##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    September 30,
    2009o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    From          to   Commission File
    No. 001-34404
  DAWSON GEOPHYSICAL
    COMPANY
  Texas(State or other jurisdiction
    of
    incorporation or organization)

75-0970548(I.R.S. Employer
    Identification No.)   508 West
    Wall, Suite 800, Midland, Texas 79701
 (Principal Executive Office)
 Telephone Number:
    432-684-3000
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class
  1 3
  Securities registered pursuant to Section 12(g) of the
    Act:
  None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
  1 3
  1 3
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


2Item 1A.

Risk Factors


6Item 1B.

Unresolved Staff Comments


12Item 2.

Properties


12Item 3.

Legal Proceedings


12Item 4.

Submission of Matters to a Vote of Security
    Holders


12PART IIItem 5.

Market for Our Common Equity and Related
    Stockholder Matters


14Item 6.

Selected Financial Data


16Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


16Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


22Item 8.

Financial Statements and Supplementary Data


22Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


22Item 9A.

Controls and Procedures


22Item 9B.

Other Information


23PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


23Item 11.

Executive Compensation


24Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


24Item 13.

Certain Relationships and Related Transactions
    and Director Independence


24Item 14.

Principal Accounting Fees and Services


24PART IVItem 15.

Exhibits and Financial Statement Schedules


24Signatures


25Index to Financial Statements


F-1Index to ExhibitsEX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANYFORM 10-K
    For the Fiscal Year Ended September 30, 2009
    DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K Form 10-K,
 Part I  Item 1.
    BUSINESS  General
  2-D, 3-D 3-D
  3-D
   2




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Business
    Strategy
    
    Attracting and retaining skilled and experienced personnel for
    our data acquisition and processing operations;
    Providing integrated in-house services necessary in each phase
    of seismic data acquisition and processing, including project
    design, land access permitting, surveying and related support
    functions as well as continuing the enhancement of our in-house
    health, safety, security and environmental programs;
    Maintaining the focus of our operations solely on the domestic
    onshore seismic market;
    Continuing to operate with conservative financial discipline;
    Updating our capabilities to incorporate advances in geophysical
    and supporting technologies; and
    Acquiring equipment to expand the recording channel capacity on
    our existing crews and equipping additional crews as market
    conditions dictate.  Business
    Description
  Geophysical Services Overview.
  2-D 3-D 2-D 3-D 3-D 3-D 3-D 2-D
  3-D 3-D 3-D
 3




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##### Table of Contents



Data Acquisition. 3-D
          Data Processing.
   4




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##### Table of Contents



Integrated Services.
  Equipment
    Acquisition and Capital Expenditures
    Clients
        Contracts
  project-by-project
 5




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##### Table of Contents



Competition
    Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K Form 10-K. 1-800-SEC-0330
  Item 1A.
    RISK
    FACTORS  An investment in our common stock is subject to a number of
    risks discussed below. You should carefully consider these
    discussions of risk and the other information included in this
    Form 10-K.
    These risk factors could materially adversely affect our
    business, financial condition or results of operations.
  Recent
    decreases in the market prices of oil and natural gas,
    disruptions in the global financial markets and the global
    economy generally have decreased demand for our seismic
    services, caused downward pressure on the prices we charge and
    affected our results of operations.
   6




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If oil
    and natural gas prices or the level of capital expenditures by
    oil and gas companies were to decline, demand for our services
    would decline and our results of operations would be adversely
    affected.
      
    the level of supply and demand for oil and natural gas;
    level of prices, and expectations about future prices, for oil
    and natural gas;
    the ability of oil and gas producers to raise equity capital and
    debt financing;
    worldwide political, military and economic conditions, including
    the ability of the Organization of Petroleum Exporting Countries
    to set and maintain production levels and prices for oil;
    the cost of exploring for, developing and producing oil and
    natural gas;
    government policies regarding the exploration for production and
    development of oil and natural gas reserves and the use of
    fossil fuels;
    level of taxation relating to the energy industry, including
    taxation of consumption of energy sources; and
    weather conditions, including large-scale weather events such as
    hurricanes that affect oil and gas operations over a wide area
    or affect prices or locally inclement weather that can preclude
    or delay our seismic operations. 7




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Our
    clients could delay, reduce or cancel their service contracts
    with us on short notice, which may lead to lower than expected
    demand and revenues.
    The
    high fixed costs of our operations could adversely affect our
    results of operations.
    Our
    revenues are subject to fluctuations that are beyond our control
    which could adversely affect our results of operations in any
    financial period.
    Our
    operations are subject to weather conditions which could
    adversely affect our results of operations.
    Our
    operations are subject to delays related to obtaining land
    access rights of way from third parties which could affect our
    results of operations.
  and/or
  We
    face intense competition in our business that could result in
    downward pricing pressure and the loss of market
    share.
    A
    limited number of customers account for a significant portion of
    our revenues, and the loss of one of these customers could harm
    our results of operations; we bear the risk if any of our
    clients become insolvent and fail to pay amounts owed to the
    Company, so any failure to pay by these clients could harm our
    results of operations.
   8




