--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


                UNITED STATES SECURITIES 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 September 30, 1999
                                         ------------------
                OR

-----
|   |     TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
-----     EXCHANGE ACT OF 1934
          For the transition period        to       .
                                    ------    ------
          Commission File Number 0-14488
                                 -------


                                  SEITEL, INC.
               (Exact name of registrant as specified in charter)

           DELAWARE                                             76-0025431
           --------                                             ----------
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                            Identification Number)

     50 Briar Hollow Lane
   West Building, 7th Floor
        HOUSTON, TEXAS                                             77027
        --------------                                             -----
     (Address of principal                                      (Zip Code)
      executive offices)

                                 (713) 881-8900
                                 --------------
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
                                 --------------
               Former name, former address and former fiscal year,
                          if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed 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   |   |
                              -----                  -----

As of November 12, 1999 there were  24,285,795  shares of the  Company's  common
stock, par value $.01 per share, outstanding.


--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
                                      INDEX



PART I.  FINANCIAL INFORMATION                                             Page
                                                                          ------

         Item 1.     Financial Statements

         Consolidated Balance Sheets as of
         September 30, 1999 (Unaudited) and December 31, 1998..............  3

         Consolidated Statements of Operations (Unaudited) for the
         Three Months Ended September 30, 1999 and 1998....................  4

         Consolidated Statements of Operations (Unaudited) for the
         Nine Months Ended September 30, 1999 and 1998.....................  5

         Consolidated Statements of Stockholders' Equity (Unaudited)
         for the Nine Months Ended September 30, 1999......................  6

         Consolidated Statements of Cash Flows (Unaudited) for the
         Nine Months Ended September 30, 1999 and 1998.....................  7

         Notes to Consolidated Interim Financial Statements (Unaudited)....  9

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

         Item 3.     Quantitative and Qualitative Disclosures
         about Market Risk................................................. 17

PART II. OTHER INFORMATION................................................. 17

<PAGE>



                         PART I - FINANCIAL INFORMATION


Item 1.    FINANCIAL STATEMENTS
           --------------------

SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
                                                          (Unaudited)
                                                         September 30,      December 31,
                                                             1999              1998
                                                           ---------         ---------
ASSETS
<S>                                                        <C>               <C>
   Cash and equivalents                                    $   5,386         $   3,161
   Receivables
      Trade, net of allowance                                 54,771            59,244
      Notes and other                                            509               581
   Net data bank                                             323,325           262,950
   Net oil and gas properties                                148,612           148,977
   Net other property and equipment                            2,541             2,294
   Investment in marketable securities                         1,566                 -
   Investment in affiliate                                         -            15,544
   Prepaid expenses, deferred charges and other assets         4,786             3,016
                                                           ---------         ---------
TOTAL ASSETS                                               $ 541,496         $ 495,767
                                                           =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY

   Accounts payable and accrued liabilities                $  42,494         $  71,555
   Income taxes payable                                          434             1,056
   Debt
      Senior Notes                                           203,000            65,000
      Line of Credit                                          19,000            85,500
      Term Loans                                                  66               172
   Obligations under capital leases                               28                18
   Contingent payables                                           274               274
   Deferred income taxes                                      30,125            28,039
   Deferred revenue                                            1,463             6,566
                                                           ---------         ---------
TOTAL LIABILITIES                                            296,884           258,180
                                                           ---------         ---------

CONTINGENCIES AND COMMITMENTS

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.01 per share; authorized
      5,000,000 shares; none issued                                -                 -
   Common stock, par value $.01 per share; authorized
      50,000,000 shares; issued and outstanding
      24,285,795 and 23,804,508 at September 30, 1999
      and December 31, 1998, respectively                        243               238
   Additional paid-in capital                                147,839           141,826
   Retained earnings                                         107,186           107,102
   Treasury stock, 175,818 shares at cost at September
      30, 1999 and December 31, 1998                          (2,977)           (2,977)
   Notes receivable from officers and employees               (6,986)           (8,651)
   Accumulated other comprehensive income (loss)                (693)               49
                                                           ---------         ---------
TOTAL STOCKHOLDERS' EQUITY                                   244,612           237,587
                                                           ---------         ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $ 541,496         $ 495,767
                                                           =========         =========
</TABLE>

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


<PAGE>


SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                  September 30,
                                                           ---------------------------
                                                             1999               1998
                                                           ---------         ---------

<S>                                                        <C>               <C>
REVENUE                                                    $  24,617         $  38,332

EXPENSES:
   Depreciation, depletion and amortization                   11,792            19,551
   Cost of sales                                               1,488             1,175
   Selling, general and administrative expenses                6,549             6,453
                                                           ---------         ---------
                                                              19,829            27,179
                                                           ---------         ---------

INCOME FROM OPERATIONS                                         4,788            11,153

Interest expense, net                                         (3,114)           (1,516)
Equity in earnings of affiliate                                    -               344
                                                           ---------         ---------

Income before provision for income taxes                       1,674             9,981

Provision for income taxes                                       850             3,693
                                                           ---------         ---------

NET INCOME                                                 $     824         $   6,288
                                                           =========         =========

Earnings per share:
   Basic                                                   $     .03         $     .28
                                                           =========         =========
   Diluted                                                 $     .03         $     .28
                                                           =========         =========

Weighted average number of common and common
   equivalent shares:

   Basic                                                      24,110            22,634
                                                           =========         =========
   Diluted                                                    24,489            22,818
                                                           =========         =========
</TABLE>

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




<PAGE>


SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                                 Nine Months Ended
                                                                   September 30,
                                                           ---------------------------
                                                              1999              1998
                                                           ---------         ---------

<S>                                                        <C>               <C>
REVENUE                                                    $  96,625         $ 106,235

EXPENSES:
   Depreciation, depletion and amortization                   44,579            52,433
   Cost of sales                                               3,967             3,654
   Selling, general and administrative expenses               21,031            18,875
                                                           ---------         ---------
                                                              69,577            74,962
                                                           ---------         ---------

INCOME FROM OPERATIONS                                        27,048            31,273

Interest expense, net                                         (8,137)           (3,913)
Equity in earnings (loss) of affiliate                           (91)              469
Impairment due to dividend distribution of
   affiliate stock                                            (7,794)               --
                                                           ---------         ---------

Income before provision for income taxes                      11,026            27,829

Provision for income taxes                                     4,577            10,307
                                                           ---------         ---------

NET INCOME                                                 $   6,449         $  17,522
                                                           =========         =========

