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 March 31, 2000

                  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                      (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)

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




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 May 11, 2000 there were 23,640,613  shares of the Company's  common stock,
par value $.01 per share outstanding.


<PAGE>


                                      INDEX


                                                                            Page
PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements

          Consolidated Balance Sheets as of
          March 31, 2000 (Unaudited) and December 31, 1999................... 3

          Consolidated Statements of Operations  (Unaudited) for the
          Three Months Ended March 31, 2000 and 1999......................... 4

          Consolidated Statements of Stockholders' Equity (Unaudited)
          for the Three Months Ended March 31, 2000.......................... 5

          Consolidated Statements of Cash Flows (Unaudited)
          for the Three Months Ended March 31, 2000 and 1999................. 6

          Notes to Consolidated Interim Financial Statements................. 8

          Item 2.  Management's Discussion and Analysis of
                   Financial Condition and Results of Operations............. 10

          Item 3.  Quantitative and Qualitative Disclosures
                   about Market Risk......................................... 13

PART II.  OTHER INFORMATION.................................................. 14



<PAGE>




SEITEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
                                                                (Unaudited)
                                                                  March 31,          December 31,
                                                                    2000                 1999
                                                                  ---------           ---------
<S>                                                               <C>                 <C>
ASSETS
   Cash and equivalents                                           $   4,727           $   5,188
   Receivables
     Trade (net)                                                     39,076              62,240
     Notes and other                                                    284                 436
   Net data bank                                                    339,373             329,885
   Net oil and gas properties                                       151,378             150,166
   Net other property and equipment                                   2,373               2,421
   Investment in marketable securities                                  993                 993
   Prepaid expenses, deferred charges and other assets                4,420               4,590
                                                                  ---------           ---------

   TOTAL ASSETS                                                   $ 542,624           $ 555,919
                                                                  =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
   Accounts payable and accrued liabilities                       $  39,057           $  49,785
   Income taxes payable                                                 141                 373
   Debt
     Senior Notes                                                   184,667             184,667
     Line of credit                                                  37,000              40,500
     Term loans                                                           -                  33
   Obligations under capital leases                                      33                  23
   Contingent payables                                                  274                 274
   Deferred income taxes                                             33,678              32,778
   Deferred revenue                                                   1,678               4,462
                                                                  ---------           ---------
TOTAL LIABILITIES                                                   296,528             312,895
                                                                  ---------           ---------

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
      24,321,131 and 24,285,795 at March 31, 2000
     and December 31,1999, respectively                                 243                 243
   Additional paid-in capital                                       147,727             147,549
   Retained earnings                                                112,622             110,117
   Treasury stock, 680,518 shares at cost at
     March 31, 2000 and December 31, 1999                            (6,279)             (6,279)
   Notes receivable from officers and employees                      (6,661)             (6,915)
   Accumulated other comprehensive loss                              (1,556)             (1,691)
                                                                  ---------           ---------
TOTAL STOCKHOLDERS' EQUITY                                          246,096             243,024
                                                                  ---------           ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $ 542,624           $ 555,919
                                                                  =========           =========
</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 March 31,
                                                                        ----------------------------
                                                                           2000               1999
                                                                         --------           --------

<S>                                                                      <C>                <C>
REVENUE                                                                  $ 28,431           $ 37,881


EXPENSES
   Depreciation, depletion and amortization                                13,159             17,739
   Cost of sales                                                            1,650              1,292
   Selling, general and administrative expenses                             6,670              7,204
                                                                         --------           --------
                                                                           21,479             26,235
                                                                         --------           --------

INCOME FROM OPERATIONS                                                      6,952             11,646

Interest expense, net                                                      (3,098)            (2,163)
Equity in loss of affiliate                                                     -                (91)
Impairment due to dividend distribution
   of affiliate stock                                                           -             (7,794)
                                                                         --------           --------

Income before provision for income taxes                                    3,854              1,598
Provision for income taxes                                                  1,349                848
                                                                         --------           --------

NET INCOME                                                               $  2,505           $    750
                                                                         ========           ========

Net income per share:
   Basic                                                                 $    .11           $    .03
                                                                         ========           ========
   Diluted                                                               $    .11           $    .03
                                                                         ========           ========