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Our
    results of operations could be adversely affected by asset
    impairments.
    We may
    be unable to attract and retain skilled and technically
    knowledgeable employees which could adversely affect our
    business and our growth.
    Capital
    requirements for our operations are large. If we are unable to
    finance these requirements, we may not be able to maintain our
    competitive advantage.
    The
    Company relies on a limited number of key suppliers for specific
    seismic services and equipment.
   9




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Technological
    change in our business creates risks of technological
    obsolescence and requirements for future capital expenditures.
    If we are unable to keep up with these technological advances,
    we may not be able to compete effectively.
    We
    operate under hazardous conditions that subject us to risk of
    damage to property or personal injuries and may interrupt our
    business.
    We may
    be subject to liability claims that are not covered by our
    master service agreements or by insurance.
      We may
    be held liable for the actions of our
    subcontractors.
   10




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Our
    industry is subject to governmental regulation which may
    adversely affect our future operations.
    and/or
  Cap-and-Trade
      Certain
    provisions of our charter and bylaws and our shareholder rights
    plan may make it difficult for a third party to acquire us, even
    in situations that may be viewed as desirable by
    shareholders.
   11




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##### Table of Contents



Failure
    to maintain effective internal controls in accordance with
    Section 404 of the Sarbanes-Oxley Act could have a material
    adverse effect on our stock price.
    Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES    Owned or



Building AreaLocation

Leased

Purpose

Square FeetMidland, TX

Leased

Executive offices and data processing


29,960Midland, TX

Owned

Field office


61,402Equipment fabrication facilityMaintenance and repairs shop       Item 3.
    LEGAL
    PROCEEDINGS      Item 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    Executive
    Officers of the Registrant
    12




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##### Table of Contents



Name

Age

PositionL. Decker Dawson


89


Chairman of the Board of DirectorsStephen C. Jumper


48


President, Chief Executive Officer and DirectorC. Ray Tobias


52


Executive Vice President, Chief Operating OfficerChristina W. Hagan


54


Executive Vice President, Secretary and Chief Financial OfficerHowell W. Pardue


73


Executive Vice PresidentK.S. Forsdick


58


Senior Vice President       L. Decker Dawson. (1989-1990),
  Stephen C. Jumper. 3-D
  C. Ray Tobias.
  Christina W. Hagan.
  Howell W. Pardue.
  K.S. Forsdick.
 13




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##### Table of Contents



Part II  Item 5.
    MARKET
    FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS  ®
  Quarter Ended

High


LowDecember 31, 2007

$
83.86


$
64.67March 31, 2008

$
78.00


$
48.75June 30, 2008

$
79.95


$
56.41September 30, 2008

$
65.93


$
40.27December 31, 2008

$
46.15


$
14.31March 31, 2009

$
22.23


$
9.96June 30, 2009

$
31.42


$
13.13September 30, 2009

$
35.98


$
23.60         Equity
    Compensation Plan Information
  Number ofSecurities RemainingAvailable forNumber of





Future IssuanceSecurities to





Under Equitybe Issued





Compensation PlansUpon Exercise


Weighted-Average Exercise


(Excluding Securitiesof Outstanding


Price of


Reflected inPlan Category

Options


Outstanding Options


Column (a))(a)


(b)


(c)Equity compensation plans approved by security holders


152,000


$
18.91



786,550
(1)Equity compensation plans not approved by security holders










Total


152,000


$
18.91



786,550
(1)   (1)
    
    Although 238,550 shares are available to be issued under
    the 2004 Incentive Stock Plan, the Company does not intend to
    grant additional shares from this Plan. There are
    548,000 shares available to be issued under the 2006 Stock
    and Performance Incentive Plan. 14




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##### Table of Contents



Performance
    Graph
    Comparison
    of 5 Year Cumulative Total Return*
    
  9/04

9/05

9/06

9/07

9/08

9/09DAWSON GEOPHYSICAL COMPANY


100.00



144.60



141.97



370.51



223.18



130.88S & P 500


100.00



112.25



124.37



144.81



112.99



105.18VALUE-LINE OILFIELD SERVICES


100.00



151.20



163.68



248.78



196.06



164.08   *
    $100 invested on 9/30/04 in stock or index, including
    reinvestment of dividends. Fiscal year ending September 30.  ©
 15




