<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

(Mark One)

   (X)     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934.

           For the quarterly period ended March 31, 1997

   ( )     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 0-27564

                             3-D GEOPHYSICAL, INC.

             (Exact name of Registrant as Specified in its Charter)

<TABLE>
<S>                                                                             <C>
                          Delaware                                                          13-3841601
(State or Other Jurisdiction of Incorporation or Organization)                  (I.R.S. Employer Identification No.)

              7076 South Alton Way, Building H
                    Englewood, Colorado                                                       80112
           (Address of Principal Executive Office)                                          (Zip Code)
</TABLE>

Registrant's telephone number, including area code: (303) 290-0214

Indicate by check mark whether the registrant (1) has filed all reports
required 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 the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

The total number of shares of the registrant's Common Stock, $.01 par value per
share, outstanding on May 2, 1997 was 11,625,000.





<PAGE>   2
                             3-D GEOPHYSICAL, INC.
            FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997



<TABLE>
<CAPTION>
PART I.     Financial Information                                                                 Page
<S>                                                                                            <C>
     Item 1  Financial Statements.

        Condensed Consolidated Balance Sheets at                                                 3 - 4
        December 31, 1996 and March 31, 1997

        Condensed Consolidated Statements of Operations for the                                      5
        Three Months Ended  March 31, 1996 and March 31, 1997

        Condensed Consolidated Statements of Cash Flows for the                                      6
        Three Months Ended March 31, 1996 and March 31, 1997

        Notes to Condensed Consolidated Financial Statements                                    7 - 11

     Item 2  Management's Discussion and Analysis of Financial Condition and Results           12 - 15
     of Operations.

PART II.   Other Information


     Item 1  Legal Proceedings.                                                                     16

     Item 2  Changes in Securities.                                                                 16

     Item 3  Defaults Upon Senior Securities.                                                       16

     Item 4  Submission of Matters to a Vote of Security Holders.                                   16

     Item 5  Other Information.                                                                     16

     Item 6  Exhibits and Reports on Form 8-K.                                                      16

Financial Data Schedule                                                                             17
Signatures                                                                                          18
</TABLE>





                                       2
<PAGE>   3





                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)



<TABLE>
<CAPTION>
                                                                  December 31,        March 31,
                                                                       1996             1997
                                                                ---------------   ---------------
<S>                                                             <C>               <C>
ASSETS
Current assets:
     Cash and cash equivalents                                  $        17,624   $         6,556
     Restricted cash                                                        820               800
     Accounts receivable billed, net of the allowance for
         doubtful accounts of $83 and $56 as of December 31,
         1996 and March 31, 1997                                         11,268            17,401
     Accounts receivable, unbilled                                        2,933             3,925
     Other receivables                                                      282               982
     Deferred income taxes                                                  108                68
     Prepaid expenses and other                                             999             1,279
                                                                ---------------   ---------------
                 Total current assets                                    34,034            31,011

Property and equipment, net of accumulated depreciation of
         $5,525 and $6,580 as of December 31, 1996 and
         March 31, 1997                                                  35,529            41,536
Goodwill, net of accumulated amortization of $362 and $490 as
         of December 31, 1996 and March 31, 1997                          6,115             8,556
Other assets                                                              1,588             1,641
                                                                ---------------   ---------------
Total assets                                                    $        77,266   $        82,744
                                                                ===============   ===============
</TABLE>



  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.





                                       3
<PAGE>   4




                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)



<TABLE>
<CAPTION>
                                                                December 31,         March 31, 
                                                                    1996               1997
                                                               ---------------    ---------------
<S>                                                            <C>                <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Current maturities of long-term debt and capital leases   $         7,559    $         7,254
     Accounts payable                                                   12,912              9,784
     Accrued liabilities                                                 1,560              2,491
     Deferred revenue                                                    1,536                 91
                                                               ---------------    ---------------
                 Total  current liabilities                             23,567             19,620


Long-term debt and capital leases, net of current maturities             4,597              6,107
Deferred income taxes                                                      937              1,572

Stockholders' equity:
     Common stock, $.01 par value, 25,000,000 shares
       authorized, 11,100,000 and 11,625,000 shares issued and 
       outstanding, respectively                                           111                116
     Preferred stock, $.01 par value, 1,000,000 shares
       authorized, none issued and outstanding                            --                 --
     Additional paid in capital                                         51,426             57,581
     Retained earnings                                                     739              1,675
     Cumulative foreign currency translation adjustment                 (4,111)            (3,927)
                                                               ---------------    ---------------
Total stockholders' equity                                              48,165             55,445
                                                               ---------------    ---------------

                 Total liabilities and stockholders' equity    $        77,266    $        82,744
                                                               ===============    ===============

</TABLE>


  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.