Weighted average number of common and common equivalent shares:
   Basic                                                                   23,625             23,635
                                                                         ========           ========
   Diluted                                                                 23,743             23,945
                                                                         ========           ========
</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>
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       5,126          -         -        -           -             -
  Tax reduction from exer-
     cise of stock options                       -     -         597          -         -        -           -             -
  Treasury stock purchased                       -     -           -          -  (504,700)  (3,302)          -             -
  Payments received on
     notes receivable from
     officers and employees                      -     -           -          -         -        -       1,736             -
  Distribution of Eagle Geo-
     physical, Inc.shares                        -     -           -     (6,365)        -        -           -             -
  Net income               $    9,380            -     -           -      9,380         -        -           -             -
  Foreign currency trans-
     lation adjustments          (695)           -     -           -          -         -        -           -          (695)
  Unrealized loss on
     marketable securities
     net of income
     tax benefit of $526       (1,045)           -     -           -          -         -        -           -        (1,045)
                             --------
  Comprehensive income     $    7,640
                             ========   ---------- -----   ---------  ---------  --------  -------    --------    ----------

Balance, December 31, 1999              24,285,795   243     147,549    110,117  (680,518)  (6,279)     (6,915)       (1,691)
  Net proceeds from issuance
     of common stock                        35,336     -         156          -         -        -           -             -
  Tax reduction from exer-
     cise of stock options                       -     -          22          -         -        -           -             -
  Payments received on
     notes receivable from
     officers and employees                      -     -           -          -         -        -         254             -
  Net income               $    2,505                                    2,505
  Foreign currency trans-
     lation adjustments           135            -     -           -          -         -        -           -           135
                             --------
  Comprehensive income     $    2,640
                             ========   ---------- -----   ---------  ---------  --------  -------    --------    ----------

Balance, March 31, 2000
       (unaudited)                      24,321,131 $ 243   $ 147,727  $ 112,622  (680,518) $(6,279)   $ (6,661)   $   (1,556)
                                        ========== =====   =========  =========  ========  =======    ========    ==========
</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>
                                                                           Three Months Ended March 31,
                                                                            -------------------------
                                                                               2000           1999
                                                                            ---------      ----------
<S>                                                                        <C>            <C>
Cash flows from operating activities:
   Cash received from customers                                            $   48,811     $    42,579
   Cash paid to suppliers and employees                                       (14,515)        (12,426)
   Interest paid                                                               (4,223)           (840)
   Interest received                                                              258             199
   Income taxes paid                                                             (659)           (466)
                                                                            ---------      ----------
     Net cash provided by operating activities                                 29,672          29,046
                                                                            ---------      ----------

Cash flows from investing activities:
   Cash invested in seismic data                                              (20,587)        (62,623)
   Cash invested in oil and gas properties                                     (5,639)        (10,786)
   Cash paid to acquire property and equipment                                   (186)           (143)
   Deferred IPO costs                                                            (759)              -
                                                                            ---------      ----------
     Net cash used in investing activities                                    (27,171)        (73,552)
                                                                            ---------      ----------

Cash flows from financing activities:
   Borrowings under line of credit agreement                                   14,900          18,323
   Principal payments under line of credit                                    (18,400)       (103,823)
   Principal payments on term loans                                               (33)            (41)
   Principal payments under capital lease obligations                             (12)            (18)
   Proceeds from issuance of senior notes                                           -         138,000
   Proceeds from issuance of common stock                                         158              45
   Costs of debt and equity transactions                                           (2)         (2,018)
   Payments on notes receivable from officers and employees                       254             339
                                                                            ---------      ----------
     Net cash provided (used) by financing activities                          (3,135)         50,807
                                                                            ---------      ----------

Effect of exchange rate changes                                                   173             (30)
                                                                            ---------      ----------

Net increase (decrease) in cash and equivalents                                  (461)          6,271

Cash and cash equivalents at beginning of period                                5,188           3,161
                                                                            ---------      ----------