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##### Table of Contents



Item 6.
    SELECTED
    FINANCIAL DATA    Years Ended September 30,

2009


2008


2007


2006


2005(In thousands, except per share amounts)Operating revenues

$
243,995


$
324,926


$
257,763


$
168,550


$
116,663Net income

$
10,222


$
35,007


$
27,158


$
15,855


$
10,016Net income per common share

$
1.31


$
4.57


$
3.57


$
2.11


$
1.50Weighted average equivalent common shares outstanding


7,807



7,669



7,602



7,518



6,706Total assets

$
237,157


$
233,621


$
195,862


$
149,418


$
114,127Revolving line of credit

$



$



$
5,000


$



$
Long-term debt-less current maturities

$



$



$



$



$
Stockholders equity

$
198,379


$
185,960


$
149,155


$
119,208


$
101,904     Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K. Form 10-K.
  Overview
       16




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Results
    of Operations
  Fiscal
    Year Ended September 30, 2009 Versus Fiscal Year Ended
    September 30, 2008
  Operating Revenues.
  Operating Costs.
   17




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Taxes.
  Fiscal
    Year Ended September 30, 2008 Versus Fiscal Year Ended
    September 30, 2007
  Operating Revenues.
  Operating Costs.
        Taxes.
  Liquidity
    and Capital Resources
  Introduction.
 18




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##### Table of Contents



Cash Flows.
      Capital Expenditures.
  3-D
  Capital Resources.
  30-day
 19




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##### Table of Contents



Payments Due by Period (in 000s)Less than

1-3

3-5

More thanTotal

1 Year

Years

Years

5 YearsOperating lease obligations

$
1,209


$
578


$
610


$
21


$
     Off-Balance
    Sheet Arrangements
    Effect of
    Inflation
    Critical
    Accounting Policies
    Revenue Recognition.
  out-of-pocket out-of-pocket
   20




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##### Table of Contents



Allowance for Doubtful Accounts.
  Impairment of Long-Lived Assets.
  Depreciable Lives of Property, Plant and
    Equipment.
  Tax Accounting.
  Stock-Based Compensation.
  Recently
    Issued Accounting Pronouncements
  820-10, 820-10 820-10 820-10 820-10-15-1A, 820-10 820-10-15-1A
  825-10, 825-10
 21




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##### Table of Contents



825-10-65-1, 825-10-65-1 825-10-65-1
  855-10, 855-10 855-10 Form 10-K
  105-10, 105-10 105-10
  Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  30-day available-for-sale.
  Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Managements
    Evaluation of Disclosure Controls and Procedures
   22




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Rule 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control over Financial Reporting
  Internal Control  Integrated Framework page F-3.
  Changes
    in Internal Control over Financial Reporting
  Rule 13a-15(f) 15d-15(f)
  Item 9B.
    OTHER
    INFORMATION   Part III  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Regulation S-K) http://www.dawson3d.com
 23




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Item 11.
    EXECUTIVE
    COMPENSATION    Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K.
  Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   Part IV  Item 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    Financial Statements.
           Financial Statement Schedules.
  page F-23
      Exhibits.
  Form 10-K
 24




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##### Table of Contents



SIGNATURES      By:
    /s/  Stephen
    C. Jumper        Signature

Title

Date/s/  L.
    Decker DawsonL.
    Decker Dawson

Chairman of the Board of Directors

11-30-09/s/  Stephen
    C. JumperStephen
    C. Jumper

President, Chief Executive Officer and Director (principal
    executive officer)

11-30-09/s/  Paul
    H. BrownPaul
    H. Brown

Director

11-30-09/s/  Gary
    M. HooverGary
    M. Hoover

Director

11-30-09/s/  Jack
    D. LaddJack
    D. Ladd

Director

11-30-09/s/  Ted
    R. NorthTed
    R. North

Director

11-30-09/s/  Tim
    C. ThompsonTim
    C. Thompson

Director

11-30-09/s/  Christina
    W. HaganChristina
    W. Hagan

Executive Vice President, Secretary and Chief Financial Officer
    (principal financial and accounting
    officer)

11-30-09  25




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##### 



INDEX TO
    FINANCIAL STATEMENTS   
 Financial Statements of Dawson Geophysical Company

PageReports of Independent Registered Public
    Accounting Firm, dated November 30, 2009


F-2Balance Sheets as of September 30, 2009 and
    2008


F-4Statements of Operations for the years ended
    September 30, 2009, 2008 and 2007


F-5Statements of Stockholders Equity and Other
    Comprehensive Income for the years ended September 30,
    2009, 2008 and 2007


F-6Statements of Cash Flows for the years ended
    September 30, 2009, 2008 and 2007


F-7Notes to Financial Statements


F-8Financial Statement Schedule:Schedule II  Valuation and
    Qualifying Accounts for the years ended September 30, 2009,
    2008 and 2007