                                       4
<PAGE>   5



                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                    For the Three Months
                                                           Ended
                                                         March 31,
                                                  1996               1997
                                            ---------------    ---------------
<S>                                         <C>                <C>            
Net revenues                                $         7,052    $        24,699

Expenses
     Cost of data acquisition                         5,018             19,283
     Depreciation and amortization                      633              1,832
     General and administrative expenses                859              2,051
                                            ---------------    ---------------
                                                      6,510             23,166

Operating income                                        542              1,533

Other income (expense)
     Miscellaneous                                      132                442
     Interest expense                                  (142)              (338)
     Foreign currency transaction/
             translation gains (losses)                  68                (60)
                                            ---------------    ---------------
                                                         58                 44

Income before  provision for income taxes
     and extraordinary item                             600              1,577
Provision for income taxes                              138                639
                                            ---------------    ---------------
Income before extraordinary item                        462                938

Extraordinary item, net of tax expense of
      $  36                                              57               --
                                            ---------------    ---------------
Net income                                  $           519    $           938
                                            ===============    ===============

Income per share before extraordinary       $           .09    $           .08
     item
Extraordinary item per share, net of tax
     expense                                            .01               --
                                            ---------------    ---------------
                           

Net earnings per share                      $           .10    $           .08
                                            ===============    ===============



Weighted average common shares
     outstanding                                      5,163             11,934
</TABLE>



  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.





                                       5
<PAGE>   6



                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


<TABLE>
<CAPTION>
                                                             For the Three Months Ended
                                                                      March 31,
                                                               1996                1997
                                                          ---------------    ---------------
<S>                                                       <C>                <C>             
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used by operating activities                     $        (1,862)   $        (8,145)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                  (233)            (1,497)
Consideration paid to acquire seismic data acquisition
         companies                                                (10,328)            (2,664)
Proceeds from sale of property and equipment                           21                  4
                                                          ---------------    ---------------
Net cash used by investing activities                             (10,540)            (4,157)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash paid in connection with public offerings of common
        stock                                                      (3,268)              --
Proceeds from public offerings, net of underwriting
        discounts                                                  32,085              3,701
Retirement of indebtedness of acquired companies                   (4,599)            (1,139)
Principal payments on notes payable and capital leases             (1,134)            (3,626)
Proceeds of borrowings under notes payable                           --                2,300
Dividend paid to owners of predecessor company                     (2,510)              --
                                                          ---------------    ---------------
Net cash provided by financing activities                          20,574              1,236

Net increase (decrease) in cash                                     8,172            (11,066)
Cash at beginning of period                                           609             17,624
Effect of change in exchange rate on cash                              12                 (2)
                                                          ---------------    ---------------
Cash at end of period                                     $         8,793    $         6,556
                                                          ===============    ===============

</TABLE>





  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.





                                       6
<PAGE>   7



                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. ORGANIZATION AND BASIS OF PRESENTATION

On February 9, 1996, 3-D Geophysical, Inc. (the "Company") consummated an
initial public offering (the "Offering") and simultaneously acquired in
separate transactions, in exchange for cash, notes and shares of common stock,
Geoevaluaciones, S.A. de C.V. ("GEO"), Processos Interactivos Avanzados, S.A.
de C.V. ("PIASA"), certain assets and liabilities of the land seismic business
of Northern Geophysical of America, Inc. ("Northern"), Paragon Geophysical,
Inc. ("Paragon") and Kemp Geophysical Corporation ("Kemp") (collectively
referred to as the "Operating Subsidiaries").

For accounting purposes the acquisitions of GEO and PIASA (the "Mexican
Operations") were treated as a recapitalization of GEO and PIASA with GEO
(combined with PIASA)  deemed to be the acquirer of the Company and considered
the predecessor company.