Earnings per share:
   Basic                                                   $     .27         $     .78
                                                           =========         =========
   Diluted                                                 $     .26         $     .76
                                                           =========         =========

Weighted average number of common and
   common equivalent shares:
   Basic                                                      23,850            22,593
                                                           =========         =========
   Diluted                                                    24,361            22,960
                                                           =========         =========
</TABLE>

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

<PAGE>

SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                     Notes
                                                                                                  Receivable  Accumulated
                                        Common Stock       Additional            Treasury Stock      from        Other
                         Comprehensive------------------    Paid-In   Retained   ---------------  Officers &  Comprehensive
                             Income     Shares    Amount    Capital   Earnings   Shares   Amount   Employees    Income
                            --------  ----------  ------    -------    -------   -------  ------   --------   ----------
<S>                        <C>        <C>        <C>       <C>        <C>       <C>       <C>     <C>        <C>

Balance, December 31, 1997            22,548,408 $   225   $128,406   $ 82,742  (175,818)$(2,977) $  (1,109) $       (14)

   Net proceeds from
     issuance
     of common stock                     106,067       1        983          -         -       -          -            -
   Tax reduction from
     exercise
     of stock options                          -       -        344          -         -       -          -            -
   Sale of common stock to
     officers and employees              794,300       8      8,183          -         -       -     (8,191)           -
   Acquisition of oil and
     gas properties                      355,733       4      3,910          -         -       -          -            -
   Payments received on
     notes receivable from
     officers and employees                    -       -          -          -         -       -        649            -
   Net income              $  24,360           -       -          -     24,360         -       -          -            -
   Foreign currency
     translation
     adjustments net of
     income tax expense
     of $67                       63           -       -          -          -         -       -          -           63
                            --------
   Comprehensive income    $  24,423
                            ========  ----------  ------    -------    -------   -------  ------   --------   ----------

Balance, December 31, 1998            23,804,508     238    141,826    107,102  (175,818) (2,977)    (8,651)          49

   Net proceeds from
     issuance
     of common stock                     481,287       5      5,134          -         -       -          -            -
   Tax reduction from
     exercise
     of stock options                          -       -        879          -         -       -          -            -
   Payments received on
     notes receivable from
     officers and employees                    -       -          -          -         -       -      1,665            -
   Distribution of Eagle
     Geophysical, Inc.
     shares                                    -       -          -     (6,365)        -       -          -            -
   Net income              $   6,449           -       -          -      6,449         -       -          -            -
   Foreign currency
     translation
     adjustments net of
     income tax expense
     of $17                        12           -       -          -          -         -       -          -           12
   Unrealized loss on
     marketable securities
     net of income tax
     benefit of $754            (754)          -       -          -          -         -       -          -         (754)
                            --------
   Comprehensive income    $   5,707
                            ========  ----------  ------    -------    -------   -------  ------   --------   ----------
Balance, September 30, 1999
     (unaudited)                      24,285,795 $   243   $147,839   $107,186  (175,818)$(2,977) $  (6,986) $      (693)
                                      ==========  ======    =======    =======   =======  ======   ========   ==========
</TABLE>

                     The accompanying notes are an integral
                part of these consolidated financial statements.
<PAGE>


SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
                                                                Nine Months Ended
                                                                  September 30,
                                                           ---------------------------
                                                             1999               1998
                                                           ---------         ---------
<S>                                                        <C>               <C>
Cash flows from operating activities:
   Cash received from customers                            $  89,473         $ 108,661
   Cash paid to suppliers and employees                      (26,631)          (17,284)
   Interest paid                                              (6,215)           (3,320)
   Interest received                                             321               298
   Income taxes paid                                          (1,553)           (2,535)
                                                            --------          --------
      Net cash provided by operating activities               55,395            85,820
                                                            --------          --------

Cash flows from investing activities:
   Cash invested in seismic data                            (111,636)         (100,429)
   Cash invested in oil and gas properties                   (25,440)          (31,586)
   Net proceeds from sale of oil and gas properties           11,657                 -
   Cash paid to acquire property and equipment                  (920)             (681)
   Cash from disposal of property and equipment                    -                17
   Investment in marketable securities                        (3,043)                -
                                                            --------          --------
      Net cash used in investing activities                 (129,382)         (132,679)
                                                            --------          --------

Cash flows from financing activities:
   Borrowings under line of credit agreements                 63,908            69,207
   Principal payments under line of credit                  (130,408)          (24,207)
   Principal payments on term loans                             (106)             (262)
   Principal payments on capital lease obligations               (23)              (59)
   Proceeds from issuance of senior notes                    138,000                 -
   Proceeds from issuance of common stock                      5,175             1,015
   Costs of debt and equity transactions                      (2,038)              (66)
   Payments on receivables from officers and employees         1,665                76
                                                            --------          --------
      Net cash provided by financing activities               76,173            45,704
                                                            --------          --------

Effect of exchange rate changes                                   39                79
                                                            --------          --------

Net increase (decrease) in cash and equivalents                2,225            (1,076)

Cash and cash equivalents at beginning of period               3,161             4,881
                                                            --------          --------

Cash and cash equivalents at end of period                 $   5,386         $   3,805
                                                            ========          ========
</TABLE>

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



<PAGE>


SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited), continued
(In thousands)
<TABLE>
<CAPTION>
                                                                Nine Months Ended
                                                                  September 30,
                                                           ---------------------------
                                                             1999               1998
                                                           ---------         ---------

<S>                                                        <C>               <C>
Reconciliation of net income to net cash provided by
   operating activities:
Net income                                                 $   6,449         $  17,522
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Impairment due to dividend distribution of
   affiliate stock                                             7,794                 -
   Equity in loss (earnings) of affiliate                         91              (469)
   Depreciation, depletion and amortization                   44,579            52,432
   Deferred income tax provision                               2,799             4,935
   Non-cash sales                                             (6,522)           (1,140)
   Gain on sale of property and equipment                          -               (13)
   Decrease in receivables                                     4,545             3,623
   Decrease (increase) in other assets                           (40)              347
   Increase (decrease) in other liabilities                   (4,300)            8,583
                                                            --------         ---------
      Total adjustments                                       48,946            68,298
                                                            --------         ---------

Net cash provided by operating activities                  $  55,395         $  85,820
                                                            ========         =========

Supplemental schedule of non-cash investing and
   financing activities:

   Dividend payable of affiliate stock                     $   6,365         $       -
                                                            ========         =========
   Capital lease obligations incurred                      $      33         $       -
                                                            ========         =========
</TABLE>

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

<PAGE>


SEITEL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited)
September 30, 1999

NOTE A-BASIS OF PRESENTATION

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions of Regulation S-X.  Accordingly,  they do
not include all of the  information  and notes  required by  generally  accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Certain reclassifications
have been  made to the  amounts  in the prior  year's  financial  statements  to
conform to the  current  year's  presentation.  Operating  results  for the nine
months ended  September 30, 1999 are not  necessarily  indicative of the results
that  may be  expected  for the year  ending  December  31,  1999.  For  further
information,  refer to the financial  statements  and notes thereto for the year
ended December 31, 1998  contained in the Company's  Annual Report filed on Form
10-K with the Securities and Exchange Commission.