F-23   F-1




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Internal Control 
    Integrated Framework
      F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control 
    Integrated Framework .
        Internal Control  Integrated
    Framework
        F-3




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##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  BALANCE SHEETS
  September 30,


September 30,2009


2008ASSETSCurrent assets:Cash and cash equivalents

$
36,792,000


$
8,311,000Short-term investments


25,267,000



Accounts receivable, net of allowance for doubtful accounts of
    $533,000 in September 2009 and $55,000 in September 2008


40,106,000



76,221,000Prepaid expenses and other assets


7,819,000



877,000Current deferred tax asset


1,694,000



873,000Total current assets


111,678,000



86,282,000Property, plant and equipment


240,820,000



250,519,000Less accumulated depreciation


(115,341,000
)


(103,180,000
)Net property, plant and equipment


125,479,000



147,339,000Total assets

$
237,157,000


$
233,621,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
6,966,000


$
15,308,000Accrued liabilities:Payroll costs and other taxes


2,720,000



3,363,000Other


10,600,000



14,869,000Deferred revenue


2,230,000



993,000Total current liabilities


22,516,000



34,533,000Deferred tax liability


16,262,000



13,128,000Stockholders equity:Preferred stock-par value $1.00 per share; 5,000,000 shares
    authorized, none outstanding






Common stock-par value
    $.331/3
    per share; 50,000,000 shares authorized, 7,822,994 and
    7,794,744 shares issued and outstanding in each period


2,608,000



2,598,000Additional paid-in capital


89,220,000



87,051,000Other comprehensive income, net of tax


18,000



Retained earnings


106,533,000



96,311,000Total stockholders equity


198,379,000



185,960,000Total liabilities and stockholders equity

$
237,157,000


$
233,621,000    F-4




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##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  STATEMENTS OF OPERATIONS
  Years Ended September 30,2009


2008


2007Operating revenues

$
243,995,000


$
324,926,000


$
257,763,000Operating costs:Operating expenses


192,839,000



237,484,000



190,117,000General and administrative


7,856,000



6,762,000



6,195,000Depreciation


26,160,000



24,253,000



18,103,000226,855,000



268,499,000



214,415,000Income from operations


17,140,000



56,427,000



43,348,000Other income (expense):Interest income


249,000



497,000



749,000Interest expense






(482,000
)


(145,000
)Other income (expense)


326,000



(35,000
)


506,000Income before income tax


17,715,000



56,407,000



44,458,000Income tax expense:Current


(5,193,000
)


(17,834,000
)


(13,906,000
)Deferred


(2,300,000
)


(3,566,000
)


(3,394,000
)(7,493,000
)


(21,400,000
)


(17,300,000
)Net income

$
10,222,000


$
35,007,000


$
27,158,000Net income per common share

$
1.31


$
4.57


$
3.57Net income per common share-assuming dilution

$
1.30


$
4.53


$
3.54Weighted average equivalent common shares outstanding


7,807,385



7,669,124



7,601,889Weighted average equivalent common shares outstanding-assuming
    dilution


7,853,531



7,728,651



7,669,462    F-5




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DAWSON
    GEOPHYSICAL COMPANY
  STATEMENTS OF
    STOCKHOLDERS EQUITY AND OTHER COMPREHENSIVE INCOME
  AccumulatedCommon Stock


Additional


OtherNumber





Paid-in


Comprehensive


Retainedof Shares


Amount


Capital


Income (Expense)


Earnings


TotalBalance September 30, 2006


7,549,244


$
2,517,000


$
82,370,000


$
(33,000
)

$
34,354,000


$
119,208,000Net income


















27,158,000



27,158,000Other comprehensive income net of tax:Realization of gains on investments














51,000Income tax expense














(18,000
)Other comprehensive income














33,000







33,000Comprehensive income for the period






















27,191,000Excess tax benefit of employee stock plan










1,312,000











1,312,000Stock-based compensation expense










588,000











588,000Issuance of common stock as compensation


3,000



1,000



119,000











120,000Exercise of stock options


106,250



35,000



701,000











736,000Balance September 30, 2007


7,658,494



2,553,000



85,090,000







61,512,000



149,155,000Impact of adopting certain provisions of ASC
    740-10


















(208,000
)


(208,000
)Net income


















35,007,000



35,007,000Excess tax benefit of employee stock plan










440,000











440,000Stock-based compensation expense










836,000











836,000Issuance of common stock as compensation


6,500



2,000



423,000











425,000Issuance of restricted stock awards andunearned compensation


94,500



31,000



(32,000
)










(1,000
)Exercise of stock options


35,250



12,000



294,000











306,000Balance September 30, 2008


7,794,744



2,598,000



87,051,000







96,311,000



185,960,000Net income


















10,222,000



10,222,000Other comprehensive income net of tax:Unrealized holding gains arising during the period














