stock costs		—			—			(3,713	)	(O)		(3,713	)
Other financial items, net		531			(3,449	)		(1,553	)	(P)		(4,471	)
Total other income (expense)		(5,645	)		(16,806	)		(20,885	)			(43,336	)
Income (loss) before income taxes		10,254			(5,770	)		(23,685	)			(19,201	)
Provision for income taxes		9,268			13,483			—				22,751
Net income (loss)		986			(19,253	)		(23,685	)			(41,952	)
Dividends and accretion on preferred stock		6,325			—			7,648		(Q)		13,973
Income (loss) applicable to common stockholders	$	(5,339	)	$	(19,253	)	$	(31,333	)		$	(55,925	)
Income per common share:
Basic and diluted	$	(0.51	)								$	(3.20	)
Weighted average common shares outstanding:
Basic and diluted		10,390						7,111		(G)		17,501

See accompanying footnotes

Exhibit 99.4

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Nine Months Ended September 30, 2009

	Historical
	Geokinetics			PGS Onshore			Pro Forma Adjustments				Pro Forma Combined
	(in thousands, except per share data)
Revenues:
Seismic acquisition	$	376,800		$	137,555		$	—			$	514,355
Data processing		7,812			—			—				7,812
Multi-client library		3,996			4,003			—				7,999
Total revenue		388,608			141,558			—				530,166
Expenses:
Cost of sales		277,927			125,152			—				403,079
Selling and administrative costs		39,113			7,194			2,800		(M)		49,107
Multi-client library amortization		2,664			3,170			—				5,834
Depreciation and amortization		39,014			15,456			—				54,470
Total expenses		358,718			150,972			2,800				512,490
Loss on disposal of property and equipment		(2,142	)		—			—				(2,142	)
Operating income		27,748			(9,414	)		(2,800	)			15,534
Other income (expense):
Interest income		198			335			—				533
Interest expense		(4,526	)		(8,069	)		(15,400	)	(N)		(27,995	)
Mandatorily redeemable preferred stock costs		—			—			(2,785	)	(O)		(2,785	)
Other financial items, net		1,491			1,382			(1,553	)	(P)		1,320
Total other income (expense)		(2,837	)		(6,352	)		(19,738	)			(28,927	)
Income (loss) before income taxes		24,911			(15,766	)		(22,538	)			(13,393	)
Provision for income taxes		18,280			(2,734	)		—				15,546
Net income (loss)		6,631			(13,032	)		(22,538	)			(28,939	)
Dividends and accretion on preferred stock		6,199			—			8,001		(Q)		14,200
Income (loss) applicable to common stockholders	$	432		$	(13,032	)	$	(30,539	)		$	(43,139	)
Income per common share:
Basic and diluted	$	0.04									$	(2.44	)
Weighted average common shares outstanding:
Basic and diluted		10,542						7,111		(G)		17,653

See accompanying footnotes.

Exhibit 99.4

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Nine Months Ended September 30, 2008

	Historical
	Geokinetics			PGS Onshore			Pro Forma Adjustments				Pro Forma Combined
	(in thousands, except per share data)
Revenues:
Seismic acquisition	$	347,596		$	148,703		$	—			$	496,299
Data processing		9,202			—			—				9,202
Multi-client library		42			59,350			—				59,392
Total revenue		356,840			208,053			—				564,893
Expenses:
Cost of sales		278,313			138,368			—				416,681
Selling and administrative costs		29,286			10,708			2,800		(M)		42,794
Multi-client library amortization		370			41,259			—				41,629
Depreciation and amortization		35,345			10,504			—				45,849
Total expenses		343,314			200,839			2,800				546,953
Loss on disposal of property and equipment		(461	)		—			—				(461	)
Gain on insurance claim		697			—			—				697
Operating income		13,762			7,214			(2,800	)			18,176
Other income (expense):
Interest income		510			133			—				643
Interest expense		(5,009	)		(8,847	)		(14,139	)	(N)		(27,995	)
Mandatorily redeemable preferred stock costs		—			—			(2,785	)	(O)		(2,785	)
Other financial items, net		179			(1,593	)		(1,553	)	(P)		(2,967	)
Total other income (expense)		(4,320	)		(10,307	)		(18,477	)			(33,104	)
Income (loss) before income taxes		9,442			(3,093	)		(21,277	)			(14,928	)
Provision for income taxes		4,146			10,526			—				14,672
Net income (loss)		5,296			(13,619	)		(21,277	)			(29,600	)
Dividends and accretion on preferred stock		4,343			—			8,001		(Q)		12,344
Income (loss) applicable to common stockholders	$	953		$	(13,619	)	$	(29,278	)		$	(41,944	)
Income per common share:
Basic and diluted	$	0.09									$	(2.40	)
Weighted average common shares outstanding:
Basic and diluted		10,363						7,111		(G)		17,474

