EAGLE GEOPHYICAL INC, S-1, 1997-06-02

EAGLE GEOPHYICAL INC
S-1, 1997-06-02

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

EAGLE GEOPHYSICAL, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 1382 76-0522659
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

50 BRIAR HOLLOW LANE
6TH FLOOR WEST
HOUSTON, TEXAS 77027
(713) 627-1990
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

JAY N. SILVERMAN, PRESIDENT
EAGLE GEOPHYSICAL, INC.
50 BRIAR HOLLOW LANE
6TH FLOOR WEST
HOUSTON, TEXAS 77027
(713) 627-1990
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

<TABLE>
<S> <C>
N. L. STEVENS III
W. MARK YOUNG JOSEPH W. ARMBRUST
GARDERE WYNNE SEWELL & RIGGS, L.L.P. BROWN & WOOD LLP
333 CLAY AVENUE, SUITE 800 ONE WORLD TRADE CENTER
HOUSTON, TEXAS 77002 NEW YORK, NEW YORK 10048
(713) 308-5500 (212) 839-5300
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
============================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $0.01 par value............................. $101,430,000 $30,750
============================================================================================================
</TABLE>

(1) Includes shares subject to over-allotment options granted to the
Underwriters. See "Underwriting." Estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(a).
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION -- DATED JUNE , 1997

PROSPECTUS
- --------------------------------------------------------------------------------
5,880,000 SHARES
EAGLE GEOPHYSICAL, INC.
[EAGLE GEOPHYSICAL, INC. LOGO] COMMON STOCK
- --------------------------------------------------------------------------------
Of the 5,880,000 shares of common stock, $0.01 par value (the "Common Stock"),
offered hereby, 4,000,000 shares are being sold by Eagle Geophysical, Inc. (the
"Company") and 1,880,000 shares are being sold by a selling stockholder (the
"Selling Stockholder"). The Company will not receive any of the proceeds from
the sale of the shares of Common Stock by the Selling Stockholder. See
"Principal and Selling Stockholders."

Prior to this offering (the "Offering"), there has been no public market for the
Common Stock of the Company. It is currently estimated that the initial public
offering price will be between $ and $ per share. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public offering price. The Company has applied to have the Common
Stock approved for inclusion in The Nasdaq Stock Market's National Market (the
"Nasdaq National Market") under the symbol "EGEO."

SEE "RISK FACTORS" ON PAGES 8 TO 13 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=======================================================================================================================
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions(1) Company(2) Stockholder
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.............................. $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $ $
=======================================================================================================================
</TABLE>

(1) The Company, the parent corporation of the Selling Stockholder, the Selling
Stockholder, certain officers, directors and employees of the Company and
certain corporations owned by such officers, directors and employees of the
Company (the "Additional Selling Stockholders") have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated to be
$ .

(3) The Company, the Selling Stockholder and the Additional Selling Stockholders
have granted the Underwriters 30-day over-allotment options to purchase, in
the aggregate, up to 882,000 additional shares of the Common Stock on the
same terms and conditions set forth above. If such options are exercised in
full, the total Price to Public will be $ , the total Underwriting
Discounts and Commissions will be $ , the total Proceeds to Company
will be $ and the total Proceeds to Selling Stockholder and
Additional Selling Stockholders will be $ . See "Underwriting."
- --------------------------------------------------------------------------------
The shares of Common Stock are offered by the several Underwriters subject to
delivery by the Company and the Selling Stockholder (and, if applicable, the
Additional Selling Stockholders) and acceptance by the Underwriters, to prior
sale and to withdrawal, cancellation or modification of the offer without
notice. Delivery of the shares to the Underwriters is expected to be made at the
office of Prudential Securities Incorporated, One New York Plaza, New York, New
York, on or about , 1997.

<TABLE>
<S> <C>
PRUDENTIAL SECURITIES INCORPORATED SIMMONS & COMPANY
INTERNATIONAL
</TABLE>

, 1997
<PAGE> 3

[INSERT GRAPHICS OR PICTURES]

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless
otherwise indicated, all information in this Prospectus assumes an initial
public offering price of $ per share, the midpoint of the price range
set forth on the cover page of this Prospectus, and that the Underwriters'
over-allotment options will not be exercised. All references to the Common Stock
give effect to the 3,400-for-one stock split effected May 22, 1997. This
Prospectus contains certain forward-looking statements that involve risk and
uncertainties. The Company's actual results could differ materially from the
results anticipated in these forward-looking statements as a result of certain
of the factors set forth under "Risk Factors" and elsewhere in this Prospectus.
Unless the context indicates otherwise, certain technical and other terms used
in this Prospectus have the meanings assigned to them in the Glossary appearing
elsewhere herein.

Eagle Geophysical, Inc. currently owns 19.0% of the outstanding shares of
Energy Research International. Prior to or contemporaneously with the
consummation of the Offering, Eagle Geophysical, Inc. will acquire the remaining
81.0% of the outstanding shares of Energy Research International in exchange for
600,000 shares of Common Stock of Eagle Geophysical, Inc. Such acquisition is a
condition to the consummation of the Offering, and the Offering will not be
consummated unless such acquisition is completed. Unless the context indicates
otherwise, all references herein to the "Company" mean Eagle Geophysical, Inc.
and its subsidiaries, including Energy Research International, assuming the
consummation of such acquisition, and all pro forma financial data given is for
such combined entity unless specified otherwise.

THE COMPANY

Eagle Geophysical, Inc. (the "Company") is a highly-focused international
oilfield service company engaged in the acquisition of seismic information, with
a specialization in the acquisition of high definition three-dimensional ("3D")
seismic data in logistically difficult wetland environments and in congested
offshore areas. Seismic data is used by oil and gas companies in the exploration
for new oil and gas reserves and the development of existing reserves. The
Company was formed to combine the onshore seismic data acquisition business
conducted by Seitel Geophysical, Inc. ("SGI") since 1993 with the offshore
seismic data acquisition business conducted by Energy Research International
("ERI") and its operating subsidiaries (the "Horizon Companies"), which was
commenced in 1974.

The Company's crews and equipment have been configured for the technically
and logistically demanding operations they conduct. The Company operates three
onshore 1,850 channel Opseis(R) radio telemetry seismic data acquisition crews
in the U.S. Gulf Coast region and four towed-streamer seismic data acquisition
vessels, primarily in the North Sea and the U.S. Gulf of Mexico. The Company's
wetland crews and equipment, which use radio signals rather than traditional
cables to collect seismic data, are specifically designed to work in
environmentally sensitive and operationally challenging swamp and marsh
environments. Because these Opseis systems use radio signals to transmit data,
they can be operated more efficiently than cable-based systems, particularly in
wetland areas and highly populated areas where there are numerous topographic
obstructions, such as rivers, bays, highways and towns. These systems also excel
in environmentally sensitive areas where physical intrusion must be minimized.

The Company believes that it has developed particular expertise in both the
front-end planning and execution of complex onshore 3D surveys. Front-end
planning involves obtaining permits from the numerous land and mineral owners
required in large onshore 3D acquisition projects and refining such projects to
capitalize on the capabilities of the Company's radio telemetry systems. The
Company believes that the combination of its superior permitting, planning and
project management skills and the capabilities of the Company's equipment to
acquire data around obstacles and areas where permission from land owners cannot
be obtained provides the Company with a competitive advantage in seeking data
acquisition work in the wetland regions of the U.S. Gulf Coast.
3
<PAGE> 5

The Company also operates four seismic data acquisition vessels under
charter or lease, each of which is currently configured to tow either two or
three streamers. These vessels are well equipped to work in congested offshore
areas with dense marine traffic, production platforms and other obstructions,
where vessels towing more streamers are ill-suited to work due to their lack of
maneuverability. The configuration of the Company's vessels is also optimal for
conducting small and medium sized high definition seismic surveys around
offshore platforms. These surveys may be used by oil and gas companies to
delineate the extent of or enhance the production from existing fields.

Approximately 52% of the Company's 1996 pro forma combined revenues was
derived from its onshore operations, and the remaining 48% of revenues was
derived from offshore operations. All onshore revenues in 1996 were attributable
to 3D data acquisition activities. Offshore revenues in 1996 were attributable
approximately 85% to 3D data acquisition activities and 15% to two-dimensional
("2D") data acquisition activities.

INDUSTRY OVERVIEW

Seismic data is used by oil and gas companies to identify and image
underground geological structures likely to trap hydrocarbons, both to aid in
the exploration for new hydrocarbon reservoirs and to enhance production from
existing reservoirs. A seismic data acquisition project generally consists of
designing and planning the survey, obtaining permission from mineral and land
owners to perform the survey (if on land) and acquiring the seismic data. Such
data, when processed, is then used to produce computer generated three-
dimensional images or two-dimensional cross sections of subsurface geologic
formations. These cross sections and images are then used by oil and gas
companies to evaluate the potential for successful drilling for or production of
oil and gas.

Historically, 2D surveys were the primary technique used to acquire seismic
data. However, advances in computer technology in the last five to ten years
have made 3D seismic data, which provides a more comprehensive geophysical
image, a practical and capable oil and gas exploration and development tool. 3D
seismic data is proving to be more accurate and effective than 2D data at
identifying potential hydrocarbon-bearing geological formations. The use of 3D
seismic data to identify locations to drill both exploration and development
wells has improved the economics of finding and producing oil and gas. The
success and acceptance of 3D seismic data has in turn created increased demand
for 3D seismic surveys in recent years. The Company anticipates that demand for
3D seismic data will continue to increase both in the Company's current primary
areas of operations and in other areas internationally.

BUSINESS STRATEGIES

The Company's objective is to increase stockholder value by enhancing its
market position as a specialized provider of seismic acquisition services
through the following business strategies:

BUILD ON STRONG INDUSTRY REPUTATION. The Company believes that it has a
strong industry reputation within its specialized wetland and offshore markets
for providing high quality seismic data to its customers in a timely and
cost-efficient manner through the use of advanced seismic technologies. The
Company plans to continue to capitalize on its strong industry reputation to
expand its customer base within its niche markets.

CONTINUE TO FOCUS ON WETLAND REGIONS. The Company believes that the focused
application of radio telemetry technology is key to the Company's current and
future success in wetland and populated areas. The Company's wetland crews and
equipment have been configured to optimize performance in these areas. The
Company intends to continue to focus its onshore seismic data acquisition
activities in wetland and populated regions, where it has completed over
fifty-five 3D surveys since 1993.

ENHANCE OFFSHORE ACQUISITION CAPABILITIES. The Company plans to expand the
streamer towing capacity of one of its vessels from three to between four and
six streamers at the end of 1997, significantly increasing the vessel's data
acquisition capabilities. This will enable the Company to further increase
flexibility and efficiency in its offshore seismic data acquisition operations.
4
<PAGE> 6

ACQUIRE ADDITIONAL EQUIPMENT. The Company intends to charter additional
offshore seismic vessels and acquire additional onshore equipment to meet
customer demand. The Company believes that sufficient customer demand currently
exists to add another seismic data acquisition vessel to its fleet and to add
more wetland seismic acquisition crews. The Company will evaluate the
acquisition of additional equipment and crews as its resources permit and as
customer demand dictates.

EXPAND INTERNATIONALLY. The Company is currently pursuing opportunities to
expand its wetland seismic data acquisition activities internationally,
primarily into Latin America. The Company believes that demand for seismic data
acquisition services will continue to grow in this and other regions
internationally. The Company intends to take advantage of the international
reputation and experience, including previous onshore operating experience, of
the Horizon Companies as it expands its wetland activities internationally. The
Company believes that the greater financial resources available to its offshore
operations following the Offering will better enable it to satisfy existing
customer demand for its services and to mobilize its seismic acquisition vessels
to new geographic markets, such as Latin America, Africa and Southeast Asia, as
opportunities arise outside its primary areas of operation in the U.S. Gulf of
Mexico and the North Sea.

RELATIONSHIP WITH SEITEL, INC.

The Company, formed in December 1996, is a combination of the onshore
seismic data acquisition business conducted by SGI, which is a wholly-owned
subsidiary of Seitel, Inc. ("Seitel"), and the offshore seismic data acquisition
business conducted by the Horizon Companies. After consummation of the Offering,
Seitel will retain indirect ownership of 18.9% of the outstanding shares of
Common Stock (16.5% if the Underwriters' over-allotment options are exercised in
full). In 1996, seismic data acquisition services provided to Seitel and its
subsidiaries accounted for approximately 52% of the Company's pro forma combined
revenues. The Company currently has contracts with Seitel and its subsidiaries
to perform certain specific seismic data acquisition projects, representing 47%
of the Company's backlog as of May 16, 1997. The Company anticipates that Seitel
will continue to be a significant customer after the Offering. See "Certain
Transactions."

THE OFFERING

Common Stock Offered by the Company..... 4,000,000 shares

Common Stock Offered by the Selling
Stockholder............................. 1,880,000 shares

Common Stock to be Outstanding after the
Offering................................ 8,025,000 shares(1)

Use of Proceeds......................... The net proceeds to the Company
from the Offering will be used to
repay $36.9 million of debt and/or
capital lease obligations of the
Company, including certain debt
owed to or guaranteed by Seitel,
and the remaining $ million of
such proceeds will be used to fund
a portion of the capital
expenditures required to increase
the streamer capacity of one of the
offshore seismic data acquisition
vessels operated by the Company.
See "Use of Proceeds."

Proposed Nasdaq National Market
Symbol.................................. EGEO

Risk Factors............................ For a discussion of certain factors
relevant to an investment in the
Common Stock, see "Risk Factors."
- ---------------

(1) Does not include 704,450 shares issuable upon exercise of stock options to
be granted to management, employees and directors effective upon
consummation of the Offering, all of which will have an exercise price per
share equal to the initial public offering price set forth on the cover page
of this Prospectus. See "Management -- Independent Directors Stock Option
Plan" and "-- Stock Option Plan."
5
<PAGE> 7

SUMMARY SELECTED PRO FORMA AND HISTORICAL FINANCIAL DATA

The Summary Selected Financial Data below has been taken or derived from
the audited consolidated financial statements and the unaudited consolidated
condensed financial statements of Eagle Geophysical, Inc. (referred to herein as
"Eagle" for periods prior to the acquisition of the remaining interest in ERI)
and ERI, the parent corporation of the Horizon Companies, or the unaudited pro
forma consolidated financial statements of the Company, included elsewhere in
this prospectus. This summary financial data should be read in conjunction with
Eagle's Consolidated Financial Statements, ERI's Consolidated Financial
Statements, the Pro Forma Consolidated Financial Statements and the accompanying
notes contained elsewhere in this Prospectus. See also "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

The following unaudited pro forma consolidated balance sheet as of March
31, 1997 and the consolidated statements of operations for the year ended
December 31, 1996 and the three month periods ended March 31, 1996 and 1997 give
effect to certain transactions that will take place upon the closing of the
Offering, including the acquisition by the Company, accounted for as a purchase
transaction, of the remaining 81% of the outstanding shares of ERI in exchange
for the issuance by the Company of 600,000 shares of Common Stock (the "ERI
Acquisition") and the application of the net proceeds of the Offering to repay
certain indebtedness of the Company, as if such transactions had taken place on
March 31, 1997 in the case of the unaudited pro forma consolidated balance sheet
and January 1, 1996 in the case of the unaudited pro forma consolidated
statements of operations.
PRO FORMA FINANCIAL DATA

<TABLE>
<CAPTION>
FOR THE QUARTER
ENDED MARCH 31,
-------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996 1996 1997
----------------------------------------------------------- -------------- --------------
EAGLE ENERGY PRO FORMA PRO FORMA PRO FORMA
GEOPHYSICAL, RESEARCH COMBINED AS COMBINED AS COMBINED AS
INC. INTERNATIONAL ADJUSTMENTS(1) ADJUSTED(2) ADJUSTED(1)(2) ADJUSTED(1)(2)
------------ ------------- -------------- ----------- -------------- --------------
(HISTORICAL) (HISTORICAL) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue.......................... $48,136 $43,607 $ (828) $90,915 $13,674 $23,626
------- ------- ------- ------- ------- -------
Expenses:
Operating expenses............. 34,917 37,601 (828) 71,690 12,250 16,557
Depreciation and
amortization................. 3,409 4,615 1,323(3) 9,347 2,024 3,010
Selling, general and
administrative expenses...... 2,680 2,619 1,601(4) 6,900 1,228 1,367
Interest expense, net.......... 531 1,649 (1,529)(5) 651 110 34
------- ------- ------- ------- ------- -------
Total expenses............. 41,537 46,484 567 88,588 15,612 20,968
------- ------- ------- ------- ------- -------
Income (loss) before provision
for income taxes............... 6,599 (2,877) (1,395) 2,327 (1,938) 2,658
Provision (benefit) for income
taxes.......................... 2,420 -- (860) 1,560 (56) 489
------- ------- ------- ------- ------- -------
Net income (loss)(6)............. $ 4,179 $(2,877) $ (535) $ 767 $(1,882) $ 2,169
======= ======= ======= ======= ======= =======
Earnings (loss) per share(6)..... $ .10 $ (.23) $ .27
======= ======= =======
Pro forma shares outstanding..... 8,025 8,025 8,025
======= ======= =======
Other Financial Data:
EBITDA(7)........................ $10,539 $ 3,387 $12,325 $ 196 $ 5,702
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
----------------------------------
PRO FORMA
PRO FORMA COMBINED
COMBINED(1) AS ADJUSTED(1)(2)
----------- -----------------
(UNAUDITED)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................................. $ 1,304 $21,399
Total assets.............................................. 84,960 99,246
Total debt, capital lease obligations and due to
affiliate............................................... 49,239 14,489
Stockholders' equity...................................... 18,833 68,004
</TABLE>

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

(1) Reflects pro forma adjustments for the ERI Acquisition and adjustments to
reflect the consummation of the Offering and the sale of 25,000 shares of
Common Stock, at the initial public offering price, to Jay N. Silverman,
President of the Company, for a note.

(2) Reflects the combination of the adjustments and the historical financial
statements.

(3) Reflects the amortization of goodwill associated with the acquisition of ERI
over a 15-year estimated useful life.

(4) Represents identifiable additions to selling, general and administrative
expenses the Company estimates it will incur when operating as a public
registrant.

(5) Reflects a reduction in interest expense as a result of the application of
estimated net proceeds from the Offering to reduce debt and capital lease
obligations.

(6) Excludes the effect of a $600,000 extraordinary gain for early
extinguishment of debt on ERI's historical 1996 financial statements.

(7) EBITDA represents earnings before interest expense, taxes, depreciation and
amortization. EBITDA is used by management of the Company as a supplemental
financial measurement in the evaluation of its business and should not be
considered as an alternative to net income as an indicator of the operating
performance of the Company or as an alternative to cash flow as a measure of
liquidity. EBITDA is presented here to provide additional information about
the Company.
6
<PAGE> 8

SUMMARY SELECTED PRO FORMA AND HISTORICAL FINANCIAL DATA -- (CONTINUED)

HISTORICAL FINANCIAL DATA

<TABLE>
<CAPTION>
AS OF AND FOR
THE THREE MONTHS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------- -----------------
1993 1994 1995 1996 1996 1997
------------ -------- -------- -------- ------- -------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
EAGLE GEOPHYSICAL, INC.
Statement of Operations Data:
Revenue.............................................. $ 5,650 $25,721 $29,275 $48,136 $ 5,974 $12,981
------- ------- ------- ------- ------- -------
Expenses:
Operating expenses................................. 3,596 20,070 20,986 34,917 4,336 9,286
Depreciation and amortization...................... 409 1,817 2,471 3,409 657 1,302
Selling, general and administrative................ 108 1,673 2,874 2,680 361 450
Interest expense, net.............................. 147 384 408 531 136 158
------- ------- ------- ------- ------- -------
Total expenses................................. 4,260 23,944 26,739 41,537 5,490 11,196
------- ------- ------- ------- ------- -------
Income before provision for income taxes............. 1,390 1,777 2,536 6,599 484 1,785
Provision for income taxes........................... 509 651 933 2,420 178 655
------- ------- ------- ------- ------- -------
Net income........................................... $ 881 $ 1,126 $ 1,603 $ 4,179 $ 306 $ 1,130
======= ======= ======= ======= ======= =======
Statement of Cash Flow Data:
Operating activities................................. $ 827 $ 1,509 $ 2,429 $ 2,941 $ 321 $ 112
Investing activities................................. (4,791) (234) (289) (7,928) (232) (6,710)
Financing activities................................. 3,989 (1,271) (2,111) 4,929 (100) 6,598
Other Financial Data:
EBITDA............................................... $ 1,946 $ 3,978 $ 5,415 $10,539 $ 1,277 $ 3,245
Consolidated Balance Sheet Data:
Cash and cash equivalents............................ $ 25 $ 29 $ 58 $ -- $ 47 $ --
Total assets......................................... 7,063 14,413 17,364 26,643 20,997 35,262
Total debt and capital lease obligations............. 3,989 8,034 5,932 10,902 5,832 17,800
Stockholder's equity................................. 881 2,007 3,610 7,789 3,916 8,919
</TABLE>

<TABLE>
<CAPTION>
AS OF AND FOR
THE THREE MONTHS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------- -----------------
1993 1994 1995 1996 1996 1997
------------ -------- -------- -------- ------- -------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ENERGY RESEARCH INTERNATIONAL
Statement of Operations Data:
Revenue.............................................. $ 9,591 $19,457 $29,423 $43,607 $ 7,700 $11,079
------- ------- ------- ------- ------- -------
Expenses:
Operating expenses................................. 8,360 16,360 27,075 37,601 7,914 7,705
Depreciation....................................... 78 1,683 3,856 4,615 1,036 1,377
Selling, general and administrative................ 690 1,703 2,196 2,619 467 517
Interest expense, net.............................. 90 528 1,456 1,649 406 536
------- ------- ------- ------- ------- -------
Total expenses................................. 9,218 20,274 34,583 46,484 9,823 10,135
------- ------- ------- ------- ------- -------
Income (loss) before provision for income taxes and
extraordinary item................................. 373 (817) (5,160) (2,877) (2,123) 944
Provision for income taxes........................... 63 11 -- -- -- --
------- ------- ------- ------- ------- -------
Income (loss) before extraordinary item.............. 310 (828) (5,160) (2,877) (2,123) 944
Extraordinary item................................... -- -- -- 600 -- --
------- ------- ------- ------- ------- -------
Net income (loss).................................... $ 310 $ (828) $(5,160) $(2,277) $(2,123) $ 944
======= ======= ======= ======= ======= =======
Statement of Cash Flow Data:
Operating activities................................. $ 1,376 $ 990 $ (1) $ 4,473 $ 771 $ 1,342
Investing activities................................. (1,154) (7,556) (2,758) (3,113) (21) (548)
Financing activities................................. -- 6,629 2,830 (1,471) (981) (850)
Other Financial Data:
EBITDA............................................... $ 541 $ 1,394 $ 152 $ 3,387 $ (681) $ 2,857
Consolidated Balance Sheet Data:
Cash................................................. $ 155 $ 266 $ 373 $ 813 $ 306 $ 1,304
Total assets......................................... 7,884 28,920 28,040 28,057 25,113 30,421
Total debt and capital lease obligations............. -- 21,712 24,543 21,072 23,333 23,236
Stockholders' equity (deficit)....................... 307 (491) (5,626) (11,231) (7,694) (9,935)
</TABLE>

7
<PAGE> 9

RISK FACTORS

An investment in the securities offered hereby involves a high degree of
risk. Prospective investors should carefully consider the risk factors described
below, in addition to the other information set forth in this Prospectus, in
connection with an investment in the securities offered hereby.

This Prospectus includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other
than statements of historical facts, included in this Prospectus that address
activities, events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, including the risk factors discussed
below, general economic and business conditions, the business opportunities (or
lack thereof) that may be presented to and pursued by the Company, changes in
laws or regulations and other factors, many of which are beyond the control of
the Company. Prospective investors are cautioned that any such statements are
not guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.

ABSENCE OF COMBINED OPERATING HISTORY. The Company is a combination of the
businesses conducted by SGI and the Horizon Companies (the "Combined
Businesses"). The Combined Businesses have been operating separately and neither
the historical results of their separate operations nor their pro forma
financial information is necessarily indicative of the results that would have
been achieved had the Combined Businesses been operated on an integrated basis
or the results that may be realized in the future. In addition, prior to the
Offering, Eagle has been a subsidiary of Seitel and has relied on Seitel for
certain financial, management, administrative and other resources. See "Certain
Transactions." A number of significant changes will occur in the funding and
operations of the Company in connection with the consummation of the Offering.
These changes include the contemplated establishment of the Company's bank
revolving credit facility and its own incentive compensation and stock option
plans. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Management." These changes may have a substantial
impact on the financial position and future results of operations of the
Company. As a result, the historical financial information included in this
Prospectus does not necessarily reflect the financial position and results of
operations of the Company in the future or what the financial position and
results of operations of the Company would have been had it been operated as a
combined stand-alone entity during the periods presented.

Although certain members of management of the Company have extensive
experience in providing onshore and offshore seismic data acquisition services
and in managing businesses that provide such services, there can be no assurance
that the Company will be able to integrate the Combined Businesses into a
combined entity on an economically efficient basis or that the Company's
management group will be able to manage effectively the combined entity and
implement the Company's business strategies. See "Management."

INFLUENCE OF SEITEL ON THE COMPANY. Approximately 52% of the pro forma
combined revenues of the Company for the year ended December 31, 1996 were
derived from seismic data acquisition services provided to Seitel and its
subsidiaries. Such revenues, in the case of Eagle, are based on prices charged
to unaffiliated parties for similar work. Such revenues are not necessarily
indicative of the revenues Eagle would have earned had it provided these
services to unrelated third parties. The Horizon Companies charged Seitel for
these services at an amount believed by management of the Horizon Companies to
be equal to amounts it would have charged unrelated third parties for such
services. The loss of Seitel as a customer would have a material adverse effect
on the Company's financial condition and results of operations. There can be no
assurance that Seitel will enter into any material contracts with the Company
for seismic data acquisition services in the

8
<PAGE> 10

future. See "Description of Business -- Customers," "Certain Transactions," Note
G to Consolidated Financial Statements of Eagle and Note E to Consolidated
Financial Statements of ERI.

In the past, Seitel has guaranteed certain indebtedness of the Company and
has made loans to the Company. Of the approximately $ million estimated net
proceeds to the Company from the Offering, approximately $8.2 million will be
used to repay debt owed by the Company to Seitel and an additional approximately
$17.5 million will be used to repay debt of the Company that has been guaranteed
by Seitel. Such funds will not be available to the Company for other uses such
as capital expenditures, funding acquisitions or working capital. The Company's
borrowing costs may increase in the future as a result of having to obtain
financing based on its own creditworthiness. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Upon completion of the Offering, Seitel will indirectly own 18.9% of the
outstanding Common Stock (16.5% if the underwriters' over-allotment options are
exercised in full). In addition, Paul A. Frame, the President and Chief
Executive Officer and a director of Seitel, will serve as a director of the
Company, will serve as Chairman of the Executive Committee of the Board of
Directors of the Company, will be actively involved in the management of the
Company with respect to marketing and expansion of the Company's business and
will receive stock options to acquire shares of Common Stock from the Company.
See "Management -- Stock Option Plan." Consequently, in addition to its current
position as a significant customer of the Company, Seitel will be able to
exercise significant influence over the management of the Company. Such
influence will extend to matters such as the election of directors of the
Company, the approval of matters submitted for stockholder approval and
responding to any potential takeover of the Company.

Mr. William Lurie is also currently a director of Seitel. Mr. Lurie, who is
Chairman of the Board of Directors of the Company, will retire from the Seitel
board at or prior to the consummation of the Offering. Mr. Jay Silverman, who is
the President and Chief Executive Officer and a director of the Company, is
currently an executive officer of Seitel. Mr. Silverman will cease to be an
executive officer of Seitel upon consummation of the Offering. A substantial
portion of Mr. Silverman's present personal assets is comprised of common stock
and other equity interests in Seitel. Mr. Silverman is not under any obligation
to reduce his economic interests in Seitel as he assumes his role as Chief
Executive Officer of the Company.

POTENTIAL CONFLICTS OF INTEREST. Conflicts of interest may arise in the
future between Seitel and the Company in a number of areas relating to their
past and ongoing relationships, including potential acquisitions of businesses
or properties, other business opportunities, the election of new or additional
directors, the payment of dividends, incurrence of indebtedness, tax matters,
financial commitments, registration rights and issuances and sales of capital
stock of the Company. Although the Company and Seitel do not currently compete
against each other in any material respect, there can be no assurance that
Seitel and the Company will not in the future compete against each other. Any
officer or director of Seitel who serves as a director of the Company, such as
Mr. Frame, may have conflicts of interest in addressing business opportunities
and strategies as to which Seitel's and the Company's interests differ. Although
the Company intends to follow the procedures provided by the Delaware General
Corporation Law regarding conflicts of interest with respect to agreements and
transactions between Seitel and the Company, the Company has not adopted any
formal procedures to ensure that conflicts of interest will not occur or to
resolve any such conflicts of interest that do occur. See "Certain
Transactions." There can be no assurance that any such conflicts of interest
will be resolved in favor of the Company.

The Company and Seitel have entered into a number of agreements for the
purpose of defining their ongoing relationship and providing for an orderly
separation of the companies. See "Certain Transactions." These agreements were
negotiated in the context of a parent-subsidiary relationship and are therefore
not the result of negotiations between independent parties. In addition, the
Company did not retain separate legal counsel from the counsel retained by
Seitel in connection with the negotiation of these agreements. It is the
intention of the Company and Seitel that such agreements and the transactions
provided for therein, taken as a whole, should accommodate the parties'
interests in a manner that is fair to both parties, while continuing certain
mutually beneficial arrangements. The parties intend that such agreements and
transactions provide

9
<PAGE> 11

fair market value to them on terms no less favorable to the Company than would
otherwise be available from unaffiliated parties. Because of the complexity of
the various relationships between the Company and Seitel, however, there can be
no assurance that each of such agreements, or the transactions provided for
therein, will be effected on terms at least as favorable to the Company as could
have been obtained from unaffiliated third parties.

DEPENDENCE UPON ENERGY INDUSTRY SPENDING. Demand for the Company's services
depends upon the level of capital expenditures by oil and gas companies for
exploration, production and development activities. These activities depend in
part on oil and gas prices, expectations about future prices, the cost of
exploring for, producing and delivering oil and gas, the sale and expiration
dates of leases in the United States and abroad, the discovery rate of new oil
and gas reserves, local and international political, regulatory and economic
conditions and the ability of oil and gas companies to obtain capital. In
addition, a decrease in oil and gas expenditures could result from such factors
as unfavorable tax and other legislation or uncertainty concerning national
energy policies. Beginning in 1982, a sharp decline in oil and gas prices led to
a worldwide reduction in oil and gas exploration activities. This decline
resulted in a significant reduction in the overall demand for seismic services.
Since reaching a high in 1981, the number of companies providing seismic
services has declined dramatically. Notwithstanding recent increases in oil and
gas exploration activity, no assurance can be given that current levels of oil
and gas activities will be maintained or that demand for the Company's services
will reflect the level of such activities. Decreases in oil and gas activities
could have a significant adverse effect upon the demand for the Company's
services and the Company's results of operations.