31,000Income tax expense














(13,000
)Other comprehensive income














18,000







18,000Comprehensive income for the period






















10,240,000Excess tax benefit of employee stock plan










5,000











5,000Stock-based compensation expense










1,667,000











1,667,000Issuance of common stock as compensation


5,000



2,000



89,000











91,000Exercise of stock options


23,250



8,000



408,000











416,000Balance September 30, 2009


7,822,994


$
2,608,000


$
89,220,000


$
18,000


$
106,533,000


$
198,379,000    F-6




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##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  STATEMENTS OF CASH FLOWS
  Years Ended September 30,2009


2008


2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
10,222,000


$
35,007,000


$
27,158,000Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation


26,160,000



24,253,000



18,103,000Noncash compensation


1,758,000



1,259,000



707,000Deferred income tax expense


2,300,000



3,566,000



3,394,000Excess tax benefit from share-based payment arrangement


(5,000
)


(440,000
)


(1,312,000
)Provision for bad debts


993,000



32,000



51,000Other


106,000



443,000



995,000Change in current assets and liabilities:Decrease (increase) in accounts receivable


31,641,000



(15,743,000
)


(10,684,000
)Increase in prepaid expenses and other assets


(6,942,000
)


(62,000
)


(125,000
)(Decrease) increase in accounts payable


(7,960,000
)


2,900,000



646,000(Decrease) increase in accrued liabilities


(4,912,000
)


1,644,000



10,435,000Increase (decrease) in deferred revenue


1,237,000



(1,929,000
)


2,059,000Net cash provided by operating activities


54,598,000



50,930,000



51,427,000CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of short-term investments


(25,313,000
)






Proceeds from maturity of short-term investments










6,500,000Proceeds from disposal of assets


124,000



29,000



537,000Partial proceeds on fire insurance claim


2,843,000







Capital expenditures, net of noncash capital expenditures
    summarized below in noncash investing activities


(4,192,000
)


(53,269,000
)


(58,701,000
)Net cash used in investing activities


(26,538,000
)


(53,240,000
)


(51,664,000
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from exercise of stock options


416,000



306,000



736,000Proceeds from revolving line of credit






15,000,000



5,000,000Repayment on revolving line of credit






(20,000,000
)


Excess tax benefit from share-based payment arrangement


5,000



440,000



1,312,000Net cash provided (used) by financing activities


421,000



(4,254,000
)


7,048,000Net increase (decrease) in cash and cash equivalents


28,481,000



(6,564,000
)


6,811,000CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


8,311,000



14,875,000



8,064,000CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
36,792,000


$
8,311,000


$
14,875,000SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest expense

$



$
541,000


$
145,000Cash paid during the period for income taxes

$
13,222,000


$
18,812,000


$
10,259,000NONCASH INVESTING ACTIVITIES:Accrued purchases of property and equipment

$



$
382,000


$
790,000Equipment purchase through reduction of insurance proceeds

$
638,000


$



$
Unrealized gain on investments

$
31,000


$



$
    F-7




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS
  1.
    Summary
    of Significant Accounting Policies  Organization
    and Nature of Operations
  2-D, 3-D
  Cash
    Equivalents
    Short-Term
    Investments
  available-for-sale
  Fair
    Value of Financial Instruments
    Concentrations
    of Credit Risk
    Property,
    Plant and Equipment
   F-8




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Impairment
    of Long-Lived Assets
    Revenue
    Recognition
    out-of-pocket out-of-pocket
    Allowance
    for Doubtful Accounts
    Tax
    Accounting
   F-9




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Use of
    Estimates in the Preparation of Financial
    Statements
    Stock-Based
    Compensation
    Reclassifications
    2.
    Short-term
    Investments    As of September 30, 2009 (in 000s)Amortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair ValueShort-term investments:U.S. Treasury bills

$
9,987


$
7


$



$
9,994U.S. Treasury notes


10,153



20







10,173FDIC guaranteed bonds


5,096



4







5,100Total

$
25,236


$
31
(a)

$



$
25,267   (a)
    
    Other comprehensive income reflected on the Balance Sheet
    reflects unrealized gains net of the tax effect of approximately
    $13,000.  available-for-sale.
  3.
    Fair
    Value of Financial Instruments   F-10




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      As of September 30, 2009 (in 000s)Fair Value Measurements at Reporting Date Using:Quoted Prices in


Significant Other


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


InputsTotal


(Level 1)


(Level 2)