     The Company  accounts for its  marketable  equity  securities in accordance
with Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain  Investments in Debt and Equity Securities."  Management  determines the
appropriate  classification of marketable securities at the time of purchase and
reevaluates   such  designation  at  each  balance  sheet  date.  The  Company's
marketable securities are categorized as  available-for-sale  and are carried at
fair value, with unrealized holding gains and losses, net of taxes, reflected in
accumulated other  comprehensive  income included in stockholders'  equity until
realized.  For the  purpose of  computing  realized  gains and  losses,  cost is
identified on a specific identification basis.

NOTE B-EARNINGS PER SHARE

     In accordance  with SFAS No. 128,  "Earnings per Share," basic earnings per
share  is  computed  based  on the  weighted  average  shares  of  common  stock
outstanding during the periods.  Diluted earnings per share is computed based on
the weighted  average shares of common stock plus the assumed issuance of common
stock for all potentially dilutive  securities.  Earnings per share computations
to  reconcile  basic and diluted net income for the three and nine months  ended
September 30, 1999 and 1998 consist of the  following  (in thousands  except per
share amounts):
<TABLE>
<CAPTION>

                                                     Three Months Ended                   Nine Months Ended
                                                       September 30,                        September 30,
                                                 -------------------------          -------------------------
                                                   1999            1998                1999           1998
                                                 ---------      ----------          ----------      ---------

<S>                                            <C>            <C>                 <C>             <C>
Net income                                     $       824    $      6,288        $      6,449    $    17,522
                                                 =========      ==========          ==========      =========

Basic weighted average shares                       24,110          22,634              23,850         22,593
Effect of dilutive securities: (1)<F1>
   Options and warrants                                379             184                 511            367
                                                 ---------      ----------          ----------      ---------
Diluted weighted average shares                     24,489          22,818              24,361         22,960
                                                 =========      ==========          ==========      =========
Per share income:
   Basic                                       $       .03    $        .28        $        .27    $       .78
   Diluted                                     $       .03    $        .28        $        .26    $       .76
-------------------
<FN>
(1)<F1>  During the third  quarter of 1999 and 1998 and the first nine months of
         1999 and 1998,  a weighted  average  number of options and  warrants to
         purchase 4,543,000, 3,873,000, 4,072,000 and 2,563,000 shares of common
         stock were  outstanding,  respectively,  but were not  included  in the
         computation of diluted per share income  because their exercise  prices
         were greater than the average market price of the common shares.
</FN>
</TABLE>


<PAGE>


NOTE C-DATA BANK

     Costs incurred in the creation of proprietary  seismic data,  including the
direct and incremental costs of Company personnel engaged in project  management
and design,  are capitalized.  Substantially all (greater than 87%) of the costs
incurred to develop the  Company's  data bank have been for programs  created by
the Company.  The Company uses the income  forecast method to amortize the costs
of seismic data programs it creates.  Under the income forecast method,  seismic
data costs are amortized in the proportion  that revenue for a period relates to
management's  estimate of ultimate  revenues.  Since  inception,  management has
established guidelines regarding its annual charge for amortization. Under these
guidelines,  seismic data created by the Company is amortized in a set period of
time based on historical  experience with both the timing and amount of revenue.
Management  estimates  that 90% of the costs incurred in the creation of seismic
data is amortized  within five years of such data becoming  available for resale
for  two-dimensional  seismic data and within seven years of such data  becoming
available for resale for  three-dimensional  seismic data. If anticipated  sales
fall below the benchmark  guidelines,  amortization is accelerated.  The Company
also purchases existing seismic data programs from other companies. The costs of
purchased seismic data programs are generally amortized on a straight-line basis
over ten years; however, the costs of a significant purchase (greater than 5% of
the net book value of the data  bank),  are  amortized  using the greater of the
income forecast  method or ten-year  straight-line  method.  As of September 30,
1999,  almost  all (96%) of the net costs of the  Company's  data bank are fully
amortized within 10 years from when such data becomes available for resale.

     In certain cases,  the Company grants seismic licenses to third parties for
data to be used in their  operations  (not for resale) in exchange for exclusive
ownership of seismic data from the third party. The Company  recognizes  revenue
for the licenses  granted and records a data library  asset for the seismic data
acquired. These transactions are accounted for as non-monetary exchanges and are
valued at the fair market  value of such  licenses  based on values  realized in
cash  transactions with other third parties for similar seismic data. During the
first  nine  months  of 1999,  the  Company  licensed  seismic  data  valued  at
$6,522,000 in exchange for the purchase of seismic data for its library.

NOTE D-OIL AND GAS PROPERTIES

     The  Company  accounts  for  its oil and  gas  exploration  and  production
activities  using the full-cost  method of  accounting.  Under this method,  all
costs  associated with  acquisition,  exploration and development of oil and gas
reserves,  including  directly related overhead costs and interest costs related
to its unevaluated properties and certain properties under development which are
not  currently  being  amortized,  are  capitalized.  For the nine months  ended
September 30, 1999 and 1998, general and administrative  costs of $1,474,000 and
$1,276,000,  respectively,  have been capitalized to oil and gas properties. For
the nine months ended September 30, 1999 and 1998,  interest costs of $2,343,000
and $1,790,000, respectively, have been capitalized to oil and gas properties.

     On July 26, 1999,  the Company sold its 18.75%  working  interest in 11 oil
and gas wells,  one salt water disposal well and  approximately  16,000 acres of
leasehold and options to lease for net proceeds of approximately $11.7 million.

     The Company has announced its intentions to sell  approximately  90% of its
ownership in DDD Energy, Inc. ("DDD Energy"), a wholly-owned subsidiary, through
an initial public  offering  expected to close during the first quarter of 2000.
In the  event  the sale is not  completed,  DDD  Energy  will  continue  to be a
wholly-owned  subsidiary of the Company.  The Company does not anticipate a loss
will be incurred on this  transaction.  Proceeds from the proposed offering will
be used to reduce debt and provide funds for seismic data library additions.