RISKS IN INTERNATIONAL OPERATIONS. Approximately 25% of the Company's pro
forma combined 1996 revenues were derived from operations outside the U.S., and
the Company is subject to the risks inherent in doing business internationally.
In addition, the Company intends to expand its international operations. Since
the Company has an established presence in the North Sea through the Horizon
Companies, the Company does not view its offshore operations in the North Sea as
being subject to undue risks of this type. However, as the Company expands the
scope and extent of its onshore and offshore operations outside of their current
locations in the U.S. Gulf Coast, the North Sea and the Gulf of Mexico, these
risks may become more significant. Such risks include the possibility of
unfavorable changes in tax or other laws, partial or total expropriation,
currency exchange rate fluctuations and restrictions on currency repatriation,
the disruption of operations from labor and political disturbances, insurrection
or war, and the effect of requirements of partial local ownership of operations
in certain countries. See "Description of Business -- Geographic Operations."

OPERATING RISKS. The Company's crews often conduct operations in extreme
weather, in difficult terrain that is not easily accessible and under other
hazardous conditions. Accordingly, its operations are subject to risks of injury
to personnel and loss of equipment. Each of the Company's vessels is taken out
of service for approximately two to four weeks each year, generally at different
off-season times of the year, for routine maintenance and service. Fixed costs,
including costs associated with operating leases, labor costs and depreciation,
account for a significant portion of the Company's costs and expenses. As a
result, low productivity resulting from weather interruptions, equipment
failures or other causes can result in significant operating losses,
particularly when the Company is performing its services under a turnkey
contract. For example, one of the Company's vessels suffered an engine failure
in the fourth quarter of 1996, which adversely affected the Company's 1996 pro
forma combined results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations." In addition, while the
Company has insurance policies that protect it against liabilities that may be
incurred in the ordinary course of its business, the Company is unable to insure
fully against all possible loss or liability. For example, no insurance is
available at a cost deemed reasonable by the Company for war, nationalization,
expropriation or other extreme events. The Company does not carry business
interruption insurance with respect to its operations.

SUBSTANTIAL COMPETITION. The offshore and onshore seismic data acquisition
business is highly competitive. The Company believes that it has five major
competitors for its offshore seismic data acquisition business worldwide and six
major competitors for its wetland seismic data acquisition business in the U.S.
Gulf Coast region. Competitive factors include price, experience, availability,
technological expertise, performance and reputation for dependability. Certain
of the Company's major competitors operate more data acquisition crews than the
Company, provide integrated data acquisition, processing and interpretation
services, have substan-

10
<PAGE> 12

tially greater revenues than the Company or are subsidiaries or divisions of
major industrial enterprises having far greater financial and other resources
than the Company and more extensive relationships with major integrated and
multinational oil and gas companies. Such resources may enable these competitors
to maintain technological and certain other advantages relating to costs that
may provide them with an advantage over the Company in bidding for contracts. In
addition, certain competitors having greater financial resources than the
Company may take an economic interest in the seismic data acquired or in oil and
gas exploration and development projects in exchange for the services they
perform for their customers. See "Description of Business -- Competition."

CAPITAL INTENSIVE BUSINESS; OBSOLESCENCE OF TECHNOLOGY. The Company
competes in a capital intensive industry. The development of seismic data
acquisition equipment has been characterized by rapid technological advancements
in recent years and this trend may continue. There can be no assurance that
manufacturers of seismic equipment will not develop new systems that have
competitive advantages over systems now in use that either render the Company's
current equipment obsolete or require the Company to make significant capital
expenditures to maintain its competitive position. The Company's strategy is to
upgrade its vessels and data acquisition systems as often as necessary to
maintain its competitive position. However, to do so may require large
expenditures of capital. There can be no assurance that the Company will have
the capital necessary to upgrade its equipment to maintain its competitive
position or that any required financing therefor will be available on favorable
terms. If the Company is unable to raise the capital necessary to update its
data acquisition systems to the extent necessary, it may be materially and
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" and
"Description of Business."

The Company's ability to compete is highly dependent upon, among other
things, its ability to provide seismic data of a competitive quality. Because of
the significant technological changes that have already taken place with respect
to 3D seismic data acquisition and those that may occur in the future, the
Company is, like other seismic companies, generally dependent on its ability to
keep pace with changes and improvements in data acquisition technologies and to
acquire advanced equipment and vessels. Any significant technological
developments affecting seismic surveying could adversely affect the Company.
Over time, the value of and demand for seismic vessels and onshore seismic data
acquisition equipment can be expected to fluctuate, depending upon a variety of
factors including alternative types, sizes and technical abilities of competing
vessels and equipment.

RELIANCE ON KEY SUPPLIERS. The Company is dependent on Georex, Inc., a
subsidiary of Compagnie Generale de Geophysique, S.A. ("CGG"), which is a
competitor of the Company, for additions to and replacements for its Opseis
seismic data acquisition systems, and Opseis is a registered trademark of CGG.
The Company is also dependent on Input/Output, Inc. and Syntron, Inc., a
subsidiary of GeoScience Corporation, for additions to and replacements for its
offshore seismic data acquisition systems. Although these companies are not the
only suppliers of seismic data acquisition systems, they are the Company's
primary suppliers. In addition, the Company considers the Opseis system to be
the state-of-the-art seismic data equipment for performing 3D seismic surveys in
marshes and swamps. In the event of any disruption in the supply of repair
services or replacement parts from the Company's primary suppliers, the Company
may be unable to obtain such services or parts from other sources and would have
to acquire other equipment that may be less advanced technologically. Although
the Company believes it will be able to obtain systems from its primary
suppliers in the future, should it be unable to do so, the Company's anticipated
revenues or operating margins could be reduced significantly and the amount of
cash needed for capital expenditures could be increased significantly.

ENVIRONMENTAL AND OTHER REGULATIONS. The Company's operations are
materially affected by government regulation in the form of international
conventions, national, state and local laws and regulations in force in the
jurisdictions in which the Company operates, as well as in the country or
countries of registration of the Company's vessels. The Company is required by
various governmental and quasi-governmental agencies to obtain certain permits,
licenses and certificates with respect to its operations. In particular, the
United States Oil Pollution Act of 1990 sets forth technical and operational
requirements for vessels operating in the U.S. Gulf of Mexico. The Company
believes that it possesses all permits, licenses and certificates material to
the

11
<PAGE> 13

operation of its business. The modification of existing laws or regulations or
the adoption of new laws or regulations curtailing drilling for oil and gas or
imposing more stringent restrictions on seismic operations could adversely
affect the Company.

RELIANCE ON KEY PERSONNEL. The Company's operations are dependent on the
efforts of Messrs. Paul A. Frame, Director and Chairman of the Executive
Committee, Jay N. Silverman, President, and Gerald M. Harrison, Executive Vice
President. If any of these key persons becomes unable to continue in his present
role, or if the Company is unable to attract and retain other skilled employees,
the Company's business could be adversely affected. The Company will have
employment agreements with automatic renewal features with Messrs. Silverman and
Harrison. The Company will have a bonus compensation agreement with Mr. Frame
that will expire December 31, 1999. See "Management."

ABSENCE OF PUBLIC MARKET AND DETERMINATION OF OFFERING PRICE. Prior to the
Offering, there has been no public market for the Common Stock, and there can be
no assurance that an active public market for the Company's Common Stock will
develop, or if a trading market does develop, that it will continue after the
Offering. Consequently, the initial public offering price of the Common Stock
will be determined by negotiations among the Company and the representatives of
the several Underwriters (the "Representatives") and may bear no relation to the
market price for the Common Stock after the Offering. See "Underwriting" for
factors to be considered in determining the initial public offering price. There
can be no assurance that the price so determined will be representative of the
current or future market value of the Common Stock offered hereby. The Company
has applied to have the Common Stock approved for quotation on the Nasdaq
National Market.

IMMEDIATE AND SUBSTANTIAL DILUTION. Purchasers of the Common Stock offered
hereby will experience immediate and substantial dilution of approximately
$ per share in the pro forma net tangible book value per share of Common
Stock from the initial public offering price set forth on the cover page of this
Prospectus. See "Dilution."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON
STOCK. Upon completion of the Offering, the Company will have 8,025,000 shares
of Common Stock outstanding. The 5,880,000 shares to be sold in the Offering
(6,762,000 shares if the Underwriters' over-allotment options are exercised in
full) will be freely tradeable in the public market without restriction or
further registration under the Securities Act, except for any shares purchased
by affiliates of the Company. The Selling Stockholder (which will beneficially
own 18.9% of the outstanding shares of Common Stock after the Offering) and the
executive officers, directors and the other current stockholders of the Company
(who will beneficially own approximately 7.8% of the outstanding shares of
Common Stock after the Offering and who will hold options exercisable at the
initial public offering price for an additional 600,000 shares of Common Stock)
have agreed that, for a period of 180 days after the consummation of the
Offering, they will not, directly or indirectly, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any shares of
Common Stock or other capital stock of the Company or any securities convertible
into or exchangeable for any shares of Common Stock or other capital stock of
the Company without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters. Prudential Securities Incorporated
may, in its sole discretion, at any time and without notice, release all or any
portion of the shares of Common Stock subject to such agreement. The Company has
granted certain registration rights to Seitel with respect to the shares of
Common Stock it will retain after the Offering that will effectively allow
Seitel to sell up to 50% of such shares approximately one year after the
Offering and the balance two years after the Offering and to participate as a
selling stockholder, subject to certain limitations, in future public offerings
of Common Stock by the Company. See "Certain Transactions -- Registration Rights
Agreement" and "Shares Eligible for Future Sale."

Prior to the Offering, there has been no public market for the Common
Stock, and no prediction can be made as to the effect, if any, that the sale of
shares or the availability of shares for sale will have on the market price of
the Common Stock prevailing from time to time. Nevertheless, sales of
substantial amounts of the

12
<PAGE> 14

Common Stock in the public market could adversely affect prevailing market
prices and the ability of the Company to raise equity capital in the future. See
"Shares Eligible for Future Sale" and "Underwriting."

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION, BY-LAWS AND DELAWARE GENERAL CORPORATION LAW. Certain provisions
of the Company's Certificate of Incorporation and By-Laws and of the Delaware
General Corporation Law may tend to deter potential unsolicited offers or other
efforts to obtain control of the Company that are not approved by the Board of
Directors. Such provisions may therefore deprive the stockholders of
opportunities to sell shares of Common Stock at prices higher than prevailing
market prices. See "Description of Capital Stock -- Certain Anti-Takeover
Effects of Certain Provisions of the Certificate of Incorporation, By-laws and
Delaware General Corporation Law."

13
<PAGE> 15

THE COMPANY

The Company is a highly-focused international oilfield service company
engaged in the acquisition of seismic information, with a specialization in the
acquisition of high definition 3D seismic data in logistically difficult wetland
environments and in congested offshore areas. The Company was formed in December
1996 to combine the onshore seismic data acquisition business conducted by SGI
since 1993 with the offshore seismic data acquisition business conducted by the
Horizon Companies, which was originally commenced in 1974 and acquired by ERI in
1993.

Prior to the Offering, ERI, the holding company of the Horizon Companies,
was owned 19.0% by the Company and 81.0% by certain members of management of the
Horizon Companies ("Horizon Management"). Contemporaneously with the
consummation of the Offering, the Company will issue 600,000 shares of its
Common Stock to Horizon Management in exchange for the remaining 81.0% of the
issued and outstanding shares of ERI, whereby ERI and the Horizon Companies will
become wholly-owned subsidiaries of the Company. The Horizon Companies are not
in any way associated with Horizon Resources, Inc., a Delaware corporation based
in Houston, Texas, or any of its affiliated companies.

After consummation of the Offering, Seitel will retain indirect ownership
of 18.9% of the outstanding shares of Common Stock (16.5% if the Underwriters'
over-allotment options are exercised in full), and Horizon Management will
collectively own 7.5% of the outstanding shares of Common Stock (4.9% if the
Underwriters' over-allotment options are exercised in full).

The executive office of the Company is located at 50 Briar Hollow Lane, 6th
Floor West, Houston, Texas 77027, and its phone number at that address is (713)
627-1990.

14
<PAGE> 16

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
4,000,000 shares of Common Stock offered by the Company hereby are estimated to
be $ million after deducting underwriting discounts and commissions and
estimated offering expenses, assuming an initial public offering price of $
per share (the midpoint of the price range set forth on the cover page of this
Prospectus). The Company intends to use the net proceeds approximately as
follows: (i) $36.9 million to repay indebtedness as set forth in the table
below; and (ii) approximately $ million to fund a portion of the capital
expenditures required to increase the streamer capacity of the Simon Labrador.
Pending use thereof, the Company intends to invest the net proceeds in short
term, investment grade or government securities.

The Company will not receive any of the proceeds from the sale of the
Common Stock being sold by the Selling Stockholder and the Additional Selling
Stockholders. See "Principal and Selling Stockholders."

The following table sets forth certain information concerning the
indebtedness to be paid with the net proceeds of the Offering:

<TABLE>
<CAPTION>
PRINCIPAL
OUTSTANDING AT ANNUAL
NAME OF LENDER MAY 1, 1997(1) INTEREST RATE MATURITY DATE
-------------- --------------- --------------- --------------
<S> <C> <C> <C>
The Bank of N.T. Butterfield & Son Ltd.(2).... $ 7,632,000 8.25% On demand-
September 1997
NationsBanc Leasing Corporation of North
Carolina(1)(3).............................. 14,210,000 7.73%-8.06% August 1999-
April 2002
Compass Bank.................................. 1,153,000 7.61% June 1998
MetLife Capital Corporation................... 276,000 7.52% March 1999
MetLife Capital, Limited Partnership.......... 1,853,000 5.00%-6.00% July 1997-
July 1999
GE Capital Fleet Services..................... 307,000 5.00%-6.00% July 1997-
March 1999
Teledyne Industries, Inc.(4).................. 593,000 11.25%-12.00% September
1997-October
1997
Input/Output, Inc.(5)......................... 2,749,000 10.00% September 1999
Seitel, Inc.(6)............................... 8,169,000 5.35%-9.50% On demand-
December 2001
-----------
Total............................... $36,942,000
===========
</TABLE>

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

(1) Does not include accrued interest, but does include prepayment penalties,
which are immaterial in amount except with respect to NationsBanc Leasing
Corporation of North Carolina. The prepayment penalty for the NationsBanc
Leasing Corporation indebtedness is estimated to be approximately $400,000.

(2) The exchange rate of British pounds to U.S. dollars assumed for purposes of
calculating these amounts is $1.65 per pound. This indebtedness is comprised
of a revolving credit facility with an outstanding balance of $7,232,000 and
a term loan with an outstanding balance of $400,000. The revolving credit
facility and the term loan bear interest at the rate of LIBOR plus 2.0%. The
revolving credit facility is payable on demand, and the term loan matures in
September 1997.

(3) This indebtedness is comprised of four term loans with outstanding principal
amounts of $5,160,000, $1,086,000, $7,006,000, and $558,000, with fixed
interest rates of 8.0%, 8.06%, 7.98%, and 7.73%, respectively, maturing July
2001, August 1999, April 2002, and March 2000, respectively. The proceeds of
these loans were used to acquire one Opseis seismic data acquisition system
and related equipment and various offshore seismic data acquisition
equipment. The Company is currently evaluating whether to repay this
indebtedness to NationsBanc Leasing Corporation of North Carolina or,
alternatively, to exercise its purchase option under the capital lease
relating to the seismic data acquisition vessel Simon Labrador, which
capital lease had an outstanding principal balance at May 1, 1997 of
$12,691,000, bears

15
<PAGE> 17

interest at 7.00%, and matures in April 2001. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity
and Capital Resources." For purposes of this Prospectus, it has been assumed
that the Company will repay the NationsBanc indebtedness.

(4) This indebtedness is comprised of two promissory notes with outstanding
principal amounts of $263,000 and $330,000, bearing interest at 11.25% and
12.00%, respectively, and maturing September and October 1997, respectively.
The proceeds of these loans were used to acquire offshore seismic data
acquisition equipment. The $330,000 indebtedness was incurred after May 1,
1997.

(5) Capital lease of offshore seismic data acquisition equipment.

(6) This indebtedness is comprised of term loans of $2,679,000 and $2,000,000
owed to Seitel by ERI maturing December 2001 and July 1998, respectively and
intercompany advances of $3,490,000 by Seitel to Eagle. Interest on the
$2,679,000 loan accrues at a variable rate of interest equal to 5.35% until
December 31, 1997, increasing to 8.0% from January 1, 1998 through December
31, 1998, and then at the prime rate of interest plus 1% from January 1,
1999 through December 31, 2001. Interest on the $2,000,000 loan accrues at
the prime rate of interest plus 1%. The proceeds of these loans were used to
repay $2,000,000 of existing indebtedness of ERI and to pay consideration
upon the repurchase by ERI of certain of its shares from Seitel. The
intercompany advances relate to amounts advanced on behalf of Eagle for
expenses incurred with respect to third party projects and taxes and
allocable overhead with respect to third-party projects. These advances are
payable on demand and bear interest at a rate equal to Seitel's cost of
funds, which is currently 7.25%.

16
<PAGE> 18

CAPITALIZATION

The following table sets forth Eagle's capitalization at March 31, 1997 on
an historical basis and the Company's capitalization at March 31, 1997 on a pro
forma combined basis to reflect the ERI Acquisition. The pro forma combined as
adjusted gives effect to the sale by the Company of 4,000,000 shares of the
Common Stock offered hereby at an assumed initial public offering price and the
application of the net proceeds therefrom for planned repayments of indebtedness
as of March 31, 1997 and the planned dividend to Seitel, Inc. (see "Dividend
Policy"). The data set forth below should be read in conjunction with the other
financial information presented elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1997
-------------------------------------
PRO FORMA
PRO FORMA COMBINED
ACTUAL COMBINED AS ADJUSTED(1)
------- --------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Current portion of long-term debt, capital lease
obligations and due to affiliate........................ $ 4,952 $18,752 $ 4,618
======= ======= =======
Long-term obligations(2):
Long-term debt.......................................... 12,933 12,933 --
Capital lease obligations............................... 1,319 12,875 9,871
Due to affiliate........................................ -- 4,679 --
------- ------- -------
Total long-term obligations..................... 14,252 30,487 9,871
------- ------- -------
Stockholders' equity(3):
Preferred stock, $0.01 par value; authorized 5,000,000
shares; no shares issued and outstanding............. -- -- --
Common stock, $0.01 par value; authorized 25,000,000
shares; issued and outstanding: 3,400,000 shares
actual; 4,025,000 shares pro forma combined;
8,025,000 shares pro forma combined as adjusted...... 34 42 82
Additional paid-in capital................................ 7,755 18,036 68,567
Retained earnings (deficit)(4)............................ 1,130 1,130 (270)
Note receivable from stockholder.......................... -- (375) (375)
------- ------- -------
Total stockholders' equity...................... 8,919 18,833 68,004
------- ------- -------
Total capitalization............................ $23,171 $49,320 $77,875
======= ======= =======
</TABLE>

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

(1) Adjusted to reflect the Offering and the application of the net proceeds to
reduce indebtedness of $34,750,000 as of March 31, 1997. However, as of May
1, 1997, the Company's total long-term obligations and due to affiliate,
which is to be repaid from a portion of the proceeds of the Offering, was
$36,942,000. Upon the application of the net proceeds from the Offering, the
current portion of capital lease and due to affiliate obligations is
expected to be $4,618,000 and total long-term obligations is expected to be
$9,871,000.

(2) See Note 3 under "Use of Proceeds."

(3) Excludes 704,450 shares of Common Stock issuable upon exercise of stock
options to be granted to management, employees and directors effective upon
consummation of the Offering, all of which will have an exercise price per
share equal to the initial public offering price set forth on the cover page
of this Prospectus. See "Management -- Independent Directors Stock Option
Plan" and " -- Stock Option Plan."

(4) The "pro forma combined as adjusted" balance reflects a $270,000 after tax
prepayment penalty on the early extinguishment of debt.

17
<PAGE> 19

DIVIDEND POLICY

Prior to the ERI Acquisition and the Offering, Eagle has been a
wholly-owned, indirect subsidiary of Seitel. The revenues of Eagle generated by
work performed for Seitel and its other subsidiaries were based on prices
charged to unaffiliated third parties for similar work and included a profit.
Because Eagle was a wholly-owned subsidiary of Seitel, the profits generated by
such intercompany work were eliminated from Seitel's financial statements upon
consolidation. Upon consummation of the ERI Acquisition and the Offering, Eagle
will no longer be a wholly-owned subsidiary of Seitel. Because Seitel does not
intend to fund any payables to the Company which resulted from such intercompany
work and which are still outstanding at the time the Offering is completed, the
Company will declare a dividend prior to the Offering to eliminate any remaining
intercompany receivables from Seitel. At the close of business on the day
preceding the consummation of the Offering, Eagle will declare a dividend to its
sole stockholder, a wholly-owned, indirect subsidiary of Seitel, of Eagle's
receivable from Seitel for profits attributable to work performed by Eagle for
Seitel and its subsidiaries since inception, less taxes and allocable overhead
attributable to such intercompany work. As of March 31, 1997, the amount of such
net intercompany receivable was approximately $6 million. See "Certain
Transactions."

The Company does not currently intend to declare or pay dividends on the
Common Stock after the Offering and expects that after the Offering it will
retain funds generated by operations for the development and growth of the
Company's business. The Company's future dividend policy will be determined by
the Company's Board of Directors on the basis of various factors, including,
among other things, the Company's financial condition, cash flows from
operations, the level of its capital expenditures, its future business
prospects, the requirements of Delaware law and any restrictions imposed by the
Company's credit facilities. The Company anticipates that the proposed working
capital line of credit will impose restrictions on the Company's ability to pay
dividends.

18
<PAGE> 20

DILUTION

Purchasers of the Common Stock offered hereby will experience an immediate
and substantial dilution in the pro forma net tangible book value of the Common
Stock from the initial public offering price. As of March 31, 1997, the pro
forma net tangible deficit per share of the Common Stock was $0.25, after giving
effect to the ERI Acquisition. Net tangible book value per share represents the
Company's total tangible assets less total liabilities divided by the total
number of shares of Common Stock outstanding. After further giving effect to the
sale by the Company of the 4,000,000 shares of Common Stock to be sold by the
Company in the Offering (at an assumed initial public offering price of $
per share, and after deducting underwriting discounts and commissions and
estimated expenses of the Offering to be paid by the Company), and the
application of the net proceeds as set forth for planned repayments of
indebtedness, the Company's as adjusted pro forma net tangible book value per
share of Common Stock as of March 31, 1997 would have been $6.00, representing
an immediate increase of $6.25 in pro forma net tangible book value per share to
existing stockholders and an immediate dilution of $ per share to persons
purchasing shares in the Offering. The following table illustrates this dilution
per share of Common Stock:

<TABLE>
<S> <C> <C>
Assumed initial public offering price....................... $
------
Pro forma net tangible deficit per share before the
Offering............................................... $(0.25)
------
Increase per share attributable to new investors.......... 6.25
------
Adjusted pro forma net tangible book value per share after
the Offering.............................................. 6.00
------
Dilution per share to new investors......................... $
======
</TABLE>

The following table sets forth, on a pro forma basis as of March 31, 1997,
the difference between existing stockholders and new investors with respect to
the number of shares of Common Stock purchased from the Company and the total
cash consideration and average price per share paid to the Company (based upon
an assumed initial offering price of $ per share for new investors) without
giving effect to underwriting discounts and commissions and offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------- --------------------- PRICE
NUMBER(1) PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(2)................. 4,025,000 50.2% $18,833,000 % $ 4.68
New investors............................ 4,000,000 49.8% % $
--------- ------ ----------- ------
8,025,000 100.0% $ 100.0%
========= ====== =========== ======
</TABLE>

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

(1) The number of shares disclosed for the existing stockholders includes
1,880,000 shares being sold by the Selling Stockholder in the Offering. The
number of shares disclosed for the new investors does not include the
1,880,000 shares being purchased by the new investors from the Selling
Stockholder in the Offering.

(2) The total consideration paid by existing stockholders represents the
combined stockholders' equity after the ERI Acquisition and before the
Offering. See "Pro Forma Financial Information."

19
<PAGE> 21

SELECTED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma consolidated financial statements summarized below
and included elsewhere in this Prospectus are derived from the historical
consolidated financial statements of Eagle and ERI included elsewhere in this
Prospectus.

The unaudited pro forma consolidated balance sheet as of March 31, 1997 and
the consolidated statements of operations for the year ended December 31, 1996
and the three month periods ended March 31, 1996 and 1997 give effect to certain
transactions which will take place upon the closing of the Offering, including
the acquisition by the Company, accounted for as a purchase transaction, of the
remaining 81% of the outstanding shares of ERI in exchange for the issuance by
the Company of 600,000 shares of Common Stock and the application of the net
proceeds of the Offering to repay certain indebtedness of the Company, as if the
transactions had taken place on March 31, 1997 in the case of the unaudited pro
forma consolidated balance sheet and January 1, 1996 in the case of the
unaudited pro forma consolidated statements of operations.

The unaudited pro forma consolidated statements of operations may not be
indicative of actual results that would have been achieved had the transactions
to be effected at the closing of the Offering actually been completed as of the
dates indicated. In addition, the unaudited pro forma consolidated financial
statements are not necessarily indicative of the results of future operations of
the Company and should be read in conjunction with Eagle and ERI's historical
and consolidated financial statements and notes thereto contained elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
FOR THE QUARTER
FOR THE YEAR ENDED MARCH 31,
ENDED DECEMBER 31, 1996 -------------------------------
----------------------------------------------------------- 1996 1997
PRO FORMA -------------- --------------
EAGLE ENERGY COMBINED PRO FORMA PRO FORMA
GEOPHYSICAL, RESEARCH AS COMBINED AS COMBINED AS
INC. INTERNATIONAL ADJUSTMENTS(1) ADJUSTED(2) ADJUSTED(1)(2) ADJUSTED(1)(2)
------------ ------------- -------------- ----------- -------------- --------------
(HISTORICAL) (HISTORICAL) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue......................... $48,136 $43,607 $ (828) $90,915 $13,674 $23,626
------- ------- ------- ------- ------- -------
Expenses:
Operating expenses............ 34,917 37,601 (828) 71,690 12,250 16,557
Depreciation and
amortization................ 3,409 4,615 1,323(3) 9,347 2,024 3,010
Selling, general and
administrative expenses..... 2,680 2,619 1,601(4) 6,900 1,228 1,367
Interest expense, net......... 531 1,649 (1,529)(5) 651 110 34
------- ------- ------- ------- ------- -------
Total expenses............ 41,537 46,484 567 88,588 15,612 20,968
------- ------- ------- ------- ------- -------
Income (loss) before provision
for income taxes.............. 6,599 (2,877) (1,395) 2,327 (1,938) 2,658
Provision (benefit) for income
taxes......................... 2,420 -- (860) 1,560 (56) 489
------- ------- ------- ------- ------- -------
Net income (loss)(6)............ $ 4,179 $(2,877) $ (535) $ 767 $(1,882) $ 2,169
======= ======= ======= ======= ======= =======
Earnings (loss) per share(6).... $ .10 $ (.23) $ .27
======= ======= =======
Pro forma shares outstanding.... 8,025 8,025 8,025
======= ======= =======
Other Financial Data:
EBITDA(7)....................... $10,539 $ 3,387 $12,325 $ 196 $ 5,702
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
-----------------------------
PRO FORMA
PRO FORMA COMBINED AS
COMBINED(1) ADJUSTED(1)(2)
----------- --------------
(UNAUDITED)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................................. $ 1,304 $21,399
Total assets.............................................. 84,960 99,246
Total debt, capital lease obligations and due to
affiliate............................................... 49,239 14,489
Stockholders' equity...................................... 18,833 68,004
</TABLE>

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

(2) Reflects the combination of the adjustments and the historical financial
statements.

(3) Reflects the amortization of goodwill associated with the acquisition of ERI
over a 15-year estimated useful life.

(4) Represents identifiable additions to selling, general and administrative
expenses the Company estimates it will incur when operating as a public
registrant.

(5) Reflects a reduction in interest expense as a result of the application of
estimated net proceeds from the Offering to reduce debt and capital lease
obligations.

(6) Excludes the effect of a $600,000 extraordinary gain for early
extinguishment of debt on ERI's historical 1996 financial statements.

20
<PAGE> 22

SELECTED FINANCIAL INFORMATION

The selected financial information set forth below for Eagle has been
derived from the audited Consolidated Financial Statements and the unaudited
consolidated condensed financial statements of Eagle. Such Consolidated
Financial Statements for the years ended December 31, 1994, 1995 and 1996 have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report included elsewhere herein. The selected financial
information set forth below for ERI has been derived from the audited
Consolidated Financial Statements and the unaudited consolidated condensed
financial statements of ERI. Such Consolidated Financial Statements for the
years ended December 31, 1994, 1995 and 1996 have been audited by KPMG,
independent public accountants, as indicated in their report included elsewhere
herein. The financial information set forth below as of March 31, 1997 and for
the three month periods ended March 31, 1996 and 1997, is derived from Eagle and
ERI's unaudited consolidated condensed financial statements, which, in the
opinion of management of the individual companies, include all adjustments
necessary for a fair presentation of the financial condition and results of
operations of Eagle and ERI for such periods. The results of operations for
interim periods are not necessarily indicative of a full year's operations. This
information should be read in conjunction with the Consolidated Financial
Statements of Eagle and ERI, the notes related thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AS OF AND FOR
AS OF AND FOR THE YEARS ENDED THE THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
----------------------------------------- ------------------
1993 1994 1995 1996 1996 1997
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
EAGLE GEOPHYSICAL, INC.
Statement of Operations Data:
Revenue.................................................. $5,650 $25,721 $29,275 $48,136 $ 5,974 $12,981
------ ------- ------- ------- ------- -------
Expenses:
Operating expenses..................................... 3,596 20,070 20,986 34,917 4,336 9,286
Depreciation and amortization.......................... 409 1,817 2,471 3,409 657 1,302
Selling, general and administrative.................... 108 1,673 2,874 2,680 361 450
Interest expense, net.................................. 147 384 408 531 136 158
------ ------- ------- ------- ------- -------
Total expenses..................................... 4,260 23,944 26,739 41,537 5,490 11,196
------ ------- ------- ------- ------- -------
Income before provision for income taxes................. 1,390 1,777 2,536 6,599 484 1,785
Provision for income taxes............................... 509 651 933 2,420 178 655
------ ------- ------- ------- ------- -------
Net income............................................... $ 881 $ 1,126 $ 1,603 $ 4,179 $ 306 $ 1,130
====== ======= ======= ======= ======= =======
Balance Sheet Data:
Cash and cash equivalents................................ $ 25 $ 29 $ 58 $ -- $ 47 $ --
Total assets............................................. 7,063 14,413 17,364 26,643 20,997 35,262
Total debt and capital lease obligations................. 3,989 8,034 5,932 10,902 5,832 17,800
Stockholders' equity..................................... 881 2,007 3,610 7,789 3,916 8,919
</TABLE>
<TABLE>
<CAPTION>
AS OF AND FOR
AS OF AND FOR THE YEARS ENDED THE THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
----------------------------------------- ------------------
1993 1994 1995 1996 1996 1997
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ENERGY RESEARCH INTERNATIONAL
Statement of Operations Data:
Revenue.................................................. $9,591 $19,457 $29,423 $43,607 $ 7,700 $11,079
------ ------- ------- ------- ------- -------
Expenses:
Operating expenses..................................... 8,360 16,360 27,075 37,601 7,914 7,705
Depreciation........................................... 78 1,683 3,856 4,615 1,036 1,377
Selling, general and administrative.................... 690 1,703 2,196 2,619 467 517
Interest expense, net.................................. 90 528 1,456 1,649 406 536
------ ------- ------- ------- ------- -------
Total expenses..................................... 9,218 20,274 34,583 46,484 9,823 10,135
------ ------- ------- ------- ------- -------
Income (loss) before provision for income taxes and
extraordinary item..................................... 373 (817) (5,160) (2,877) (2,123) 944
Provision for income taxes............................... 63 11 -- -- -- --
------ ------- ------- ------- ------- -------
Income (loss) before extraordinary item.................. 310 (828) (5,160) (2,877) (2,123) 944
Extraordinary item....................................... -- -- -- 600 -- --
------ ------- ------- ------- ------- -------
Net income (loss)........................................ $ 310 $ (828) $(5,160) $(2,277) $(2,123) $ 944
====== ======= ======= ======= ======= =======
Balance Sheet Data:
Cash..................................................... $ 155 $ 266 $ 373 $ 813 $ 306 $ 1,304
Total assets............................................. 7,884 28,920 28,040 28,057 25,113 30,421
Total debt and capital lease obligations................. -- 21,712 24,543 21,072 23,333 23,236
Stockholders' equity (deficit)........................... 307 (491) (5,626) (11,231) (7,694) (9,935)
</TABLE>

21
<PAGE> 23

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

The following discussion provides general information for, and the results
of operations of, the onshore operations that were conducted by Eagle and the
offshore operations that were conducted by the Horizon Companies prior to the
consummation of the Offering. The primarily forward-looking discussion of
liquidity and capital resources of the combined entity gives effect to the
Offering and the intended use of proceeds. See "Use of Proceeds." The following
discussion should be read in connection with Eagle's Consolidated Financial
Statements, ERI's Consolidated Financial Statements, the Company's Pro Forma
Combined Financial Statements and the related Notes thereto included elsewhere
in this Prospectus. All such financial statements have been prepared in
accordance with generally accepted accounting principles in the United States.
The following information contains certain forward-looking statements. For a
discussion of certain limitations inherent in forward-looking statements, see
the second paragraph under "Risk Factors."