Cash and equivalents at end of period                                      $    4,727     $     9,432
                                                                            =========      ==========
</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>
                                                                               Three Months Ended March 31,
                                                                               ---------------------------
                                                                                 2000               1999
                                                                               --------           --------
<S>                                                                            <C>                <C>
Reconciliation of net income to net cash provided by operating activities:
Net income                                                                     $  2,505           $    750
Adjustments to reconcile net income to net cash provided by
     operating activities:
   Impairment due to dividend distribution of affiliate stock                         -              7,794
   Depreciation, depletion and amortization                                      13,159             17,739
   Deferred income tax provision (benefit)                                          900             (2,307)
   Non-cash sales                                                                     -             (4,035)
   Equity in loss of affiliate                                                        -                 91
   Decrease in receivables                                                       23,316             12,684
   Decrease in other assets                                                         289                486
   Decrease in accounts payable and other liabilities                           (10,497)            (4,156)
                                                                               --------           --------
     Total adjustments                                                           27,167             28,296
                                                                               --------           --------

Net cash provided by operating activities                                      $ 29,672           $ 29,046
                                                                               ========           ========



Supplemental schedule of non-cash investing and financing activities:
   Dividend payable of affiliate stock                                         $      -           $  6,365
                                                                               ========           ========
   Capital lease obligations incurred                                          $     22           $      -
                                                                               ========           ========
</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)
March 31, 2000

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 accounting  principles
generally  accepted in the United States 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 three months ended March 31, 2000 are not necessarily indicative
of the results that may be expected for the year ending  December 31, 2000.  For
further information, refer to the financial statements and notes thereto for the
year ended December 31, 1999  contained in the Company's  Annual Report filed on
Form 10-K with the Securities and Exchange Commission.

NOTE B-EARNINGS PER SHARE

         In accordance with Statement of Financial Accounting Standards ("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  diluted
securities.  Earnings per share  computations to reconcile basic and diluted net
income  for the three  months  ended  March  31,  2000 and 1999  consist  of the
following (in thousands except per share amounts):
<TABLE>
<CAPTION>
                                                            Three Months Ended March 31,
                                                         ------------------------------------
                                                            2000                      1999
                                                         ----------                ----------

<S>                                                      <C>                       <C>
Net income                                               $    2,505                $      750
                                                         ==========                ==========

Basic weighted average shares                                23,625                    23,635
Effect of dilutive securities: (1)<F1>
   Options and warrants                                         118                       310
                                                         ----------                ----------
Diluted weighted average shares                              23,743                    23,945
                                                         ==========                ==========
Per share income:
   Basic                                                 $      .11                $      .03
   Diluted                                               $      .11                $      .03
-------------------
<FN>
(1)<F1>  A weighted  average  quarter-to-date  number of options and warrants to
         purchase   6,159,000  and   4,758,000   shares  of  common  stock  were
         outstanding  during the first  quarter of 2000 and 1999,  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>

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 88%) 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. 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
expectations,  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 March 31, 2000, almost all (96%)
of the net costs of the Company's  data bank are expected to be fully  amortized
within 10 years from when such data becomes available for resale.
<PAGE>

         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  parties for similar  seismic
data. During the first quarter of 1999, the Company licensed seismic data valued
at $4,035,000 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 are capitalized,  including salaries, benefits and other internal costs
directly attributable to these activities.  Costs associated with production and
general corporate activities are expensed in the period incurred.  For the three
months  ended  March 31,  2000 and 1999,  exploration  and  development  related
overhead costs of $478,000 and $479,000,  respectively, have been capitalized to
oil and gas  properties.  Interest  costs  related to  unproved  properties  and
certain  properties  under  development  are  also  capitalized  to oil  and gas
properties.  For the three months ended March 31, 2000 and 1999,  interest costs
of $745,000 and $775,000,  respectively,  have been  capitalized  to oil and gas
properties.

NOTE E-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 as of and for the
three months ended March 31, 2000 and 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                Exploration
                                                                                    and              Total
                                                                 Seismic         Production        Segments
                                                                ---------        ---------        ----------
<S>                                                             <C>              <C>              <C>
As of and for the three months ended March 31, 2000
---------------------------------------------------
Revenue from external purchasers                                $  23,019        $   5,412        $  28,431
Depreciation, depletion
  and amortization                                                 10,288            2,572           12,860
Cost of sales                                                          77            1,573            1,650
Segment operating income                                           12,654            1,267           13,921
Capital expenditures (a)<F1>                                       19,758            3,809           23,567
Assets                                                            380,574          156,913          537,487

As of and for the three months ended March 31, 1999
---------------------------------------------------
Revenue from external purchasers                                $  33,922        $   3,959        $  37,881
Depreciation, depletion
  and amortization                                                 15,378            2,081           17,459
Cost of sales                                                          65            1,227            1,292
Segment operating income                                           18,479              651           19,130
Capital expenditures (a)<F1>                                       55,789            9,699           65,488
Assets                                                            347,358          161,947          509,305