The acquisitions of  Northern, Paragon and Kemp  were treated as business
combinations accounted for by the purchase method of accounting as prescribed
by Accounting Principles Board Opinion No. 16 ("APB 16") and SEC Staff
Accounting Bulletin No. 48.  Northern and Kemp are being valued at the fair
market value of consideration given.  In connection with the acquisitions of
Northern and Kemp, the excess of consideration given over the fair market value
of net assets acquired  is being amortized on a straight-line basis over 15
years.  The acquisition of Paragon's Common Stock in exchange for shares of the
Company's common stock  was accounted for at Paragon's historical costs.   The
accompanying condensed consolidated financial statements include the accounts
of Northern, Kemp and Paragon from February 9, 1996, the effective date of the
acquisitions.  In December 1996, Paragon and Kemp were merged into Northern.

ACQUISITION OF J.R.S. EXPLORATION

On January 27, 1997 the Company consummated the purchase of J.R.S. Exploration
Company, Limited ("J.R.S. Exploration"), a Canadian seismic data acquisition
company, by acquiring all of the issued and outstanding stock of several
intermediate holding companies which existed solely as holding companies for
the stock of J.R.S. Exploration.  On that same date, in a separate transaction,
the Company purchased all of the issued and outstanding stock of Siegfried &
Siegfried Resource Consultants, Limited ("Siegfried & Siegfried"), a Canadian
company owned by a key employee of J.R.S.  Exploration, which leased certain
seismic data acquisition equipment to J.R.S. Exploration.  These acquisitions
were effected through a newly-formed subsidiary of the Company, 3-D Geophysical
of Canada, Inc. ("3-D Canada") whereby shares of 3-D Canada, which are
convertible into shares of the Company on a one-for-one basis, and cash were
exchanged for the stock of the acquired companies.  These acquisitions are
being treated for accounting purposes as purchase business combinations under
the provisions of APB 16, with the excess of consideration paid to acquire
these companies over the fair market value of the assets acquired being
accounted for as goodwill, which is being amortized over a 15-year life on a
straight-line basis.

The condensed consolidated financial statements of the Company include the
operations of J.R.S. Exploration and Siegfried & Siegfried (the "Canadian
Operations") from January 1, 1997, which is the date that management of the
Company and the former shareholders of the acquired companies deem to be the
date upon which the Company assumed effective control of the operations of the
acquired companies.  For accounting purposes, the shares of 3-D Canada are
deemed to be outstanding shares of the Company.  Due to the acquisition of the
Canadian Operations and the acquisitions of Northern, Paragon and Kemp after
the end of the first month in the quarter ended March 31, 1996, and due to the
fact that the United States Operations contain a full quarter of performance
during 1997, the Company's condensed consolidated financial statements as of
and for the three months ended March 31, 1997 are not comparable to the
financial statements of the Company as of and for the three months ended March
31, 1996.





                                       7
<PAGE>   8





                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The consideration paid to the former owners of the Canadian Operations and the
allocation of such consideration to the acquired assets is as follows:

<TABLE>
<CAPTION>
                                                                (in thousands)
                                                                --------------
<S>                                                               <C>       
Cash paid for the stock and assets of the acquired companies      $    2,665
Stock issued to the former owners of the Canadian Operations at
     a price of $9.00 per share                                        2,625
Liabilities assumed:
Bank overdraft                                                           637
Accounts payable                                                       2,019
Accrued and other current liabilities                                    420
Debt assumed:
      Current                                                          1,139
                                                                  ----------
Amounts allocated to acquired assets                              $    9,505
                                                                  ==========

Allocation of the purchase price to the acquired assets:

Cash                                                              $      137
Accounts receivable:
     Trade                                                             3,516
Prepaid expenses and other current assets                                 28
Property and equipment                                                 3,082
Goodwill                                                               2,742
                                                                  ----------
                                                                  $    9,505
                                                                  ==========
</TABLE>


The 1996 year-end condensed balance sheet data was derived from audited
financial statements, but does not include all disclosure required by generally
accepted accounting principles.