(Level 3)Short-term investments:U.S. Treasury bills

$
9,994


$
9,994


$



$
U.S. Treasury notes


10,173



10,173







FDIC guaranteed bonds


5,100



5,100







Total

$
25,267


$
25,267


$



$
   available-for-sale
    4.
    Property,
    Plant and Equipment    September 30,2009


2008


Useful LivesLand, building and other

$
5,589,000


$
5,350,000



3 to 40 yearsRecording equipment


149,444,000



160,516,000



5 to 10 yearsVibrator energy sources


58,745,000



58,750,000



10 to 15 yearsVehicles


26,856,000



25,713,000



2 to 10 yearsOther(a)


186,000



190,000



240,820,000



250,519,000Less accumulated depreciation


(115,341,000
)


(103,180,000
)Net property, plant and equipment

$
125,479,000


$
147,339,000   (a)
    
    Other represents accumulated costs associated with equipment
    fabrication and modification not yet completed. F-11




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   5.
    Supplemental
    Balance Sheet Information    September 30,2009


2008Trade and accrued trade receivables

$
33,910,000


$
67,186,000Allowance for doubtful accounts


(533,000
)


(55,000
)Insurance receivable associated with fire damage


1,836,000



4,339,000Accrued receivable for workers compensation stop loss
    policy


4,893,000



4,751,000Total accounts receivable

$
40,106,000


$
76,221,000     September 30,2009


2008Prepaid other

$
591,000


$
877,000Income tax receivable


7,228,000



Total prepaid expenses and other assets

$
7,819,000


$
877,000Other current liabilities consist of the following at
    September 30, 2009 and 2008:September 30,2009


2008Accrued self insurance reserves

$
6,698,000


$
6,704,000Accrued bonus and profit sharing


1,014,000



3,855,000Income and franchise taxes payable


674,000



1,262,000Accrued payables associated with fire damage






794,000Other accrued expenses and current liabilities


2,214,000



2,254,000Total other current liabilities

$
10,600,000


$
14,869,000   6.
    Debt  30-day
 F-12




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   7.
    Stock-Based
    Compensation        Incentive
    Stock Options:
      Group A

Group BExpected term

4 years

6 yearsExpected volatility

57.57%

56.85%Risk free interest rate

1.67%

2.82%Expected dividend yield



     F-13




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  WeightedWeighted


AverageNumber of


Average


Remaining


AggregateOptioned


Exercise


Contractual


IntrinsicShares


Price


Term in Years


Value ($000)Balance as of September 30, 2008


23,250


$
17.91Granted


152,000



18.91Exercised


(23,250
)


17.91






$
206Forfeited






Balance as of September 30, 2009


152,000


$
18.91



9.17


$
1,287Exercisable as of September 30, 2009





$







$
       Number of


Weighted AverageNonvested


Grant DateShare Awards


Fair ValueNonvested option awards outstanding September 30, 2008


8,250


$
17.91Granted


152,000



18.91Vested


(8,250
)


17.91Forfeited






Nonvested option awards outstanding September 30, 2009


152,000


$
18.91           Stock
    Awards:
   F-14




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Number of


Weighted AverageRestricted


Grant DateShare Awards


Fair ValueNonvested restricted shares outstanding September 30, 2008


94,500


$
43.43Granted






Nonvested restricted shares outstanding September 30, 2009


94,500


$
43.43         8.
    Employee
    Benefit Plans    9.
    Advertising
    Costs    10.
    Income
    Taxes   F-15




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Year Ended September 30,2009


2008


2007Current Federal

$
3,770,000


$
16,082,000


$
11,778,000Current State


1,423,000



1,752,000



2,128,000Deferred Federal


1,921,000



3,296,000



3,280,000Deferred State


379,000



270,000



114,000Total

$
7,493,000


$
21,400,000


$
17,300,000     Year Ended September 30,2009


2008


2007Tax expense computed at statutory rates

$
6,200,000


$
19,743,000


$
15,560,000Change in valuation allowance


(12,000
)


(18,000
)


(2,000
)State income tax


1,089,000



1,270,000



1,505,000Other


216,000



405,000



237,000Income tax expense

$
7,493,000


$
21,400,000


$
17,300,000     September 30,2009


2008Deferred tax assets:Receivables

$
199,000


$
20,000Restricted stock


978,000



464,000Workers compensation


408,000



493,000Other


716,000



430,000Total gross deferred tax assets


2,301,000



1,407,000Less valuation allowance


(58,000
)


(70,000
)Total deferred tax assets


2,243,000



1,337,000Deferred tax liabilities:Property and equipment


(16,798,000
)


(13,592,000
)Other


(13,000
)


Total gross deferred tax liabilities


(16,811,000
)


(13,592,000
)Net deferred tax liability

$
(14,568,000
)

$
(12,255,000
)Current portion of net deferred tax asset/liability

$
1,694,000


$
873,000Non-current portion of net deferred tax asset/liability


(16,262,000
)