<FN>
(a)<F1>  Includes other ancillary equipment.
</FN>
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                                Three months ended March 31,
                                                                                 --------------------------
                                                                                  2000             999
                                                                                 ---------        ---------
<S>                                                                              <C>              <C>
Income before income taxes:
     Total reportable segment operating income                                   $  13,921        $  19,130
     Selling general and administrative expense                                     (6,670)          (7,204)
     Interest expense, net                                                          (3,098)          (2,163)
     Equity in loss of affiliate                                                         -              (91)
     Impairment due to dividend distribution of affiliate stock                          -           (7,794)
     Eliminations and other                                                           (299)            (280)
                                                                                 ---------        ---------
     Income before income taxes                                                  $   3,854         $  1,598
                                                                                 =========        =========
</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 $2,505,000 for the first quarter of 2000 as compared
to $5,875,000 for the first quarter of 1999. Additionally,  in the first quarter
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 first quarter 1999
net income to $750,000.

RESULTS OF OPERATIONS

         Total revenue was  $28,431,000 and $37,881,000 in the first quarters of
2000 and 1999,  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 $23,019,000 in the first
quarter of 2000  compared to  $33,922,000  in the first  quarter of 1999. In May
1999,  the Company made a  management  decision to focus its  marketing  team on
licensing of existing  data that would  generate  current cash flow.  Management
continued  this  decision to limit data  creation in the first  quarter of 2000,
which was the primary reason for lower seismic revenue than in the first quarter
of 1999.

         Net  volume  and  price  information  for  the  Company's  oil  and gas
production  for the  first  quarters  of 2000  and  1999  is  summarized  in the
following table:
<TABLE>
<CAPTION>
                                                                    Quarter Ended
                                                                      March 31,
                                                        ----------------------------------
                                                           2000                     1999
                                                        ---------               ----------
<S>                                                     <C>                     <C>
Natural gas volumes (mmcf)                                  1,305                    1,630
Average natural gas price ($/mcf)                       $    2.75               $     1.85
Crude oil/condensate volumes (mbbl)                            70                       84
Average crude oil/condensate price ($/bbl)              $   25.27               $    10.12
</TABLE>

         Oil and  gas  revenue  was  $5,412,000  in the  first  quarter  of 2000
compared to $3,959,000 in the first quarter of 1999. The increase in oil and gas
revenue was primarily  attributable  to higher market prices in the 2000 quarter
offset by lower production volumes as compared to the first quarter of 1999. The
decline  in oil  and gas  production  was  primarily  due to  normal  production
declines  experienced  on  several  of the  Company's  older  wells as well as a
decline  related to a group of wells that was sold in July 1999.  These declines
were partially offset by production from newer wells.

         Depreciation,  depletion and  amortization  consists  primarily of data
bank   amortization  and  depletion  of  oil  and  gas  properties.   Data  bank
amortization   was  $10,288,000  in  the  first  quarter  of  2000  compared  to
$15,378,000   in  the  first  quarter  of  1999.  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
46% for the first  quarters of 2000 and 1999. See Note C for a discussion of the
Company's seismic data amortization policy.
<PAGE>

         Depletion of oil and gas properties was $2,572,000 in the first quarter
of 2000 compared to $2,081,000 for the first quarter of 1999,  which amounted to
$1.49 and $.98, respectively,  per mcfe of gas produced during such periods. The
rate per mcfe  varies with the  estimate  of proved oil and gas  reserves of the
Company at each quarter end, as well as evaluated  property costs.  The increase
in the rate was primarily due to lower proved reserves at March 31, 2000 than at
March 31, 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  $1,573,000 or $.91 per mcfe of gas produced in the first quarter of
2000  compared  to  $1,227,000,  or $.57 per mcfe of gas  produced  in the first
quarter of 1999.  The increase in this rate was primarily due to workover  costs
related to two wells in the first quarter of 2000 being higher than the workover
costs incurred in the first quarter of 1999.

         The  Company's  selling,   general  and  administrative  expenses  were
$6,670,000  in the first  quarter of 2000  compared to  $7,204,000  in the first
quarter of 1999.  This decrease  primarily  resulted from a decrease in variable
expenses  related to revenue and pretax profits which was partially offset by an
increase  in overhead  costs due to the growth of the  Company's  operations  in
Canada between periods and certain nonrecurring costs in 2000.