In the opinion of the Company, the accompanying condensed consolidated
financial statements include all adjustments which are of a normal recurring
nature necessary to present fairly the Company's financial position at March
31, 1997, the results of its operations for the three-month periods ended March
31, 1996 and 1997, and its cash flows for the three- month periods ended March
31, 1996 and 1997.  All significant intercompany accounts have been eliminated.
Although the Company believes that this disclosure is adequate to make the
information presented not misleading, certain information and footnote
disclosure normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the applicable rules and regulations of the Securities and
Exchange Commission.  These condensed consolidated financial statements should
be read in conjunction with the financial statements included in the Company's
Annual Report on Form 10-K  for the year ended December 31, 1996, which was
filed pursuant to the Securities Exchange Act of 1934, as amended.  The results
of operations for the three-month period ended March 31, 1997 are not
necessarily indicative of the results to be expected for the full year.





                                       8
<PAGE>   9




                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


PRO FORMA INFORMATION

The accompanying summary pro forma information for the Company for the
three-month periods ended March 31, 1996 and 1997 represents the operations of
the Company as if the acquisitions of the Operating Subsidiaries and the
Canadian Operations, and the Company's public offerings had occurred on January
1, 1996.


<TABLE>
<CAPTION>
                                                         For the Three Months Ended
                                                                  March 31,
                                                    (in thousands, except per share data)
                                                             1996              1997
                                                     ----------------  ----------------
<S>                                                  <C>       <C>     <C>       <C>
Net revenues                                         $         14,362  $         24,699
                                                     ================  ================                                  
Extraordinary item, net of tax expense               $             57  $              -
                                                     ================  ================                                  
Net income                                           $            821  $            938
                                                     ================  ================                                  

Income per share before extraordinary item                        .06               .08
Extraordinary item per share, net of tax expense                  .01                 -
                                                     ----------------  ----------------
Earnings per share                                                .07               .08
                                                     ================  ================                                  
</TABLE>

The pro forma results described above assume a weighted average number of
common shares outstanding of 11,934,000.

The summary pro forma information is not necessarily indicative of the actual
results that would have been achieved if the acquisitions of the Operating
Subsidiaries and the Canadian Operations, and the Company's public offerings
had occurred on the date indicated or which may be realized in the future.

REVENUE RECOGNITION AND REVENUE ADJUSTMENTS


The Company generates revenue through providing seismic data acquisition and
geophysical services.  Revenues from seismic data acquisition and geophysical
services are recognized as the work progresses on the percentage of completion
method.

Net revenues may include contractual revenue adjustments from the Company's
operations in Mexico, for which the related seismic data acquisition and
geophysical services have been provided.  These revenue adjustments are based
on independent economic data, primarily the Mexican inflation rate as measured
by the consumer price index.  Contractual revenue adjustments for the three
month periods ended March 31, 1996 and 1997 are not considered by the Company
to be significant to the quarterly financial statements.

2.  SECOND PUBLIC OFFERING OF COMMON STOCK

On December 17, 1996, the Company completed a second public offering of
3,500,000 shares of common stock at a price to the public of $7.50 per share.
Subsequently, on January 2, 1997, the underwriters exercised their
overallotment option to purchase an additional 525,000 shares at a price to the
public of $7.50 per share.  Total proceeds to the Company, net of the
underwriters' discounts and offering costs, were approximately $27.2 million.
Of these net proceeds, $4.0 million was used to pay the cash portion of the
purchase price for the Canadian Operations and to retire certain of their
existing debt obligations, $3.0 million was used to retire certain debt
obligations outstanding under a loan agreement with First Interstate Bank of
Texas, N.A., a subsidiary of Wells Fargo Bank, $20.2 million has been and will
be used to purchase additional seismic data acquisition equipment and for
working capital purposes.







                                       9
<PAGE>   10


                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


3.  CONCENTRATIONS OF CREDIT RISK

During the three months ended March 31, 1997,  one customer accounted for 25%
of net revenues and during the three months ended March 31, 1996, two customers
accounted for 28% and 23% of net revenues, respectively.

As of December 31, 1996, two customers accounted for 33% and 13% of accounts
receivable, respectively, and as of March 31, 1997, one customer accounted for
31% of accounts receivable.

4.  RECENT ACCOUNTING PRONOUNCEMENTS

In February 1997, Statement of Financial Accounting Standards No. 128,
"Earnings per Share", was issued.  This statement, which is required to be
adopted in the fourth quarter of fiscal 1997, establishes standards for
computing and presenting earnings per share ("EPS") and applies to entities
with publicly held common stock.   This statement simplifies the standards for
computing EPS under existing accounting principles and makes it more comparable
to international accounting standards.  This statement requires restatement of
all prior-period EPS data presented, however, management believes that the
adoption of this standard will not have a significant impact on the financial
statements.