See accompanying footnotes.

Exhibit 99.4

Footnotes to Unaudited Condensed Pro Forma

Combined Financial Information

Unaudited Condensed Pro Forma Combined Balance Sheet Footnotes

All numbers in thousands

(A) Excess proceeds from the note offering and the common stock offering after the acquisition, the restructuring of our preferred stock, the repayment of our outstanding debt and capital lease obligations and fees and expenses.

(B) Effect of the net assets that are not included in the acquisition (the “Excluded Assets”):

Cash	$	11,393
Restricted cash		335
Current deferred tax asset		4,539
Non-Current deferred tax asset		15,384
Deferred tax liabilities and other		(7,086	)
Income taxes payable		(6,998	)
Excluded net assets	$	17,567

We expect that all, or a majority of, the deferred tax amounts will be eliminated prior to closing.

(C) The following table presents the preliminary allocation of the excess purchase price of the net assets acquired:

Net assets of PGS Onshore	$	174,585
Less: Excluded net assets		(17,567	)
Net assets acquired		157,018
Purchase price (1)		202,837
Excess purchase price	$	45,819

(1)  Calculated as follows:

Original purchase price	$	210,000
Issuance of 2,153,616 shares of the Company’s common stock, valued at $12.11 per share for purposes of the transaction		(26,080	)
Cash price paid at closing		183,920
Working capital adjustment		(2,802	)
Adjustment for cash acquired		2,293
Adjusted cash price		183,411
Issuance of 2,153,616 shares of the Company’s common stock at fair market value of $9.02 per share on the day of the acquisition		19,426
Adjusted purchase price	$	202,837

The excess purchase price has been allocated to goodwill as we have not completed our evaluation of the fair value of the acquired assets and assumed liabilities.

(D) Includes the debt issuance cost from the issuance of the notes of $8,645, the new senior secured revolving credit facility of $2,228, the difference between the fair value of the new series of preferred stock exchanged in the preferred stock restructuring plus expenses of $169 less the write off of the deferred financing costs of $963 associated with the retired debt.

Exhibit 99.4

(E) Reflects the repayment of our long-term debt, and substantially all of our capital leases and other obligations.

(F) Includes the issuance of the notes for $300,000 less a discount of 1.907% for estimated net proceeds of $294,279.

(G) Includes the par value of the common stock issued to Petroleum Geo-Services (2,153,616 shares), the shares issued in the equity offering (4,000,000 shares), shares issued as a result of the overallotment to underwriters in the equity offering (207,200 shares), and the shares to be issued in conjunction with exchange of the series C preferred stock (750,000 shares).

(H) Represents the excess of par value of shares issued to Petroleum Geo-Services ($19,404), the shares issued in the equity offering ($33,945), the shares issued as a result of the overallotment to underwriters in the equity offering ($1,804), the revaluation of the common stock warrants ($269), and the shares to be issued in conjunction with the exchange of the series C preferred stock ($6,930).

The fair value of the shares issued to Petroleum Geo-Services on the day of closing was $9.02 per share, the fair value of the shares issued as a result of the overallotment to underwriters in the equity offering was $8.72, and the fair value of the shares issued in conjunction with the exchange of the series C preferred stock was $9.25 per share as these shares were issued in conjunction with the equity offering.