         Net  interest  expense  was  $3,098,000  in the first  quarter  of 2000
compared to $2,163,000 in the first quarter of 1999.  The increase was primarily
due to the series of senior notes  totaling $138 million being  outstanding  for
the entire first quarter of 2000 whereas they were only outstanding for one-half
of the first quarter of 1999.

         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. currently 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 at March 31, 1999.

         The Company's  effective  income tax rate was 35% for the first quarter
of 2000 compared to 53% for the first quarter of 1999. Income tax expense in the
first quarter 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% 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.

Liquidity and Capital Resources

         The  Company's   cash  flow  from   operations  was  $  29,672,000  and
$29,046,000  for the three months  ended March 31, 2000 and 1999,  respectively.
The small increase from 1999 to 2000 was primarily  attributable  to an increase
in  collections  from customers  partially  offset by an increase in payments to
suppliers and employees and increased interest expense paid.

         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  borrowing  that the  Company  can make  under  this
facility.  The balance  outstanding  on the revolving  line of credit at May 11,
2000 was $38 million bearing an average interest rate of 6.96%.
<PAGE>

         On November 9, 1999,  the Company's  wholly-owned  subsidiary,  Olympic
Seismic Ltd.  ("Olympic"),  entered into revolving credit facilities which allow
it to borrow up to $5 million  (Canadian  dollars) by way of prime based  loans,
bankers'  acceptances,  or letters of credit.  Prime  based  loans and  bankers'
acceptances  bear  interest at the rate of the bank's  prime rate plus 0.35% per
annum and  0.50% per  annum,  respectively.  Letter of credit  fees are based on
scheduled  rates in effect at the time of  issuance.  The facility is secured by
Olympic's  assets,  but is not  guaranteed  by Seitel,  Inc. or any of its other
subsidiaries.  Borrowings  under  the  facility  are  limited  to 75%  of  trade
receivables  less than 90 days old. The  facility is subject to  repayment  upon
demand and is available from time to time at the Bank's sole discretion. Olympic
did not have any  amounts  outstanding  under  this  line of credit at March 31,
2000, or May 11, 2000. Olympic is not a party to any of the debt held by Seitel,
Inc.

         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  on
February 15 and August 15. As of May 11, 2000,  the balance  outstanding  on the
Series D, E and F Notes was $138 million.

         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 which began on 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 June 30
and December 30. As of May 11, 2000, the balance outstanding on the Series A, B,
and C Notes was $46,667,000.

         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 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
in one or more series:  (i) unsecured  debt  securities,  which may be senior or
unsubordinated;  (ii)  preferred  stock;  (iii)  common  stock,  and (iv)  trust
preferred securities.

         From  January 1, 2000,  through  May 11,  2000,  the  Company  received
$142,000  from the exercise of common stock  purchase  warrants and options.  In
connection  with these  exercises,  the Company will also receive  approximately
$22,000 in tax savings.

         In November  1999, the Company's 19% owned  subsidiary,  Vision Energy,
filed a  registration  statement  with the SEC to accomplish the spin-off of DDD
Energy  through an initial public  offering.  In the proposed  offering,  Vision
Energy would acquire all of the stock of DDD Energy from the Company in exchange
for the  issuance  of shares  of Vision  Energy  stock to the  Company,  and the
Company would sell most of these Vision Energy shares in the public offering for
cash.  Completion  of the  offering is expected to occur during the last half of
2000;  however,  its  completion is dependent  upon market  conditions and other
factors.  As of March 31, 2000,  the Company had incurred  costs related to this
offering  totaling  $956,000  which are  included  in  prepaid  expenses  in the
Company's  balance sheet as of March 31, 2000. The Company  continues to explore
opportunities  to maximize the value of DDD Energy.  The Company  intends to use
the cash  proceeds  from the  spin-off  of DDD Energy to reduce debt and provide
funds for seismic data bank capital expenditures.
<PAGE>

         During  November and December  1999,  the Company  repurchased  504,700
shares of its common stock in the open market at a cost of $3,302,000,  pursuant
to a stock repurchase  program authorized by the Board of Directors in 1997. The
Board has authorized expenditures of up to $25 million towards the repurchase of
its common  stock.  As of May 11, 2000,  the Company has  repurchased a total of
679,700 shares of its common stock at a cost of $6,275,000 since 1997 under this
plan.