GENERAL

The Company's revenues are generated from the sale of onshore and offshore
seismic data acquisition services. The Company focuses its onshore operations in
logistically difficult wetland environments along the U.S. Gulf Coast, and
focuses its offshore operations in congested areas in the North Sea and the U.S.
Gulf of Mexico. The Company generally provides its onshore seismic data
acquisition services under fixed fee contracts with its customers. The Company
provides its offshore seismic data acquisition services under either distance-
or time-based contracts (or a combination of both methods) or turnkey contracts
that provide for a fixed fee. The Company generally does not retain rights to
the data acquired. Onshore operations accounted for approximately 52% of the
Company's pro forma combined revenues for the year ended December 31, 1996, with
offshore operations accounting for the remaining 48% of pro forma combined
revenues.

ONSHORE OPERATIONS

With respect to its onshore operations, the Company's prices, and therefore
its revenues, vary depending primarily on demand for the Company's services, the
number of acquisition crews of the Company, the acquisition capacity of each
crew, the utilization rates of the Company's crews and the complexity and
difficulty of the projects undertaken by each crew. The Company began its
onshore operations in 1993 with one crew operating a 1,300 channel Opseis radio
telemetry system. The Company added a second 1,300 channel Opseis onshore crew
in May 1994, and incrementally upgraded the channel capacity of both crews in
1995 and 1996 to a total of 1,850 channels per crew. The Company added a third
1,850 channel Opseis crew in January 1997. Thus, the Company has increased the
number of crews operated and the acquisition capacities of its crews from year
to year for the periods presented in the financial statements, which has
contributed substantially to the increased revenues from year to year.

The Company has historically experienced high utilization rates for its
crews, with its crews generally under contract except when mobilizing from one
project to another. However, weather delays not compensated by the Company's
customers and delays due to equipment failure can reduce operational
utilization, resulting in reduced revenues.

Revenues for less complex, easier to perform seismic acquisition projects
tend to be lower than revenues for more complex, difficult to perform projects,
even when the projects take the same amount of time for a crew to perform. The
mix of more and less complex projects results in variations from year to year
for revenues attributable to each crew. The projects performed by the Company's
two onshore crews operating in 1996 were weighted more heavily towards complex
projects than in 1995, resulting in substantially increased revenues per crew
over 1995 levels. The Company anticipates that the mix of project complexity for
its onshore crews in 1997 will more closely approximate 1995 levels.

OFFSHORE OPERATIONS

Similar to the Company's onshore operations, prices and revenues with
respect to offshore operations vary depending primarily on demand, the number of
vessels operated by the Company, the acquisition capacity of

22
<PAGE> 24

each vessel, utilization rates and the complexity and difficulty of the projects
undertaken by each vessel. In 1994, the Company operated one vessel for the
entire year, one vessel for six months, and two other vessels for two and four
months, respectively. In 1995, the Company operated three vessels for the entire
year and one vessel for four months, and in 1996 the Company operated three
vessels for the entire year and one vessel for nine months. Two of these vessels
were upgraded from two to three streamers in mid-1996. Thus, the Company has
increased the number of vessels operated and the acquisition capacities of its
vessels from year to year for the periods presented in the financial statements,
which has contributed substantially to the increased revenues from year to year.

The Company has also historically experienced high utilization rates for
its offshore vessels, with its vessels generally under contract except during
periods of scheduled maintenance and when mobilizing from one project to
another. The Company's vessels are generally taken out of service for two to
four weeks per year for scheduled maintenance, which the Company schedules for
off-season times of the year to minimize any impact on revenues. Weather delays
not compensated by the Company's customers and delays due to equipment failure
have in certain periods presented reduced operational utilization, resulting in
reduced revenues.

In April 1997, one of the Simon Labrador's streamers suffered a mechanical
failure and was damaged. The Company currently estimates that the cost of
repairing such damage is unlikely to exceed $250,000. The Company believes that
any damage in excess of its $250,000 insurance deductible will be covered by the
Company's insurance. The Company does not anticipate that this vessel will be
taken out of service for any significant length of time to effect required
repairs to the streamer. The Company estimates that the net income earned by the
Company on the project that was being performed when such damage occurred was
approximately $400,000 less than the Company had expected for that project. This
decrease was the result of the project taking longer to complete after such
damage since the vessel was operating with two instead of three streamers, the
vessel earning a reduced dayrate as a result of operating with fewer streamers
and the Company incurring the estimated cost of repair.

The Company currently intends to increase the streamer capacity of the
Simon Labrador beginning in the fourth quarter of 1997 and carrying over into
the first quarter of 1998 at an estimated capital cost of approximately $18
million, a portion of which will be funded from the proceeds of the Offering.
This vessel will be taken out of service for a period of approximately 90 days
to accomplish these modifications, which will reduce the Company's revenues
during these quarters. The Company anticipates that revenues and income
generated by this vessel will increase as a result of these upgrades.

RESULTS OF OPERATIONS

The following discussion of the Results of Operations is divided into a
discussion of the Company's onshore operations, which were conducted by Eagle,
and the Company's offshore operations, which were conducted by the Horizon
Companies prior to the consummation of the Offering. These discussions are
presented based on the revenues and expenses of the separate companies prior to
the ERI Acquisition, which will occur contemporaneously with the Offering. The
revenues of Eagle include intercompany profits from work performed for Seitel
and its subsidiaries. See "Risk Factors -- Influence of Seitel, Inc. on the
Company," "Certain Transactions" and Note G to Eagle's Consolidated Financial
Statements.

The ERI Acquisition has been accounted for in the Pro Forma Combined
Financial Statements under the purchase method of accounting. As a result, the
assets and liabilities of ERI have been recorded at their estimated fair values
as of the date of this Prospectus. The purchase price in excess of such net
assets has been recorded as goodwill and will be amortized over a 15-year
period. Accordingly, the Company's depreciation and amortization will increase
by approximately $1.3 million per year in future periods as a result of
amortization of this goodwill. The Company expects the principal effects of the
ERI Acquisition on future results of operations to be this increase in
depreciation and amortization costs associated with goodwill and the decrease in
interest expense resulting from the repayment of debt with the proceeds of the
Offering. See "-- Liquidity and Capital Resources."

23
<PAGE> 25

ONSHORE OPERATIONS

First Quarter 1997 Compared to First Quarter 1996

Revenue increased 117.3% from $6.0 million in the first quarter of 1996 to
$13.0 million in the first quarter of 1997, primarily due to the addition of a
third Opseis crew in January 1997. In the first quarter of 1997, Eagle operated
three crews, whereas in the first quarter of 1996, Eagle operated two crews.
Additionally, the surveys performed by the Company's crews in the 1997 period
were in more difficult logistical and environmental areas, providing higher
contract prices per crew, than the surveys performed in the 1996 period.
Although the surveys performed by the Company's onshore crews during 1996 were
generally more logistically demanding than in prior years, the surveys performed
in the first quarter of 1996 were not as logistically demanding as the surveys
performed during the last three quarters of 1996.

Operating costs increased 114.2% from $4.3 million in the first quarter of
1996 to $9.3 million in the first quarter of 1997, primarily due to the addition
of the third crew in the 1997 period. Operating margin percentage (revenues less
operating costs, as a percentage of revenues) increased slightly from 27.4% to
28.5% in the first quarter of 1997.

Depreciation and amortization increased 98.2% from $0.7 million in the
first quarter of 1996 to $1.3 million in the first quarter of 1997, resulting
from operating three crews in the 1997 period versus two in the 1996 period and
from depreciation of marine seismic equipment purchased by Eagle in July 1996
and leased to the Horizon Companies. Selling, general and administrative
expenses increased 24.7% from $0.4 million in the first quarter of 1996 to $0.5
million in the first quarter of 1997, primarily due to the addition of
administrative staff to support the expanded operations. Net interest expense
increased from $0.1 million in the 1996 period to $0.2 million in the 1997
period due to financing costs associated with the third crew.

1996 Compared to 1995

Onshore revenues increased 64.4% from $29.3 million for 1995 to $48.1
million for 1996. This increase in revenue was primarily due to increased
production from the two crews operating in 1996 and higher prices due to these
crews performing a greater proportion of higher definition seismic data
acquisition services than in 1995 and performing seismic data acquisition
services in logistically and environmentally more difficult areas than in 1995.
The Company increased the channel capacity of both crews during 1996 by
approximately 20% over their 1995 channel capacity. This enabled each crew to
acquire more seismic data, resulting in higher revenues.

Operating costs increased 66.4% from $21.0 million for 1995 to $34.9
million for 1996, reflecting the higher costs associated with performing
services in logistically and environmentally difficult areas. These higher costs
were primarily attributable to additional subcontract service and labor costs.
Operating margin percentage changed only slightly from 28.3% for 1995 to 27.5%
for 1996.

Depreciation and amortization increased 38.0% from $2.5 million in 1995 to
$3.4 million in 1996, primarily as a result of depreciation related to
additional equipment costs from the increased channel capacity of both crews in
addition to new capital purchases of geophones for both crews during 1996.
Selling, general and administrative expenses decreased slightly, from $2.9
million in 1995 to $2.7 million in 1996, primarily due to cost saving measures
implemented in 1996. Net interest expense increased from $0.4 million in 1995 to
$0.5 million in 1996, reflecting additional financing costs for equipment
purchases made during 1996.

1995 Compared to 1994

Onshore revenue increased 13.8% from $25.7 million for 1994 to $29.3
million for 1995. This increase resulted from two acquisition crews operating
for all of 1995 compared to 1994 when one crew was in operation for the entire
year and the second acquisition crew, which was added in May 1994, was in
operation for only eight months during the year.

Operating costs increased 4.6% from $20.1 million for 1994 to $21.0 million
for 1995 due to the increase in revenues from 1994 to 1995. Operating margin
percentage increased from 22.0% for 1994 to 28.3% for 1995.

24
<PAGE> 26

The improved operating margin resulted from the expansion of the crews' channel
capacity, which yielded a higher return on revenues.

Depreciation and amortization increased from $1.8 million in 1994 to $2.5
million in 1995, reflecting the depreciation for the two crews operating for a
full year in 1995 compared with one crew operating for a full year and one for a
partial year in 1994. The Company's selling, general and administrative expenses
increased from $1.7 million in 1994 to $2.9 million in 1995 due primarily to
variable compensation expenses related to the increased level of business as
well as legal fees associated with a contract dispute with a customer. Net
interest expense increased 6.3% from 1994 to 1995 due to financing costs
associated with additional equipment purchases.

OFFSHORE OPERATIONS

First Quarter 1997 Compared to First Quarter 1996

Revenue increased 43.9% from $7.7 million in the first quarter of 1996 to
$11.1 million in the first quarter of 1997, primarily due to improved vessel
utilization in the 1997 period. In the first quarter of 1997, the Simon Labrador
operated in the Falkland Islands for the entire quarter, whereas in the first
quarter of 1996, this vessel operated in the North Sea and had lower earnings
due to seasonal weather conditions. Additionally, the Discoverer and Abshire
Tide operated for the entire first quarter of 1997, whereas in the first quarter
of 1996, they were in startup mode in the U.S. Gulf of Mexico and therefore
operated for only a part of the quarter.

Operating expenses decreased slightly from $7.9 million in the first
quarter of 1996 to $7.7 million in the first quarter of 1997, primarily due to
lower variable operating costs of vessel operations and due to the Pacific
Horizon being in drydock one month in the 1997 quarter. Operating margins
increased from negative 2.8% to 30.5% due to the increase in revenue.

Depreciation increased 32.9% from $1.0 million in the first quarter of 1996
to $1.4 million in the first quarter of 1997, resulting from operating four
vessels in the 1997 period versus three in the 1996 period and from the purchase
of additional capital equipment in late 1996 with corresponding depreciation
beginning in 1997. Selling, general and administrative expenses increased
slightly due to additional legal and administrative costs. Interest expense
increased from $0.4 million in the 1996 period to $0.5 million in the 1997
period due to financing costs associated with additional working capital
requirements.

No provision was made for United States and United Kingdom income taxes in
either quarter due to operating losses and operating loss carry-forwards from
the offshore operations.

1996 Compared to 1995

Offshore revenues increased 48.2% from $29.4 million in 1995 to $43.6
million in 1996, primarily due to additional months of vessel operations coupled
with vessel streamer upgrades. In 1996, three vessels operated for the entire
year and one vessel for nine months, whereas in 1995, three vessels operated for
the entire year and one vessel for four months. Additionally, the streamer
capabilities of two of the vessels were upgraded in mid-1996 from two to three
streamers, providing expanded revenue capacity. In the fourth quarter of 1996,
one vessel was inactive due to a major engine failure that resulted in reduced
revenues of approximately $1.8 million and adversely affected operating margins.

Operating costs increased 38.9% from $27.1 million in 1995 to $37.6 million
1996. This increase was primarily due to company growth, increased vessel
operations and the additional streamer capacity of the vessels in service.
Operating margins improved from 8.0% in 1995 to 13.8% in 1996 due to more
profitable contracts and improved vessel utilization. A significantly
unprofitable contract in the Gulf of Mexico contributed to the lower operating
margins in 1995.

Depreciation increased 19.7% from $3.9 million in 1995 to $4.6 million in
1996, primarily due to additional vessels and equipment upgrades put into
service in 1996. Selling, general and administrative expenses increased 19.3%
from $2.2 million in 1995 to $2.6 million in 1996, primarily due to additional
legal costs of $0.1 million incurred by ERI in connection with Seitel's
investment in ERI and additional personnel

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<PAGE> 27

costs of $0.2 million to accommodate ERI's growth. Net interest expense
increased from $1.5 million in 1995 to $1.6 million in 1996 due to the increased
borrowing by the Company.

No provision was made for United States and United Kingdom income taxes in
either 1996 or 1995 due to operating losses from the offshore operations.

1995 Compared to 1994

Revenue increased 51.2% from $19.5 million for 1994 to $29.4 million for
1995 due to additional vessel capacity in service in 1995. In 1995 three vessels
operated for the entire year and one vessel operated for four months, whereas
during 1994 one vessel operated for the entire year, one vessel operated for six
months, one vessel operated for four months and one vessel operated for two
months.

Operating costs increased 65.5% from $16.4 million in 1994 to $27.1 million
in 1995 due to the additional vessel capacity in 1995 and the costs associated
with the startup of these additional vessels. Operating margins decreased from
15.9% in 1994 to 8.0% in 1995, primarily due to a significantly unprofitable
contract in the U.S. Gulf of Mexico.

Depreciation increased from $1.7 million in 1994 to $3.9 million in 1995 as
a result of equipment purchases made in mid- to late-1994 to equip the new
vessels placed in service during 1994. Selling, general and administrative
expenses increased 28.9% from $1.7 million for 1994 to $2.2 million for 1995.
During 1994, Horizon Management, who owned stock of ERI, elected to receive
reduced salaries. Net interest expense increased from $0.5 million to $1.5
million due to additional working capital requirements and additions to ERI's
vessel fleet.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the Offering, Eagle has been a wholly-owned subsidiary of Seitel.
In the past, Seitel has guaranteed certain indebtedness of Eagle and has made
loans to Eagle. Therefore, the historical liquidity and capital resources of
Eagle may not be indicative of the Company's future liquidity and capital
resources.

The Company's pro forma working capital as of March 31, 1997, after giving
effect to the consummation of the ERI Acquisition and the application of the net
proceeds from this Offering, was $ . See "Use of Proceeds." The pro
forma indebtedness of the Company as of such date consisted of a capital lease
obligation totaling approximately $12.4 million relating to the capital lease of
the vessel Simon Labrador.

The Company will repay $36.9 million of existing indebtedness with a
portion of the net proceeds of the Offering, which will significantly decrease
the Company's interest expenses and will eliminate the Company's obligation to
make payments on the principal of such debt in the future. See "Use of
Proceeds." This will allow the Company to apply the cash generated from
operations towards its capital requirements rather than to service such debt.

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<PAGE> 28

The Company currently plans to expand its existing data acquisition
capabilities through the expansion of the streamer towing capacity of one of its
vessels beginning in the fourth quarter of 1997 and carrying over into the first
quarter of 1998, at a capital cost of approximately $18 million. A portion of
this capital expenditure will be funded from the net proceeds of the Offering.
See "Use of Proceeds." The Company anticipates that the portion of this capital
expenditure not funded from the net proceeds of the Offering will be funded from
cash from operations and additional borrowing. In 1998, the Company intends to
charter and equip one additional offshore seismic vessel, at a capital cost of
approximately $20 to $30 million. The Company intends to fund these capital
costs with a combination of cash from operations and additional debt or equity
financing.

The Company operates the Simon Labrador under a capital lease with
Simon-Horizon Limited ("Simon"), which in turn leases the vessel from Royal Bank
of Scotland (Industrial Leasing) Limited ("RBS") under a capital lease. Pursuant
to the arrangement between the Company and Simon, the Company is required to use
its best endeavors to obtain the release of Simon from all obligations in
connection with the lease of this vessel. The Company is currently negotiating
with RBS to enter into a capital lease for the vessel directly with RBS, the
effect of which would be to release Simon from its obligations with respect to
the vessel. If RBS will not enter into a lease for this vessel directly with the
Company or will not agree to other arrangements that will release Simon from its
obligations with respect to this vessel, the Company may be required to exercise
its purchase option under the capital lease, which would currently require a
payment of approximately $12.7 million. If the Company is required to exercise
such purchase option and is unable to obtain financing for such purchase price,
the Company would be required to apply funds set aside for capital expenditures
or other funds from operations towards such purchase price. See Note 3 under
"Use of Proceeds."

The Company is also currently pursuing opportunities to expand its wetland
seismic data acquisition activities internationally, primarily into Latin
America. Any such expansion will likely require the addition of another onshore
crew at a capital cost of approximately $5 to $7 million. The Company currently
intends to fund any such required capital costs with a combination of cash from
operations and additional debt financing.

The Company is continually evaluating the practical applications of new
seismic technology and equipment in order to maintain its competitive
technological position; however, the Company does not have any current
arrangement or agreement to acquire or employ any such new technology. The
Company may revise its plans with respect to capital expenditures in response to
future changes in the seismic data acquisition industry in general and the
demand for its services in particular, its results of operations, its other
capital requirements and other relevant factors.

As of March 31, 1997, the Company had capital commitments to purchase
approximately $1.4 million of additional marine seismic data acquisition
equipment as part of its scheduled routine replacement of existing equipment. As
of May 31, 1997, the Company had purchased approximately $330,000 of such
equipment, which was financed with vendor financing which the Company intends to
repay with a portion of the net proceeds of the Offering. See "Use of Proceeds."
The purchase price of the balance of such equipment will be funded with cash
from operations and vendor financing.

The Company intends to establish a working capital revolving credit
facility prior to consummation of the Offering. There can be no assurance that
the Company will be able to obtain such financing on terms acceptable to the
Company. In the past, Seitel has guaranteed certain indebtedness of the Company
and has made loans to the Company. All of such debt owed to Seitel is being
repaid with a portion of the net proceeds of the Offering. The Company's
borrowing costs may increase in the future as a result of having to obtain
financing based on its own creditworthiness.

The Company believes that its planned capital expenditures and operating
requirements through the end of 1997 will be funded from a portion of the net
proceeds of this Offering and the Company's cash flow from operations. The
Company anticipates that its cash flow from operations will be sufficient to
fund its operating requirements for the foreseeable future, and that any
additional capital expenditures will be funded from the Company's cash flow from
operations and additional debt or equity financing. If the Company is not able
to obtain additional financing, it will be unable to make such capital
expenditures and the Company's financial position and results of operations may
be materially and adversely affected as a result.

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<PAGE> 29

SEASONALITY

The onshore and offshore seismic data acquisition operations of the Company
are subject to seasonal fluctuation, with the greatest volume of data
acquisition occurring during the summer and fall. This is due primarily to
adverse weather conditions, which are more prevalent in the winter and spring.

NEW ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share," effective for
interim and annual periods after December 15, 1997. This statement replaces
primary earnings per share with a newly defined basic earnings per share and
modifies the computation of diluted earnings per share. The application of this
statement will not have any impact on earnings per share for the three years
ended December 31, 1996, as there were no common stock equivalent shares
outstanding.

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<PAGE> 30

DESCRIPTION OF BUSINESS

GENERAL

INDUSTRY OVERVIEW

Historically, 2D surveys were the primary technique used to acquire seismic
data. However, advances in computer technology in the last five to ten years
have made 3D seismic data, which provides a more comprehensive geophysical
image, a practical and capable oil and gas exploration and development tool. 3D
seismic data is proving to be more accurate and effective than 2D data at
identifying potential hydrocarbon-bearing geological formations. The use of 3D
seismic data to identify locations to drill both exploration and development
wells has improved the economics of finding and producing oil and gas. This in
turn has created increased demand for 3D seismic surveys in recent years.

Seismic data is acquired on land by deploying thousands of seismic sensors,
called geophones, over a portion of the area to be covered by the seismic
survey. An energy source, such as subsurface dynamite or truck mounted
vibrators, is used to generate seismic waves that move through the geological
formations under the area and are reflected by various subsurface strata back to
the surface, where they are detected by the geophones. The geophones and energy
sources must be deployed over the survey area, which will cover many square
miles, in a specified configuration. For 2D data, the ideal configuration of
geophones and energy sources is a straight line with an energy source and small
groups of geophones, or geophone stations, placed evenly every few hundred feet
along the line. For 3D data, the ideal configuration is generally a grid of
perpendicular lines spaced a few hundred to a few thousand feet apart, with
geophone stations spaced evenly every few hundred feet along one set of parallel
lines, and energy sources spaced evenly every few hundred feet along the
perpendicular lines. This configuration must be carefully designed to provide
optimal imaging of the targeted geological structures while taking into account
surface obstructions such as water wells and oil and gas wells, pipelines and
areas where permission to enter upon the land cannot be obtained. Typically,
between four and six geophone stations are connected by relatively short wires
to electronic field recording boxes, which collect the seismic data from those
geophones. These boxes are in turn connected to a central recording unit that
records the data from all of the deployed geophones. Once the network of
geophones and field recording boxes is deployed over a portion of the area to be
surveyed, one of the energy sources is activated, the reflected seismic waves
are detected by the geophones, the signals from the geophones are collected and
digitized by the recording boxes, and the boxes send the seismic data to the
central recording system. The geophones and recording boxes from one end of the
single line in the case of 2D data, or one end of the multiple lines being
recorded in the case of 3D data, are then removed from that end of the line or
lines, and are moved to locations at the other end of the line or lines. An
energy source again generates seismic waves that are recorded, and the process
is repeated, moving one step of a few hundred feet at a time, until the entire
area to be surveyed has been covered.

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<PAGE> 31

Conventional land-based seismic data acquisition systems use cumbersome
cables, which can be many miles long, to connect the recording boxes to the
central recording unit. The Company's radio telemetry systems, on the other
hand, use radio signals to transmit seismic data to the central recording unit.
Radio signals can go over and through obstructions that cables must go around,
which makes the Company's data acquisition systems more efficient in wetland
environments where there are numerous geographic obstacles. In addition, by
eliminating these lengthy cables, the Company's data acquisition systems are
less intrusive on the environment, making them better suited for work in
ecologically sensitive areas.

Each geophone station in an onshore seismic data acquisition system,
whether a traditional cable system or a radio telemetry system, requires a
separate channel in the recording system. The number of channels required for a
particular seismic data acquisition project will depend on the number of "live"
geophone stations that are required to collect data for each discharge from an
energy source. Generally, the higher the resolution of the data to be acquired,
the more live channels that are required in conducting the survey. Most advanced
3D surveys being conducted by the Company's wetland crews utilize between 1,000
and 1,400 live channels. In order to operate efficiently, an onshore acquisition
system should have more total channels than are required to record the seismic
waves from any given energy source discharge. This allows additional geophones
and recording boxes to be deployed along the geophone lines in advance, which
can increase efficiency in acquiring data, and allows for a certain portion of
the system to undergo repairs and maintenance without interrupting data
acquisition activities.

The conventional method of acquiring offshore seismic data involves
releasing acoustic energy, normally generated by a burst of compressed air, into
the water. The energy, in the form of a pressure wave, travels through the water
into the sea bed and is reflected from various subsurface strata back to
hydrophones towed behind the seismic acquisition vessel. Hydrophones are
sensitive pressure sensors, many thousands of which are deployed in towed
streamer arrays behind the seismic vessel. The reflected energy is detected by
the hydrophones in the streamers, and the data from the hydrophones is
transmitted by wire or optical fibers to sophisticated recording equipment on
the vessel. Navigation and positioning equipment, including global positioning
systems ("GPS"), lasers, acoustic and azimuth devices, are used to accurately
determine the positions of the vessel, energy sources, and streamer arrays as
they traverse the survey area. A recording of seismic data is made at regular
intervals over the sea bed as the vessel traverses the survey area along
predetermined paths. To acquire 2D data, independent lines of data are acquired
and recorded. To acquire 3D data, a dense grid of lines of data is acquired and
recorded. The density of data required for 3D data is most efficiently achieved
by using multiple energy sources and streamers. However, some geological
structures can be better imaged by limiting the lateral distance from the
streamers to the energy source, and in these situations fewer streamers are more
effective at collecting the data. Vessels towing fewer streamers are generally
more maneuverable than vessels towing more streamers, and are therefore better
suited to conduct 3D surveys in congested areas offshore with dense marine
traffic and numerous obstacles such as drilling rigs, supply vessels and
platforms. Conversely, vessels towing more streamers are generally more
efficient at conducting larger, wide-swathe 3D surveys in open water.

Similar to onshore seismic data acquisition systems, the channel capacity
of offshore seismic data acquisition systems is governed by the number of
hydrophone groups deployed in the streamers, the number of digitizing modules
available, and the capability of the onboard recording system. The vessels
operated by the Company have either 1,024 or 1,440 channels and can be
incrementally upgraded by adding a combination of additional hydrophone groups,
digitizing modules and more recording capacity as appropriate for the specific
requirements of a seismic data acquisition project.

After the raw seismic data has been acquired, it is sent to a data
processing facility where it is processed using sophisticated computer hardware
and software. The processed data can then be manipulated and viewed on computer
workstations by geoscientists to map the structures of the subsurface to
determine if formations exist where hydrocarbons are likely to have accumulated
and where such formations are located.

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<PAGE> 32

BUSINESS OVERVIEW

The Company performs seismic data acquisition services for its customers,
which include major and independent oil companies and seismic data marketing
companies, on a contract basis. Historically, the Company generally has not
retained any interest in the data it acquires for its customers, although in the
future the Company may perform its services in exchange for an ongoing interest
in the data in response to customer proposals. The Company's geotechnical staff
works closely with its customers to design seismic surveys to meet the
customers' specific requirements while working within the confines imposed by
permits, topographical obstructions and manmade structures. The Company applies
its experience and expertise with its knowledge of the capabilities of its
equipment to optimize its customer's seismic surveys within these confines. The
Company performs limited processing of seismic data for quality control
purposes, and delivers the seismic data it acquires to third-party processors
selected by its customers for complete processing.

The Company's crews and equipment have been configured for the technically
complex and logistically demanding operations they conduct. The Company operates
three onshore 1,850 channel Opseis radio telemetry seismic data acquisition
crews in the U.S. Gulf Coast region and four towed-streamer seismic data
acquisition vessels, primarily in the North Sea and the U.S. Gulf of Mexico. The
Company's wetland crews and equipment, which use radio signals rather than
traditional cables to collect seismic data, are specifically designed to work in
environmentally sensitive and operationally challenging swamp and marsh
environments. Because these systems use radio signals to transmit data, they can
be operated more efficiently than cable-based systems, particularly in wetland
areas and highly populated areas where there are numerous topographic
obstructions, such as rivers, bays, highways and towns. These systems also excel
in environmentally sensitive areas where physical intrusion must be minimized.

The Company believes that it has developed particular expertise in both the
front-end planning and execution of complex onshore 3D surveys. Front-end
planning involves obtaining permits from the numerous land and mineral owners
required in large onshore 3D acquisition projects and refining such projects to
capitalize on the capabilities of the Company's radio telemetry systems. The
Company believes it has developed expertise in the execution of complex 3D
acquisition projects, including its ability to efficiently manage the surveying,
drilling and permit compliance for the thousands of geophone and source points
required in large 3D acquisition projects. The Company believes that the
combination of its superior permitting, planning and project management skills
and the capabilities of the Company's equipment to acquire data around obstacles
and areas where permission from land owners cannot be obtained provides the
Company with a competitive advantage in seeking data acquisition work in the
wetland regions of the U.S. Gulf Coast.

The Company operates four seismic data acquisition vessels under charter or
lease, each of which is currently configured to tow either two or three
streamers. These vessels are well equipped to work in congested offshore areas
with dense marine traffic, production platforms and other obstructions, where
vessels towing more streamers are ill-suited to work due to their lack of
maneuverability. The configuration of the Company's vessels is also optimal for
conducting small and medium sized high definition seismic surveys around
offshore platforms. These surveys may be used by oil and gas companies to
delineate the extent of or enhance the production from existing fields.