(I) Consists of the impact of commitment fees associated with the bridge loan ($2,750), the advisory fees and expenses associated with the acquisition ($2,800), the early repayment of debt penalties and expenses ($1,553) and the write off of the deferred financing costs associated with the retired debt ($963).

(J) Represents the inducements paid to the holders of the series B-1 and B-2 preferred stock in connection with the modifications of $2,121 in cash and $6,937 in common stock plus the effect of the repricing of the common stock warrants of $269.

(K) Represents the estimated fair value of the series C preferred stock to be issued in connection with the preferred stock restructuring. The new series of preferred stock is considered a mandatorily redeemable financial instrument that is within the scope of ASC 480, “Distinguishing liabilities from equity” and therefore is classified a long-term liability.

(L) Represents the series B-2 preferred stock that was exchanged for the series C preferred stock in connection with the preferred stock restructuring.

Unaudited Condensed Pro Forma Combined Statements of Operations Footnotes

All numbers in thousands

(M) Represents the advisory fees and expenses associated with the PGS Onshore acquisition of $2,800.

(N) The adjustments to interest expense include the following items:

(1) commitment fee for the bridge loan of $2,750 for all periods; plus

(2) the write-off of deferred financing cost associated with the retirement of our current working capital facility of $963 for all periods; plus

Exhibit 99.4

(3) the amortization of debt issuance costs and the original issue discount related to the note offering and the new senior secured revolving credit facility of $3,126, $2,344 and $2,344 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; plus

(4) interest expense on these notes of $29,250, $21,938 and $21,938 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; less

(5) the elimination of interest expense related to the retirement of our current working capital facility and capital leases of $6,991, $4,526 and $5,009 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; and less

(6) the elimination of interest expense relating to indebtedness of PGS Onshore that we will not be assuming of $13,479, $8,069 and $8,847 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively.

	Year Ended			Nine Months Ended
Description	December 31, 2008			September 30, 2009			September 30, 2008
(1) Commitment fee for the bridge loan	$	2,750		$	2,750		$	2,750
(2) Write off of deferred financing costs associated with retired debt		963			963			963
(3) Amortization of deferred financing costs and the original issue discount related to the notes		3,126			2,344			2,344
(4) Interest expense on the notes		29,250			21,938			21,938
(5) Elimination of interest expense		(6,991	)		(4,526	)		(5,009	)
(6) Elimination of PGS Onshore interest expense		(13,479	)		(8,069	)		(8,847	)
Total	$	15,619		$	15,400		$	14,139

(O) Dividends payable and amortization of deferred financing costs related to the series C preferred stock of $3,713, $2,785 and $2,785 for the year ended December 31, 2008 and the nine months ended September 30, 2009 and 2008, respectively. The new series of preferred stock is considered a mandatorily redeemable financial instrument that is within the scope of ASC 480, “Distinguishing liabilities from equity” and therefore is classified as a long-term liability.

(P) Reflects loss on early repayment of debt of $1,533.

(Q) Adjustments to dividends and accretion on preferred stock include the following items:

(1) Increase in the dividend rate on the series B-1 preferred stock of $1,270, $952 and $952 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively; less

(2) Dividends on the series B-2 preferred stock of $2,681, $2,010, and $2,010 for the year ended December 31, 2008, and the nine months ended September 30, 2009 and September 30, 2008, respectively, which were exchanged for series C preferred stock;  plus

(3) Common stock inducement paid to holders of the series B-2 preferred stock of $6,938 for all periods; plus

(4) Cash inducement to holders of the series B-1 preferred stock of $1,451 and to holders of the series B-2 preferred stock of $670, or a total of $2,121 for all periods

Exhibit 99.4

	Year Ended			Nine Months Ended
Description	December 31, 2008			September 30, 2009			September 30, 2008
(1) Increase in the dividend rate on the series B-1 preferred stock	$	1,270		$	952		$	952
(2) Dividends on the series B-2 preferred stock		(2,681	)		(2,010	)		(2,010	)
(3) Common stock inducement to holders of the series C preferred stock		6,938			6,938			6,938
(4) Cash inducement to holders of the series B-1 and C preferred stock		2,121			2,121			2,121
Total	$	7,648		$	8,001		$	8,001