5.  EARNINGS PER SHARE

The number of shares used in the EPS calculation is determined as follows:

<TABLE>
<CAPTION>
                                                                         For the Three
                                                                         Months Ended 
                                                                        March 31, 1997
                                                                        --------------
<S>                                                                       <C>
Shares outstanding at December 31, 1996                                   11,100,000
Shares sold in overallotment option relating to second public
           offering                                                          519,167
Shares deemed issued to former owners of J.R.S. Exploration                  291,666
Common stock equivalents, principally common stock options                    22,698
                                                                         -----------
Weighted average common shares outstanding                                11,933,531
                                                                         ===========
</TABLE>


6.    INCOME TAXES

The effective income tax rates for the three months ended March 31, 1996 and
1997 are 23% and  41%, respectively.    The differences between the statutory
federal income tax rate on income before provision for income taxes and
extraordinary item, and the Company's effective income tax rate, result
primarily from the effects of the inflation component of Mexican tax law for
the three months ended March 31, 1996 which caused the Company to realize
inflation related deductions during that time, thereby lowering the effective
tax rate.  During the three months ended March 31, 1997, the Company's tax rate
was slightly higher than the U.S. statutory tax rate due to the Company
realizing taxable income due to the inflation component in Mexico, combined
with the effect of the Company earning substantial taxable income in Canada,
where the statutory tax rate is 45%.





                                       10
<PAGE>   11




                     3-D GEOPHYSICAL, INC. and SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.    COMMITMENTS AND CONTINGENCIES


GEO has a dispute, and may be threatened with litigation, in connection with
certain agreements it entered into with Capilano International Inc., a Canadian
company ("Capilano").  The dispute concerns a certain Letter of Intent  and  a
certain Technical Assistance Agreement, dated June 3, 1991 and June 1, 1992,
respectively  (the "Capilano Agreements").  Capilano stated in its 1994 Annual
Report to Shareholders that it has had difficulty in collecting amounts owing
from a Mexican company (presumably, GEO) to which Capilano supplied technical
assistance and stated in its 1995 Annual Report to Shareholders that it had
written down accounts receivable in Mexico by approximately Canadian $1.9
million (approximately U.S. $1.4 million).  GEO maintains that it is not
obligated to compensate Capilano for certain services GEO believes were either
inadequately provided or not provided at all by Capilano and the parties
disagree upon how certain profits and losses should be allocated under the
Capilano Agreements.  Representatives of Capilano and GEO have had periodic
discussions since May, 1996 in an effort to resolve this dispute. The Company
is not currently able to estimate the effect, if any, on GEO's results of
operations and financial position which may result from  resolution of this
matter.  Accordingly, the Company's financial statements do not reflect any
adjustment related to this matter.  A portion of the amounts payable to the
former stockholders of GEO in connection with the acquisition by the Company of
the stock of GEO owned by such stockholders is held in escrow and available to
pay amounts in settlement or otherwise in connection with the dispute with
Capilano.





                                       11
<PAGE>   12



2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

For accounting purposes, GEO (together with PIASA) is considered the
predecessor company and the financial performance of Northern, Kemp and Paragon
are included as of  February 9, 1996.  In December 1996, Paragon and Kemp were
merged into Northern.  The financial performance of J.R.S. Exploration and
Siegfried & Siegfried are included as of January 1, 1997.  The Company's
statements of operations and cash flows for the three months ended March 31,
1997 are not comparable to the statements of operations and cash flows for the
three months ended March 31, 1996, and the Company's balance sheet as of March
31, 1997 is not comparable to its balance sheet as of December 31, 1996.

The following discussion has been divided into two sections.  The first section
relates to the operating performance of the Company. The second section
discusses the Company's liquidity and capital resources as of March 31, 1997.
For the purposes of this discussion, the operations of GEO, PIASA and 3-D
Geophysical of Latin America, Inc. are considered the "Latin American
Operations", the operations of J.R.S. Exploration and Siegfried & Siegfried are
considered the "Canadian Operations" and the operations of Northern Geophysical
and 3-D Geophysical are considered the "United States Operations".