(13,128,000
)Total net deferred tax liability

$
(14,568,000
)

$
(12,255,000
)    F-16




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    September 30,2009


2008Balance at beginning of fiscal year

$
135,000


$
137,000Increase (decrease) in prior year tax positions


350,000



Increase (decrease) in current year tax positions






Settlement with taxing authorities






Expiration of statutes of limitations


(69,000
)


(2,000
)Balance at end of fiscal year

$
416,000


$
135,000         11.
    Net
    Income per Common Share   F-17




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    2009


2008


2007Numerator:Net income and numerator for basic and diluted net income per
    common share  income available to common shareholders

$
10,222,000


$
35,007,000


$
27,158,000Denominator:Denominator for basic net income per common share-weighted
    average common shares


7,807,385



7,669,124



7,601,889Effect of dilutive securities-employee stock options and
    restricted stock grants


46,146



59,527



67,573Denominator for diluted net income per common share-adjusted
    weighted average common shares and assumed conversions


7,853,531



7,728,651



7,669,462Net income per common share

$
1.31


$
4.57


$
3.57Net income per common share-assuming dilution

$
1.30


$
4.53


$
3.54   12.
    Major
    Customers    2009

2008

2007A


31
%


36
%


49
%B






20
%


     13.
    Commitments
    and Contingencies  pick-up
 F-18




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
            Payments Due by Period (in 000s)Less than





More thanTotal

1 Year

1-3 Years

3-5 Years

5 YearsOperating lease obligations

$
1,209


$
578


$
610


$
21


$
       14.
    Rights
    Agreement     F-19




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
            and/or
    15.
    Recently
    Issued Accounting Pronouncements  820-10, 820-10 820-10 820-10 820-10-15-1A, 820-10
 F-20




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  820-10-15-1A
  825-10, 825-10
  825-10-65-1, 825-10-65-1 825-10-65-1
  855-10, 855-10 855-10 Form 10-K
  105-10, 105-10 105-10
  16.
    Subsequent
    Events  Form 10-K
 F-21




---



##### Table of Contents



DAWSON
    GEOPHYSICAL COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   17.
    Quarterly
    Financial Data (Unaudited)  Quarter EndedDecember 31


March 31


June 30


September 30Fiscal 2008:Operating revenues

$
77,599,000


$
78,363,000


$
84,568,000


$
84,396,000Income from operations

$
12,217,000


$
13,143,000


$
16,145,000


$
14,922,000Net income

$
7,704,000


$
8,292,000


$
9,707,000


$
9,304,000Net income per common share

$
1.01


$
1.08


$
1.27


$
1.21Net income per common share assuming dilution

$
1.00


$
1.07


$
1.26


$
1.20Fiscal 2009:Operating revenues

$
80,216,000


$
64,625,000


$
52,319,000


$
46,835,000Income (loss) from operations

$
12,445,000


$
9,951,000


$
(2,337,000
)

$
(2,919,000
)Net income (loss)

$
7,734,000


$
6,170,000


$
(1,626,000
)

$
(2,056,000
)Net income (loss) per common share

$
1.00


$
0.79


$
(0.21
)

$
(0.26
)Net income (loss) per common share assuming dilution

$
0.99


$
0.79


$
(0.21
)

$
(0.26
)    F-22




---



##### Table of Contents



Schedule II
  Dawson
    Geophysical Company
  Valuation
    and Qualifying Accounts
  Balance at


Charged to





Balance atBeginning


Costs and





End ofof Period


Expenses


Deductions


PeriodAllowance for doubtful accounts*:Fiscal Year:2009

$
55,000


$
993,000


$
515,000


$
533,0002008


176,000



32,000



153,000



55,0002007


148,000



51,000



23,000



176,000Valuation allowance for deferred tax assets:Fiscal Year:2009

$
70,000


$
(12,000
)

$



$
58,0002008


88,000



(18,000
)






70,0002007


90,000



(2,000
)






88,000   *
    
    Deductions related to allowance for doubtful accounts represent
    amounts that have been deemed uncollectible and written off by
    the Company. F-23




---



##### Table of Contents



INDEX TO
    EXHIBITS  Number

Exhibit3
.1

Second Restated Articles of Incorporation of the Company, as
    amended (filed on February 9, 2007 as Exhibit 3.1 to
    the Companys Quarterly Report on
    Form 10-Q
    for the first quarter ended December 31, 2006 (File
    No. 000-10144)
    and incorporated herein by reference and filed on
    November 28, 2007 as Exhibit 3.1 to the Companys
    Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).3
.2