NOTE E-INVESTMENT IN EAGLE GEOPHYSICAL, INC.

     On April 22, 1999, the Board of Directors of Seitel,  Inc.  declared to its
common  stockholders a dividend consisting of the 1,520,000 shares of the common
stock of Eagle Geophysical,  Inc.  ("Eagle") owned by the Company.  The dividend
was declared at the rate of approximately 0.064 shares of Eagle common stock for
each share of Seitel, Inc. common stock owned as of the close of business on the
record date of May 18, 1999.

         The fair market  value of the common stock of Eagle held by the Company
on the date this dividend was declared was lower than the carrying  value of the
stock on the Company's  balance  sheet;  therefore,  a non-cash,  non-recurring,
pre-tax impairment, net of bonus effect, of $7,794,000 was recorded for the nine
months ended September 30, 1999.


<PAGE>

NOTE F-INDUSTRY SEGMENTS

         SFAS NO. 131,  "Disclosures About Segments of an Enterprise and Related
Information,"  established  standards for reporting  information about operating
segments in annual  financial  statements and requires  selected  information in
interim financial reports. Selected financial information for the three and nine
months ended September 30, 1999 and 1998 is as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                        Exploration
                                                                                            and                    Total
                                                                  Seismic                Production               Segments
                                                                ------------            -------------           -------------
Three months ended September 30, 1999
-------------------------------------
<S>                                                           <C>                     <C>                     <C>
Revenue from external purchasers                              $      19,804           $        4,813          $       24,617
Depreciation, depletion
  and amortization                                                    9,300                    2,188                  11,488
Cost of sales                                                            96                    1,392                   1,488
Segment operating income                                             10,408                    1,233                  11,641
Capital expenditures (a)<F1>                                         18,795                    3,845                  22,640
Assets                                                              379,784                  154,867                 534,651

Three months ended September 30, 1998
-------------------------------------
Revenue from external purchasers                              $      33,714           $        4,618          $       38,332
Depreciation, depletion
  and amortization                                                   16,009                    3,323                  19,332
Cost of sales                                                            39                    1,136                   1,175
Segment operating income                                             17,666                      159                  17,825
Capital expenditures (a)<F1>                                         43,509                   12,179                  55,688
Assets (b)<F2>                                                      317,292                  156,623                 473,915

Nine months ended September 30, 1999
------------------------------------
Revenue from external purchasers                              $      83,266           $       13,359          $       96,625
Depreciation, depletion
  and amortization                                                   37,380                    6,326                  43,706
Cost of sales                                                           227                    3,740                   3,967
Segment operating income                                             45,659                    3,293                  48,952
Capital expenditures (a)<F1>                                         97,998                   17,970                 115,968
Assets                                                              379,784                  154,867                 534,651

Nine months ended September 30, 1998
------------------------------------
Revenue from external purchasers                              $      91,807           $       14,428          $      106,235
Depreciation, depletion
  and amortization                                                   42,085                    9,697                  51,782
Cost of sales                                                           151                    3,503                   3,654
Segment operating income                                             49,571                    1,228                  50,799
Capital expenditures (a)<F1>                                        106,841                   33,761                 140,602
Assets (b)<F2>                                                      317,292                  156,623                 473,915

<FN>
(a)<F1>  Includes other ancillary equipment.
(b)<F2>  Balance as of December 31, 1998.

</FN>
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                                                              Three Months Ended                    Nine Months Ended
                                                                September 30,                         September 30,
                                                        -----------------------------       -----------------------------
                                                            1999             1998              1999              1998
                                                        ------------      -----------       -----------      ------------
<S>                                                   <C>               <C>               <C>              <C>
Income from continuing operations before income taxes:
     Total reportable segment operating income        $       11,641    $      17,825     $      48,952    $       50,799
     Selling general and administrative expense               (6,549)          (6,453)          (21,031)          (18,875)
     Interest expense, net                                    (3,114)          (1,516)           (8,137)           (3,913)
     Equity in earnings (loss) of affiliate                        -              344               (91)              469
     Impairment due to dividend distribution of
       affiliate stock                                             -                -            (7,794)                -
     Eliminations and other                                     (304)            (219)             (873)             (651)
                                                        ------------      ------------      -----------      ------------
     Income from continuing operations before
       income taxes                                   $        1,674    $       9,981     $      11,026    $       27,829
                                                        ============      ===========       ===========      ============
</TABLE>


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

OVERVIEW

     The  Company's  income from core  seismic  marketing  and  exploration  and
production operations was $824,000 for the third quarter of 1999 and $11,574,000
for the nine months ended  September 30, 1999 as compared to $6,064,000  for the
third quarter of 1998 and  $17,216,000  for the nine months ended  September 30,
1998.  Additionally,  in the first nine months of 1999,  the Company  recorded a
non-cash,  non-operating  loss on the dividend  distribution  of affiliate stock
totaling  $5,066,000,  net of tax,  along with  equity in loss of  affiliate  of
$59,000, net of tax, bringing net income for the nine months ended September 30,
1999 to  $6,449,000.  In the third  quarter and first nine  months of 1998,  the
Company  recorded  its equity in the  earnings  of  affiliate  of  $224,000  and
$306,000,  net of tax,  respectively,  bringing third quarter 1998 net income to
$6,288,000 and the first nine months of 1998 net income to $17,522,000.

RESULTS OF OPERATIONS

     Total revenue was $24,617,000 and $38,332,000 in the third quarters of 1999
and 1998,  respectively,  and  $96,625,000  and  $106,235,000  in the first nine
months of 1999 and 1998,  respectively.  Revenue  primarily  consists of revenue
generated from the marketing of seismic data and oil and gas production.

     Revenue from the  marketing of seismic  data was  $19,804,000  in the third
quarter of 1999  compared to  $33,714,000  in the third  quarter of 1998 and was
$83,266,000  in the first nine  months of 1999  compared to  $91,807,000  in the
first  nine  months of 1998.  During  the third  quarter  of 1999,  the  Company
continued to focus on client  interest in its existing  data library  versus the
new data  creation  market.  The Company's  existing data library  available for
resale continued to increase significantly through the first quarter of 1999 due
to the  creation  of seismic  data and the  purchase  of the Amoco  Canada  data
library in February  1999.  As a result,  revenue from the licensing of existing
data  increased  between the  periods;  however,  such  increase was offset by a
decrease in revenue from new data creation.  Because of the current  emphasis on
marketing  existing data, the Company reduced the amount of expenditures made in
creating  new  seismic  data in the  second  and third  quarters  of 1999  which
resulted in a decrease in revenue associated with the creation of new data.