RESULTS OF OPERATIONS

These forward-looking statements reflect numerous assumptions, involve a number
of risks and uncertainties, and actual results may vary materially.  Among the
factors that could cause actual results to differ materially are:
unanticipated adverse weather conditions; the level of activity in the oil and
gas industry; inflationary trends; interest and exchange rates, and the other
risks detailed from time to time in the Company's filings with the SEC.

Three Months Ended March 31, 1997 compared to March 31, 1996

Net revenues.  Net revenues for the Company increased 250.2%  to $24.7 million
in the three months ended March 31, 1997 from $7.1 million in the three months
ended March 31, 1996.  The increase is primarily attributable to the inclusion
of $5.0 million of net revenues of the Canadian Operations and a 259.2%
increase to $17.6 million in the three months ended March 31, 1997, from $4.9
million in the three months ended March 31, 1996, for the United States
Operations. These increases were partially offset by a 4.8% decrease to $2.0
million for the three months ended March 31, 1997 from $2.1 million for the
three months ended March 31, 1996 for the Latin American Operations.  The
increase in net revenues for the United States Operations is primarily
attributable to a large contract with a major customer in the North Slope
region of Alaska as well as the 1997 period reflecting a full quarter of
performance.  The decrease in revenues for the Latin American Operations
relates to delays in the start-up phases of the 3-D contract which began in
December of 1996 near Poza Rica, Mexico and will be completed this year.

Cost of Data Acquisition.  Cost of data acquisition for the Company increased
284.3% to $19.3 million in the three months ended March 31, 1997 from $5.0
million in the three months ended March 31, 1996.  The increase is primarily
attributable to the inclusion of $3.3 million of cost of data acquisition of
the Canadian Operations and a 305.7% increase to $14.2 million in the three
months ended March 31, 1997, from $3.5 million in the three months ended March
31, 1996, for the United States Operations. The increase in cost of data
acquisition for the United States Operations is primarily attributable to a
large contract with a major customer in the North Slope region of Alaska as
well as 1997 reflecting a full quarter of performance.  Cost of data
acquisition for the Latin American Operations increased 22.8% to $1.8 million
for the three months ended March 31, 1997 from $1.5 million for the three
months ended March 31, 1996.  Gross margins for the United States Operations
decreased to  20% from 29% primarily due to the North Slope project.  This is
due to the fact that much of the equipment utilized to complete that contract
was leased instead of being owned. This situation resulted in large rental costs
being realized in the completion of that project but did not result in a
negative impact on the Company's return on assets.  Gross margins for operations
in the contiguous United States increased to 33% from 29% due to improved
productivity in the Company's operations in Texas and California.   Gross
margins for the Latin American Operations decreased to 9% from 29% due to the
Company not recognizing field margin on the 3-D contract which began in December
of 1996 near Poza Rica, Mexico in order to comply with the Company's accounting





                                       12
<PAGE>   13



2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (continued)

policies.  Such accounting policies do not allow for the recognition of margin
on data acquisition contracts which are not at least 20% complete as measured
by cost incurred to date.

Depreciation and Amortization.  Depreciation and amortization for the Company
increased 189.4% to $1.8 million in the three months ended March 31, 1997 from
$633,000 in the three months ended March 31, 1996. The increase is partially
attributable to the inclusion of $180,000 of depreciation and amortization of
the Canadian Operations and a 147.2% increase to $1.2 million in the three
months ended March 31, 1997, from $500,000 in the three months ended March 31,
1996, for the United States Operations. Depreciation and amortization for the
Latin American Operations increased 212.8% to $416,000 for the three months
ended March 31, 1997 from $133,000 for the three months ended March 31, 1996.
The increase in depreciation and amortization for the United States Operations
and the Latin American Operations is primarily attributable to purchases of
approximately $23.8 million of new seismic data acquisition and related
equipment during 1996.