Approximately 52% of the Company's 1996 pro forma revenues was derived from
its onshore operations, and the remaining approximately 48% of revenues was
derived from offshore operations. All onshore revenues in 1996 were attributable
to 3D data acquisition activities. Offshore revenues in 1996 were attributable
approximately 85% to 3D data acquisition activities and approximately 15% to 2D
data acquisition activities.

BUSINESS STRATEGY

The Company's objective is to increase stockholder value by enhancing its
market position as a specialized provider of seismic acquisition services
through the following business strategies:

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<PAGE> 33

timely and cost-efficient manner through the use of advanced seismic
technologies. The Company plans to capitalize on its strong industry reputation
to expand its customer base within its niche markets.

EXPAND INTERNATIONALLY. The Company is currently pursuing opportunities to
expand its wetland seismic data acquisition activities internationally,
primarily into Latin America. The Company believes that demand for seismic data
acquisition services will continue to grow in this and other regions
internationally. The Company intends to take advantage of the international
reputation and experience, including previous onshore operating experience, of
the Horizon Companies as it expands its wetland activities internationally. The
Company believes that the greater financial resources available to its offshore
operations following the Offering will better enable it to satisfy existing
customer demand and to mobilize its seismic acquisition vessels to new
geographic markets, such as Latin America, Africa and Southeast Asia, as
opportunities arise outside its primary areas of operation in the U.S. Gulf of
Mexico and the North Sea.

ONSHORE SEISMIC OPERATIONS

The Company acquires onshore seismic data using seismic recording crews
employed by the Company and operating equipment owned or leased by the Company.
Onshore seismic crews generally range in size from 40 to 60 persons, depending
on the terrain involved and the complexity of the project. The equipment
utilized by Company crews includes the Opseis recording systems, which are made
up of radio telemetry field recording boxes (called seismic acquisition remotes,
or "SARs"), a truck-based central recording unit, trailer-based mobile
maintenance and repair facilities and equipment, and various spare parts, along
with geophones, trailers used for transporting the system from project to
project, vibroseis trucks, and off-road trucks, swamp buggies, all terrain
vehicles ("ATVs"), conventional boats and air boats used to deploy geophones and
SARs. The Company subcontracts the surveying services used to determine the
exact placement of geophones and energy sources and the drilling services for
dynamite shot holes. Company crews deploy and maintain the geophones and SARs,
oversee the operation of the energy sources, and operate all of the recording
system components relating to seismic data recording activities.

The Company currently operates three onshore acquisition crews, each
utilizing an 1,850 channel 24 bit Opseis 3D seismic data acquisition system. The
Company believes that these systems are the best currently available for
conducting complex 3D seismic surveys in difficult and environmentally sensitive
wetland environments. These systems use radio signals to transmit seismic data
from the SARs to the central recording system and are therefore more efficient
in swamps and marshes and in areas of numerous man-made obstacles than systems
that use cables to transmit data. The SARs are waterproof and are designed to be
used in a wet environment.

Prior to acquiring onshore seismic data in the field, the specifications of
the survey must be designed to optimize the imaging of the targeted geologic
strata, permits must be obtained from the mineral owners of the survey area, and
permits to enter onto the land must be obtained from surface owners or lessees
whose

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property will be traversed in the acquisition operations. The specifications of
the seismic surveys are generally designed by the Company's customers, with
varying degrees of input from the Company. A typical 3D survey conducted by the
Company in the U.S. Gulf Coast region will require permits from hundreds or even
thousands of mineral and land owners. Although some customers obtain these
permits themselves, many contract with the Company, as part of the acquisition
project, to obtain these permits. The Company has developed proprietary computer
software to track which permits have been obtained and the conditions imposed by
the various permits. Once permitted, surveys frequently require modifications to
take into account surface obstructions, such as water wells and oil and natural
gas wells, highways, towns and areas where permits cannot be obtained. The
Company combines its experience in conducting onshore surveys in areas with many
obstructions with its knowledge of the capabilities of its radio telemetry
systems to modify surveys after permitting to optimize the quality of the data
obtained within the physical limitations imposed. The Company believes that the
combination of its superior permitting, planning and project management skills
and the capabilities of the Company's equipment to acquire data around obstacles
and areas where permission from land owners cannot be obtained provides the
Company with a competitive advantage in seeking data acquisition work in the
wetland regions of the U.S. Gulf Coast.

OFFSHORE SEISMIC OPERATIONS

The Company acquires offshore seismic data using seismic crews employed by
the Company and operating chartered or leased vessels that have been modified
and outfitted with a full complement of data acquisition, recording, navigation
and communications equipment owned or leased by the Company. The Company's
seismic crews generally range in size from 12 to 20 persons, excluding the
ship's captain and vessel crew. Seismic crews live aboard the ship during their
tours of duty and work staggered shifts to permit continuous operations. Company
crews direct the positioning of the vessel using sophisticated navigation
equipment, deploy and retrieve streamers and energy sources, and operate all of
the systems relating to seismic activities. Company crews are not responsible
for the vessels or for vessel crews, who are employees of the vessel owner or a
contract operator. Each vessel has an equipment complement consisting of
recording instrumentation, digital recording streamers, location systems,
multiple navigation systems, and, except for the recording vessel Abshire Tide,
a seismic energy source and control system. Seismic reflections detected by the
hydrophones on the streamers are digitized and partially processed before they
are transmitted to recording instruments for storage on magnetic media.

Two of the Company's vessels, the Discoverer and the Abshire Tide,
currently work together as a single seismic data acquisition crew in the U.S.
Gulf of Mexico. The subsalt surveys currently being recorded in the U.S. Gulf of
Mexico require a greater distance between the energy source and the hydrophones,
or longer offset, than ordinary surveys. This can be accomplished either by a
single vessel towing very long streamers, or by two vessels working in tandem
towing shorter streamers. When vessels work in tandem, only one vessel is
required to have an energy source. Vessels working together can also
"undershoot" obstructions such as platforms and drilling rigs, where the energy
source is discharged on one side of the obstruction and the hydrophone streamers
are towed on the other side of the obstruction.

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<PAGE> 35

The following table sets forth certain information as of May 1, 1997
concerning the seismic vessels operated by the Company. As of such date, all of
these vessels were operating or mobilizing to committed projects.

<TABLE>
<CAPTION>
LAST TOTAL DATA
SIGNIFICANT LENGTH BEAM STREAMER ACQUISITION CHARTER/LEASE CURRENT
VESSEL NAME UPGRADE (FEET) (FEET) CAPABILITY SYSTEM EXPIRATION LOCATION
----------- ----------- ------ ------ ---------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Simon Labrador....... 1991 263 55 3 Syntron 2001(1) Falkland
1,440 Channel Islands
16 Bit
Discoverer(2)........ 1996 236 52 3 Syntron 1998(3) Gulf of
1,440 Channel Mexico
16 Bit
Abshire Tide(2)...... 1996 194 40 3 Syntron 1997(4) Gulf of
1,440 Channel Mexico
16 Bit
Pacific Horizon...... 1996 251 41 2 Input/Output 2001(5) North Sea
1,024 Channel
24 Bit
</TABLE>

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

(1) The Simon Labrador is leased under a capital lease expiring in 2001, with a
ten-year renewal option. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

(2) The Discoverer and Abshire Tide work in tandem as a single seismic crew.

(3) Pursuant to a one year extension option, this charter can be extended to
1999.

(4) The Company is currently negotiating to extend the term of this charter for
one year.

(5) This charter can be terminated by the Company on one-month's notice.

The Company believes that maintaining a combination of short-term vessel
charters with long-term capital leases and other arrangements provides
flexibility to manage the risks associated with the fixed costs of charters by
adjusting the size of its fleet according to market demand while also providing
stability in the Company's vessel fleet. The Company generally believes that
chartering vessels maintains vessel and financial flexibility and reduces to
some extent the Company's exposure to technological change and obsolescence of
the vessels. Although several of the Company's vessels are under short-term
charters, the Company believes that there is a sufficient supply of suitable
vessels available for charter at acceptable rates that can be outfitted or
modified within a reasonable period of time to meet its needs for such vessels.
All of the vessels in the Company's vessel fleet are operated under charter
agreements or leases expiring from 1997 to 2001, with provisions for extensions
ranging from a month to ten years.

The Company generally operates its offshore seismic data vessels on a
24-hours-a-day, seven-days-a-week basis. Each of the Company's vessels is taken
out of service for approximately two to four weeks each year, generally at
different off-season times of the year, for routine maintenance and service.

The Company intends to upgrade the seismic data acquisition capabilities of
the Simon Labrador at the end of 1997 or early 1998 to increase its streamer
capability from three to between four and six streamers and to upgrade its data
acquisition system from a 16 bit to a 24 bit resolution system. This upgrade
will significantly increase the seismic data acquisition capabilities of the
Simon Labrador, which will enable the Company to further increase efficiency in
difficult operational and technically demanding areas. In addition, the Company
is evaluating the potential charter of an additional seismic acquisition vessel
in mid-1998, subject to financing and sustained customer demand, to further
increase its offshore seismic data acquisition capabilities.

CAPITAL EXPENDITURES

The Company has numerous competitors for both its onshore and offshore
seismic data acquisition business, and substantial financial and other resources
are required to maintain the state-of-the-art technology

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<PAGE> 36

necessary to permit effective competition in bidding for contracts. Seismic data
acquisition technology has progressed rapidly over recent years, and the Company
expects this trend to continue. Sophisticated seismic data acquisition equipment
and related crew training are very costly. For example, the cost of equipping a
crew with a state-of-the-art system, such as the 1,850 channel Opseis systems
the Company currently operates onshore (including training and ancillary
equipment), ranges from approximately $5.0 to $7.0 million, the largest
component of which is attributable to the SARs. Similarly, the cost of equipping
a modern seismic data acquisition vessel with between four and six streamers
would range from approximately $20.0 to $30.0 million plus vessel charter costs.
The Company's strategy is to update its onshore and offshore data acquisition
systems to maintain its competitive position. This may require large capital
expenditures in addition to the Company's planned capital expenditures. There
can be no assurance that the Company will have or otherwise be able to obtain
the capital necessary to upgrade its equipment or to acquire any addition
required equipment.

The Company currently intends to expand the data acquisition capabilities
of the seismic acquisition vessel Simon Labrador in late 1997 or early 1998 at
an estimated capital cost of approximately $18.0 million. This upgrade will
significantly expand the seismic data acquisition capabilities of this vessel by
increasing its streamer capacity from three to between four and six streamers
and updating its recording equipment from a 16 bit system to a 24 bit system.
The Company also intends to charter and equip an additional seismic acquisition
vessel during 1998 at a projected cost ranging from $20.0 to $30.0 million. As
the Company expands its onshore operations internationally, it is likely that
the Company will need to acquire additional onshore acquisition systems at an
estimated capital cost of approximately $5.0 to $7.0 million per crew. The
Company anticipates that the funds for such expenditures will come from a
portion of the net proceeds of the Offering, cash from operations and additional
bank financing. However, there can be no assurance that funds from operations
will be sufficient, or that additional bank financing will be available on terms
acceptable to the Company. The Company may revise its plans in response to
future changes in the oil and gas industry in general and in the demand for its
services in particular, its results of operations, its other capital
requirements and other factors. See "Risk Factors -- Capital Intensive Business;
Rapid Obsolescence of Technology," "Use of Proceeds" "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources," and "Description of Business -- Competition."

GEOGRAPHIC OPERATIONS

ONSHORE. During 1996, onshore 3D seismic data acquisition contract revenues
were $47.3 million, or 52.0% of the Company's pro forma combined revenues. For
the first three months of 1997, onshore 3D seismic data acquisition contract
revenues were $12.5 million, or 53.1% of the Company's pro forma combined
revenues. The revenues in both 1996 and the first three months of 1997 were
generated from surveys conducted in the U.S. Gulf Coast region. The Company
expects in the near term to continue to focus its onshore surveys in this
region, although the Company intends to seek opportunities for contract revenues
in other areas, primarily Latin America, where oil and gas exploration and
production activities exist.

OFFSHORE. During 1996, offshore seismic data acquisition contract revenues
were $43.6 million, or 48.0% of the Company's pro forma combined revenues. These
revenues were generated primarily from surveys conducted in the North Sea and
the U.S. Gulf of Mexico. For the first three months of 1997, offshore seismic
data acquisition contract revenues were $11.1 million, or 46.9% of the Company's
pro forma combined revenues. These revenues were generated primarily from
surveys conducted in the Falkland Islands and the U.S. Gulf of Mexico. The
Company expects in the near term to continue to focus its offshore surveys in
the North Sea and the U.S. Gulf of Mexico, although the Company may take
advantage of opportunities for contract revenues in other areas of the world
where offshore oil and gas exploration and production activities exist.

SALES AND MARKETING

MARKETING. The Company's services traditionally have been marketed by the
Company's principal executive officers. After the Offering, the Company intends
to maintain this marketing approach in order to preserve long-term relationships
established by the Company's executive officers. As the Company's

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<PAGE> 37

geographical and technical capabilities expand, the Company currently intends to
continue to implement its marketing efforts from its principal offices in
Houston, Texas and Sevenoaks, England.

ONSHORE SEISMIC DATA ACQUISITION CONTRACTS. When the Company acquires
seismic data onshore, its customer specifies the area to be surveyed, directs
the scope and extent of the survey, and retains ownership of the data obtained.
The Company generally contracts to acquire onshore seismic data under contracts
that provide for a fixed fee for performing the survey. These contracts are
often awarded on a competitive bid basis. Under fixed fee contracts, the Company
generally bears the risk of delays that are beyond its control. See "Risk
Factors -- Operating Risks." The Company frequently seeks to pass some of this
risk to the customer by negotiating for the customer to pay standby charges for
delays not caused by the Company, such as adverse weather. The Company's
contracts generally provide for progress payments unless the Company anticipates
completing the survey in a short time period.

OFFSHORE SEISMIC DATA ACQUISITION CONTRACTS. When the Company acquires
offshore seismic data, the customer directs the scope and extent of the survey
and retains ownership of the data obtained. Contracts for offshore seismic data
acquisition, which are often awarded on a competitive bid basis, are either
distance- or time-based contracts (or a combination of both methods) or turnkey
contracts that provide for a fixed fee. Under the distance method, payments are
based upon the number of seismic lines or kilometers of data collected. When
operating on a time basis, payments are based on agreed rates per unit of time,
which may be expressed in periods ranging from hours to months. Under both of
these methods, most of the risk of business interruption (except for
interruption caused by failure of the Company's equipment) is borne by the
customer, except in winter months when the Company assumes greater
responsibility for weather-related interruption. For both of these types of
contracts, progress payments are generally required unless it is expected that
the survey can be completed in a brief period of time. Turnkey contracts
generally provide more profit potential for the Company, but involve more risk
due to the potential for weather-related and other types of delays. See "Risk
Factors -- Operating Risks." Before entering into these types of contracts, the
Company attempts to evaluate the cost and associated risk involved through an
analysis of the likelihood of weather-related delays, the size of the survey and
the expected period of time required to complete the survey.

MULTI-CLIENT DATA. The Company has generally performed its seismic data
acquisition services for its customers on a contract basis without retaining any
interest in the data it acquires for its customers. The Company has begun to
receive more requests from its customers to perform its services for lower fees
but where the Company would retain certain rights to the data it acquires. If
the Company were to retain such rights, it would be permitted to license the
data to multiple clients, which could potentially result in higher returns than
if the Company were to perform its services for a higher fixed fee, but also
presents the risk of a lower return. The Company may in the future perform its
services in exchange for an ongoing interest in the acquired data in response to
customer proposals.

BACKLOG. The Company's backlog represents commitments for seismic data
acquisition services from both its onshore and offshore seismic data acquisition
businesses. All backlog consists of commitments believed to be firm. However,
backlog estimates are based on a number of assumptions and estimates, including
assumptions as to exchange rates between the U.S. dollar and the British pound
and other currencies and estimates of the percentage of completion of contracts.
Contracts for services are occasionally varied or modified by mutual consent and
in certain instances may be canceled by the customers on short notice without
penalty. Consequently, the Company's backlog as of any particular date may not
be indicative of the Company's actual operating results for any succeeding
fiscal period.

As of May 16, 1997, the Company estimates that its total backlog was
approximately $57 million. Backlog for its onshore crews was approximately $32
million in future gross revenues from existing customer commitments, and backlog
for its offshore seismic acquisition crews was approximately $25 million in
future gross revenues from existing customer commitments. Of these backlog
amounts, approximately $12 million of the onshore backlog and approximately $15
million of the offshore backlog is attributable to work to be performed for
Seitel and its subsidiaries.

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<PAGE> 38

COMPETITION

The acquisition of onshore and offshore seismic data for oil and gas
companies is highly competitive worldwide. Competition for available seismic
surveys is based on a number of competitive factors, including crew
availability, price, performance, dependability and technology.

As a result of changing technology and capital requirements, the seismic
industry, both for onshore and offshore seismic data acquisition services, has
consolidated substantially since the early 1980s, thereby reducing the number of
competitors in the industry. Although dozens of companies perform onshore
seismic data acquisition services, only a few companies compete actively to
perform complex 3D surveys in the difficult wetland regions along the U.S. Gulf
Coast. The Company's primary competitors in the wetland onshore seismic data
acquisition business in the U.S. Gulf Coast region are Acadian Geophysical
Services, Inc., Boone Geophysical, Inc. (a subsidiary of Venture Seismic, Inc.),
Geco-Prakla (a subsidiary of Schlumberger Limited), Signature Geophysical
Services, Inc., Veritas DGC, Inc. and Western Atlas Inc. The Company's primary
competitors in the offshore seismic data acquisition business are Compagnie
Generale de Geophysique, S.A., Geco-Prakla, Petroleum Geo-Services ASA, Veritas
DGC, Inc. and Western Atlas Inc.

CUSTOMERS

ONSHORE. The Company's major customers for its onshore operations include
primarily independent oil and gas companies and seismic data marketing
companies. For the year ended December 31, 1996, Seitel's data library
subsidiary, Seitel Data, Ltd., accounted for approximately 28%, Seitel's oil and
gas exploration and production subsidiary, DDD Energy, Inc., accounted for
approximately 29% and Fina Oil and Chemical Company accounted for approximately
20% of Eagle's consolidated gross revenues from onshore operations. For the year
ended December 31, 1995, Seitel Data, Ltd. accounted for approximately 14%, DDD
Energy, Inc. accounted for approximately 39% and Broughton Associates, J.V.
accounted for approximately 22% of Eagle's consolidated gross revenues from
onshore operations, and for the year ended December 31, 1994, Seitel Data, Ltd.
accounted for approximately 16%, DDD Energy, Inc. accounted for approximately
40% and Greenhill Petroleum Corporation accounted for approximately 28% of
Eagle's consolidated gross revenues from onshore operations.

OFFSHORE. The Company's major customers for its offshore operations include
primarily multi-national oil and gas companies, foreign national oil and gas
companies, and seismic data marketing companies. For the year ended December 31,
1996, Seitel Data, Ltd. accounted for approximately 46% and Clyde Petroleum
Exploratie BV accounted for approximately 26% of ERI's consolidated gross
revenues from offshore operations. For the year ended December 31, 1995, Seitel
Data, Ltd. accounted for approximately 8% and Amerada Hess Ltd. and British Gas
Exploration and Production Ltd. accounted for approximately 37% and 26%,
respectively, of ERI's consolidated gross revenues from offshore operations, and
for the year ended December 31, 1994, Seitel Data, Ltd. accounted for
approximately 21% and British Gas Exploration and Production Ltd., Amerada Hess
Ltd. and Chevron Europe Ltd. accounted for approximately 16%, 13% and 10%,
respectively, of ERI's consolidated gross revenues from offshore operations.

Due to the nature of the Company's operations, it is likely that
significant portions of future consolidated revenues may continue to be
attributable to a few customers, although it is possible that the identity of
such customers will change from period to period. See "Risk Factors -- Influence
of Seitel, Inc. on the Company"

EMPLOYEES

At May 1, 1997, the Company employed approximately 330 full-time personnel.
The Company has not experienced any material work stoppages related to union
activities and considers the relations with its employees to be good.

PROPERTIES

The Company occupies eight leased facilities that are principally used for
general administrative functions, maintenance, storage and warehouse space.
Three of these facilities are located in Texas, one is

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located in Louisiana and four are located in England. These properties range in
size from approximately 1,000 to approximately 9,000 square feet, the terms of
the leases range from month-to-month to leases that expire in 2001, and the
leases provide for annual rents ranging from approximately $12,000 to
approximately $182,000. The Company's annual lease expense under these leases
total approximately $500,000. The Company will sublease one of these properties,
which serves as the Company's executive offices, from Seitel and its
subsidiaries under a sublease that will expire in August 2000 and which will
provide for annual rental of approximately $108,000, which amount is included in
the $500,000 total lease expense referred to above. See "Certain Transactions."

ENVIRONMENTAL MATTERS/GOVERNMENTAL REGULATION

The Company's operations are subject to a variety of laws and regulations,
including laws and regulations relating to the protection of the environment.
The Company is required to invest financial and managerial resources to comply
with such laws and related permit requirements in its operations and anticipates
that it will continue to do so in the future. Although such expenditures
historically have not been material to the Company, the fact that such laws or
regulations are changed frequently makes it impossible for the Company to
predict the cost or impact of such laws and regulations on its future
operations.

The adoption of laws and regulations that have the effect of limiting
exploration or production activities by oil and gas companies could adversely
affect the Company's operations by reducing the demand for its services. Certain
import and export regulations may also limit the Company's ability to operate in
certain areas.

In addition, the Company's offshore operations are influenced by licensing
activities and lease sales of governmental authorities. The timing and extent of
licensing and leasing of areas for exploration and production influences the
level of seismic data acquisition activity within a particular country.

LEGAL PROCEEDINGS

The Company is involved in or threatened with various legal proceedings
from time to time arising in the ordinary course of business. Management of the
Company does not believe that any liabilities resulting from any such current
proceedings will have a material adverse effect on its consolidated operations
or financial position.

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<PAGE> 40

MANAGEMENT

The following table sets forth the executive officers and directors of the
Company and their ages as of May 15, 1997:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William L. Lurie....................... 66 Chairman of the Board of Directors
Jay N. Silverman....................... 43 President, Chief Executive Officer and
Director
Gerald M. Harrison..................... 43 Executive Vice President and Director
George Purdie.......................... 41 Senior Vice President -- Offshore Operations
and Director
Richard W. McNairy..................... 56 Vice President -- Chief Financial Officer and
Secretary
Neil A.M. Campbell..................... 42 Vice President -- International Finance
Paul A. Frame.......................... 50 Director
</TABLE>

WILLIAM L. LURIE is the Chairman of the Board of Directors of the Company.
Mr. Lurie has been a director and a member of the Audit Committee and
Compensation Committee of Seitel since November 1995 and will retire from such
positions prior to consummation of the Offering. He has been Co-Chairman of The
Foundation for the Prevention & Early Resolution of Conflicts since April 1996.
He was President of Prevention and Early Resolution of Conflicts, a consulting
firm, from 1994 until April 1996. Mr. Lurie has been a Director of Minerals
Technologies, Inc., a mining and minerals company listed on the New York Stock
Exchange, since 1993 and is a member of its Compensation Committee. He was
Executive Consultant to the Chairman of The Business Roundtable from 1993 to
1994 and President of The Business Roundtable from 1984 to 1993. Prior to that
time, Mr. Lurie was Vice President -- General Counsel of International Paper
Company, a global paper and forest products company listed on the New York Stock
Exchange. He has been a Director of Intersystems, Inc., a manufacturing company
listed on the American Stock Exchange, since November 1995.

JAY N. SILVERMAN is the President and Chief Executive Officer and a
Director of the Company. Mr. Silverman has served as President of Eagle
Geophysical Onshore, Inc., the Company's onshore crew operations subsidiary,
since its formation in December 1996, and served as President of SGI from July
1993 until May 1997. From July 1993 until May 1997, he was Seitel's Vice
President of Operations, and from August 1990 to July 1993, he was Seitel's
Manager of Field Operations. From January 1988 to July 1990, Mr. Silverman was
Vice President of Operations of East Coast Drilling and Boring, Inc., a private
drilling company. Between August 1976 and January 1988, Mr. Silverman served as
Crew Chief, Operations Supervisor and Manager for Western Geophysical Company.

GERALD M. HARRISON is the Executive Vice President and a Director of the
Company. Mr. Harrison has been Chairman and Managing Director of the Horizon
Companies since 1993. From 1991 to 1993, Mr. Harrison was Managing Director of
Simon-Horizon Limited and President and Chairman of Simon-Horizon Inc.,
predecessors of the Horizon Companies. From 1988 to 1990, Mr. Harrison was
Operations Director of Simon-Horizon Limited, overseeing both onshore and
offshore seismic operations. Between 1980 and 1988, Mr. Harrison served as Field
Crew Manager and Manager of Domestic and International Operations for
predecessor companies of the Horizon Companies.

GEORGE PURDIE is the Senior Vice President -- Offshore Operations and a
Director of the Company. Mr. Purdie has been Operations Director of the Horizon
Companies since 1993, and from 1990 to 1993 was Operations Director of
Simon-Horizon Limited. From 1980 to 1989 he served in various onshore and
offshore field management posts for predecessor companies of the Horizon
Companies.

RICHARD W. MCNAIRY is the Vice President -- Chief Financial Officer and
Secretary of the Company. Mr. McNairy served as Vice President and Chief
Financial Officer of Veritas Energy Service, Inc. from February 1994 through
March 1997, prior to which he was corporate controller of Halliburton Energy
Services Group for three years and Vice President-Finance for its geophysical
services subsidiary for the preceding two

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<PAGE> 41

years. Prior to 1989 and since 1974, he was employed in various financial and
operational management capacities with predecessor companies acquired by
Halliburton.

NEIL A.M. CAMPBELL is the Vice President -- International Finance of the
Company. Mr. Campbell has been Finance Director, Chief Financial Officer, and
Company Secretary of the Horizon Companies since 1993. Mr. Campbell served as
Finance Director and Company Secretary of Simon-Horizon Limited. from 1990 to
1993, and as Chief Accountant and Company Secretary of Simon-Horizon Limited.
and its predecessors from 1987 to 1990. Mr. Campbell served in various
accounting positions for predecessors of the Horizon Companies from 1984 to
1987, and in various accounting positions for British Petroleum from 1972 to
1984.

PAUL A. FRAME has been a Director of the Company since its formation in
December 1996. Mr. Frame has been Chief Executive Officer of Seitel since July
1992, President of Seitel since January 1987 and a director of Seitel since May
1986. Mr. Frame was Executive Vice President of Seitel from January 1985 through
January 1987, and was Vice President of Marketing of Seitel from August 1984
through January 1985.

All directors are elected to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Executive
officers are generally elected annually by the Board of Directors to serve,
subject to the discretion of the Board of Directors, until their successors are
elected or appointed.

COMPENSATION OF DIRECTORS

Each director who is not also an officer of the Company (an "Outside
Director") will receive an annual director's fee of $25,000 plus meeting fees of
$2,500 for each meeting of the Board of Directors or committee thereof in which
such director participates. If such Outside Director serves as Chairman of the
Board of Directors, such director will receive an annual director's fee of
$50,000 plus meeting fees. Outside Directors will also be reimbursed for
reasonable out-of-pocket expenses incurred in connection with attendance of
meetings of the Board of Directors or committees thereof.

The Company intends to establish a Deferred Compensation Plan for Directors
whereby each Outside Director may elect to defer cash compensation for annual
director's fees or meeting fees to a date subsequent to such director's death,
retirement, disability or termination of services as a director. Earnings with
respect to such deferred compensation may be calculated, at the election of the
director, as if the amount deferred had been invested in Common Stock or as if
the amount deferred had been invested in an account bearing interest at the
prime rate minus 1.5%.

INDEPENDENT DIRECTORS STOCK OPTION PLAN

The Company intends to adopt an Independent Directors Stock Option Plan
(the "Directors Option Plan"). The purposes of the Directors Option Plan will be
to promote ownership of a greater proprietary interest in the Company by
independent directors of the Company, thereby aligning such Directors' interests
more closely with the interests of the stockholders of the Company, and to
assist the Company in attracting and retaining highly qualified persons to serve
as independent directors. The maximum number of shares of Common Stock that may
be subject to awards granted under the Directors Option Plan is 100,000 shares,
which may be authorized and unissued shares, treasury shares, or shares acquired
by the Company for purposes of the Directors Option Plan. Shares of Common Stock
which are attributable to awards which have expired, terminated or been
cancelled or forfeited during any calendar year will be available for issuance
or use in connection with future awards.

The Directors Option Plan will generally provide for an automatic grant of
options to independent directors upon their initial election to serve as a
director of the Company and upon each successive reelection to the Board of
Directors. Upon each such election or reelection, options to purchase 5,000
shares will be automatically granted to each independent director. The exercise
price for such options will be equal to the closing price of the Common Stock on
the date of such election or reelection. The options will become exercisable one
year after the date of grant and will expire at the earlier of five years after
the date of grant,

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<PAGE> 42

12 months after the optionee ceases to serve as a director due to death,
disability or retirement after age 65, or 60 days after the optionee ceases to
serve as a director for any other reason.

Pursuant to the Directors Option Plan, the Company will grant Mr. Lurie,
the Chairman of the Board of Directors, effective as of the date of the
consummation of the Offering, options to purchase up to 25,000 shares of Common
Stock at an exercise price equal to the initial public offering price set forth
on the cover page of this Prospectus. This grant will be in lieu of the grant of
options generally provided under the Directors Option Plan upon initial election
to the Board. These options will vest in cumulative installments of one-third of
the number of shares subject thereto on each of the first, second, and third
anniversaries of the date of grant, and will expire on the tenth anniversary of
the date of grant, subject to earlier expiration 12 months after Mr. Lurie
ceases to be a director.

An independent director for purposes of the Directors Option Plan is a
director who receives no compensation from the Company and its subsidiaries
other than annual directors fees, meeting fees, reimbursement of expenses and
options under the Directors Option Plan and has not, during the three months
prior to any grant, been an employee of the Company or any of its subsidiaries.
Mr. Lurie is the only current director of the Company eligible to receive grants
of options under the Directors Option Plan.

The Directors Option Plan will be administered by the Board of Directors,
provided that any action by the Board shall be taken only if approved by a
majority of the directors of the Company who are not then eligible to receive
grants of options under the plan. The Directors Option Plan may be amended,
altered, suspended, discontinued or terminated by the Board without stockholder
approval, unless such approval is required by law or regulation or applicable
rules of the Nasdaq National Market or any other stock market on which the
Common Stock is then quoted or listed. The Directors Option Plan will expire ten
years after adoption or such earlier date as the number of shares reserved for
issuance thereunder becomes insufficient for the automatic grants of options
provided therein. The Board may terminate the Directors Option Plan at any time
in its sole discretion. No options may be granted under the Directors Option
Plan after it is terminated. The termination of the Directors Option Plan, or
any amendment thereto, shall not affect any shares previously issued to an
option holder or any option previously granted under the Directors Option Plan.