         During  the  first  three  months  of 2000,  gross  seismic  data  bank
additions and capitalized oil and gas exploration and development costs amounted
to $19,758,000 and $3,783,000 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 exercise of common stock
purchase warrants and options and, borrowings under the Company's revolving line
of credit.

         Currently,  the  Company  anticipates  capital  expenditures  to  total
approximately  $50 million for seismic data bank  additions for the remainder of
2000 and a range of  approximately $7 to $16 million for oil and gas exploration
and  development  efforts for the remainder of 2000 depending upon the timing of
the proposed offering. 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   currently   anticipated   2000  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 2000, the Company could arrange for additional
debt or equity  financing during 2000;  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.  Upon consummation of the proposed spin-off of
DDD Energy, proceeds from such offering would be used to reduce debt and provide
funds for additional seismic data bank capital expenditures.

Recent Accounting Pronouncements

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS No.
133,  as amended by SFAS No.  137, 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  treatment.  The Company has not yet
quantified  the impact of adopting SFAS No. 133.  However,  management  does not
believe  that the  adoption  of SFAS No. 133 will have a material  impact on the
Company's financial position or results of operations.

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. 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, 1999.
<PAGE>

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,  1999 for a detailed
discussion of these risks. The following  information  discusses  changes in the
Company's market risk exposures since December 31, 1999.

Commodity Price Risk

         During the first quarter of 2000,  the Company  recognized  net hedging
losses of $62,000.  As of March 31, 2000, the Company had open  commodity  price
hedges  totaling  1,375,000  MMBtu at an  average  price of $2.52  per MMBtu and
15,000 barrels at an average price of $27.30 per barrel.

Interest Rate Risk

         The  Company  may enter into  various  financial  instruments,  such as
interest  rate  swaps,  to manage  the  impact of  changes  in  interest  rates.
Currently,  the Company  has no open  interest  rate swap or interest  rate lock
agreements.  Therefore,  the  Company's  exposure to changes in  interest  rates
primarily  results from its  short-term  and long-term  debt with both fixed and
floating interest rates.


Foreign Currency Exchange Rate Risk

         The  Company  conducts  business  in the  Canadian  dollar  and  pounds
sterling and is therefore subject to foreign currency exchange rate risk on cash
flows related to sales, expenses, financing and investing transactions. On March
31, 2000, the Company entered into forward exchange contracts to hedge a portion
of its foreign currency exchange risk related to its Canadian activities.  As of
March 31, 2000,  the Company had open forward  exchange  contracts  totaling $13
million  (Canadian  dollars)  at an  exchange  rate into U.S.  dollars  of .6925
maturing in equal amounts of $1 million (Canadian dollars) each month from April
2000 to April 2001. Exposure from market rate fluctuations related to activities
in the  Cayman  Islands,  where  the  Company's  functional  currency  is pounds
sterling, is not material at this time.

                           PART II - OTHER INFORMATION

Items 1., 2., 3., 4., and 5.   Not applicable.
----------------------------

Item 6.   Exhibits and Reports on Form 8-K

          (a)    Exhibits
                 10.1    Common  Stock  Purchase  Warrant  Certificate  for  the
                         purchase of 90,000 shares of Seitel,  Inc. Common Stock
                         issued to Kevin S. Fiur

          (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:    May 12, 2000           /s/  Paul A. Frame
                                      -------------------------------------
                                      Paul A. Frame
                                      President




Dated:    May 12, 2000           /s/  Debra D. Valice
                                      -------------------------------------
                                      Debra D. Valice
                                      Chief Financial Officer




Dated:    May 12, 2000           /s/  Marcia H. Kendrick
                                      -------------------------------------
                                      Marcia H. Kendrick
                                      Chief Accounting Officer




<PAGE>





                                     EXHIBIT
                                      INDEX
-------  ------------------------------------------------------------    -------
Exhibit              Title                                                Page
                                                                         Number
-------  ------------------------------------------------------------    -------

10.1     Common Stock Purchase  Warrant  Certificate for the purchase       17
         of 90,000 shares of 17 Seitel,  Inc.  Common Stock issued to
         Kevin S. Fiur