General and Administrative Expenses.  General and administrative expenses for
the Company increased 138.8% to $2.1 million in the three months ended March
31, 1997 from $859,000 in the three months ended March 31, 1996.  The increase
is partially attributable to the inclusion of $343,000 of general and
administrative expenses of the  Canadian Operations.  In addition, general and
administrative expenses for the United States Operations increased 112.1% to
$1.2 million for the three months ended March 31, 1997 from $581,000 for the
three months ended March 31, 1996.  General and administrative expenses of the
Latin American Operations increased 71.3% to $476,000 for the three months
ended March 31, 1997 from $278,000 for the three months ended March 31, 1996.
General and administrative expenses increased in the United States due to the
added costs associated with being a public company and increased marketing
costs and due to 1997 reflecting a full quarter of performance.  The increase
in general and administrative expenses for the Latin American Operations is due
to the opening of the Company's branch office in Peru and also due to the
addition of support staff in Mexico City needed to complete this year's awarded
contracts.

Operating Income.  Operating income for the Company  increased 182.8% to $1.5
million in the three months ended March 31, 1997 from $542,000 for the three
months ended March 31, 1996.  The increase is primarily attributable to the
inclusion of $1.2 million of operating income from the Canadian Operations and
a 177.7% increase to $1.0 million for the three months ended March 31, 1997
from $365,000 for the three months ended March 31, 1996 for the Company's
operations in the United States.   These increases were partially offset by a
506.2% decrease due to an operating loss of $719,000 for the three months ended
March 31, 1997 from operating income of $177,000 for the three months ended
March 31, 1996 for the Latin American Operations.  Operating income increased
in the United States based on the growth in net revenues and the full quarter
of income being reflected in 1997.  Operating income for the Latin American
Operations decreased due to the Company not recognizing field margin on the 3-D
contract which began in December of 1996 near Poza Rica, Mexico in order to
comply with the Company's accounting policies. Such accounting policies do not
allow for the recognition of margin on data acquisition contracts which are not
at least 20% complete as measured by costs incurred to date.

Miscellaneous Income (Expense).  The Company's miscellaneous income increased
234.8% to $442,000 for the three months ended March 31, 1997, from $132,000 for
the three months ended March 31, 1996.  The increase is primarily the result of
larger amounts of interest income being earned from the unutilized proceeds of
the company's second public offering.

Interest Expense.  The Company's interest expense increased 138.0% to $338,000
for the three months ended  March 31, 1997 from $142,000 for the three months
ended March 31, 1996.   The increase is attributable to interest charges on
borrowings of approximately $8.0 million  of term debt and $2.0 million of
revolving credit under a facility with the Company's principal lender during
the three months ended March 31, 1997.  This credit facility was entered into
in May 1996.





                                       13
<PAGE>   14



2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (continued)

Foreign Currency Losses.   The Company recognized a foreign currency loss of
$60,000 in the three months ended March 31, 1997 compared to a foreign currency
gain of $68,000 in the three months ended March 31, 1996.  The loss is
primarily attributable to the fluctuation of the Peso/Dollar exchange rate.

The inflation rate in Mexico, as measured by the consumer price index, has
exceeded 100% for the three years ended December 31, 1996.  Accordingly, the
Company has adopted the dollar as the functional currency  for the Mexican
Operations beginning January 1, 1997 as prescribed by Statement of Financial
Accounting Standards No. 52 ("Statement 52").  Using the dollar as the
functional currency results in adjustments to the consolidated statement of
operations for foreign currency translation gains and losses.  In 1996, these
amounts were included in cumulative foreign currency translation adjustments,
reflected in stockholders' equity, and were not charged to earnings.  For the
three months ended March 31, 1997, the adjustment resulting from the adoption
of the dollar as the functional currency in accordance with Statement 52 did
not have a significant impact on the financial statements.

Income Tax Expense.  The Company provided for income tax expense from
operations of $639,000 in the three months ended March 31, 1997 compared to
income tax expense of $138,000 in the three months ended March 31, 1996.  The
increase is primarily  attributable to the United States Operations and
Canadian Operations being taxed at 38% and 45% effective tax rates,
respectively,  partially offset by a 36% effective tax rate for losses of the
Latin American Operations.

LIQUIDITY AND CAPITAL RESOURCES

From December 31, 1996 to March 31, 1997, total assets of the Company increased
from $77.3 million to $82.7 million, total liabilities decreased from $29.1
million to $27.3 million and total stockholders' equity increased from $48.2
million to $55.4 million.   These changes are principally due to the
acquisition of the Canadian Operations, the exercise of the underwriters'
overallotment option relating to the company's second public offering and the
1997 first quarter earnings of the Company.