Options to be granted under the Directors Option Plan will be nonqualified
stock options. An option holder will not recognize taxable income on the grant
of options under the Directors Option Plan, but will recognize taxable ordinary
income upon exercise of the options equal to the amount that the fair market
value of the underlying stock on the date of exercise exceeds the aggregate
exercise price. The income tax treatment of any gain or loss realized upon a
holder's disposition of shares received upon exercise of the options will depend
on the timing of such disposition. If the holder holds the shares received upon
exercise for at least one year from the date of exercise, the difference, if
any, between the amount realized from such sale and the holder's tax basis
(generally the aggregate exercise price plus the amount of income recognized
upon exercise of the options) will be taxed as long-term capital gain or loss.
If the holder disposes of such shares in less than one year, the gain or loss
will generally be taxed as short-term capital gain or loss.

The Company is entitled to a deduction for federal income tax purposes with
respect to the exercise of options under the Directors Option Plan (but not the
disposition of shares acquired upon exercise) in an amount equal to the ordinary
income recognized by the option holder, to the extent it is reasonable
compensation.

INDEPENDENT DIRECTORS; BOARD COMMITTEES

Nasdaq National Market rules require that a Nasdaq listed company have two
or more independent directors on its board of directors. Mr. Lurie, Chairman of
the Board of Directors, will not be employed by the Company and will retire from
his position as an independent director of Seitel at or prior to consummation of
the Offering. Therefore, he will qualify as an independent director. The Company
is in the process of identifying other potential independent directors, and the
Board of Directors intends to appoint at least one additional independent
director as soon as possible after the Offering.

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<PAGE> 43

Nasdaq National Market rules also require that listed companies have an
established audit committee, the majority of the members of which are to be
independent directors. The Board of Directors intends to establish an audit
committee when the additional independent directors are appointed to the Board
of Directors. The audit committee will recommend to the Board the appointment of
the independent public accountants to serve as auditors for the Company, and
will discuss and review the scope and fees of the prospective annual audit and
review the results with the auditors, review compliance with existing major
accounting and financial policies of the Company, review the adequacy of the
financial organization of the Company and consider comments by the auditors
regarding controls and accounting procedures and management's response to those
comments.

The Company also intends to establish a compensation committee, all of the
members of which will be outside directors as such term is defined in Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The
compensation committee will meet periodically to determine the compensation of
certain of the Company's executive officers and other significant employees and
the Company's personnel policies and will administer the Stock Option Plan and
other executive compensation plans and arrangements. The compensation committee
will also be empowered to approve compensation payable to the Company's
executive officers for the purposes of Section 162(m) of the Code, which limits
the deductability of compensation in excess of $1 million if not approved
pursuant to the provisions of such section and the regulations thereunder. In
the event compensation payable by the Company to an executive officer is in
excess of $1 million in any year and has not been approved as required by
Section 162(m), the compensation in excess of $1 million may not be deductible
by the Company for federal income tax purposes.

The Company has established an Executive Committee, which consists of
Messrs. Frame (Chairman) and Lurie. The Executive Committee has the authority to
exercise all of the powers of the Board of Directors in the management of the
business and affairs of the Company, subject to certain limitations under the
Delaware General Corporation Law.

EXECUTIVE COMPENSATION

The Company was incorporated in December 1996 and began operations in
January 1997. No salaries were paid during 1996 by the Company. Compensation to
be paid to the Company's chief executive officer and the four other most highly
compensated executive officers during 1997 is disclosed below under
"-- Employment Agreements."

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with certain of its
executive officers, the terms of which are described below.

The Company intends to enter into employment agreements with Messrs.
Silverman and McNairy that provide for annual base salaries of $260,000 and
$150,000, respectively. The employment agreement with Mr. Silverman will also
provide for a quarterly bonus equal to 25.0% of his base salary if the operating
profit margin (revenues less operating expenses expressed as a percentage of
revenues) for the onshore operations for such quarter is at least 17% and an
incentive bonus of between 4% and 5% of the Company's pre-tax profits (which
percentage varies based on the Company's profit margin). The Company calculates
all bonuses without taking into account the expenses of the bonuses paid to its
officers and directors. Mr. Silverman, who received total cash compensation in
1996 of $726,336 from SGI under his former employment arrangement, would have
received total cash compensation in 1996 of $613,080 under the above-described
employment agreement based on the Company's pro forma combined results for 1996.
The employment agreement with Mr. McNairy will provide for an incentive bonus
equal to one-third of the base annual salary. Mr. Silverman's employment
agreement will be for an original term of three years, and will automatically
renew for successive one-year terms unless either party gives notice otherwise
at least six-months prior to expiration of the then-current term. Mr. McNairy's
employment agreement will be for a term of two years. The employment agreement
with Mr. Silverman will contain a covenant not to compete during his employment
with the Company or its subsidiaries, and for one year thereafter if the Company
terminates his employment for cause

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<PAGE> 44

or he terminates his employment without cause. In the event the Company
terminates Mr. Silverman's employment without cause, as such term will be
defined in his employment agreement, the Company will be required to pay Mr.
Silverman severance payments each year for two years equal to the average of his
total cash compensation for the previous three years, to vest all options
previously granted to Mr. Silverman that are not then vested, and to forgive
outstanding indebtedness owed by Mr. Silverman to the Company relating to his
purchase of 25,000 shares of Common Stock to the extent the value of such shares
at the date of such termination is less than the outstanding indebtedness. See
"Certain Transactions." The terms of the employment agreement between Mr.
Silverman and the Company cannot be considered to have been determined through
arms-length negotiations.

Each of Messrs. Harrison, Purdie and Campbell have existing employment
agreements with the Horizon Companies, which employment agreements will be
amended upon consummation of the ERI Acquisition and the Offering. Such
employment agreements, as amended, will provide for base annual salaries of
$221,000 (L134,000) for Mr. Harrison and $205,000 (L124,000) for Messrs. Purdie
and Campbell. These employment agreements require the Company and the employee
to give twenty-four months advance notice of termination (other than for
termination with cause). If the Company terminates the employment of Messrs.
Harrison, Purdie or Campbell other than in accordance with the terms of such
agreement (i.e., without giving twenty-four months advance notice, other than
for termination with cause), the options granted to such employee set forth
under "-- Stock Option Plan" will become fully vested, and the Company may be
liable to such employee for breach of contract. The employment agreements
provide for an annual incentive bonus equal to 50.0% of the annual base salary
if performance criteria established by the Company are met (which criteria for
the year to end December 31, 1997 are that the operating profit margin (revenues
less cost of sales, expressed as a percentage of revenues) from the Company's
offshore operations equal or exceed 24.0%, and provide for an additional
incentive bonus of between 2.0% and 3.0% of the net after-tax profits of the
Company from its offshore operations in excess of 5.0% of gross revenues from
offshore operations. The employment agreements also provide for a bonus of 3% of
the excess, if any, of net after-tax profits of the Company's offshore business
for a fiscal year over the greater of (i) net after-tax profits of the Company's
offshore business for the prior fiscal year or (ii) 5% of the gross revenues of
the Company's offshore business for the prior fiscal year, if the Company's
gross revenues from its offshore business increase by at least 20% as compared
to the prior fiscal year and the net after-tax profits of the Company's offshore
business equal or exceed 5% of gross revenues from its offshore business.

In addition to the employment agreements with the Company's executive
officers described above, the Company will enter into a bonus agreement with Mr.
Frame, who will serve as a director of the Company and as Chairman of the
Executive Committee of the Board of Directors. In addition to his other duties
as a director of the Company, Mr. Frame will be responsible for strategic
planning, marketing, and domestic and international growth of the Company's
business. The Board of Directors of Seitel has agreed to allow Mr. Frame, who is
the President and Chief Executive Officer of Seitel, to devote up to 20% of his
time to the Company until December 31, 1999. Pursuant to the bonus agreement,
the Company will pay Mr. Frame bonuses each year during the term of the bonus
agreement equal to 1% of the increase in the Company's gross revenues for such
year over the Company's gross revenues for the prior year (excluding revenues
attributable to mergers and acquisitions in the year of such merger or
acquisition unless it is the final year of the term of the bonus agreement) and
4% of the Company's net after tax profits in excess of its 1996 pro forma
combined net after-tax profits of $0.8 million. The bonus agreement with Mr.
Frame will be for a fixed term expiring December 31, 1999. Mr. Frame will also
receive annual director's fees and meeting fees as an outside director. The
terms of the bonus agreement between Mr. Frame and the Company cannot be
considered to have been determined through arms-length negotiations.

STOCK OPTION PLAN

The Company intends to adopt a Stock Option Plan (the "Option Plan"), the
purpose of which will be to provide directors, officers and other key employees
and consultants of the Company and its subsidiaries with additional incentives
by providing them with the opportunity to increase their ownership interests in
the Company. The maximum number of shares of Common Stock that may be subject to
awards granted under

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<PAGE> 45

the Option Plan will be 1,100,000 shares, which may be authorized and unissued
shares, treasury shares or shares acquired by the Company for purposes of the
Option Plan. Shares of Common Stock that are attributable to awards that have
expired, terminated or been cancelled or forfeited during any calendar year will
be available for issuance or use in connection with future awards.

The Compensation Committee or such other committee of the Board of
Directors as may be appointed by the Board (the "Committee") will be empowered
to administer the Option Plan. The Board has not yet established a Compensation
Committee, and therefore the Option Plan will be administered initially by the
Board of Directors as a whole.

Options granted under the Option Plan will be either incentive stock
options within the meaning of Section 422 of the Code or non-qualified stock
options, as designated at the time of the grant of the options. If options
granted under the Option Plan are not designated as incentive stock options or
nonqualified stock options, they will be deemed to be incentive stock options to
the extent they comply with the requirements of the Code applicable for
incentive stock option treatment and as non-qualified options to the extent they
do not satisfy such requirements.

Any employee of the Company or a subsidiary, including directors who are
not eligible to receive grants of options under the Directors Option Plan, will
be eligible to receive grants of options under the Option Plan. Actual
participation in the Option Plan will be determined in the sole discretion of
the Committee.

The exercise price for incentive stock options under the Option Plan shall
not be less than 100% of the fair market value per share on the date of grant of
such option. In the event that an incentive stock option is granted under the
Option Plan to any person who, at the time such incentive stock option is
granted, owns more than 10.0% of the total combined voting power of classes of
shares of the Company or of any subsidiary of the Company (a 10.0% stockholder),
then the exercise price of the incentive stock options shall not be less than
110% of the fair market value of the shares on the date such option is granted.
Fair market value as used in the Option Plan means the closing sales price of
Common Stock per share as reported in the Wall Street Journal as of the date of
the grant. Pursuant to the terms of the Option Plan, there are no restrictions
applicable to the exercise price of non-qualified stock options. Payment for the
shares acquired upon exercise of an option under the Option Plan shall be made
in cash or other property deemed acceptable by the Committee.

Options granted under the Option Plan will be exercisable at such times,
under such conditions (including, without limitation, performance criteria with
respect to the Company and/or the optionee), in such amounts and during such
period or periods as the Committee determines on the date of the grant of such
options. Such options, however, shall not be exercisable after the expiration of
ten years from the date such option is granted. In the case of an incentive
stock option granted to a more than 10.0% stockholder, such incentive stock
options shall not be exercisable after the expiration of five years from the
date such incentive stock options are granted.

The aggregate fair market value (determined as of the time an incentive
stock option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time by any participant during any
calendar year, under the Option Plan and all of the Company's other plans, may
not exceed $100,000. Any options granted in excess of this limit will be
non-qualified options.

In general, if an optionee ceases to be an employee or director of the
Company or its subsidiaries for reasons other than disability or death, he or
she will have, with respect to incentive stock options, until the earlier of
three months from the date of such termination or the date the option expires to
exercise the option, to the extent the optionee was entitled to exercise the
option on the date of termination. If an optionee is unable to continue to
perform services for the Company or any of its subsidiaries as a result of
disability, he or she will have until the earlier of 12 months from the date of
such disability or the date the option expires to exercise the option, in whole
or in part, to the extent the optionee was entitled to exercise the option on
such date. In addition, the optionee must have been an employee since the date
of grant and must be an employee on the date of disability to take advantage of
this provision. These same rules apply to the exercise of options in the event
of the death of an optionee. Unless provided otherwise in a specific option
grant, an option granted

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<PAGE> 46

under the Option Plan may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder, and will not be assignable by
operation of law or subject to execution, attachment or similar process.

The Option Plan will expire ten years after its date of adoption. The Board
may terminate the Option Plan at any time in its sole discretion. No options may
be granted under the Option Plan after it is terminated. The termination of the
Option Plan, or any amendment thereto, shall not affect any shares previously
issued to a participant or any option previously granted under the Option Plan.

The Option Plan will not be qualified under the provisions of Section
401(a) of the Code, and it is not intended to be subject to any of the
provisions of the Employee Retirement Income Security Act of 1974, as amended.

The Board of Directors intends to approve the grant, effective as of the
date of consummation of the Offering, of options to acquire a total of 679,450
shares under the Option Plan to directors, officers and employees of the
Company. The options that will be granted under the Option Plan, other than the
options granted to Mr. Frame, will vest in cumulative installments of one-third
of the number of shares subject thereto on each of the first, second and third
anniversaries of the grant date and will expire on the tenth anniversary of the
date of the grant. Mr. Frame's options will vest on the fifth anniversary of the
date of grant or, if earlier, in cumulative installments of one-third of the
total shares subject thereto when the Company's gross revenues reach $150
million, $175 million and $200 million, respectively, if the Company's after tax
profit is at least 4% of gross revenues upon attainment of such revenue targets.
The options granted to Mr. Frame will expire 10 years from the date of grant.
The exercise price of each such option will be equal to the initial public
offering price per share set forth on the cover page of this Prospectus.
Included in these options are stock options to be granted to directors and
executive officers of the Company in the amounts set forth below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF OFFICER/DIRECTOR COVERED BY OPTIONS
------------------------ ------------------
<S> <C>
Mr. Silverman.......................................... 150,000
Mr. Frame.............................................. 100,000
Mr. Harrison........................................... 75,000
Mr. Purdie............................................. 75,000
Mr. Campbell........................................... 75,000
Mr. McNairy............................................ 25,000
</TABLE>

Certain options granted under the Option Plan are intended to be incentive
stock options within the meaning of Section 422 of the Code. An option holder
will not recognize taxable income upon the grant of incentive stock options
under the Option Plan. In addition, an option holder will not recognize taxable
income with respect to the excess of the fair market value of stock received on
exercise of an incentive stock option over the exercise price under the Option
Plan. The income tax treatment of any gain or loss recognized upon an option
holder's disposition of shares received upon exercise of incentive stock options
granted under the Option Plan depends on the timing of the disposition. If the
option holder holds the shares received upon exercise of such incentive stock
options for the longer of two years from the date such incentive stock option
was granted or one year from the date of exercise, the difference (if any)
between the amount realized from the sale of such shares and the holder's tax
basis (i.e., generally the exercise price) will be taxed as long-term capital
gain or loss.

If an option holder disposes of the shares acquired upon exercise of an
incentive stock option before the end of the applicable holding periods
described above (i.e., he or she makes a "disqualifying disposition"), such
holder may be deemed to be in receipt of taxable income in the year of the
disqualifying disposition, depending on the selling price. If the selling price
exceeds the fair market value of the stock on the date of exercise, the excess
of the fair market value on the date of exercise over the exercise price will be
taxable to the holder as ordinary income, and the excess of the selling price
over the fair market value on the date of

45
<PAGE> 47

exercise will be taxable to the holder as capital gain. If the selling price
exceeds the exercise price but not the fair market value of the stock on the
date of exercise, the excess of the selling price over the exercise price will
be taxable to the holder as ordinary income. If the selling price is less than
the exercise price, the difference will be treated as capital loss.

The Company is not entitled to a deduction for federal income tax purposes
with respect to the grant or exercise of incentive stock options under the
Option Plan or the disposition of shares acquired upon exercise of incentive
stock options if the applicable holding periods have been met. In the event of a
disqualifying disposition, however, the Company will be entitled to a federal
income tax deduction in an amount equal to the ordinary income recognized by the
holder, to the extent it is reasonable compensation.

Options granted under the Option Plan that are not incentive stock options
within the meaning of Section 422 of the Code will be non-qualified stock
options. An option holder will not realize taxable income upon the grant of
non-qualified stock options. An option holder will recognize taxable ordinary
income upon the exercise of non-qualified stock options equal to the amount that
the fair market value of the underlying stock on the date of exercise exceeds
the aggregate exercise price. The income tax treatment of any gain or loss
realized upon an option holder's disposition of shares received upon exercise of
non-qualified stock options depends on the timing of the disposition. If the
option holder holds the shares received upon exercise of such non-qualified
stock options for at least one year from the date of exercise, the difference
(if any) between the amount realized from the sale of such shares and the
holder's tax basis (i.e., generally the exercise price plus the amount of
ordinary income recognized by the holder on exercise of the option) will be
taxed as long-term capital gain or loss. If an option holder disposes of the
shares acquired upon exercise of a non-qualified stock option within one year
from the date of exercise of the option, such holder will generally recognize
short term capital gain or loss.

The Company is entitled to a deduction for federal income tax purposes with
respect to the exercise of nonqualified stock options, but not the disposition
of shares acquired upon exercise of such non-qualified stock options, in an
amount equal to the ordinary income recognized by the option holder, to the
extent it is reasonable compensation.

HORIZON PENSION PLAN

The Horizon Pension Plan (the "Pension Plan") provides defined retirement
benefits to employees of Horizon Exploration Ltd. who are members. The Pension
Plan operates in accordance with UK Pensions Legislation and is approved by the
UK Inland Revenue, and in accordance with a Trust Deed, the Trustees are
responsible for its management. The Trustees under the Pension Plan are Messrs.
Harrison, Purdie and Campbell and one other employee of Horizon Exploration Ltd.
The Trustees have appointed independent advisors, administrators and investment
managers, auditors and solicitors to assist them in administering the Pension
Plan.

The Pension Plan originated in 1975 and was most recently revised in July
1993, when Horizon Exploration Ltd. became independent of the Simon Group.

The benefits provided by the Pension Plan are precisely defined in the
Trust Deed. Generally, the Pension Plan provides an income, at the normal
retirement age of 60, of one sixtieth of final salary for every year in the
Pension Plan, up to a maximum of forty-sixtieths. Recent UK legislation requires
the retirement income to be increased annually at the rate of 5% or the UK
retail price index, whichever is the lower, on benefits accruing from April
1997. Retirement income for benefits accrued prior to this date may be increased
at the Trustees' discretion.

All UK employees of Horizon Exploration Ltd. and Exploration Holdings Ltd.,
also a subsidiary of ERI, who are at least 20 years of age are eligible to join
the Pension Plan. Current membership is 116 out of 139 eligible employees plus
four retirees. During the next five years, one existing employee should reach
retirement age.

According to the most recent review of the value of the Pension Plan Fund
by an independent actuary employed by the Pension Plan's independent advisors,
which was completed in early 1997 and which

46
<PAGE> 48

determined such value as of April 1996, such fund is sufficient to meet existing
accrued benefits. The current funding levels are 10.2% from the employer and
3.5% from the employee, and these levels were deemed adequate to meet the
anticipated benefits and obligations of the Pension Plan in the most recent plan
review. The funding level is, by UK legislation, subject to review no less
frequently than every three years.

The Company is not bound to accept any Trustee recommendations on the
future level of Company contributions, and the Trustees are not bound to accept
any Company recommendations on the future level of employee contributions.
However, the Trustees, in a role of stewardship, are obliged to monitor funding
levels and maintain them at adequate levels while insuring that, in the event
future funding is not available, the Pension Plan can be wound up and meet its
then current liabilities.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth the following information as of June 2,
1997, with respect to the beneficial ownership of the Company's Common Stock by
(i) each stockholder known by the Company to own beneficially more than 5.0% of
the outstanding Common Stock, (ii) each director and executive officer of the
Company, (iii) all executive officers and directors of the Company as a group,
(iv) the Selling Stockholder and (v) the Additional Selling Stockholders. Except
as otherwise indicated below, each of the persons named in the table has sole
voting and investment power with respect to all shares of Common Stock
beneficially owned by him as set forth opposite his name.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING(1) AFTER OFFERING(1)
---------------------- ----------------------
NUMBER OF NUMBER OF SHARES NUMBER OF
NAME AND ADDRESS SHARES PERCENTAGE BEING OFFERED SHARES PERCENTAGE
---------------- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
EHI Holdings, Inc.(2)(3).............. 3,400,000 84.5% 1,880,000 1,520,000 18.9%
50 Briar Hollow Lane,
7th Floor West
Houston, Texas 77027
Gerald M. Harrison(3)(4).............. 188,000 4.7% -- 188,000 2.3%
George Purdie(3)(5)................... 188,000 4.7% -- 188,000 2.3%
Neil A.M. Campbell(3)(6).............. 188,000 4.7% -- 188,000 2.3%
David Burns(3)(7)..................... 36,000 * -- 36,000 *
William L. Lurie(8)................... -- -- -- -- --
Paul A. Frame(2)(9)................... -- -- -- -- --
Jay N. Silverman(10).................. 25,000 * -- 25,000 *
Richard W. McNairy(11)................ -- -- -- -- --
All executive officers and directors
as a group (7 persons)(3)........... 589,000 14.6% -- 589,000 7.3%
</TABLE>

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

(*) Less than 1.0%

(1) Beneficial ownership includes shares over which the indicated beneficial
owner exercises voting and/or investment power.

(2) EHI Holdings, Inc. is a wholly-owned, indirect subsidiary of Seitel, Inc.
Mr. Frame is a Director and is Chief Executive Officer of Seitel, Inc. As a
result of this relationship, Mr. Frame may be deemed to be the beneficial
owner of the shares owned by EHI Holdings, Inc., although Mr. Frame
disclaims any such beneficial ownership, and no such beneficial ownership
is reflected in this table.

(3) In the event the Underwriters exercise in full the over-allotment options
to purchase up to 882,000 shares of Common Stock, the Company will sell
602,000 shares, the Selling Stockholder will sell 100,000 shares, and
Oliveira Limited (Gerald Harrison), Dormera Limited (George Purdie),
Balmedie Limited (Neil Campbell) and Larlane Limited (David Burns) (the
"Additional Selling Stockholders") will sell 56,400 shares, 56,400 shares,
56,400 shares and 10,800 shares, respectively, of Common Stock in
connection with the Underwriters' exercise of such over-allotment options.
See "Underwriting."

47
<PAGE> 49

(4) Includes 188,000 shares of Common Stock to be acquired in connection with
the ERI Acquisition. These shares are owned of record by Oliveira Limited,
all of the outstanding stock of which is owned by Mr. Harrison. Does not
include 75,000 shares of Common Stock issuable upon exercise of options to
be granted to Mr. Harrison upon consummation of the Offering, none of which
are exercisable until one year after grant. See "Management -- Stock Option
Plan."

(5) Includes 188,000 shares of Common Stock to be acquired in connection with
the ERI Acquisition. These shares are owned of record by Dormera Limited,
all of the outstanding stock of which is owned by Mr. Purdie. Does not
include 75,000 shares of Common Stock issuable upon exercise of options to
be granted to Mr. Purdie upon consummation of the Offering, none of which
are exercisable until one year after grant. See "Management -- Stock Option
Plan."

(6) Includes 188,000 shares of Common Stock to be acquired in connection with
the ERI Acquisition. These shares are owned of record by Balmedie Limited,
all of the outstanding stock of which is owned by Mr. Campbell. Does not
include 75,000 shares of Common Stock issuable upon exercise of options to
be granted to Mr. Campbell upon consummation of the Offering, none of which
are exercisable until one year after grant. See "Management -- Stock Option
Plan."

(7) Includes 36,000 shares of Common Stock to be acquired in connection with
the ERI Acquisition. These shares are owned of record by Larlane Limited,
all of the outstanding stock of which is owned by Mr. Burns. Does not
include 75,000 shares of Common Stock issuable upon exercise of options to
be granted to Mr. Burns upon consummation of the Offering, none of which
are exercisable until one year after grant. See "Management -- Stock Option
Plan."

(8) Does not include 25,000 shares of Common Stock issuable upon exercise of
stock options to be granted to Mr. Lurie upon consummation of the Offering,
none of which are exercisable until one year from the date of grant. See
"Management -- Non-employee Directors Stock Option Plan."

(9) Does not include 100,000 shares of Common Stock issuable upon exercise of
stock options to be granted to Mr. Frame, upon consummation of the
Offering, which will vest on the fifth anniversary of the date of grant or,
if earlier, in cumulative installments of one-third of the total shares
subject thereto when the Company's gross revenues reach $150 million, $175
million and $200 million, respectively, if the Company's after tax profit
is at least 4% of gross revenues upon attainment of such revenue targets.
See "Management -- Stock Option Plan."

(10) Includes 25,000 shares of Common Stock that Mr. Silverman intends to
purchase from the Company prior to the Offering. In connection therewith,
Mr. Silverman will borrow the purchase price for such shares from the
Company. See "Certain Transactions." Does not include 150,000 shares of
Common Stock issuable upon exercise of stock options to be granted to Mr.
Silverman upon consummation of the Offering, none of which are exercisable
until one year from the date of grant. See "Management -- Stock Option
Plan."

(11) Does not include 25,000 shares of Common Stock issuable upon exercise of
stock options to be granted to Mr. McNairy upon consummation of the
Offering, none of which are exercisable until one year from the date of
grant. See "Management -- Stock Option Plan."

48
<PAGE> 50

CERTAIN TRANSACTIONS

Prior to the ERI Acquisition and the Offering, Eagle has been an indirect,
wholly-owned subsidiary of Seitel. As the sole stockholder, Seitel was
responsible for providing Eagle with financial, management, administrative and
other resources. Furthermore, Seitel had exercised substantial control over the
operation of Eagle. Accordingly, Eagle has no history of operating as an
independent entity.

Prior to the Offering, Seitel provided Eagle with significant management
functions and services, including treasury, accounting, tax, internal audit,
legal, human resources and other support services. Eagle was charged and/or
allocated expenses of $1.2 million, $0.7 million and $0.6 million for the years
ended December 31, 1996, 1995 and 1994, respectively, and $0.3 million for the
three months ended March 31, 1997. The costs of these services were directly
charged and/or allocated using methods that Eagle's management believed were
reasonable. Such charges and allocations are not necessarily indicative of the
costs Eagle would have incurred to obtain these services had it been a separate
entity. Neither Seitel nor the Company has conducted any study or obtained any
estimates from third parties to determine what the cost of obtaining such
services from third parties may have been. See Note G to Eagle's Consolidated
Financial Statements.

Prior to the Offering, Seitel has advanced expenses on behalf of Eagle with
respect to its third-party work, including amounts attributable to taxes and
allocable overhead relating to such third-party work. As of May 1, 1997, Eagle
owed Seitel approximately $3.5 million for such expenses. This intercompany
balance accrues interest at a rate equal to Seitel's cost of funds, which is
currently 7.25%. Pursuant to the Master Separation Agreement described below,
the Company will repay Seitel the then current amount of such advances relating
to third-party work at the time of closing of the Offering with a portion of the
net proceeds therefrom.

Prior to the Offering, a significant portion of the total seismic data
acquisition services performed by Eagle were provided to Seitel. Revenues for
these services were based on prices charged to unaffiliated third parties for
similar work. The revenues to Eagle provided by work performed for Seitel were
$14.3 million in 1994, or 55.5% of Eagle's total revenues, $15.4 million for
1995, or 52.6% of Eagle's total revenues, $27.2 million for 1996, or 56.5% of
Eagle's total revenues, and $8.1 million for the three months ended March 31,
1997, or 62.3% of Eagle's total revenues from onshore services for such period.
Such revenues are not necessarily indicative of the revenues Eagle would have
earned had it provided these services to unrelated third parties.

In July 1996, Seitel acquired 50.0% of the outstanding shares of ERI from
Oliveira Limited, Dormera Limited, and Balmedie Limited, companies owned by
Messrs. Harrison, Purdie and Campbell, respectively. Messrs. Harrison, Purdie
and Campbell guaranteed the obligations of these companies for any breach of the
representations, warranties and covenants made by such companies in connection
with such transaction, which obligations will survive until July 1998. In
connection with this acquisition, Seitel loaned $2 million to ERI, which debt
will be repaid to Seitel from a portion of the net proceeds of the Offering. See
"Use of Proceeds." In November 1996, ERI repurchased a portion of these shares
from Seitel, as a result of which Seitel's ownership was reduced to 19.0% of the
outstanding shares of ERI. ERI issued a note for $2.7 million to Seitel in
consideration of such repurchase of shares, which note will be repaid to Seitel
from the net proceeds of the

49
<PAGE> 51

Offering. See "Use of Proceeds." Seitel contributed these shares of ERI to the
Company in May 1997. Therefore, from July 1996 until the consummation of the
Offering, Seitel has held an equity interest in ERI, the parent corporation of
the Horizon Companies. Prior to the Offering, a significant portion of the total
seismic data acquisition services performed by the Horizon Companies were
provided to Seitel. See Note E to Consolidated Financial Statements of ERI. The
Horizon Companies charged Seitel for these services at an amount believed by
management of the Horizon Companies to be equal to amounts it would have charged
unrelated third parties for such services. The revenues to the Horizon Companies
provided by work performed for Seitel in 1996 were $20.0 million, or 46.0% of
the Horizon Companies' total revenues for that year, and $5.4 million for the
three months ended March 31, 1997, or 48.6% of ERI's total revenues from
offshore services for such period.

Contemporaneously with the consummation of the Offering, the Company will
issue an aggregate of 600,000 shares of Common Stock to Oliveira Limited,
Dormera Limited, Balmedie Limited, and Larlane Limited (the "Sellers") in
exchange for the 81.0% of the outstanding shares of ERI owned by such entities.
Messrs. Harrison, Purdie, and Campbell, who will be directors or executive
officers of the Company after the Offering, and David Burns, who will be an
employee of the Company after the Offering, own all of the issued and
outstanding shares of Oliveira Limited, Dormera Limited, Balmedie Limited, and
Larlane Limited, respectively. Messrs. Harrison, Purdie, Campbell and Burns have
guaranteed the obligations of the Sellers for any breach of the representations,
warranties and covenants made by the Sellers in connection with such
transaction, which obligations will survive until one year after the date of
consummation of the Offering. Messrs. Harrison, Purdie, Campbell and Burns and
the Sellers have agreed not to sell or otherwise dispose of the acquired shares
of Common Stock for one year after consummation of the ERI acquisition or more
than 50% of such shares of Common Stock prior to two years after consummation of
the ERI Acquisition, except for dispositions pursuant to the exercise (if any)
of the over-allotment options granted to the Underwriters by the Sellers in the
Offering or pledges of such shares of Common Stock pursuant to bona fide lending
transactions (subject to the lock-up agreements with the Underwriters).

Prior to the consummation of the Offering, the Company intends to lend Jay
Silverman an amount equal to the initial public offering price per share set
forth on the cover page of this Prospectus multiplied by 25,000 shares. Mr.
Silverman will use the proceeds of such loan to purchase 25,000 shares of Common
Stock from the Company prior to consummation of the Offering at the initial
public offering price per share set forth on the cover page of this Prospectus.
Interest will accrue under such loan at a fixed rate of 6.0% per annum. Interest
only will be payable under such loan for three years, and thereafter Mr.
Silverman will repay such loan in 60 equal monthly installments of principal and
interest. Such loan will be secured by a pledge of the 25,000 shares of Common
Stock purchased with the proceeds of such loan in favor of the Company. See
"Management -- Employment Agreements."