     Oil and gas revenue was $4,813,000 in the third quarter of 1999 compared to
$4,618,000  in the third  quarter of 1998.  The  increase  between  periods  was
primarily due to higher prices  received by the Company for both its natural gas
and crude oil production during the third quarter of 1999, partially offset by a
decrease in natural gas  production.  Oil and gas revenue was $13,359,000 in the
first nine months of 1999  compared to  $14,428,000  in the first nine months of
1998.  The  decrease  in oil and gas  revenue  for the  nine  month  period  was
primarily  caused by both lower  natural gas  production  and prices  during the
first nine  months of 1999.  The  decrease  in natural  gas  production  between
periods was primarily due to production  declines  experienced on certain of the
Company's older wells. Additionally, in July 1999, the Company sold its interest
in 11 oil  and gas  wells,  five  of  which  were  producing,  whose  production
partially offset these declines during the first six months of 1999. The Company
anticipates  that wells that came  on-line in the third  quarter of 1999 and new
wells anticipated to come on-line in the fourth quarter of 1999 will offset most

<PAGE>

of this production  decline.  Net volume and price information for the Company's
oil and gas  production for the third quarters and first nine months of 1999 and
1998 are summarized in the following table:
<TABLE>
<CAPTION>

                                                           Quarter Ended                         Nine Months Ended
                                                           September 30,                           September 30,
                                                    ----------------------------            ----------------------------
                                                      1999              1998                  1999              1998
                                                    ----------       -----------            ----------       -----------
<S>                                                   <C>               <C>                   <C>               <C>
Natural gas volumes (mmcf)                            1,150             1,622                 4,226             4,543
Average natural gas price ($/mcf)                 $    2.65        $     2.20             $    2.18        $     2.35
Crude oil/condensate volumes (mbbl)                     101                88                   282               286
Average crude oil/condensate price ($/bbl)        $   16.50        $    11.22             $   13.73        $    12.36
</TABLE>

     Depreciation,  depletion and amortization  consists  primarily of data bank
amortization and depletion of oil and gas properties. Data bank amortization was
$9,300,000  during the third quarter of 1999 compared to $16,009,000  during the
third quarter of 1998 and was  $37,380,000  during the first nine months of 1999
compared  to  $42,085,000  during the first nine  months of 1998.  The amount of
seismic data  amortization  fluctuates  based on the level of seismic  marketing
revenue.  As a percentage  of revenue from  licensing  seismic  data,  data bank
amortization was 48% for the third quarters of 1999 and 1998 and was 46% for the
first nine months of 1999 and 1998. As of September  30, 1999,  almost all (96%)
of the net costs of the Company's data bank are fully amortized  within 10 years
from  when  such data  becomes  available  for  resale.  See Note C for  further
discussion of the Company's seismic data amortization policy.

     Depletion of oil and gas properties was $2,188,000 for the third quarter of
1999 compared to $3,323,000  for the third  quarter of 1998,  which  amounted to
$1.25 and $1.55, respectively, per mcfe of gas produced during such periods. For
the nine months  ended  September  30, 1999 and 1998,  depletion  of oil and gas
properties was $6,326,000 and $9,697,000,  respectively, which amounted to $1.07
and $1.55,  respectively,  per mcfe of gas  produced  during such  periods.  The
decreases  in the  rate are due to the  significant  increase  in the  Company's
proved reserves as of January 1, 1999 as determined by the Company's independent
reserve  engineers  resulting  from both new  discoveries  in 1998 and  positive
revisions to previous  reserve  estimates.  In the third  quarter of 1999,  this
decrease in rate was partially offset as a result of the sale of proved reserves
in connection with the sale of the Company's interest in 11 oil and gas wells in
July 1999.

     Cost of sales consists of expenses  associated  with oil and gas production
and seismic resale support  services.  Oil and gas production  costs amounted to
$1,392,000  or $.79 per mcfe of gas produced and  $3,740,000 or $.63 per mcfe of
gas produced in the third  quarter and first nine months of 1999,  respectively.
This compares to  $1,136,000 or $.53 per mcfe of gas produced and  $3,503,000 or
$.56 per mcfe of gas  produced  in the third  quarter  and first nine  months of
1998, respectively.  The increase in this rate in the third quarter is primarily
due to (1) an  increase  in the per mcfe rate  associated  with lease  operating
expenses as a result of the operating costs remaining  relatively constant while
the  production  declined,  (2) higher  workover  costs  incurred and (3) higher
production  taxes resulting from the higher prices received in the third quarter
of 1999. The increase in this rate for the nine month period is primarily due to
an increase in the per mcfe rate associated  with lease operating  expenses as a
result  of  the  operating  costs  remaining  relatively  while  the  production
declined.

     The Company's selling,  general and administrative expenses were $6,549,000
and  $21,031,000  during  the  third  quarter  and  first  nine  months of 1999,
respectively,  compared to $6,453,000 and  $18,875,000  during the third quarter
and first nine months of 1998,  respectively.  The increase  between  periods is
primarily due to legal and other  non-recurring  expenses  incurred in the third
quarter and first nine months of 1999 and an  increase in costs  resulting  from
the Company's  expansion in Canada.  These increases were partially  offset by a
reduction  of  variable   expenses,   including   commissions   on  revenue  and
compensation tied to pre-tax profits. As a percentage of revenue, total selling,
general and  administrative  expenses were 27% and 22% for the third quarter and
first nine months of 1999,  respectively,  and 17% and 18% for the third quarter
and first nine months of 1998, respectively.

     Net interest expense was $3,114,000 and $8,137,000 in the third quarter and
first nine months of 1999,  respectively,  compared to $1,516,000 and $3,913,000
in the third quarter and first nine months of 1998,  respectively.  The increase
was  primarily  due to the  addition of $138 million of senior notes on February
12, 1999 at an average  interest rate of 7.3% partially offset by lower interest
expense on the  Company's  revolving  line of credit due to lower  amounts being
borrowed.
<PAGE>

     On April 22,  1999,  the Board of  Directors  of  Seitel,  Inc.  declared a
dividend to its common  stockholders  consisting of the 1,520,000  shares of the
common stock of Eagle  Geophysical,  Inc. owned by the Company.  The fair market
value of the common stock of Eagle held by the Company on the date this dividend
was  declared was lower than the  carrying  value of the stock on the  Company's
balance sheet; therefore, a non-cash, non-recurring,  pre-tax impairment, net of
bonus effect, of $7,794,000 was recorded for the nine months ended September 30,
1999.