On December 17, 1996, the Company completed a second public offering of
3,500,000 shares of common stock at a price to the public of $7.50 per share.
Subsequently, on January 2, 1997, the underwriters exercised their
overallotment option to purchase an additional 525,000 shares at a price to the
public of $7.50 per share.  The proceeds, net of the underwriters' discounts
and offering costs, were approximately $27.2 million.  Of these net proceeds,
$4.0 million was used to pay the cash portion of the purchase price for the
Canadian Operations and to retire certain of their existing debt obligations,
$3.0 million was used to retire certain debt obligations outstanding under a
loan agreement with Wells Fargo Bank Texas, N. A., formerly First Interstate
Bank of Texas, N. A.,  $20.2 million has been and will be used to purchase
additional seismic data acquisition equipment and for working capital purposes.

At March 31, 1997 the Company had $6.6 million of cash.   The Company utilized
$8.1 million net cash from operating activities in the three months ended March
31, 1997 compared with utilizing $1.9 million in the three months ended March
31, 1996.  The increase in net cash utilized from operating activities is
primarily due to increased revenues in the current year from the Company's
operations in the United States and Canada, which led to growth in the
Company's receivables.

Net cash used in investing activities decreased to $4.2 million in the three
months ended March 31, 1997 from $10.5 million in the same period  in the prior
year.  The decrease is due to both periods including acquisitions of seismic
data acquisition businesses with 1997 reflecting a smaller acquisition than for
the three months ended March 31, 1996.  This  decrease was partially offset by
equipment purchases of $1.5 million during the three months ended March 31,
1997 compared to $233,000 during the three months ended March 31, 1996.





                                       14
<PAGE>   15





2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (continued)

Net cash provided by financing activities decreased to $1.2 million for the
three months ended March 31,1997 from  $20.6 million in the three months ended
March 31, 1996 due to the completion of the Company's initial public offering
in February 1996.

At November 1, 1996, the Company's estimated backlog of commitments for
services totaled $54.6 million.  The Company expects to complete substantially
all of  these commitments during 1997 and 1998; however, commitments are
subject to cancellation at the option of the Company's customers on short
notice and without penalty.

The Company believes that its planned capital expenditures and operating
requirements through the end of 1997 will be funded from cash from operations
and proceeds from the second public offering and other equipment financing if
required.  If other financing is required, there can be no assurance that the
Company will be able to obtain financing on terms favorable to the Company, or
at all.  If the financing sources described above are insufficient to fund the
Company's planned capital expenditures and operating requirements and the
Company is unable to obtain additional financing, the Company may be unable to
complete its capital expenditure program and may be materially and adversely
affected as a result.





                                       15
<PAGE>   16





PART II.       OTHER INFORMATION


Item 1.   Legal Proceedings.

          None

Item 2.   Changes in Securities.

          None

Item 3.   Defaults Upon Senior Securities.

          None

Item 4.   Submission of Matters to a Vote of Security Holders.

          None

Item 5.   Other Information.

          None

Item 6.   Exhibits and Reports on Form 8-K.

          (a) List of exhibits

                  Financial Data Schedule

          (b) The Company filed a Current Report on Form 8-K (the "Form 8-K") on
              March 27, 1997, pursuant to Item 2 of Form 8-K, reporting the
              purchases of J.R.S. Exploration Company Limited and Siegfried &
              Siegfried Resource Consultants Limited (the "Canadian Operations")
              for an aggregate purchase price consisting of C$3,650,000 and
              291,666 shares of the Company's Common Stock.   The cash portion
              of the purchase price for the Canadian Operations was funded from
              the proceeds of the Company's December 1996 public offering.  The
              Company filed Amendment No. 1 to the Form 8-K on April 10, 1997
              for the purpose of reporting the financial statements required to
              be filed pursuant to Item 7 of Form 8-K.





                                       16
<PAGE>   17



                                   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, thereunto duly authorized.

                                    3-D GEOPHYSICAL, INC.
                                        
DATED: May 8, 1997                      
                                    BY:  /S/  RICHARD DAVIS         
                                    Richard Davis
                                    President and Chief Executive Officer
                                        
                                        
                                        
                                        
DATED: May 8, 1997                     
                                    BY:  /S/  RONALD L. KOONS
                                    Ronald L. Koons
                                    Treasurer and Chief Financial Officer
                                    (principal financial and accounting officer)





                                       17