The Company and Seitel intend to enter into a number of agreements for the
purpose of defining their continuing relationship. These agreements will be
negotiated in the context of a parent-subsidiary relationship and therefore will
not be the result of negotiations between independent parties. It is the
intention of the Company and Seitel that such agreements and the transactions
provided for therein, taken as a whole, should accommodate the parties'
interests in a manner that is fair to both parties, while continuing certain
mutually beneficial arrangements. The parties intend that such agreements and
transactions provide fair market value to them on terms no less favorable to the
Company than would otherwise be available from unaffiliated parties. Because of
the complexity of the various relationships between the Company and Seitel,
however, there can be no assurance that each of such agreements, or the
transactions provided for therein, will be effected on terms at least as
favorable to the Company as could have been obtained from unaffiliated third
parties. The Company intends to follow the procedures provided by the Delaware
General Corporation Law, which include a vote to affirm any such future
agreements by a majority of the Company's directors who are not employees,
officers or directors of Seitel. There can be no assurance that any such
arrangements or transactions will be the same as those that would be negotiated
between independent parties.

The following is a summary of certain prospective arrangements between the
Company and Seitel.

MASTER SEPARATION AGREEMENT. The Master Separation Agreement will provide
for the Company and Seitel to enter into a Sublease, a Registration Rights
Agreement, a Tax Indemnity Agreement and an

50
<PAGE> 52

Administrative Services Agreement. In addition, the Master Separation Agreement
will require the Company to repay $8.2 million of indebtedness owed by the
Company and its subsidiaries to Seitel and to repay $17.5 million of
indebtedness owed by the Company and its subsidiaries to third parties
guaranteed by Seitel (or obtain the release of Seitel's guaranty)
contemporaneously with the consummation of the Offering. See "Use of Proceeds."
Under the Master Separation Agreement, Seitel and its subsidiaries and the
Company and its subsidiaries will indemnify each other with respect to
liabilities arising in connection with the operations of their respective
businesses prior to and after the date of consummation of the Offering,
including liabilities under the Securities Act with respect to the Offering. The
Master Separation Agreement will also provide for continued access by the
Company to historical financial and operational information relating to the
Company and its subsidiaries maintained by Seitel.

SUBLEASE. The Sublease between the Company and Seitel will provide for the
Company to lease its principal corporate offices, comprising approximately 9,000
square feet, from Seitel for a term of three years at an annual rent of
approximately $108,000. The Sublease will also provide for the Company to
utilize certain shared office equipment, such as phone systems and central
computer systems, for an additional charge.

REGISTRATION RIGHTS AGREEMENT. Pursuant to the Registration Rights
Agreement, the Company will agree to register the offer and sale by Seitel on a
delayed and continuous basis from time to time of the shares of Common Stock
owned by Seitel after the Offering (1,520,000 shares, or 1,420,000 if the
Underwriters' over-allotment options are exercised in full) at the expense of
the Company. The Company will agree to file a shelf registration statement
within 370 days after consummation of the Offering and to use its best efforts
to secure the effectiveness of such shelf registration statement as soon as
possible thereafter. Seitel will agree in the Registration Rights Agreement not
to sell more than 50.0% of such shares pursuant to such registration prior to
the date two years after the consummation of the Offering. In addition, the
Company will grant Seitel the right to participate as a selling stockholder in
future underwritten public offerings of the Company's Common Stock, subject to
certain restrictions. The Company and Seitel will each agree to indemnify the
other against, or to contribute to losses arising out of, certain liabilities in
connection with any such registration, including liabilities under the
Securities Act.

TAX INDEMNITY AGREEMENT. Prior to the Offering, Eagle has been a member of
the Seitel affiliated group and has filed its tax returns on a consolidated
basis with such group. After the Offering, the Company will no longer be a
member of the Seitel affiliated group. The Company and Seitel will enter into a
Tax Indemnity Agreement to define their respective rights and obligations
relating to federal, state and other taxes for periods before and after the
Offering. Pursuant to the Tax Indemnity Agreement, Eagle will be required to pay
Seitel (to the extent not already paid) its share of federal income taxes prior
to the date of consummation of the Offering, and the Company shall be
responsible for federal income taxes from its operations on and after the date
of consummation of the Offering. Any subsequent refunds, additional taxes or
penalties or other adjustments relating to Eagle's federal income taxes for
periods prior to the date of consummation of the Offering shall be for the
benefit of or be borne by Seitel. Similar provisions apply under the Tax
Indemnity Agreement to other taxes, such as state and local income taxes.

ADMINISTRATIVE SERVICES AGREEMENT. Seitel and the Company intend to enter
into an Administrative Services Agreement pursuant to which Seitel will provide
the Company with administrative services, primarily accounting services, at up
to the same levels as provided prior to the Offering. Seitel will provide these
services for a 90-day transition period to allow the Company adequate time to
build an internal administrative staff. The Company will pay Seitel for these
services at Seitel's actual cost of providing these services.

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DESCRIPTION OF CAPITAL STOCK

The Company has authorized capital stock consisting of 25,000,000 shares of
Common Stock, $0.01 par value, and 5,000,000 shares of Preferred Stock, $0.01
par value. Prior to the Offering, there were outstanding 4,025,000 shares of
Common Stock (including the effects of the sale of shares of Common Stock to Mr.
Silverman and the ERI Acquisition) and no shares of Preferred Stock.

COMMON STOCK

All outstanding shares of Common Stock are, and the shares of Common Stock
offered by the Company hereby when issued and paid for will be, fully paid and
nonassessable. All holders of Common Stock have full voting rights and are
entitled to one vote for each share held of record on all matters submitted to a
vote of the stockholders. Votes may not be cumulated in the election of
directors. Stockholders have no preemptive or subscription rights. The Common
Stock is neither redeemable nor convertible, and there are no sinking fund
provisions. Holders of Common Stock are entitled to dividends when, as and if
declared by the Board of Directors from funds legally available therefor and are
entitled, upon liquidation, to share ratably in all assets remaining after
payment of liabilities. See "Dividend Policy." The rights of holders of Common
Stock will be subject to any preferential rights of any Preferred Stock that may
be issued in the future.

The transfer agent and registrar for the Common Stock is
.

PREFERRED STOCK

The Board of Directors of the Company is authorized (without any further
action by the stockholders) to issue Preferred Stock in one or more series and
to fix voting rights, liquidation preferences, dividend rates, conversion
rights, redemption rights and terms, including sinking fund provisions, and
certain other rights and preferences of any series established by the Board of
Directors, and to increase or decrease the number of shares within each such
series. The Board of Directors may issue Preferred Stock for such consideration
and on such terms as it deems desirable. Satisfaction of any dividend
preferences of outstanding Preferred Stock would reduce the amount of funds
available for the payment of dividends on Common Stock. Also, holders of
Preferred Stock would normally be entitled to receive a preference payment in
the event of any liquidation, dissolution or winding-up of the Company before
any payment is made to the holders of Common Stock. In addition, under certain
circumstances, the issuance of Preferred Stock may render more difficult or tend
to discourage a merger, tender offer or proxy contest, the assumption of control
by a holder of a large block of the Company's securities or the removal of
incumbent management. The Board of Directors of the Company, without stockholder
approval, may issue Preferred Stock with voting and conversion rights which
could adversely affect the holders of Common Stock. The Company has no present
intention to issue any shares of Preferred Stock.

CERTAIN ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION, BY-LAWS AND
DELAWARE GENERAL CORPORATION LAW

The Certificate of Incorporation contains certain provisions, some of which
are described below, that in addition to the authorization of the Preferred
Stock may reduce the likelihood of a change in management or voting control of
the Company without the consent of the Company's Board of Directors. These
provisions could have the effect of delaying, deterring or preventing tender
offers or takeover attempts that some or a majority of the Company's
stockholders might consider to be in the stockholders' best interest, including
offers or attempts that might result in a premium over the market price for the
Common Stock.

Stockholder Action. Unless limited by the Certificate of Incorporation of a
corporation, the Delaware General Corporation Law permits stockholder action
without a meeting, without prior notice and without a vote upon the written
consent of the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted. The
Certificate of Incorporation prohibits stockholder action without a meeting,
except when there are ten or fewer stockholders. The affirmative vote of holders
of at least 80.0% of the Company's outstanding voting stock will be required to
amend this provision.

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<PAGE> 54

Fair Price Provision. The Certificate of Incorporation includes a "fair
price" provision that requires the affirmative vote of the holders of at least
80.0% of the outstanding voting stock of the Company to approve a merger with,
or disposition of assets or the issuance of securities having a fair market
value of $5.0 million or more to, an interested stockholder (as defined below),
a liquidation proposed by an interested stockholder or the reclassification of
the Company's securities or a similar transaction that increases the interested
stockholder's proportionate ownership in the Company. An "interested
stockholder" is anyone who owns or controls, directly, indirectly or together
with others, 10.0% or more of the Company's voting stock. However, a transaction
with an interested stockholder will not require stockholder approval if a
majority of disinterested directors (as defined in the Certificate of
Incorporation) approves the transaction or if the transaction involves the
distribution to the stockholders of cash or other consideration that satisfies
the "fair price" criteria set forth in the Certificate of Incorporation, which
generally require that all stockholders receive equal treatment, an adequate
price and adequate disclosure. The fair price provision of the Certificate of
Incorporation may not be amended without the affirmative vote of at least 80.0%
of all shares entitled to vote.

Evaluation Factors. The Certificate of Incorporation contains a provision
that allows the Board of Directors to evaluate factors other than the price
offered when considering a proposed acquisition of the Company. The Certificate
of Incorporation permits the Board of Directors to consider the social, legal
and economic effects of the proposed acquisition upon the Company's employees,
suppliers, customers and the communities in which the Company operates. The
Board of Directors can also consider any other factors it deems relevant,
including not only the consideration offered in the proposed transaction
relative to the market price of the Common Stock but also the value of the
Company in a freely negotiated transaction and in relation to the estimate by
the Board of Directors of the future value of the Company as an independent
entity. The affirmative vote of the holders of two-thirds or more of the
outstanding voting stock of the Company will be required to amend this
provision.

Anti-Takeover Legislation. Section 203 of the Delaware General Corporation
Law (the "DGCL") provides that, subject to certain exceptions specified therein,
a corporation shall not engage in any business combination with any "interested
stockholder" for a three-year period following the date that such stockholder
becomes an interested stockholder unless (i) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder, (ii) upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85.0% of the voting stock of the corporation outstanding at the time
the transaction commenced (excluding certain shares), or (iii) on or subsequent
to such date, the business combination is approved by the board of directors of
the corporation and at an annual or special meeting of stockholders by the
affirmative vote of at least two-thirds of the outstanding voting stock that is
not owned by the interested stockholder. Section 203 of the DGCL provides that,
except as specified, an interested stockholder is defined to include (x) any
person that is the owner of 15.0% or more of the outstanding voting stock of the
corporation at any time within three years immediately prior to the relevant
date, and (y) the affiliates and associates of any such person.

Under certain circumstances, Section 203 of the DGCL makes it more
difficult for a person who would be an "interested stockholder" to effect
various business combinations with a corporation for a three-year period,
although the stockholder may elect to exclude a corporation from the
restrictions imposed thereunder. The Certificate of Incorporation does not
exclude the Company from the restrictions imposed under Section 203 of the DGCL,
and therefore the Company will be subject to the provisions of Section 203. The
provisions of Section 203 of the DGCL may encourage companies interested in
acquiring the Company to negotiate in advance with the Board of Directors of the
Company, since the stockholder approval requirement would be avoided if a
majority of the directors then in office approve, prior to the time the
stockholder becomes an interested stockholder, either the business combination
or the transaction that results in the stockholder becoming an interested
stockholder.

LIMITATIONS ON LIABILITY OF DIRECTORS AND INDEMNIFICATION OF DIRECTORS AND
OFFICERS

The Certificate of Incorporation limits the liability of directors to the
extent allowed by the Delaware General Corporation Law. Specifically, directors
will not be held liable to the Company or its stockholders for

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<PAGE> 55

an act or omission in such capacity as a director, except for liability as a
result of (i) a breach of the duty of loyalty to the Company or its
stockholders, (ii) actions or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) payment of an
improper dividend or improper repurchase of the Company's stock under Section
174 of the Delaware General Corporation Law, or (iv) actions or omissions
pursuant to which the director will receive an improper personal benefit.

The principal effect of the limitation of liability provision is that a
stockholder is unable to prosecute an action for monetary damages against a
director of the Company unless the stockholder can demonstrate one of the
specified bases for liability. This provision, however, does not eliminate or
limit director liability arising in connection with causes of action brought
under the federal securities laws.

The Certificate of Incorporation does not eliminate the directors' duty of
care. The inclusion of this provision in the Certificate of Incorporation may,
however, discourage or deter stockholders or management from bringing a lawsuit
against directors for a breach of their fiduciary duties, even though such an
action, if successful, might otherwise have benefited the Company and its
stockholders. This provision should not affect the availability of equitable
remedies such as injunction or rescission based upon a director's breach of the
duty of care. The affirmative vote of the holders of two-thirds or more of the
outstanding voting stock of the Company will be required to amend this
provision.

The Certificate of Incorporation and By-laws provide that the Company is
generally required to indemnify its directors and officers for all judgments,
fines, settlements, legal fees and other expenses incurred in connection with
pending or threatened legal proceedings because of the director's or officer's
position with the Company or another entity that the director or officer serves
at the Company's request, subject to certain conditions, and to advance funds to
its directors and officers to enable them to defend against such proceedings. To
receive indemnification, the director or officer must have been successful in
the legal proceeding or acted in good faith and in what was reasonably believed
to be a lawful manner and in the Company's best interest. The affirmative vote
of the holders of two-thirds or more of the outstanding voting stock of the
Company will be required to amend this provision.

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<PAGE> 56

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 8,025,000 shares of
Common Stock outstanding. The 5,880,000 shares to be sold in the Offering
(6,762,000 shares if the Underwriters' over-allotment options are exercised in
full) will be freely tradeable in the public market without restriction or
further registration under the Securities Act, except for any shares purchased
by affiliates of the Company. The Selling Stockholder (which will beneficially
own 18.9% of the outstanding shares of Common Stock after the Offering) and the
executive officers, directors and the remaining stockholders of the Company (who
will beneficially own approximately 7.8% of the outstanding shares of Common
Stock after the Offering and who will hold options exercisable at the initial
public offering price for an additional 600,000 shares of Common Stock) have
agreed that, for a period of 180 days after the consummation of the Offering,
they will not, directly or indirectly, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock
or other capital stock of the Company or any securities convertible into or
exchangeable for any shares of Common Stock or other capital stock of the
Company without the prior written consent of Prudential Securities Incorporated,
on behalf of the Underwriters. Prudential Securities Incorporated may, in its
sole discretion, at any time and without notice, release all or any portion of
the shares of Common Stock subject to such agreement. These contractual
restrictions cover 2,145,000 shares (1,865,000 shares if the Underwriters'
over-allotment options are exercised in full).

All of the currently outstanding shares of Common Stock of the Company that
are not being sold in the Offering are "restricted securities" within the
meaning of Rule 144 under the Securities Act. In general, under Rule 144 as
currently in effect, a person (or persons whose shares are required to be
aggregated) who has beneficially owned, for at least one year, shares of Common
Stock that have not been registered under the Securities Act or that were
acquired from an "affiliate" of the Company, is entitled to sell within any
three-month period a number of shares of Common Stock that does not exceed the
greater of (a) 1.0% of the then-outstanding shares of Common Stock (80,000
shares upon completion of the Offering) and (b) the average weekly reported
trading volume in the Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 also are subject to certain notice and manner-of-sale
requirements and the availability of current public information about the
Company. A person (or persons whose shares are aggregated) who has not been an
"affiliate" of the Company (in general, a person who is not a director, officer
or principal stockholder of the Company) during the three months prior to resale
and who has beneficially owned restricted securities for at least two years is
entitled to sell such restricted securities under Rule 144 without regard to the
requirements discussed above. Of the 2,145,000 shares of Common Stock of the
Company that are restricted securities within the meaning of Rule 144, 1,520,000
shares will be eligible for sale on December 18, 1997 and 600,000 shares will be
eligible for sale one year from the consummation of the Offering, pursuant to
Rule 144 and subject to the volume, manner of sale and other limitations of Rule
144.

In connection with the ERI Acquisition, the Company will issue 600,000
shares of Common Stock to the Additional Selling Stockholders. The Additional
Selling Stockholders have agreed not to dispose of any of such shares for one
year after the consummation of the ERI Acquisition, and not to dispose of more
than 50% of such shares prior to two years after such consummation, other than
sales pursuant to exercise (if any) of the over-allotment options granted to the
Underwriters by the Additional Selling Stockholders in the Offering or pledges
pursuant to bona fide lending transactions (subject to the lock-up agreements
with the Underwriters).

The Company has agreed to register the offer and sale by Seitel on a
delayed and continuous basis from time to time of the shares of Common Stock
owned by Seitel after the Offering (1,520,000 shares, or 1,420,000 if the
Underwriters' over-allotment options are exercised in full) at the expense of
the Company. The Company has agreed to file a shelf registration statement
within 370 days after consummation of the Offering and to use its best efforts
to secure the effectiveness of such shelf registration statement as soon as
possible thereafter and maintain the effectiveness of such registration
statement for a period of two years thereafter. Seitel has agreed in the
Registration Rights Agreement not to sell more than 50.0% of such shares
pursuant to such registration prior to the date two years after the consummation
of the Offering. In addition,

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<PAGE> 57

the Company has granted Seitel the right to participate as a selling stockholder
in future underwritten public offerings of the Company's Common Stock, subject
to certain restrictions.

The Company intends to grant, effective as of the date of consummation of
the Offering, options to purchase up to 704,450 shares of Common Stock to its
officers, directors and employees, none of which are currently exercisable. See
"Management -- Independent Directors Stock Option Plan" and "-- Stock Option
Plan." Except for the options granted to Mr. Frame, one third of such options
will become exercisable one year from the consummation of the Offering, and
another one third of such options will become exercisable on the second and
third anniversaries of the consummation of the Offering. Mr. Frame's options
will vest on the fifth anniversary of the date of grant or, if earlier, in
cumulative installments of one-third of the total shares subject thereto when
the Company's gross revenues reach $150 million, $175 million and $200 million,
respectively, if the Company's after tax profit is at least 4% of gross revenues
upon attainment of such revenue targets. In addition, 495,550 shares remain
available under the Option Plan and the Directors Option Plan for the grant of
future options. The Company intends to file a registration statement on Form S-8
registering its sale of any shares pursuant to the exercise of such options to
such officers, directors, and employees, and the resale of shares obtained upon
such exercise by officers and directors prior to the date any such options
become exercisable.

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the
prevailing market price for the Common Stock. Sales of substantial amounts of
Common Stock, or the perception that such sales could occur, may adversely
affect prevailing market prices for the Common Stock and could impair the
Company's future ability to raise capital through an offering of equity
securities.

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<PAGE> 58

UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Prudential
Securities Incorporated and Simmons & Company International are acting as
representatives (the "Representatives"), have severally agreed, subject to the
terms and conditions contained in the Underwriting Agreement, to purchase from
the Company and the Selling Stockholder the number of shares of Common Stock set
forth opposite their respective names:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Prudential Securities Incorporated..........................
Simmons & Company International.............................

---------
Total............................................. 5,880,000
=========
</TABLE>

The Company and the Selling Stockholder are obligated to sell, and the
Underwriters are obligated to purchase, all of the shares of Common Stock
offered hereby if any are purchased.

The Underwriters, through their Representatives, have advised the Company
and the Selling Stockholder that they propose to offer the shares of Common
Stock initially at the initial public offering price set forth on the cover page
of this Prospectus; that the Underwriters may allow to selected dealers a
concession of $ per share; and that such dealers may reallow a concession
of $ per share to certain other dealers. After the public offering, the
offering price and the concessions may be changed by the Representatives.

The Company, the Selling Stockholder and the Additional Selling
Stockholders have granted to the Underwriters over-allotment options,
exercisable for 30 days from the date of this Prospectus, to purchase up to an
additional 882,000 shares of Common Stock at the initial public offering price
less the underwriting discounts and commissions as set forth on the cover page
of this Prospectus. Such additional shares will be purchased first from the
Additional Selling Stockholders (up to a total of 180,000 shares of Common
Stock), next from the Company (up to a total of 602,000 shares of Common Stock)
and then from the Selling Stockholder (up to a total of 100,000 shares of Common
Stock). The Underwriters may exercise such options solely for the purpose of
covering over-allotments incurred in the sale of the shares of Common Stock
offered hereby. To the extent such options to purchase are exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number set
forth next to such Underwriter's name in the preceding table bears to 5,880,000
shares.

The Company, together with each of its executive officers and directors and
all of the Company's current stockholders, have agreed not to, directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose of (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) any shares of Common Stock or any securities
convertible into or exchangeable or exercisable therefor for a period of 180
days from the date of this Prospectus without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters, except for
shares offered pursuant to the Offering and issuances pursuant to the exercise
of options granted under employee benefit plans existing as of the date of
consummation of the Offering or pursuant to the terms of warrants of the Company
outstanding as of the date of consummation of the Offering. Prudential
Securities Incorporated may, in its sole discretion, at any time and without
notice, release all or any portion of the securities subject to lock-up
agreements.

The Company, the parent corporation of the Selling Stockholder, the Selling
Stockholder, certain officers, directors and employees of the Company and the
Additional Selling Stockholders have agreed to

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<PAGE> 59

indemnify the several Underwriters or contribute to losses arising out of
certain liabilities, including liabilities under the Securities Act.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

Prior to the Offering, there has been no public market for the Common Stock
and no predictions can be made of the effect, if any, that the sale or
availability for sale of shares of additional Common Stock will have on the
market price of the Common Stock. Nevertheless, sales of substantial amounts of
such shares in the public market, or the perception that such sales could occur,
could materially and adversely affect the market price of the Common Stock and
could impair the Company's future ability to raise capital through an offering
of its equity securities.

The initial public offering price for the Common Stock will be determined
by negotiations between the Company and the Representatives and will not be
based upon any independent appraisal or valuation of the Company. Among the
factors to be considered in determining the initial public offering price are
the economic outlook for the industry in which the Company operates, the
Company's position in the industry, the Company's earnings prospects, the
Company's financial position, the ability and experience of the Company's
management, the prevailing conditions of the securities market at the time of
the Offering and the stock prices of publicly traded companies which the Company
and the Representatives believe to be comparable to the Company.

In connection with the Offering, certain Underwriters and selling group
members (if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M promulgated by the Securities and Exchange
Commission (the "Commission") pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company and the Selling Stockholder, and
in such case may purchase Common Stock in the open market following completion
of the Offering to cover all or a portion of such short position. The
Underwriters may also cover all or a portion of such short position, up to
882,000 shares of Common Stock, by exercising the Underwriters' over-allotment
option referred to above. In addition, Prudential Securities Incorporated, on
behalf of the Underwriters, may impose "penalty bids" under contractual
arrangements with the Underwriters whereby it may reclaim from an Underwriter
(or any selling group member participating in the Offering) for the account of
the other Underwriters, the selling concession with respect to Common Stock that
is distributed in the Offering but subsequently purchased for the account of the
Underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Common Stock at a
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph are required and, if they are
undertaken, they may be discontinued at any time.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock covered by this
Prospectus will be passed upon for the Company by Gardere Wynne Sewell & Riggs,
L.L.P., Houston, Texas, and for the Underwriters by Brown & Wood LLP, New York,
New York.

EXPERTS

The audited consolidated financial statements of Eagle and subsidiary
included in this prospectus and elsewhere in this registration statement, to the
extent and for the periods indicated in their report, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.

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<PAGE> 60

The audited consolidated financial statements of ERI and subsidiaries as of
December 31, 1995 and 1996 and for each of the years in the three years ended
December 1996 have been included in this prospectus and elsewhere in this
registration statement in reliance upon the report of KPMG, independent public
accountants, upon the authority of said firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a registration statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus, which is part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement and the exhibits
thereto. For further information concerning the Company and the Common Stock,
reference is made to the Registration Statement and to the exhibits and
schedules filed therewith, copies of which may be inspected at the Commission's
principal office, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549, or copies of which may be obtained from the Commission at such office
upon payment of the fees prescribed by the Commission. Copies of the
Registration Statement may also be inspected at the Commission's regional
offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. In addition, the Common Stock will be listed on the Nasdaq National
Market, 1735 K Street, N.W., Washington, D.C. 20006-1500, where such material
may also be inspected and copied.

As a result of the Offering, the Company will become subject to the
information and periodic reporting requirements of the Exchange Act, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the public
reference facilities, regional offices and stock exchange referred to above. In
addition, these reports, proxy statements and other information may also be
obtained from the web site that the Commission maintains at http://www.sec.gov.
The summaries in this Prospectus of additional information included in the
Registration Statement or any exhibit thereto are qualified in their entirety by
reference to such information or exhibit filed with the Commission.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements certified by an independent public
accounting firm and quarterly reports for the first three quarters of each
fiscal year containing unaudited financial information.

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GLOSSARY

16 BIT, 24 BIT

The resolution available for the process of converting analog hydrophone or
geophone signals into digital form.

GEOPHONE

A type of seismic receiver placed on land or on the sea floor that records
seismic waves by detecting particle movement.

GLOBAL POSITIONING SYSTEM (GPS)

A satellite navigation and positioning system utilized in seismic
operations.

HIGH DEFINITION SURVEYS

Surveys designed to optimize the degree to which subsurface geology and
faulting can be resolved. In general, high definition surveys require a denser
grid of seismic data recordings to be made over a given area and closer
deployment of energy sources and geophones (if on land) or hydrophone streamers
(if offshore).

HYDROPHONE

An offshore seismic receiver that records seismic waves by detecting
pressure changes.

OFFSET

Offset is the distance along the surface between energy source and receiver
positions. Long offsets are generally required for imaging deep geological
targets and for subsalt recording in the Gulf of Mexico in order to record
seismic reflections from subsalt strata with less of the reflected signal
distortion normally associated with salt formations.

POSITIONING

The accurate computing of the geographical position of source and receiver
locations onshore and of the vessel and all equipment deployed in the water
during data collection. To produce accurate seismic images, the positions of
hydrophone groups and sources must be known within a few meters throughout the
survey.

RADIO TELEMETRY SYSTEM

A seismic data acquisition system using radio signals rather than cables to
transmit seismic data to the system's central recording equipment. Because these
systems use radio signals to transmit data, they can be operated more
efficiently than cable-based systems, particularly in wetland areas and highly
populated areas where there are numerous topographic obstructions, such as
rivers, bays, highways and towns. These systems also are well-suited to work in
environmentally sensitive areas where physical intrusion must be minimized.

SAR

A radio telemetry field recording box, or a seismic acquisition remote
(SAR). SARs collect seismic data from groups of geophones, or geophone stations,
digitize the seismic data from the geophones and transmit the digitized data to
the central recording equipment of the seismic data acquisition system using
radio waves.

SOURCE (OR ENERGY SOURCE)

A device that emits acoustic energy. The most common type of source for
offshore seismic operations is known as an airgun, which releases a burst of
compressed air into the water, thereby generating an acoustic

60
<PAGE> 62

shock wave. Airguns are towed behind the vessel slightly below the surface of
the water. Onshore energy sources include dynamite and truck mounted vibrators.

STREAMER

A streamer, used in offshore seismic data acquisition operations, consists
of a cable that is several kilometers in length, is filled with liquid to
provide near neutral buoyancy, and contains many hundreds of pressure sensitive
recording instruments, known as hydrophones. The hydrophones detect pressure
changes associated with reflected seismic energy and transmit this information,
as electrical signals, along the streamer to the recording vessel. A streamer is
normally towed behind the vessel slightly below the surface of the water.

SUBSALT

The geological strata beneath salt deposits. Many of the offshore 3D
seismic data acquisition projects currently being performed in the U.S. Gulf of
Mexico are designed to image subsalt strata. Because the salt deposits have a
tendency to distort seismic wave reflections, these projects require longer
offsets to reduce such distortion.

TWO-DIMENSIONAL (2D) SEISMIC DATA

Data acquired along a single line used to generate a cross sectional view
of subsurface geological strata. 2D data is less costly to acquire than 3D data,
but does not provide as detailed an image of the subsurface.

THREE-DIMENSIONAL (3D) SEISMIC DATA

Data generally acquired simultaneously along multiple parallel lines used
to generate a three dimensional picture of subsurface geological strata, rather
than a mere cross section. To provide this three dimensional picture, much more
data must be acquired than for a two dimensional cross section, so 3D data is
significantly more expensive than 2D data. However, the use of 3D data can
significantly improve drilling results, which can make 3D data more economically
efficient than 2D data.

VIBROSEIS TRUCK

A truck mounted vibration generator that can be used to create seismic
energy on dry land.

WETLAND ENVIRONMENTS

An area subject to constant or periodic immersion in water, such as a
swamp, marsh, rice field, shallow bay or lake. The coastal areas of the U.S.
Gulf Coast contain a high proportion of wetlands. Acquisition of seismic data in
these wetland environments requires specialized equipment and techniques.

61
<PAGE> 63

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
EAGLE GEOPHYSICAL, INC. Unaudited Pro Forma Consolidated
Financial Statements
Unaudited Pro forma Consolidated Balance Sheet as of March
31, 1997............................................... F-3
Unaudited Pro forma Consolidated Statement of Operations
for the three month period ended March 31, 1997........ F-4
Unaudited Pro forma Consolidated Statement of Operations
for the year ended
December 31, 1996...................................... F-5
Notes to the Unaudited Pro forma Consolidated Financial
Statements............................................. F-6

EAGLE GEOPHYSICAL, INC.
Report of Independent Public Accountants.................. F-8
Consolidated Balance Sheets -- December 31, 1995, 1996 and
unaudited March 31, 1997............................... F-9
Consolidated Statements of Operations for the years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month periods ended
March 31, 1996 and 1997................................ F-10
Consolidated Statements of Stockholder's Equity for the
years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month period ended
March 31, 1997......................................... F-11
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month periods ended
March 31, 1996 and 1997................................ F-12
Notes to Consolidated Financial Statements................ F-13

ENERGY RESEARCH INTERNATIONAL
Report of Independent Auditors............................ F-21
Consolidated Balance Sheets -- December 31, 1995, 1996 and
unaudited
March 31, 1997......................................... F-22
Consolidated Statements of Operations for the years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month periods ended
March 31, 1996 and 1997................................ F-23
Consolidated Statements of Stockholders' Equity (Deficit)
for the years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month period ended
March 31, 1997......................................... F-24
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995, 1996 and unaudited for the
three month periods ended
March 31, 1996 and 1997................................ F-25
Notes to Consolidated Financial Statements................ F-26
</TABLE>

F-1
<PAGE> 64

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF EAGLE GEOPHYSICAL, INC.

The accompanying unaudited pro forma consolidated financial statements are
derived from the historical consolidated financial statements of Eagle and ERI
included elsewhere in this Prospectus.