     The  Company's  effective  income  tax rate  was 51% and 42% for the  third
quarter  and first nine months of 1999,  respectively,  compared to 37% for both
the third  quarter and first nine months of 1998.  The increase in the effective
income tax rate for the third quarter of 1999 was due to the estimated effective
tax rate for the year  increasing  to 38.7% from 37.7% as  estimated at June 30,
1999 as a result  of  Canadian  operations  reflecting  a larger  percentage  of
pre-tax  profits  than  had  been  originally  estimated.  The  increase  in the
effective  income tax rate for the nine months ended  September 30, 1999 was due
to the makeup of the income tax expense  for the  period.  Income tax expense in
the first nine months of 1999 consisted of two items:  (1) income tax expense on
income from core operations at the Company's  estimated annual tax rate of 38.7%
offset  by  (2)  income  tax  benefit  on the  non-recurring  loss  on  dividend
distribution  of  affiliate  stock at the tax rate of 35%.  The net of these two
items  resulted in the higher  effective tax rate.  The Company's  effective tax
rate for the remainder of 1999 is estimated to be approximately 38.7%.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash flow from  operating  activities  was  $55,395,000,  and
$85,820,000 for the nine months ended September 30, 1999 and 1998, respectively.
The decrease from 1998 to 1999 was  primarily  due to a decrease in  collections
from customers caused by the Company's reduced level of revenue  associated with
the creation of new data and timing  differences  in payments to  suppliers  and
employees.

     The Company has a $75 million  unsecured  revolving line of credit facility
that matures on March 16, 2001. The facility bears interest at a rate determined
by the ratio of the Company's debt to cash flow from operations. Pursuant to the
interest rate pricing structure, funds can currently be borrowed at LIBOR plus 1
1/2%,  the  bank's  prevailing  prime  rate,  or the  sum of the  Federal  Funds
effective rate for such day plus 1/2%. Certain restrictions exist that limit the
amount of  borrowings  that the  Company  can make  under this  facility.  As of
November 12,  1999,  the balance  outstanding  on the  revolving  line of credit
amounted to $18,000,000 bearing an average interest rate of 6.1875%.

     On December 28, 1995,  the Company  completed a private  placement of three
series  of   unsecured   Senior  Notes   totaling   $75  million.   The  Company
contemporaneously  issued  its Series A Notes and  Series B Notes,  which  total
$52.5 million and bear interest at a fixed rate of 7.17%.  On April 9, 1996, the
Company  issued its Series C Notes,  which total $22.5 million and bear interest
at a fixed rate of 7.48%.  The Series A Notes mature on December  30, 2001,  and
require annual principal  payments of $8.3 million beginning  December 30, 1999.
The  Series B and  Series C Notes  mature on  December  30,  2002,  and  require
combined  annual  principal  payments of $10 million which began on December 30,
1998. Interest on all series of the notes is payable  semi-annually on September
30 and December 30.

     On February 12, 1999,  the Company  completed a private  placement of three
series of unsecured Senior Notes totaling $138 million. The Series D Notes total
$20 million,  bear  interest at a fixed rate of 7.03% and mature on February 15,
2004, with no principal  payments due until  maturity.  The Series E Notes total
$75 million,  bear  interest at a fixed rate of 7.28% and mature on February 15,
2009, with annual  principal  payments of $12.5 million  beginning  February 15,
2004.  The Series F Notes total $43  million,  bear  interest at a fixed rate of
7.43% and mature on February  15,  2009,  with no  principal  payments due until
maturity. Interest on all series of the notes is payable semi-annually beginning
on August 15, 1999. The Company used a majority of the proceeds to repay amounts
then  outstanding  under its  revolving  lines of credit and the  remainder  for
capital expenditures.

     The Company may offer from time to time in one or more series (i) unsecured
debt securities,  which may be senior or subordinated,  (ii) preferred stock and
(iii) common stock or any  combination of the  foregoing,  up to an aggregate of
$41,041,600 pursuant to an effective "shelf"  registration  statement filed with
the Securities and Exchange Commission ("SEC").

     In addition,  under another effective "shelf" registration  statement filed
with the SEC, the Company may offer up to an aggregate  of  $200,000,000  of the
following  securities,  in any  combination,  from  time  to time on one or more
series:  unsecured  debt  securities,  which may be  senior  or  unsubordinated;
preferred stock; common stock; and trust preferred securities.

     From  January 1, 1999,  through  November 12,  1999,  the Company  received
$5,175,000 from the exercise of common stock purchase  warrants and options.  In
connection  with these  exercises,  the Company will also receive  approximately
$879,000 in tax savings.

     On July 26, 1999, the Company's wholly-owned  subsidiary,  DDD Energy, sold
its 18.75%  working  interest in 11 oil and gas wells,  one salt water  disposal
well and  approximately  16,000 acres of leasehold  and options to lease for net
proceeds of approximately $11.7 million.

     The Company has announced its intentions to sell  approximately  90% of its
ownership in DDD Energy,  through an initial public  offering  expected to close
during the first  quarter of 2000. In the event the sale is not  completed,  DDD
Energy will continue to be a wholly-owned subsidiary of the Company. The Company
does not anticipate a loss will be incurred on this  transaction.  Proceeds from
the proposed  offering will be used to reduce debt and provide funds for seismic
data library additions.

     During December 1997, the Company  repurchased 175,000 shares of its common
stock in the open market at a cost of $2,973,000, pursuant to a stock repurchase
program authorized by the Board of Directors on December 12, 1997. The Board has
authorized  expenditures  of up to $25  million  towards the  repurchase  of its
common stock.

     During the first nine months of 1999, gross seismic data bank additions and
capitalized  oil  and  gas   exploration  and  development   costs  amounted  to
$97,816,000 and $17,618,000 respectively. These capital expenditures, as well as
taxes, interest expenses, cost of sales and general and administrative expenses,
were funded by  operations,  proceeds  from the sale of oil and gas  properties,
proceeds  from the  exercise of common  stock  purchase  warrants  and  options,
borrowings  under the Company's  revolving  line of credit and proceeds from the
issuance of senior notes.