Amended and Restated Bylaws of the Company (filed on
    August 7, 2007 as Exhibit 3.2 to the Companys
    Quarterly Report on
    Form 10-Q
    for the third quarter ended June 30, 2007 (File
    No. 000-10144)
    and incorporated herein by reference).3
.3

Statement of Resolution Establishing Series of Shares of
    Series A Junior Participating Preferred Stock of the
    Company (filed on July 9, 2009 as Exhibit 3.1 to the
    Companys Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).4
.1

Rights Agreement effective as of July 23, 2009 between the
    Company and Mellon Investor Services LLC as Rights Agent, which
    includes as Exhibit A the form of Statement of Resolution
    Establishing Series of Shares of Series A Junior
    Participating Preferred Stock setting forth the terms of the
    Preferred Stock, as Exhibit B the form of Rights
    Certificate and as Exhibit C the Summary of Rights to
    Purchase Preferred Stock (filed on July 9, 2009 as
    Exhibit 4.1 to the Companys Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.1

Dawson Geophysical Company 2006 Stock and Performance Incentive
    Plan (the 2006 Plan), dated November 28, 2006
    (filed on January 29, 2007 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.2

Dawson Geophysical Company 2004 Incentive Stock Plan (filed on
    March 12, 2004 as Exhibit 10.1 to the Companys
    Registration Statement on
    Form S-8
    (File
    No. 333-113576)
    and incorporated herein by reference).10
.3

Form of Restricted Stock Agreement for the 2006 Plan (filed on
    February 11, 2008 as Exhibit 10.3 to the
    Companys Quarterly Report on
    Form 10-Q
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.4

Form of Stock Option Agreement for the 2006 Plan (filed on
    February 11, 2008 as Exhibit 10.4 to the
    Companys Quarterly Report on
    Form 10-Q
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.5

Form of Restricted Stock Agreement for the 2006 Plan (filed on
    August 6, 2007 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.6

Form of Stock Option Agreement for the 2006 Plan (filed on
    August 6, 2007 as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.7

Description of Profit Sharing Plan (filed on December 3,
    2007 as Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.8

Description of Profit Sharing Plan (filed on September 29,
    2008 as Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.9

Summary of Non-Employee Director Compensation (filed on
    February 9, 2009 as Exhibit 10.3 to the Companys
    Quarterly Report on
    Form 10-Q
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.10

Form of Master Geophysical Data Acquisition Agreement (filed on
    December 11, 2003 as Exhibit 10 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended September 30, 2003 (File
    No. 000-10144)
    and incorporated herein by reference).10
.11

Master Geophysical Data Acquisition Agreement between SandRidge
    Energy, Inc. and the Company, dated December 19, 2006
    (filed on February 9, 2009 as Exhibit 10.1 to the
    Companys Quarterly Report on
    Form 10-Q
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.12

Master Service Contract between Chesapeake Operating, Inc. and
    the Company, dated December 18, 2003 (filed on
    February 9, 2009 as Exhibit 10.2 to the Companys
    Quarterly Report on
    Form 10-Q
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.13

Revolving Line of Credit Loan Agreement, dated June 2,
    2009, between the Company and Western National Bank (filed on
    June 5, 2009 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    (File
    No. 000-10144)
    and incorporated herein by reference).10
.14

Security Agreement, dated June 2, 2009, between the Company
    and Western National Bank (filed on June 5, 2009 as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    and incorporated herein by reference).




---



##### Table of Contents



Number

Exhibit23
.1*

Consent of Independent Registered Public Accounting Firm.31
.1*

Certification of Chief Executive Officer of Dawson Geophysical
    Company pursuant to
    Rule 13a-14(a)
    promulgated under the Securities Exchange Act of 1934, as
    amended.31
.2*

Certification of Chief Financial Officer of Dawson Geophysical
    Company pursuant to
    Rule 13a-14(a)
    promulgated under the Securities Exchange Act of 1934, as
    amended.32
.1*

Certification of Chief Executive Officer of Dawson Geophysical
    Company pursuant to
    Rule 13a-14(b)
    promulgated under the Securities Exchange Act of 1934, as
    amended, and Section 1350 of Chapter 63 of
    Title 18 of the United States Code. Pursuant to SEC Release
    34-47551,
    this Exhibit is furnished to the SEC and shall not be deemed to
    be filed.32
.2*

Certification of Chief Financial Officer of Dawson Geophysical
    Company pursuant to
    Rule 13a-14(b)
    promulgated under the Securities Exchange Act of 1934, as
    amended, and Section 1350 of Chapter 63 of
    Title 18 of the United States Code. Pursuant to SEC Release
    34-47551,
    this Exhibit is furnished to the SEC and shall not be deemed to
    be filed.   *
    
    Filed herewith.
    
    Identifies exhibit that consists of or includes a management
    contract or compensatory plan or arrangement.