The unaudited pro forma consolidated balance sheet as of March 31, 1997 and
the unaudited pro forma consolidated statements of operations for the year ended
December 31, 1996 and the three month period ended March 31, 1997 give effect to
certain transactions that will take place upon the closing of the Offering as if
the transactions had taken place on March 31, 1997 in the case of the unaudited
pro forma consolidated balance sheet and January 1, 1996 in the case of the
unaudited pro forma consolidated statements of operations.

F-2
<PAGE> 65

EAGLE GEOPHYSICAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
ENERGY
EAGLE RESEARCH
GEOPHYSICAL, INC. INTERNATIONAL PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS AS ADJUSTED
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................ $ -- $ 1,304 $ 55,250(B) $21,399
(35,155)(C)
Receivables:
Trade.................................................. 9,708 4,064 (572)(D) 13,200
Other.................................................. 190 253 -- 443
Inventories.............................................. -- 1,410 -- 1,410
Due from affiliate....................................... 5,809 -- (5,809)(E) --
Prepaid expenses and other assets........................ 235 2,579 -- 2,814
-------- -------- -------- -------
Total current assets.............................. 15,942 9,610 13,714 39,266
PROPERTY AND EQUIPMENT, AT COST:
Geophysical equipment.................................... 28,515 32,248 (11,677)(A) 49,086
Furniture, fixtures and other............................ 121 240 -- 361
-------- -------- -------- -------
28,636 32,488 (11,677) 49,447
Less: Accumulated depreciation and amortization.......... (9,388) (11,677) 11,677(A) (9,388)
-------- -------- -------- -------
Net property and equipment........................ 19,248 20,811 -- 40,059
OTHER LONG-TERM ASSETS..................................... 72 -- 19,849(A) 19,921
-------- -------- -------- -------
TOTAL ASSETS...................................... $35,262 $ 30,421 $ 33,563 $99,246
======== ======== ======== =======

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of bank line............................. $ -- $ 7,232 $ (7,232)(C) $ --
Current portion of long-term debt........................ 2,606 400 (3,006)(C) --
Current portion of capital lease obligations............. 942 4,048 (2,492)(C) 2,498
Accounts payable......................................... 4,506 5,700 (572)(D) 9,634
Accrued liabilities...................................... 1,822 3,763 -- 5,585
Accrued capital lease interest........................... -- 858 -- 858
Due to affiliate......................................... 1,404 2,120 (1,404)(C) 2,120
Deferred revenue......................................... 35 -- -- 35
-------- -------- -------- -------
Total current liabilities.............................. 11,315 24,121 (14,706) 20,730
DUE TO AFFILIATE........................................... -- 4,679 (4,679)(C) --
LONG-TERM DEBT............................................. 12,933 -- (12,933)(C) --
CAPITAL LEASE OBLIGATIONS.................................. 1,319 11,556 (3,004)(C) 9,871
DEFERRED INCOME TAXES...................................... 776 -- (135)(C) 641
-------- -------- -------- -------
Total liabilities................................. 26,343 40,356 (35,457) 31,242
-------- -------- -------- -------
STOCKHOLDERS' EQUITY
Common Stock, par value $0.01 per share; authorized
25,000,000 shares; issued and outstanding 3,400,000
shares actual, 8,025,000 shares pro forma as
adjusted............................................... 34 -- 6(A) 82
42(B)
Additional paid-in capital............................... 7,755 -- 55,583(B) 68,567
9,908(A)
(4,679)(E)
Retained earnings (deficit).............................. 1,130 (9,690) 9,690(A) (270)
(1,130)(E)
(270)(C)
Translation adjustment................................... -- (245) 245(A) --
Note receivable from stockholder......................... -- -- (375)(B) (375)
-------- -------- -------- -------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT).............. 8,919 (9,935) 69,020 68,004
-------- -------- -------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $35,262 $ 30,421 $ 33,563 $99,246
======== ======== ======== =======
</TABLE>

F-3
<PAGE> 66

EAGLE GEOPHYSICAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
ENERGY
EAGLE RESEARCH
GEOPHYSICAL, INC. INTERNATIONAL PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS AS ADJUSTED
----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE............................................. $12,981 $ 11,079 $ (434)(F) $ 23,626
OPERATING EXPENSES
Operating expenses................................ 9,286 7,705 (434)(F) 16,557
Depreciation and amortization..................... 1,302 1,377 331(G) 3,010
Selling, general and administrative expenses...... 450 517 400(H) 1,367
Interest expense, net............................. 158 536 (660)(I) 34
------- -------- -------- --------
Total expenses............................ 11,196 10,135 (363) 20,968
------- -------- -------- --------
Income before provision for income taxes............ 1,785 944 (71) 2,658
Provision (benefit) for income taxes................ 655 -- (166)(J) 489
------- -------- -------- --------
NET INCOME.......................................... $ 1,130 $ 944 $ 95 $ 2,169
======= ======== ======== ========
Earnings per share.................................. $ .33 $ .27
======= ========
Weighted average number of common shares............ 3,400 4,625 8,025
======= ======== ========
</TABLE>

F-4
<PAGE> 67

EAGLE GEOPHYSICAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
EAGLE ENERGY
GEOPHYSICAL, RESEARCH
INC. INTERNATIONAL PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS AS ADJUSTED
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE.............................................. $48,136 $43,607 $ (828)(K) $90,915
OPERATING EXPENSES
Operating expenses................................. 34,917 37,601 (828)(K) 71,690
Depreciation and amortization...................... 3,409 4,615 1,323(L) 9,347
Selling, general and administrative expenses....... 2,680 2,619 1,601(O) 6,900
Interest expense, net.............................. 531 1,649 (1,529)(M) 651
------- ------- ------ -------
Total expenses.................................. 41,537 46,484 567 88,588
------- ------- ------ -------
Income (loss) before provision for income taxes...... 6,599 (2,877) (1,395) 2,327
Provision (benefit) for income taxes................. 2,420 -- (860) (N) 1,560
------- ------- ------ -------
NET INCOME (LOSS)(1)................................. $ 4,179 $(2,877) $ (535) $ 767
======= ======= ====== =======
Earnings per share................................... $ 1.23 $ .10
======= =======
Weighted average number of common shares............. 3,400 4,625 8,025
======= ====== =======
</TABLE>

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

(1) Excludes the effect of a $600,000 extraordinary gain for early
extinguishment of debt on ERI's historical 1996 financial statements.

F-5
<PAGE> 68

EAGLE GEOPHYSICAL, INC.

NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The accompanying pro forma consolidated financial statements have been
prepared to reflect certain adjustments to the historical consolidated financial
statements to give effect to the acquisition of the remaining interests in the
Horizon Companies and the net proceeds of the Offering. The adjustments are
based upon currently available information and certain estimates and
assumptions, and therefore the actual adjustments made to effect the
transactions may differ from the pro forma adjustments. However, management
believes that the assumptions provide a reasonable basis for presenting the
significant effects of the transactions as contemplated and the pro forma
adjustments give appropriate effect to these assumptions and are properly
applied in the pro forma financial information.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT MARCH 31, 1997

A.) Adjustments to reflect the acquisition of ERI including i) the exchange
of an 81% interest in ERI for 600,000 shares of Eagle Geophysical, Inc.
common stock valued at the assumed initial offering price and ii)
Seitel's contribution of its 19% ownership interest in ERI to the
Company at Seitel's carryover basis. The following table summarizes
elements of the ERI acquisition, which was accounted for by the Company
as a purchase transaction (in thousands):

<TABLE>
<S> <C>
Consideration:
Stock purchase price........................................ $ 9,000
Seitel's contributed 19% investment......................... 914
Liabilities assumed......................................... 40,356
Assets acquired............................................. (30,421)
--------
Goodwill.................................................. $ 19,849
--------
</TABLE>

B.) Reflects the issuance of 4,000,000 shares of Eagle Geophysical Inc.
common stock to the public pursuant to the Offering, net of offering
costs, and the sale of 25,000 shares of Common Stock, at the initial
public offering price, to Jay N. Silverman, President of the Company,
for a note.

C.) Adjustment to reflect the application of $35,422,000 of the estimated
net proceeds from the Offering to reduce debt, capital lease and due to
affiliate obligations at March 31, 1997, including a prepayment penalty
on early extinguishment of debt which is estimated to be approximately
$405,000, and the related tax effect.

D.) Reflects the elimination of intercompany payables and receivables
between Eagle and ERI totaling $572,000.

E.) Reflects the elimination of due from affiliate of $6,076,000 between
Eagle and affiliates in the form of a dividend.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
QUARTER ENDED MARCH 31, 1997

F.) Adjustments to eliminate $434,000 in lease income between Eagle and
ERI.

G.) Reflects the amortization of goodwill associated with the acquisition
of ERI over a 15-year estimated useful life.

H.) Represents identifiable additions to selling, general and
administrative expenses the Company estimates it will incur when
operating as a public registrant. Such incremental expenses primarily
include increases in personnel, contractual employment arrangements,
and directors' and officers' compensation and insurance.

I.) Reflects a reduction in interest expense of $660,000 as a result of
the application of $35,017,000 of the estimated net proceeds from the
Offering to reduce debt and capital lease obligations and due to
affiliate obligations at March 31, 1997.

F-6
<PAGE> 69

EAGLE GEOPHYSICAL, INC.

NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

J.) Adjustments to the provision for income taxes related to the above
adjustments applicable to Eagle. No adjustment was made to the
provision for income taxes related to ERI's adjustments as ERI was not
required to record a tax provision during the pro forma period.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1996

K.) Adjustments to eliminate $828,000 in lease income between Eagle and
ERI.

L.) Reflects the amortization of goodwill associated with the acquisition
of ERI over a 15-year estimated useful life.

M.) Reflects a reduction in interest expense of $1,529,000 as a result of
the application of $23,565,000 of the estimated net proceeds from the
Offering to reduce debt and capital lease obligations.

N.) Adjustments to the provision for income taxes related to the above
adjustments applicable to Eagle. No adjustment was made to the
provision for income taxes related to ERI's adjustments as ERI was not
required to record a tax provision during the pro forma period.

O.) Represents identifiable additions to selling, general and
administrative expenses the Company estimates it will incur when
operating as a public registrant. Such incremental expenses primarily
include increases in personnel, contractual employment arrangements,
and directors' and officers' compensation and insurance.

F-7
<PAGE> 70

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Eagle Geophysical, Inc.:

We have audited the accompanying consolidated balance sheets of Eagle
Geophysical, Inc. (a Delaware corporation and wholly owned subsidiary of Seitel,
Inc.) and subsidiary as of December 31, 1995 and 1996, and the related
consolidated statements of operations, stockholder's equity and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Eagle Geophysical, Inc. and
subsidiary as of December 31, 1995 and 1996, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1996, in conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Houston, Texas
May 21, 1997

F-8
<PAGE> 71

EAGLE GEOPHYSICAL, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ MARCH 31,
1995 1996 1997
------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 58 $ -- $ --
Receivables:
Trade, billed.......................................... 8,947 12,913 9,708
Trade, unbilled........................................ 245 363 --
Other.................................................. 73 233 190
Due from affiliate........................................ -- -- 5,809
Prepaid expenses and other assets......................... 95 860 235
------- ------- -------
Total current assets.............................. 9,418 14,369 15,942
PROPERTY AND EQUIPMENT, AT COST:
Geophysical equipment..................................... 12,531 20,200 28,515
Furniture, fixtures and other............................. 108 108 121
------- ------- -------
12,639 20,308 28,636
Less: Accumulated depreciation and amortization........... (4,694) (8,103) (9,388)
------- ------- -------
Net property and equipment........................ 7,945 12,205 19,248
OTHER LONG-TERM ASSETS...................................... 1 69 72
------- ------- -------
TOTAL ASSETS...................................... $17,364 $26,643 $35,262
======= ======= =======

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt......................... $ 879 $ 2,556 $ 2,606
Current portion of capital lease obligations.............. 1,239 1,033 942
Accounts payable.......................................... 2,515 4,623 4,506
Accrued liabilities....................................... 891 652 1,822
Due to affiliate.......................................... -- -- 1,404
Deferred revenue.......................................... -- -- 35
------- ------- -------
Total current liabilities......................... 5,524 8,864 11,315
LONG-TERM DEBT.............................................. 1,540 6,039 12,933
CAPITAL LEASE OBLIGATIONS................................... 2,274 1,274 1,319
OTHER LONG-TERM LIABILITIES................................. 100 -- --
DUE TO AFFILIATE............................................ 3,662 1,965 --
DEFERRED INCOME TAXES....................................... 654 712 776
------- ------- -------
TOTAL LIABILITIES................................. 13,754 18,854 26,343
------- ------- -------
CONTINGENCIES AND COMMITMENTS
STOCKHOLDER'S EQUITY:
Common stock, par value $.01 per share; authorized
25,000,000 shares; issued and outstanding 3,400,000
shares at December 31, 1995 and 1996 and March 31,
1997................................................... 34 34 34
Additional paid-in capital................................ 3,576 7,755 7,755
Retained earnings......................................... -- -- 1,130
------- ------- -------
TOTAL STOCKHOLDER'S EQUITY........................ 3,610 7,789 8,919
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY........ $17,364 $26,643 $35,262
======= ======= =======
</TABLE>

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

F-9
<PAGE> 72

EAGLE GEOPHYSICAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTH
PERIODS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------- -----------------
1994 1995 1996 1996 1997
------- ------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUE(1)................................ $25,721 $29,275 $48,136 $5,974 $12,981
EXPENSES
Operating expenses(1)................... 20,070 20,986 34,917 4,336 9,286
Depreciation and amortization........... 1,817 2,471 3,409 657 1,302
Selling, general and administrative
expenses............................. 1,673 2,874 2,680 361 450
Interest expense........................ 387 450 699 136 276
Interest income......................... (3) (42) (168) -- (118)
------- ------- ------- ------ -------
23,944 26,739 41,537 5,490 11,196
------- ------- ------- ------ -------
Income before provision for income
taxes................................... 1,777 2,536 6,599 484 1,785
Provision for income taxes................ 651 933 2,420 178 655
------- ------- ------- ------ -------
NET INCOME................................ $ 1,126 $ 1,603 $ 4,179 $ 306 $ 1,130
======= ======= ======= ====== =======
Earnings per share........................ $ .33 $ .47 $ 1.23 $ .09 $ .33
======= ======= ======= ====== =======
Weighted average number of common
shares.................................. 3,400 3,400 3,400 3,400 3,400
======= ======= ======= ====== =======
</TABLE>

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

(1) Includes revenue from affiliates of $14,281,000, $15,391,000, $27,217,000,
$2,882,000 and $8,081,000 for the years ended December 31, 1994, 1995, 1996
and for the unaudited three month periods ended March 31, 1996 and 1997,
respectively, and operating expenses related to such affiliate revenue of
$11,348,000, $10,845,000, $20,078,000, $2,039,000 and $5,948,000 for the
years ended December 31, 1994, 1995, 1996 and for the unaudited three month
periods ended March 31, 1996 and 1997, respectively.

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

F-10
<PAGE> 73

EAGLE GEOPHYSICAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
---------------- PAID-IN RETAINED STOCKHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993............... 3,400 $34 $ 847 $ -- $ 881
Net income............................. -- -- 1,126 -- 1,126
----- --- ------ ------- -------
Balance, December 31, 1994............... 3,400 34 1,973 -- 2,007
Net income............................. -- -- 1,603 -- 1,603
----- --- ------ ------- -------
Balance, December 31, 1995............... 3,400 34 3,576 -- 3,610
Net income............................. -- -- 4,179 -- 4,179
----- --- ------ ------- -------
Balance, December 31, 1996............... 3,400 34 7,755 -- 7,789
UNAUDITED:
Net income............................. -- -- -- 1,130 1,130
----- --- ------ ------- -------
Balance, March 31, 1997.................. 3,400 $34 $7,755 $ 1,130 $ 8,919
===== === ====== ======= =======
</TABLE>

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

F-11
<PAGE> 74

EAGLE GEOPHYSICAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTH PERIODS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------- -------------------
1994 1995 1996 1996 1997
------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 1,126 $ 1,603 $ 4,179 $ 306 $ 1,130
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 1,817 2,471 3,409 657 1,302
Gain on sale of property and equipment....... -- -- -- -- (14)
Deferred income tax provision................ 248 152 58 16 64
Increase in receivables...................... (3,623) (4,645) (4,244) (3,634) (2,198)
Increase in other assets..................... (41) (49) (833) (235) (119)
Increase (decrease) in accounts payable and
other liabilities.......................... 1,982 2,897 372 3,211 (53)
------- ------- ------- ------- -------
Total adjustments....................... 383 826 (1,238) 15 (1,018)
------- ------- ------- ------- -------
Net cash provided by operating
activities............................ 1,509 2,429 2,941 321 112
------- ------- ------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment.............. (234) (289) (7,928) (232) (6,737)
Cash received on disposal of property and
equipment.................................... -- -- -- -- 27
------- ------- ------- ------- -------
Net cash used in investing activities... (234) (289) (7,928) (232) (6,710)
------- ------- ------- ------- -------
Cash flows from financing activities:
Borrowings under term loans..................... -- -- 7,694 433 7,564
Principal payments on term loans................ (758) (812) (1,518) (225) (620)
Principal payments on capital leases............ (513) (1,299) (1,247) (308) (346)
------- ------- ------- ------- -------
Net cash provided by (used in) financing
activities............................ (1,271) (2,111) 4,929 (100) 6,598
------- ------- ------- ------- -------
Net increase (decrease) in cash and cash
equivalents..................................... 4 29 (58) (11) --
Cash and cash equivalents at beginning of
period.......................................... 25 29 58 58 --
------- ------- ------- ------- -------
Cash and cash equivalents at end of period........ $ 29 $ 58 $ -- $ 47 $ --
======= ======= ======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest..................................... $ 371 $ 408 $ 637 $ 90 $ 276
======= ======= ======= ======= =======
Income taxes................................. $ -- $ -- $ -- $ -- $ --
======= ======= ======= ======= =======
Noncash investing activities:
Capital lease obligations.................... $ 5,315 $ 10 $ 41 $ -- $ 300
======= ======= ======= ======= =======
</TABLE>

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

F-12
<PAGE> 75

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS: Eagle Geophysical, Inc. (the "Company") is an
oilfield service company engaged in seismic data acquisition services, with a
specialization in the acquisition of high-resolution, three-dimensional seismic
data in logistically difficult wetland environments primarily in the U.S. Gulf
Coast region. Since its inception, the Company has been a wholly-owned
subsidiary of Seitel Inc. ("Seitel"), which has subsidiaries that have been
significant purchasers of the Company's services -- See Note G.

The Company's future operations are dependent on a variety of factors,
including, but not limited to, the level of exploration-industry spending by
third parties; the Company's ability to maintain its technologically competitive
position in its capital-intensive business; the Company's reliance on key
suppliers and customers; risks inherent in doing business internationally;
weather; and the Company's ability to manage operating risks. See "Risk Factors"
included elsewhere in this document.

USE OF ESTIMATES: The preparation of these consolidated financial
statements requires the use of certain estimates by management in determining
the Company's assets, liabilities, contingencies, revenues and expenses. One
such estimate relates to the percentage of revenue recognized based on the stage
of completion of seismic acquisition projects. Actual results could differ from
estimates.

BASIS OF PRESENTATION: The accompanying consolidated financial statements
include the accounts of Eagle Geophysical, Inc., indirectly a wholly-owned
subsidiary of Seitel, and the accounts of its wholly-owned subsidiary, Eagle
Geophysical Onshore, Inc., both of which were formed on December 18, 1996.
Effective December 31, 1996, substantially all of the net assets of its
predecessor, Seitel Geophysical, Inc., a wholly-owned subsidiary of Seitel, were
contributed to Eagle Geophysical Onshore, Inc. The Company's reported assets,
liabilities, revenues and expenses include the predecessor operations of Seitel
Geophysical, Inc. for all periods presented. The financial reporting basis of
the contributed net assets was carried forward to the Company's accounts, and
the net equity of Seitel Geophysical, Inc. for periods prior to December 31,
1996, is reflected in the Company's additional paid-in capital account.

PROPERTY AND EQUIPMENT: Property and equipment are carried at cost and
include assets under capital leases. Maintenance and repairs are charged to
expense as incurred and expenditures for major improvements are capitalized.
Gains and losses from retirement or replacement of property and equipment are
included in operations.

Depreciation and amortization of property and equipment and assets under
capital leases are provided over the estimated useful lives of the assets, which
range from three to five years, or the term of the lease using the straight-line
method.

INCOME TAXES: The Company is included in the consolidated federal income
tax return filed by Seitel. Under an informal agreement, Seitel and its
subsidiaries have computed their individual income tax provisions as though each
were filing a separate federal income tax return. The subsidiaries pay to Seitel
the amount of their respective current federal income tax liability or, to the
extent the consolidated group is able to utilize their separate company tax
losses or credits, receive reimbursement from Seitel without regard to any
alternative minimum tax liabilities incurred by Seitel.

REVENUE AND COST RECOGNITION: Revenue from the acquisition of seismic data
is recognized on the percentage-of-completion method based on the work effort
completed compared with the total work effort estimated for the contract.
Revenue received in advance of being earned is deferred until earned.

Operating expenses include all direct material and labor costs and indirect
costs related to the acquisition of seismic data such as supplies, tools and
repairs. Selling, general and administrative costs are charged to expense as
incurred. Provisions for estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions and estimated profitability, including

F-13
<PAGE> 76

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

those arising from contract penalty provisions, and final contract settlements
may result in revisions to costs and income and are recognized in the period in
which the revisions are determined.

EARNINGS PER SHARE: Earnings per share was based on the weighted average
number of outstanding shares of common stock during the respective years. There
were no common stock equivalent shares outstanding for any period -- See Note I.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share,"
effective for interim and annual periods after December 15, 1997. This statement
replaces primary earnings per share with a newly defined basic earnings per
share and modifies the computation of diluted earnings per share. The
application of this statement will not have any impact on earnings per share for
the three years ended December 31, 1996, as there were no common stock
equivalent shares outstanding.

STATEMENT OF CASH FLOWS: For purposes of the statement of cash flows, the
Company considers all highly liquid investments or debt instruments with
original maturity of three months or less to be cash equivalents.

INTERIM FINANCIAL DATA (UNAUDITED): The unaudited financial statements as
of March 31, 1997, and for the three month periods ended March 31, 1996 and 1997
and all related footnote information for these periods have been prepared on the
same basis as the audited financial statements and, in the opinion of
management, include all adjustments, consisting of normal and recurring
adjustments, necessary for a fair presentation of financial position and results
of operations and cash flows in accordance with generally accepted accounting
principles.

STOCK-BASED COMPENSATION: The Company anticipates that certain employees of
Eagle will be granted options or warrants to purchase Eagle or Seitel stock in
future periods. Some of these options or warrants may trigger compensation
expense in the Company's financial statements.

The Company plans to account for employee stock-based compensation using
the intrinsic value method prescribed in Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, the
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," will not
affect the Company's reported results of operations and will be included as
separate pro forma disclosures only.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The estimated fair value amounts have
been determined by the Company using available market data and valuation
methodologies. The book values of cash and equivalents, receivables and accounts
payable approximate their fair value as of December 31, 1995 and 1996, because
of the short-term maturity of these instruments. Based upon the rates available
to the Company, the fair value of the term loans approximates the carrying value
of this debt as of December 31, 1995 and 1996.

IMPAIRMENT OF LONG-LIVED ASSETS: In March 1995, the Financial Accounting
Standards Board issued SFAS No. 121, "Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." This statement requires
that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
realizable. The Company adopted SFAS No. 121 effective January 1, 1996; the
adoption of this statement did not have a material effect on the Company's
consolidated financial statements.

F-14
<PAGE> 77

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE B -- INCOME TAXES

The provision for income taxes for each of the three years ended December
31, 1996, consists of the following (in thousands):

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ------
<S> <C> <C> <C>
Current -- Federal.......................................... $359 $695 $2,105
-- State............................................ 44 86 257
---- ---- ------
403 781 2,362
---- ---- ------
Deferred -- Federal......................................... 221 137 51
-- State........................................... 27 15 7
---- ---- ------
248 152 58
---- ---- ------
Tax provision -- Federal.................................... 580 832 2,156
-- State...................................... 71 101 264
---- ---- ------
$651 $933 $2,420
==== ==== ======
</TABLE>

The differences between U.S. Federal income taxes computed at the statutory
rate (34%) and the Company's income tax provisions are as follows (in
thousands):

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ------
<S> <C> <C> <C>
Statutory Federal income tax................................ $604 $862 $2,244
State income tax, less Federal benefit...................... 47 67 174
Other, net.................................................. -- 4 2
---- ---- ------
Income tax expense.......................................... $651 $933 $2,420
==== ==== ======
</TABLE>

The components of the net deferred income tax liability reflected in the
Company's consolidated balance sheets at December 31, 1995 and 1996 were as
follows (in thousands):

<TABLE>
<CAPTION>
DEFERRED TAX ASSETS
(LIABILITIES)
AT DECEMBER 31,
--------------------
1995 1996
-------- --------
<S> <C> <C>
Deferred items related to state tax provision............... $ 24 $ 26
Accrued expense and other assets............................ 376 371
------- -------
Total deferred tax assets................................... 400 397
Less: valuation allowance................................... -- --
------- -------
Deferred tax assets, net of valuation allowance........... 400 397
------- -------

Depreciation and amortization............................... (1,054) (1,109)
------- -------
Total deferred tax liabilities.............................. (1,054) (1,109)
------- -------
Net deferred tax liability.................................. $ (654) $ (712)
======= =======
</TABLE>

F-15
<PAGE> 78

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE C -- COST AND BILLINGS ON UNCOMPLETED CONTRACTS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Cost incurred and estimated earnings on uncompleted
contracts................................................. $4,898 $2,354
Billings on uncompleted contracts........................... 4,653 1,991
------ ------
Unbilled accounts receivable................................ $ 245 $ 363
====== ======
</TABLE>

Unbilled accounts receivable under customer contracts represents revenue
earned under the percentage of completion method but not yet billable under the
terms of the contract.

NOTE D -- LONG-TERM DEBT

The following is a summary of the Company's long-term debt at December 31,
1995 and 1996 (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1995 1996
------ -------
<S> <C> <C>
Term loans.................................................. $2,419 $ 8,595
Less: Current maturities.................................... (879) (2,556)
------ -------
Long-term debt.............................................. $1,540 $ 6,039
====== =======
</TABLE>

TERM LOANS: On July 15, 1993, the Company obtained a $4,300,000, five-year
term loan bearing interest at the rate of 7.61% for the purchase of a telemetry
seismic data acquisition system and auxiliary equipment. The debt is secured by
such equipment. Monthly principal and interest payments total approximately
$86,000. This term loan is guaranteed by Seitel.

On March 14, 1996, the Company obtained a $433,000, three-year term loan
bearing interest at the rate of 7.52% for the purchase of geophysical equipment.
The debt is secured by such equipment. Monthly principal and interest payments
total approximately $13,000. This term loan is guaranteed by Seitel.

On July 9, 1996, the Company obtained two term loans aggregating $7,264,000
for the purchase of land and marine seismic equipment which secures the debt.
The first loan is a $5,902,000, five year term loan bearing interest at the rate
of 8%. The second loan is a $1,362,000, three year term loan bearing interest at
the rate of 8.06%. Monthly principal and interest payments on both term loans
total approximately $163,000. These term loans are guaranteed by Seitel.

Certain of the borrowings described above contain requirements as to the
maintenance of minimum net worth and limitations on liens, total debt, debt
issuance and disposition of assets by Seitel.

Aggregate maturities of the Company's debt over the next five years are as
follows: $2,556,000 in 1997; $2,326,000 in 1998; $1,584,000 in 1999; $1,313,000
in 2000; and $816,000 in 2001.

F-16
<PAGE> 79

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE E -- LEASE OBLIGATIONS

Property and equipment in the accompanying consolidated balance sheets
includes the following assets held under capital leases (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1996
------- -------
<S> <C> <C>
Geophysical equipment....................................... $ 5,298 $ 5,339
Accumulated amortization.................................... (1,555) (2,649)
------- -------
Assets under capital lease, net............................. $ 3,743 $ 2,690
======= =======
</TABLE>

The Company is allocated a portion of the office lease expense incurred by
Seitel under its operating lease for the corporate office based on the actual
cost of such office space pro-rated to the amount utilized by the Company.
Additionally, the Company also directly leases office space under operating
leases. Rental expense for 1994, 1995 and 1996 was approximately $60,000,
$98,000 and $142,000, respectively.

Future minimum lease payments for the five years subsequent to December 31,
1996 and in the aggregate are as follows (in thousands):

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1997........................................................ $1,106 $45
1998........................................................ 881 15
1999........................................................ 447 --
2000........................................................ 11 --
2001........................................................ 2 --
------ ---
Total minimum lease payments................................ 2,447 $60
===
Less amount representing interest........................... (140)
------
Present value of net minimum lease payments................. $2,307
======
</TABLE>

NOTE F -- CONTINGENCIES AND COMMITMENTS

On September 30, 1996, the Company entered into an agreement for the
purchase of a telemetry seismic data acquisition system at a cost of
approximately $3,500,000. Payment was made upon delivery of the system in
January 1997.

The Company is involved in or threatened with various legal proceedings
from time to time arising in the ordinary course of business. Management of the
Company does not believe that any liabilities resulting from such proceedings
will have a material adverse effect on its consolidated operations or financial
position.

NOTE G -- RELATED PARTY TRANSACTIONS

The Company enters into various types of transactions with Seitel and its
subsidiaries. The Company performs seismic data acquisition services for
Seitel's seismic data library subsidiary and its exploration and production
subsidiary. During the years ended December 31, 1994, 1995, 1996 and for the
unaudited three month periods ended March 31, 1996 and 1997, the Company
recognized revenue of $14,281,000, $15,391,000, $27,217,000, $2,882,000 and
$8,081,000, respectively, for seismic data acquisition services performed for
Seitel's subsidiaries. Such revenues from affiliates are based on prices charged
to unaffiliated third parties for similar work. Gross margin recognized on work
for affiliates is limited in each reporting period to the total margin
percentage earned on work for unaffiliated parties.

F-17
<PAGE> 80

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company reimburses Seitel for direct and indirect costs of certain
Seitel employees who provide services to the Company and for other costs,
primarily general and administrative expenses, related to the Company's
operations. Seitel allocates indirect costs to the Company using a formula based
upon the ratio of the Company's levels of revenue, number of personnel or other
factors, as applicable, to the total consolidated Seitel levels for such
factors. Management of the Company believes that the use of such formula results
in a reasonable allocation of indirect costs. During the years ended December
31, 1994, 1995, 1996 and for the unaudited three month periods ended March 31,
1996 and 1997, the Company recorded general and administrative costs allocated
from Seitel of $613,000, $749,000, $1,217,000, $228,000 and $271,000,
respectively. Seitel funds the Company's direct operating costs through
intercompany advances and is reimbursed for such advances as the Company has
available cash. Amounts payable to or receivable from Seitel and its
subsidiaries bear or earn interest at the same rates which Seitel is charged or
receives. During the years ended December 31, 1994, 1995, 1996 and for the
unaudited three month period ended March 31, 1996, the Company recorded net
interest expense of $5,000, $21,000, $59,000 and $45,000, respectively, and net
interest income of $97,000 for the unaudited three month period ended March 31,
1997, related to the amounts payable to or receivable from Seitel and its
subsidiaries.