     Currently,  the Company anticipates capital  expenditures for the remainder
of  1999  to  total  approximately  $20  million.   Such  expenditures   include
approximately  $14 million for the creation of  proprietary  seismic  data,  and
approximately  $6 million for oil and gas exploration  and development  efforts.
The Company believes its current cash balances,  revenues from operating sources
and proceeds  from the exercise of common stock  purchase  warrants and options,
combined with its available  revolving  line of credit,  should be sufficient to
fund the  remaining  1999  capital  expenditures,  along with  expenditures  for
operating  and general and  administrative  expenses.  If these  sources are not
sufficient to cover the  Company's  anticipated  expenditures  or if the Company
were to increase its planned  capital  expenditures  for 1999, the Company could
arrange for additional debt or equity financing during 1999; however,  there can
be no assurance  that the Company would be able to  accomplish  any such debt or
equity financing on satisfactory  terms. If such debt or equity financing is not
available on  satisfactory  terms,  the Company could reduce its current capital
budget or any proposed  increases to its capital budget,  and fund  expenditures
with cash flow generated from operating sources.

Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS
No.  133, as  amended,  is  required to be adopted on January 1, 2001,  although
earlier  adoption  is  permitted.   The  statement  establishes  accounting  and
reporting  standards  requiring  that  every  derivative  instrument  (including
certain derivative  instruments  embedded in other contracts) be recorded in the
balance  sheet as either an asset or liability  measured at its fair value.  The
statement  requires  that changes in the  derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related results on the hedged item in the income statement,  and requires
that a company formally  document,  designate,  and assess the  effectiveness of
transactions that receive hedge  accounting.  The Company has not yet quantified
the impact of adopting  Statement 133.  However,  the Company  anticipates  that
application  of the statement  will not have a material  impact on the Company's
financial position or results of operations.

Year 2000

     Many currently  installed  computer systems and software products are coded
to accept only two-digit  entries in the date code field.  Beginning in the year
2000,  these  date  code  fields  will  need to  accept  four-digit  entries  to
distinguish  21st century dates from 20th century dates.  As a result,  computer
systems and software  used by many  companies  may need to be upgraded to comply
with such "Year 2000"  requirements.  Significant  uncertainty exists concerning
the potential effects  associated with such compliance,  but systems that do not
properly  recognize such  information  could generate  erroneous data or cause a
system to fail.

     Compliance  Program.  In order to address the Year 2000 issue,  the Company
appointed  the Chief  Operating  Officer  ("COO") to assure  that key  automated
systems and related processors would remain functional through 2000. The COO and
the Company's Information Systems Manager addressed the project by reviewing the
information   technology  ("IT")  and  non-information   technology  systems  to
determine  whether they were Year 2000  compliant.  Also, they prepared a formal
questionnaire for all significant suppliers, customers, and service providers to
determine the extent to which the Company was vulnerable to those third parties'
failure to remediate the Year 2000 problem.

     Company's  State of Readiness.  A review and assessment of the  information
technology and  non-information  technology  systems was completed as of January
31,  1999 and did not  identify  any  material  systems  which are not Year 2000
compliant.  The  Company  prepared  and  sent  a  formal  questionnaire  to  all
significant  suppliers,  customers and service providers to determine the extent
to which the Company is vulnerable to those third parties'  failure to remediate
the Year 2000 problem.  The Company  requested that these  companies  respond no
later than June 30,  1999.  As of November  12,  1999,  the Company has received
written  assurances  of  Year  2000  compliance  from  approximately  57% of its
suppliers,  customers  and service  providers.  Companies who have not responded
have been sent second requests to respond to the questionnaire.  The Company has
received oral  assurances of Year 2000 compliance from many of the third parties
with whom it has  relationships.  The Company  believes that its operations will
not be  significantly  disrupted even if third parties with whom the Company has
relationships are not Year 2000 compliant.
<PAGE>

     Costs to Address Year 2000 Compliance  Issues. The Company believes that it
will not be required to make any material  expenditures to address the Year 2000
problem as it relates to its existing  systems.  The Company estimates its total
costs already  expended and to be expended will be less than $100,000.  To date,
costs incurred to address Year 2000  compliance have been internal in nature and
have been charged to income as  incurred.  Such costs have been funded from cash
provided by operating  activities.  However,  uncertainty  exists concerning the
potential costs and effects  associated with any Year 2000  compliance,  and the
Company  intends to continue to make  efforts to ensure that third  parties with
whom it has relationships  are Year 2000 compliant.  The Company is not aware of
any IT projects that have been delayed due to the Year 2000 compliance program.

     Risk of  Non-Compliance  and  Contingency  Plan.  The goal of the Year 2000
project has been to ensure that all of the critical systems and processes, which
are under the direct control of the Company, remain functional. However, because
certain  systems and processes may be  interrelated  with systems outside of the
control of the Company,  there can be no assurance that all implementations will
be  successful.  The principal  area of risk to the Company is thought to be the
contracting  of  seismic  acquisition  crews and  vessels.  A likely  worst case
scenario is that despite the Company's efforts,  there could be a failure of the
global positioning system used by seismic acquisition crews and vessels that the
Company  contracts  which  could  result  in  the  temporary  cessation  of  the
acquisition of seismic data. However, the Company believes that the risk of such
occurrence is low based upon its  discussions  concerning  Year 2000  compliance
with  third  party  seismic  contractors.  As part  of the  Year  2000  project,
contingency plans will be developed to respond to any potential failures as they
may  be  identified.  There  can  be no  assurance  that  unexpected  Year  2000
compliance problems of either the Company or its vendors,  customers and service
providers  would not  materially  and adversely  affect the Company's  business,
financial  condition or operating results.  The Company will continue throughout
1999 to consider the likelihood of a material  business  interruption due to the
Year 2000 issue.

Information Regarding Forward Looking Statements

     This  Quarterly  Report on Form 10-Q includes  forward  looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the Securities  Exchange Act of 1934.  Although the Company believes that its
expectations are based on reasonable assumptions,  it can give no assurance that
its goals will be achieved.  Among the important factors that could cause actual
results to differ materially from those in the forward looking statements herein
include,  but are not  limited  to,  changes in the  exploration  budgets of the
Company's  seismic data and related services  customers,  actual customer demand
for the Company's seismic data and related services, the extent of the Company's
success in acquiring oil and gas properties and in  discovering,  developing and
producing  reserves,  the timing and extent of changes in  commodity  prices for
natural gas,  crude oil and condensate and natural gas liquids and conditions in
the capital markets and equity markets during the periods covered by the forward
looking  statements.  The foregoing and other risk factors are identified in the
Company's  Annual  Report on Form 10-K filed with the  Securities  and  Exchange
Commission for the year ended December 31, 1998.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
           ----------------------------------------------------------

     The  Company  is  exposed  to market  risk,  including  adverse  changes in
commodity prices,  interest rates and foreign currency exchange rates.  Refer to
the  Company's  Form 10-K for the year ended  December  31,  1998 for a detailed
discussion of these risks. The following  information  discusses  changes in the
Company's market risk exposures since December 31, 1998.

