----

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION  Washington, DC 20549                                                            **

**FORM 10-Q**

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

For the  quarterly period ended March 31, 2005

OR

[  ]

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

Commission File Number 0-14488

 

**SEITEL, INC.**

(Exact name of registrant as  specified in charter)

 
 

 
Delaware

76-0025431 

(State or other jurisdiction of  incorporation or organization)

(IRS Employer Identification  Number) 
   
 
10811 S. Westview Circle

 
Building C, Suite 100

77043 

Houston, Texas

(Zip Code) 

(Address of principal executive  offices)

    
 
Registrant's  telephone number, including area code:

(713) 881-8900

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

Yes

[ X ]

No

[    ]

Indicate by check mark whether the registrant is an accelerated filer (asdefined in Rule 12b-2 of the Act).

 

Yes

[    ]

No

[ X ]

 

Indicate by check mark whether theregistrant has filed all documents and reports required to be filed by Sections12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court.

 

Yes

[ X ]

No

[    ]

Asof May 9, 2005, there were 152,295,175 shares of the Company's common stock,par value $.01 per share outstanding.

 

**INDEX**

Page

PART I.

FINANCIAL INFORMATION

 

Item 1. 

Financial Statements

 

Condensed Consolidated Balance Sheets as of

March 31, 2005 (Unaudited) and December 31, 2004...................................................  

3

 

Condensed  Consolidated Statements of Operations (Unaudited) for the

Three Months Ended March 31, 2005 and 2004...........................................................  

4

 

Condensed Consolidated Statements of Comprehensive Loss  (Unaudited) for the

Three Months Ended March 31, 2005  and 2004........................................................... 

5

 

Condensed Consolidated Statements of Stockholders' Equity

for the Year Ended December  31, 2004 and the 

Three Months Ended March 31, 2005  (Unaudited)........................................................ 

6

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

for the Three Months Ended  March 31, 2005 and 2004.................................................  

7

 

Notes  to Condensed Consolidated Interim Financial Statements...................................  

8

 

Item  2.

Management's Discussion and Analysis of

Financial Condition and  Results of Operations.................................................. 

26

 

Item  3.

Quantitative and Qualitative Disclosures

about Market Risk.........................................................................................  

35

 

Item  4.

Controls and Procedures................................................................................  

35

 

PART II.

OTHER INFORMATION.............................................................................................  

36

 

Signatures...............................................................................................................  

38

***Index***

**PART I - FINANCIAL INFORMATION**

**Item 1.  FINANCIALSTATEMENTS**

SEITEL, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

*(In thousands, except share and per share amounts)*

 

(Unaudited)

March 31,

December 31,

2005

2004

ASSETS

      Cash and equivalents

$

43,128

$

43,285

      Restricted cash

163

162

      Receivables

            Trade, net

32,881

41,164

            Notes and other, net

2,446

2,149

      Net seismic data library

143,936

151,230

      Net property and equipment

10,134

11,077

      Oil and gas operations  held for sale

205

223

      Investment in marketable  securities

42

33

      Prepaid expenses,  deferred charges and other 

15,465

14,159

                        
      TOTAL ASSETS

$

248,400

$

263,482

                        
LIABILITIES AND STOCKHOLDERS'  EQUITY

      Accounts payable and  accrued liabilities

$

24,003

$

30,472

      Oil and gas operations  held for sale

24

28

      Debt

            Senior Notes

188,837

188,726

            Notes payable

568

697

      Obligations under  capital leases

4,855

5,294

      Deferred income taxes

513

606

      Deferred revenue

45,216

53,488

TOTAL LIABILITIES

264,016

279,311

                        
COMMITMENTS AND CONTINGENCIES 

                        
STOCKHOLDERS' EQUITY

      Preferred stock, par  value $.01 per share; authorized

            5,000,000 shares;  none issued

-

-

      Common stock, par value  $.01 per share; authorized

            400,000,000  shares; issued and outstanding 

            152,295,175 at  March 31, 2005 and 151,414,143

            at December 31, 2004

1,523

1,514

      Additional paid-in  capital

236,433

235,081

      Retained deficit

(254,530

)

(254,384

)

      Deferred compensation -  restricted stock

(2,132

)

(1,125

)

      Notes receivable from  officers and employees

            for stock  purchases

(15

)

(21

)

      Accumulated other  comprehensive income

3,105

3,106

TOTAL STOCKHOLDERS' DEFICIT

(15,616

)

(15,829

)

                        
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

248,400

$

263,482

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

***Index***

 

SEITEL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS (Unaudited)*(In thousands, except per share amounts)*

Three Months  Ended March 31, 

2005

2004

REVENUE

$

47,306

$

41,264

                        
EXPENSES:

      Depreciation and amortization

33,257

24,083

      Cost of sales

39

74

      Selling, general and administrative  

8,020

8,454

41,316

32,611

                        
INCOME FROM OPERATIONS

5,990

8,653

                        
Interest expense and other, net

(5,950

)

(4,948

)

Foreign currency exchange losses

(192

)

(85

)

Reorganization items

-

(4,147

)

                        
Loss from continuing operations before income taxes

(152

)

(527

)

Provision for income taxes

11

706

Loss from continuing operations  

(163

)

(1,233

)

Income from discontinued operations

17

35

                        
NET LOSS

$

(146

)

$

(1,198

)

                        
Basic and diluted income (loss) per share: |
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