Commodity Price Risk

     During  1999,  the Company has entered  into  natural gas swaps in order to
hedge a portion of anticipated natural gas production.  As of November 12, 1999,
the Company had open  commodity  price  hedges  totaling  2,595,000  MMbtu at an
average price of $2.52 per MMbtu.

Interest Rate Risk

     In February 1999, the Company completed a private placement of three series
of unsecured  Senior Notes totaling $138 million at an average  interest rate of
7.3%.  The Series D Notes total $20  million,  bear  interest at a fixed rate of
7.03% and mature on February  15,  2004,  with no  principal  payments due until
maturity. The Series E Notes total $75 million, bear interest at a fixed rate of
7.28% and mature on February 15, 2009, with annual  principal  payments of $12.5
million beginning February 15, 2004. The Series F Notes total $43 million,  bear
interest  at a fixed  rate of 7.43% and mature on  February  15,  2009,  with no
principal payments due until maturity. The carrying value and fair value of this
debt are the same.
<PAGE>

                           PART II - OTHER INFORMATION


Items 1., 2., 3.  Not applicable.
---------------------------------

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

     The Company's  Annual  Meeting of  Stockholders  was held on July 29, 1998.
Matters voted upon at the Annual Meeting,  and the results of those votes are as
follows:

1. The election of nine directors to serve until the 2000 Annual Meeting.

      Name                    No. of Votes For            No. of Votes Withheld
--------------------    --------------------------     -------------------------

Herbert M. Pearlman              21,931,489                      674,081
Paul A. Frame                    21,931,489                      674,081
Horace A. Calvert                21,931,489                      674,081
David S. Lawi                    21,931,489                      674,081
Debra D. Valice                  21,931,489                      674,081
Walter M. Craig, Jr.             21,931,489                      674,081
William Lerner                   21,931,089                      674,481
John E. Stieglitz                21,931,289                      674,281
Fred S. Zeidman                  21,931,289                      674,281



<PAGE>


2.  Approval of proposed  amendments to the  Company's  Non-Employee  Directors'
Stock Option Plan.

  No. of Votes For         No. of Votes Against         No. of Votes Abstained
--------------------    --------------------------     -------------------------

    5,789,492                    10,585,152                      121,720

3. Approval of the appointment of the public  accounting firm of Arthur Andersen
LLP to act as the Company's  independent  Certified  Public  Accountants for the
year of 1999.

  No. of Votes For         No. of Votes Against         No. of Votes Abstained
--------------------    --------------------------     -------------------------

   22,444,447                       107,715                       53,408

Item 5.  Other Information.
--------------------------

     A shareholder  who wishes to make a proposal at the 2000 Annual  Meeting of
Shareholders  without  complying with the  requirements  of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended (and therefore without including the
proposal  in  the  Company's  proxy  materials)   should  notify  the  Company's
Secretary, at the Company's principal executive offices, of that proposal by May
8, 2000.  If a  shareholder  fails to give that  notice by that  date,  then the
persons named as proxies in the proxy cards  solicited by the Company's Board of
Directors for that meeting will be entitled to vote the proxy cards held by them
regarding that proposal, if properly raised at the meeting, in their discretion.


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

          (a) Exhibits

               10.1 Non-Employee Directors' Retirement Plan

               10.2 Amendment No. 2 to Seitel, Inc. 1998 Employee Stock Purchase
                    Plan

               10.3 Amended and Restated 1998 Employee Stock Purchase Plan

               10.4 Amendment No. 4, dated as of August 10, 1999,  among Seitel,
                    Inc., a Delaware  Corporation;  the Lenders  executing  this
                    Agreement;  and the First National Bank of Chicago, as Agent
                    for the Lenders

               10.5 First Amendment,  dated as of July 14, 1999, to the Separate
                    Note  Purchase  Agreements,  dated as of February  12, 1999,
                    among Seitel, Inc. and the Noteholders

               10.6 Second Amendment, dated as of July 14, 1999, to the Separate
                    Note  Purchase  Agreements,  dated as of December  28, 1995,
                    among Seitel, Inc. and the Noteholders

          (b) Not applicable



<PAGE>



                                   SIGNATURES


     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,

the  registrant  has duly  caused  this report to be signed on its behalf by the

undersigned thereunto duly authorized.


                                       SEITEL, INC.




Dated:  November  12,  1999            /s/  Paul A. Frame
                                       -----------------------------------------
                                            Paul A. Frame
                                            President




Dated:  November  12,  1999            /s/  Debra D. Valice
                                       -----------------------------------------
                                            Debra D. Valice
                                            Chief Financial Officer




Dated:  November  12,  1999            /s/  Marcia H. Kendrick
                                       -----------------------------------------
                                                Marcia H. Kendrick
                                                Chief Accounting Officer




<PAGE>





                                     EXHIBIT
                                      INDEX
-------  ----------------------------------------------------------  -----------

Exhibit  Title                                                           Page
                                                                        Number
-------  ----------------------------------------------------------  -----------

10.1     Non-Employee Directors' Retirement Plan                           21

10.2     Amendment No. 2 to Seitel, Inc. 1998 Employee
         Stock Purchase Plan                                               32

10.3     Amended and Restated 1998 Employee Stock Purchase Plan            34

10.4     Amendment No. 4, dated as of August 10, 1999, among
         Seitel, Inc., a Delaware Corporation; the Lenders
         executing this Agreement; and the First National Bank of
         Chicago, as Agent for the Lenders                                 62

10.5     First  Amendment,  dated  as  of  July  14,  1999,
         to  the  Separate  Note  Purchase Agreements,
         dated as of February 12, 1999, among Seitel, Inc.
         and the Noteholders                                               79

10.6     Second  Amendment,  dated  as of  July  14,  1999,
         to  the  Separate  Note  Purchase Agreements,
         dated as of December 28, 1995, among Seitel, Inc.
         and the Noteholders                                               94