On the day immediately preceding the consummation of the Offering (as
defined in Note I), the Company intends to declare a dividend to its sole
shareholder, a wholly-owned, indirect subsidiary of Seitel, of the Company's
receivable from Seitel for work performed by the Company for Seitel and its
subsidiaries, which receivable has been classified as a due from affiliate on
the unaudited consolidated balance sheet as of March 31, 1997.

The Company leases certain marine seismic equipment to Horizon Exploration
Limited, a marine seismic company wholly-owned by Energy Research International,
under a five-year operating rental agreement expiring June 30, 2001. During the
year ended December 31, 1996 and for the unaudited three month period ended
March 31, 1997, the Company recognized revenue of $828,000 and $434,000,
respectively, related to this lease. At December 31, 1996 and March 31, 1997,
the Company had a receivable of $138,000 and $572,000, respectively, related to
this lease.

The Company and Seitel intend to enter into a number of agreements for the
purpose of defining their continuing relationship. It is currently anticipated
that after the offering Seitel will account for its investment using the equity
method of accounting. Conflicts of interest may arise in the future between
Seitel and the Company in connection with these agreements and other areas of
their ongoing relationship. The following is a summary of certain prospective
arrangements between the Company and Seitel.

MASTER SEPARATION AGREEMENT. The Master Separation Agreement will provide
for the Company and Seitel to enter into a Sublease, a Registration Rights
Agreement, a Tax Indemnity Agreement and an Administrative Services Agreement.
In addition, the Master Separation Agreement will require the Company to repay
indebtedness owed by the Company and its subsidiaries to Seitel and indebtedness
owed by the Company and its subsidiaries to third parties guaranteed by Seitel
contemporaneously with the consummation of the offering. Under the Master
Separation Agreement, Seitel and its subsidiaries and the Company and its
subsidiaries will indemnify each other with respect to liabilities arising in
connection with the operations of their respective businesses prior to and after
the date of consummation of the Offering including liabilities under the
Securities Act with respect to the Offering. The Master Separation Agreement
will also provide for continued access by the Company to historical financial
and operational information relating to the Company and its subsidiaries
maintained by Seitel.

F-18
<PAGE> 81

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

TAX INDEMNITY AGREEMENT. Prior to the offering, the Company has been a
member of the Seitel affiliated group and has filed its tax returns on a
consolidated basis with such group. After the offering, the Company will no
longer be a member of the Seitel affiliated group. The Company and Seitel will
enter into a Tax Indemnity Agreement to define their respective rights and
obligations relating to federal, state and other taxes for periods before and
after the offering. Pursuant to the Tax Indemnity Agreement, the Company will be
required to pay Seitel (to the extent not already paid) its share of federal
income taxes prior to the date of consummation of the Offering, and shall be
responsible for federal income taxes from its operations on and after the date
of consummation of the Offering. Any subsequent refunds, additional taxes or
penalties or other adjustments relating to the Company's federal income taxes
for periods prior to the date of consummation of the Offering shall be for the
benefit of or be borne by Seitel. Similar provisions apply under the Tax
Indemnity Agreement to other taxes, such as state and local income taxes.

EMPLOYMENT AGREEMENTS. The Company intends to enter into employment
agreements with certain of its executive officers in connection with its planned
initial Offering.

NOTE H -- MAJOR CUSTOMERS

During each of the years ended December 31, 1994, 1995 and 1996, three
customers accounted for 10% or more of the Company's consolidated revenue as
follows:

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Affiliated companies, wholly-owned subsidiaries of Seitel:
Seitel Data, Ltd. ........................................ 16% 14% 28%
DDD Energy, Inc. ......................................... 40% 39% 29%
Unaffiliated companies, one each year....................... 28% 22% 20%
</TABLE>

The Company extends credit to various companies in the oil and gas industry
for the acquisition of seismic data, which results in a concentration of credit
risk. This concentration of credit risk may be affected by changes in economic
or other conditions and may accordingly impact the Company's overall credit
risk. However, management believes that the risk is mitigated by the number,
size, reputation and diversified nature of the companies to which they extend
credit. Historical credit losses incurred on receivables by the Company have
been immaterial.

NOTE I -- SUBSEQUENT EVENTS

COMMON STOCK: In May 1997, the Company amended its Certificate of
Incorporation to authorize the issuance of 25,000,000 shares of common stock and
changed the par value to $.01 per share. At the same time, the Company approved
a 3,400-for-one stock split. All share and per share information included in the
accompanying consolidated financial statements has been adjusted to give
retroactive effect to the split.

Prior to the Offering, the Company intends to sell 25,000 shares of Common
Stock at the initial public offering price to the president of the Company for a
note.

F-19
<PAGE> 82

EAGLE GEOPHYSICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PREFERRED STOCK: In May 1997, the Company amended its Certificate of
Incorporation to authorize the issuance of 5,000,000 shares of preferred stock,
the terms and conditions to be determined by the Board of Directors in creating
any particular series.

STOCK OPTION PLAN: The Company intends to adopt a stock option plan prior
to the Offering, and 1,100,000 shares of common stock have been reserved for
issuance pursuant to such plan. Under the stock option plan, the Company may
grant both incentive stock options intended to qualify under Section 422 of the
Internal Revenue Code and options that are not qualified as incentive stock
options. Options will be granted at or above the market price of the Company's
stock on the date of grant.

INDEPENDENT DIRECTORS STOCK OPTION PLAN: The Company intends to adopt an
independent directors stock option plan prior to the Offering, and 100,000
shares have been reserved for issuance pursuant to such plan. Under this plan,
options will automatically be granted to independent directors upon their
election and reelection as directors of the Company. Such options will be
granted at the fair market value of the Company's stock on the date of grant.

SEITEL CONTRIBUTION: In May 1997, Seitel contributed to the Company all of
the shares that it owns of Energy Research International, representing a 19%
ownership interest. Energy Research International is a holding company that
wholly owns two marine seismic companies. This contribution will be recorded at
Seitel's basis in such investment and will result in a $914,000 increase in the
Company's additional paid-in capital.

SECURITIES OFFERING, ERI ACQUISITION: The Company plans to file a
registration statement with the Securities and Exchange Commission for an
underwritten initial public offering of shares of common stock (the "Offering").
Contemporaneously with the offering, the Company will acquire the remaining 81%
of Energy Research International in exchange for 600,000 shares of common stock.
The acquisition will be accounted for by the Company as a purchase transaction
in which the Company shall record at its cost the acquired assets less
liabilities assumed, with the difference between the cost and the sum of the
fair values of tangible assets less liabilities assumed being recorded as
goodwill.

F-20
<PAGE> 83

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of Energy Research International:

We have audited the consolidated balance sheets of Energy Research
International and consolidated subsidiaries as of December 31, 1996 and 1995,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the three-year period ended December 31,
1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements appearing on pages F-22 through
F-32 present fairly, in all material respects, the financial position of Energy
Research International and consolidated subsidiaries as of December 31, 1996 and
1995, and the results of their operations and cash flows for each of the years
in the three-year period ended December 31, 1996, in conformity with generally
accepted accounting principles in the United States of America.

/s/ KPMG

Exeter, England
May 27, 1997

F-21
<PAGE> 84

ENERGY RESEARCH INTERNATIONAL

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ MARCH 31,
1995 1996 1997
------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash...................................................... $ 373 $ 813 $ 1,304
Receivables
Trade.................................................. 3,741 3,702 4,064
Other.................................................. 297 323 253
Due from related party................................. 650 18 --
Prepaid expenses and other assets......................... 725 2,795 2,579
Inventories............................................... 1,331 1,585 1,410
------- ------- -------
Total current assets...................................... 7,117 9,236 9,610
Property and equipment, at cost:
Geophysical equipment..................................... 26,382 29,418 32,248
Furniture, fixtures and other............................. 169 246 240
------- ------- -------
26,551 29,664 32,488
Less: accumulated depreciation.............................. (5,628) (10,843) (11,677)
------- ------- -------
Net property and equipment................................ 20,923 18,821 20,811
------- ------- -------
TOTAL ASSETS................................................ $28,040 $28,057 $30,421
======= ======= =======

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current portion of long-term debt......................... 800 600 400
Current portion of capital leases......................... 2,098 2,612 4,048
Bank borrowings........................................... 6,496 6,630 7,232
Accounts payable.......................................... 5,075 7,400 5,700
Accrued liabilities....................................... 3,007 5,158 3,763
Accrued capital lease interest............................ 1,041 821 858
Due to related party...................................... -- 158 2,120
------- ------- -------
Total current liabilities................................. 18,517 23,379 24,121
Long-term debt.............................................. 2,600 -- --
Due to related party........................................ -- 4,679 4,679
Obligations under capital leases............................ 12,549 11,230 11,556
------- ------- -------
TOTAL LIABILITIES........................................... 33,666 39,288 40,356
======= ======= =======
CONTINGENCIES AND COMMITMENTS
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value; Authorized shares
900,000,000; Issued and outstanding 1996 and March 31,
1997 61,728 shares; 1995 100,000 shares................ -- -- --
Retained (deficit)........................................ (5,678) (10,634) (9,690)
Translation adjustment.................................... 52 (597) (245)
------- ------- -------
TOTAL STOCKHOLDERS' DEFICIT................................. (5,626) (11,231) (9,935)
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT................. $28,040 $28,057 $30,421
======= ======= =======
</TABLE>

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

F-22
<PAGE> 85

ENERGY RESEARCH INTERNATIONAL

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTH
PERIODS ENDED
YEAR ENDED DECEMBER 31 MARCH 31,
------------------------------ -----------------
1994 1995 1996 1996 1997
-------- -------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUE................................... $ 19,457 $ 29,423 $ 43,607 $ 7,700 $11,079
EXPENSES
Cost of sales........................... (16,360) (27,075) (37,601) (7,914) (7,705)
Depreciation............................ (1,683) (3,856) (4,615) (1,036) (1,377)
Selling, general and administrative
expenses............................. (1,703) (2,196) (2,619) (467) (517)
Interest expense........................ (608) (1,462) (1,657) (406) (536)
Interest income......................... 80 6 8 -- --
-------- -------- -------- ------- -------
(20,274) (34,583) (46,484) (9,823) (10,135)
-------- -------- -------- ------- -------
Income (loss) before provision for income
taxes and extraordinary item............ (817) (5,160) (2,877) (2,123) 944
Provision for income taxes................ (11) -- -- -- --
-------- -------- -------- ------- -------
Income (loss) before extraordinary item... (828) (5,160) (2,877) (2,123) 944
Extraordinary credit on early
extinguishment of debt.................. -- -- 600 -- --
-------- -------- -------- ------- -------
NET INCOME (LOSS)......................... (828) (5,160) (2,277) (2,123) 944
-------- -------- -------- ------- -------
Income (loss) per share
Income (loss) before extraordinary
item................................. $ (8.28) $ (51.60) $ (30.22) $(21.23) $ 15.29
Extraordinary item...................... -- -- 6.30 -- --
-------- -------- -------- ------- -------
Net income (loss)......................... $ (8.28) $ (51.60) $ (23.92) $(21.23) $ 15.29
======== ======== ======== ======= =======

Weighted average number of common
shares.................................. *100,000 *100,000 95,216 100,000 61,728
======== ======== ======== ======= =======
</TABLE>

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

* Restated to reflect the stock split effective July 1996 (See NOTE I -- COMMON
STOCK).

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

F-23
<PAGE> 86

ENERGY RESEARCH INTERNATIONAL

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK RETAINED TRANSLATION STOCKHOLDERS'
SHARES AMOUNT (DEFICIT) ADJUSTMENTS (DEFICIT)
------- ------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993.............. 100,000 $ -- $ 310 $ (3) $ 307
Net loss.............................. -- -- (828) -- (828)
Translation adjustment................ -- -- -- 30 30
------- ------- -------- ----- --------
Balance, December 31, 1994.............. 100,000 -- (518) 27 (491)
Net loss.............................. -- -- (5,160) -- (5,160)
Translation adjustment................ -- -- -- 25 25
------- ------- -------- ----- --------
Balance, December 31, 1995.............. 100,000 -- (5,678) 52 (5,626)
Net loss.............................. -- -- (2,277) -- (2,277)
Translation adjustment................ -- -- -- (649) (649)
Repurchase of and retirement
of own stock....................... (38,272) -- (2,679) -- (2,679)
------- ------- -------- ----- --------
Balance, December 31, 1996.............. 61,728 -- (10,634) (597) (11,231)
Unaudited:
Net income............................ -- -- 944 -- 944
Translation adjustment................ -- -- -- 352 352
------- ------- -------- ----- --------
Balance, March 31, 1997................. 61,728 $ -- $ (9,690) $(245) $ (9,935)
======= ======= ======== ===== ========
</TABLE>

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

F-24
<PAGE> 87

ENERGY RESEARCH INTERNATIONAL

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTH PERIODS
YEAR ENDED DECEMBER 31 ENDED MARCH 31,
--------------------------- -------------------
1994 1995 1996 1996 1997
------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)............................. $ (828) $(5,160) $(2,277) $(2,123) $ 944
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation................................ 1,683 3,856 4,615 1,036 1,377
Extraordinary credit on early extinguishment
of debt.................................. -- -- (600) -- --
(Increase)/decrease in receivables.......... (673) 141 645 1,779 (274)
(Increase)/decrease in other assets......... 662 (224) (2,324) (272) 391
(Decrease)/increase in accounts payable and
other liabilities........................ 146 1,386 4,414 351 (1,096)
------- ------- ------- ------- -------
Total adjustments................... 1,818 5,159 6,750 2,894 398
------- ------- ------- ------- -------
Net cash provided by (used in)
operating activities.............. 990 (1) 4,473 771 1,342
------- ------- ------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment.......... (7,556) (2,758) (3,113) (21) (548)
------- ------- ------- ------- -------
Net cash used in investing
activities........................ (7,556) (2,758) (3,113) (21) (548)
------- ------- ------- ------- -------
Cash flows from financing activities:
Borrowings under bank facility.............. 4,629 1,867 134 (107) 602
Borrowings under term loans................. 2,000 2,000 2,000 -- --
Principal payments on term loans............ -- (600) (2,800) (200) (200)
Principal payments on capital leases........ -- (437) (805) (674) (1,252)
------- ------- ------- ------- -------
Net cash provided by/(used in)
financing activities.............. 6,629 2,830 (1,471) (981) (850)
------- ------- ------- ------- -------
Increase (decrease) in cash................... 63 71 (111) (231) (56)
Cash at beginning of period................... 157 266 373 373 813
------- ------- ------- ------- -------
220 337 262 142 757
Translation differences....................... 46 36 551 164 547
------- ------- ------- ------- -------
Cash at end of period......................... $ 266 $ 373 $ 813 $ 306 $ 1,304
======= ======= ======= ======= =======
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest................................. $ 202 $ 589 $ 1,877 $ 425 $ 564
Income taxes............................. $ 11 $ -- $ -- $ -- $ --
Non-cash investing activities:
Capital lease obligations................ $15,083 $ -- $ -- $ -- $ 3,660
Non-cash financing activities:
Note payable issued for repurchase of own
stock (NOTE I -- COMMON STOCK)......... $ -- $ -- $ 2,679 $ -- $ --
</TABLE>

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

F-25
<PAGE> 88

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS: Energy Research International (the "Company"), a
limited liability company incorporated in the Cayman Islands, is the holding
Company of an international group of companies involved in the acquisition of
offshore seismic data. The Company was incorporated in May 1993 to acquire
through a subsidiary substantially all of the offshore seismic business
operations of Simon Petroleum Technology. The Company's future operations are
dependent on a variety of factors, including dependence upon energy industry
spending, its ability to maintain its technologically competitive position and
its ability to minimise its operating risks, among others.

ACCOUNTING: The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
and translated into U.S. dollars.

BASIS OF CONSOLIDATION: The accompanying consolidated financial statements
include the accounts of Energy Research International and the accounts of its
subsidiaries, all of which are wholly-owned. All material intercompany accounts
have been eliminated in consolidation.

PROPERTY AND EQUIPMENT: Property and equipment are carried at cost and
include assets under capital leases which are carried at the lower of cost or
present value of future minimum lease payments at the inception of the lease.
Maintenance and repairs are charged to expense as incurred and expenditures for
major improvements are capitalized. Gains and losses from retirement or
replacement of property and equipment are included in operations.

Depreciation and amortization of property and equipment and assets under
capital leases are provided over the estimated useful lives of the assets, which
range from five to seven years, or the term of the lease using the straight-line
method.

TRANSLATION OF FOREIGN CURRENCIES: The Company maintains its books and
records in United Kingdom pounds sterling, the functional unit of currency.
Transactions in other currencies are recorded using the rate of exchange at the
date of the transaction. Monetary assets and liabilities denominated in other
currencies are translated using the rate of exchange at the balance sheet date
and the gains or losses on translation are included in the income statement.

For consolidation purposes, the assets and liabilities of non United
Kingdom subsidiary undertakings are translated at the closing exchange rates.
Income statements of such undertakings are consolidated at the average rates of
exchange during the year. Exchange differences arising on these translations are
included in the cumulative translation account in stockholders'
equity/(deficit).

INCOME TAXES: The Company files income tax returns in the United Kingdom
and the United States; it is exempt from tax in the Cayman Islands.

REVENUE AND COST RECOGNITION: Revenue from the acquisition of seismic data
is recognized on either a distance or time method based upon the contractual
terms. Under the distance method, revenue is based upon the number of seismic
lines or kilometers of data collected; under the time method revenue is based on
agreed rates per unit of time.

Cost of sales includes all direct materials and labor costs and indirect
costs related to the acquisition of seismic data such as supplies, tools and
repairs. Selling, general and administrative costs are charged to expense as
incurred.

F-26
<PAGE> 89

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES: Inventories which consist primarily of spare parts for
equipment are stated at the lower of cost or market value on a first-in,
first-out basis.

NON-EXCLUSIVE SEISMIC SURVEYS: All costs incurred in acquiring and
processing non-exclusive seismic data are charged to the income statement as
they arise. Costs for the years ended December 31, 1994, 1995 and 1996 were
$Nil, $5,397,000 and $Nil, respectively.

PENSION COSTS: The Company provides for the cost of retirement benefits for
employees of its United Kingdom subsidiaries. The cost of providing these
benefits is charged to the income statement over the employees' estimated years
of service.

LOSSES PER SHARE: Losses per share were based on the weighted average
number of outstanding shares of common stock during the respective years. There
were no common stock equivalent shares outstanding for any period. In July 1996,
the Board of Directors declared a one thousand-for-one common stock split. The
calculation of losses per share for 1994 and 1995 is based upon the weighted
average number of shares outstanding which have been restated to reflect the one
thousand-for-one common stock split in 1996 and is on a basis consistent with
the weighted average number of outstanding shares during 1996.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128 "Earning per Share,"
effective for interim and annual periods after December 31, 1997. This statement
replaces primary earnings per share with a newly defined basic earnings per
share and modifies the computation of diluted earnings per share. The
application of this statement will not have any impact on losses per share for
the three years ended December 31, 1996 as there were no common stock equivalent
shares outstanding.

INTERIM FINANCIAL DATA (UNAUDITED): The unaudited consolidated financial
statements as of March 31, 1997, and for the three month periods ended March 31,
1996 and 1997 and all related footnote information for these periods have been
prepared on the same basis as the audited consolidated financial statements and,
in the opinion of management, include all adjustments, consisting of normal and
recurring adjustments, necessary for a fair presentation of financial position
and results of operations and cash flows in accordance with generally accepted
accounting principles.

FAIR VALUE OF FINANCIAL INSTRUMENTS: SFAS No. 107 "Disclosures About Fair
Value of Financial Instruments", requires disclosure of the fair value of
certain financial instruments. The estimated fair value amounts have been
determined by the Company using available market data and valuation
methodologies. The book values of cash and equivalents, receivables and accounts
payable approximate their fair value as of December 31, 1995 and 1996 because of
the short term maturity of these instruments. Based upon the rates available to
the Company, the fair value of the term loans approximates the carrying value of
this debt at December 31, 1995 and 1996.

IMPAIRMENT OF LONG-LIVED ASSETS: In March 1995, the Financial Accounting
Standards Board issued SFAS No. 121, "Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of". This statement requires
that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
realizable. The Company adopted SFAS No. 121, effective January 1, 1996; the
adoption of this statement did not have a material effect on the Company's
consolidated financial statements.

F-27
<PAGE> 90

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE B -- INCOME TAXES

The provision for income taxes for each of the three years ended December
31, 1996 comprised of the following (in thousands):

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Current -- overseas withholding tax......................... $11 $-- $--
=== === ===
</TABLE>

No income taxes are payable for the three year period ended December 31,
1996 in the United Kingdom and the United States as the Company incurred
operating losses during this period.

The components of deferred tax asset/(liability) at December 31, 1995 and
1996 were as follows (in thousands):

<TABLE>
<CAPTION>
1995 1996
---- ------
<S> <C> <C>
Deferred tax assets:
Net operating loss carry forward (no expiry date)........... $506 $1,378
Other....................................................... 14 172
---- ------
Total deferred tax assets................................... 520 1,550
Less: valuation allowance................................... 100 1,158
---- ------
Deferred tax assets, net of valuation allowance............. 420 392
---- ------
Deferred tax liabilities:
Depreciation................................................ (420) (392)
---- ------
Total deferred tax liabilities.............................. (420) (392)
---- ------
Net deferred tax asset/(liability).......................... $ -- $ --
==== ======
</TABLE>

NOTE C -- DEBT

The following is a summary of the Company's debt at December 31, 1995 and
1996 (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31ST
----------------
1995 1996
------ ------
<S> <C> <C>
Bank Borrowings............................................. $6,496 $6,630
Term Debt -- Current Portion................................ 800 600
Term Debt -- Long Term Portion.............................. 2,600 --
------ ------
Total Debt........................................ $9,896 $7,230
====== ======
</TABLE>

BANK BORROWING: On August 23, 1994, the Company entered into a revolving
banking facility ("the Facility") of L4,560,000 (December 31, 1995 $7,080,000,
December 31, 1996 $7,804,000) of which at December 31, 1995 and December 31,
1996 $6,496,000 and $6,630,000 was outstanding respectively. The Facility is
interest bearing at the rate of 8.25% per annum, variable at three months LIBOR
plus 2%. The Facility is secured by property and equipment and working capital
and is repayable on demand.

TERM LOAN: On February 27, 1995, the Company obtained a $2,000,000 term
loan over thirty months bearing interest at the rate of 8.25% per annum variable
at three month LIBOR plus 2% per annum. The loan was obtained to purchase marine
seismic data acquisition equipment, and is repayable on a quarterly basis at the
amount of $200,000 plus accrued interest. At December 31, 1995, $800,000 was
current and $600,000 was long term. At December 31, 1996, $600,000 was current
with no long term balance. The loan is secured in the same manner as the
Facility described above.

F-28
<PAGE> 91

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On August 31, 1995, the Company obtained a $2,000,000 term loan bearing
interest at prime rate plus 1% per annum. On June 28, 1996, the loan was
extinguished for $1.4 million (see Note H -- EARLY EXTINGUISHMENT OF DEBT). On
June 28, 1996 the Company obtained a loan from Seitel, Inc. which is disclosed
in NOTE E -- RELATED PARTY TRANSACTIONS.

NOTE D -- COMMITMENTS AND CONTINGENCIES

Capital lease: Property and equipment in the accompanying consolidated
balance sheets includes the following assets held under capital leases (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31ST
------------------
1995 1996
------- -------
<S> <C> <C>
Geophysical Vessel and Equipment............................ $14,969 $16,498
Accumulated Depreciation.................................... (2,809) (5,159)
------- -------
Assets under Capital Lease, Net............................. $12,160 $11,339
======= =======
</TABLE>

The Company also holds various operating leases, of which the principal
ones are in respect of vessel time charters, office/warehousing space and
certain geophysical equipment leased from Eagle Geophysical, Inc. (see NOTE
E -- RELATED PARTY TRANSACTIONS). Operating lease expenses for 1994, 1995 and
1996 were approximately $2,907,000, $859,000 and $2,082,000 respectively.

Future minimum lease payments for the five years subsequent to December 31,
1996 and in the aggregate are as follows (in thousands):

<TABLE>
<CAPTION>
CAPITAL LEASES OPERATING LEASES
-------------- ----------------
<S> <C> <C>
1997.................................................... $ 3,239 $ 2,338
1998.................................................... 3,419 2,522
1999.................................................... 3,625 2,271
2000.................................................... 3,839 2,104
2001.................................................... 1,315 1,276
------- -------
Total Minimum Lease Payments.................. 15,437 $10,511
=======
Less Amount Representing Interest....................... (1,595)
-------
Present Value of Net Minimum Lease Payments............. $13,842
=======
</TABLE>

Legal proceedings: The Company is involved in or threatened with various
legal proceedings from time to time arising in the ordinary course of business.
Management of the Company does not believe that any liabilities resulting from
any such current proceedings will have a material adverse effect on its
consolidated operations or financial position.

NOTE E -- RELATED PARTY TRANSACTIONS

In July 1996, Seitel, Inc. acquired 50% of the issued and outstanding
shares of the Company from the directors of the Company who owned 97% of the
outstanding shares; in addition Seitel, Inc. advanced the Company by way of loan
$2 million to repay existing debt, due and payable on July 3, 1998, bearing
interest at prime plus 1%. In November 1996, the Company repurchased from
Seitel, Inc. 38,272 shares for $2,679,000, thereby reducing Seitel, Inc.'s share
ownership to 19%. The repurchase price was paid by delivery of a promissory note
to Seitel, Inc. bearing interest equal to 5.35% until December 31, 1997
increasing to 8.0% from January 1, 1998 through December 31, 1998 and then at
the prime rate of interest plus 1% from January 1, 1999 through December 31,
2001, the date of repayment. The total amount due to Seitel, Inc. at December
31, 1996 is $4,679,000 and is included in the Company's consolidated balance
sheet as due to related party.

F-29
<PAGE> 92

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In May 1997, Seitel, Inc. contributed its shares in the Company to Eagle
Geophysical, Inc., indirectly a wholly-owned subsidiary of Seitel, Inc.

The Company performs seismic data acquisition services for Seitel, Inc.
During the years ended December 31, 1994, 1995 and 1996 the Company recognized
revenue for services rendered to Seitel, Inc. of $4,027,000, $2,238,000, and
$20,049,000, respectively.

A subsidiary of the Company leases certain marine seismic equipment from
Eagle Geophysical, Inc. under a five year operating rental agreement expiring
June 30, 2001. During 1996, the Company recorded costs of $828,000 related to
this lease. At December 31, 1996, the Company had a payable of $138,000 related
to this item.

NOTE F -- CONCENTRATION OF RISK

During the years ended December 31, 1994, 1995 and 1996, the Company had a
concentration of revenues in four or less customers.

During the year ended December 31, 1994, 60% of revenues were accounted for
by Seitel, Inc. (21%), Chevron UK Ltd. (10%), Amerada Hess Ltd. (13%) and
British Gas Exploration and Production Ltd (16%).

During the year ended December 31, 1995, 63% of revenues were accounted for
by Amerada Hess Ltd. (37%) and British Gas Exploration and Production Ltd (26%).

During the year ended December 31, 1996, 72% of revenues were accounted for
by Seitel, Inc. (46%) and Clyde Petroleum Exploratie BV (26%).

NOTE G -- FOREIGN OPERATIONS

Substantially all of the Company's operations are outside of the Cayman
Islands.

The Company's principal operations are in the United Kingdom and the United
States. During the years ended December 31, 1994, 1995, and 1996, revenues
recognized from the United Kingdom were $15,428,000, $28,482,000 and
$23,558,000, respectively and revenues recognized from the United States were
$4,029,000, $941,000 and $20,049,000 respectively.

NOTE H -- EARLY EXTINGUISHMENT OF DEBT

In July 1996, in connection with Seitel, Inc. acquiring a 50% interest in
the shares of the Company, the Company repaid a promissory note to a third party
which was funded by a new loan from Seitel, Inc. in the amount of $2 million.
The promissory note amounting to $2 million was redeemed for $1.4 million and as
a result the Company recorded a credit of $600,000 which has been reflected in
the Company's consolidated statement of operations as an extraordinary item for
the year ended December 31, 1996.

F-30
<PAGE> 93

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE I -- COMMON STOCK

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Authorized: 900,000,000 shares, at par value $0.001 per
share..................................................... $900,000 $900,000
-------- --------
Issued and outstanding: December 31, 1996
61,728 shares; December 31, 1995 100,000 shares........... $ 100 $ 62
-------- --------
</TABLE>

In July 1996 the directors of the Company then owning 97% of the
outstanding shares of the Company sold 50% of the outstanding shares of the
Company to Seitel, Inc.

In July 1996 the Board of Directors declared a one thousand-for-one common
stock split. In these consolidated financial statements all per share amounts
and numbers of shares have been restated to reflect the stock split.

In November 1996, the Company repurchased from Seitel, Inc. 38,272 shares
for an aggregate repurchase price of $2,679,000.

NOTE J -- PENSION PLAN

The Company provides for the cost of retirement benefits for employees of
its United Kingdom subsidiaries. The Plan known as the Horizon Pension Plan
provides retirement benefits as defined in the Trust Deed and is managed by
Trustees.

The following table sets forth the plan and funded status at December 31,
1995 and 1996 (in thousands):

<TABLE>
<CAPTION>
1995 1996
------ ------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation................................. $2,885 $4,098
Accumulated benefit obligation............................ 2,885 4,098
Projected benefit obligation.............................. 3,476 4,939
Plan assets at fair value................................... 4,360 5,969
------ ------
Plan assets in excess of projected benefit obligation....... 884 1,030
Unrecognized net transition asset........................... (705) (700)
Unrecognized net loss....................................... -- 79
------ ------
Prepaid pension cost........................................ $ 179 $ 409
====== ======
</TABLE>

Plan assets are invested in a unitised mixed managed fund. At December 31,
1996 approximately 86% of the fund was invested in UK and international equities
and the balance invested in fixed interest securities or held as cash deposits.

Net pension cost for 1995 and 1996 included the following components (in
thousands):

<TABLE>
<CAPTION>
1995 1996
------ ------
<S> <C> <C>
Service cost................................................ $ 338 $ 379
Interest cost............................................... 249 330
Actual return on plan assets................................ (489) (627)
Net amortization and deferral............................... 83 118
------ ------
Net pension cost............................................ $ 181 $ 200
====== ======
</TABLE>

F-31
<PAGE> 94

ENERGY RESEARCH INTERNATIONAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The major assumptions used in computing the net pension cost were:

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Discount rate............................................... 9.0% 9.0%
Expected long term rate of return on plan assets............ 9.5% 9.5%
Rate of increase in compensation levels..................... 6.5% 6.5%
</TABLE>

NOTE K -- SUBSEQUENT EVENTS (UNAUDITED)

Eagle Geophysical, Inc. intends to file a registration statement with the
Securities and Exchange Commission for an underwritten initial public offering
of shares of common stock. Eagle Geophysical, Inc. currently owns 19% of the
outstanding shares of the Company and prior to or contemporaneously with the
consummation of the offering by Eagle Geophysical, Inc. of its common stock
pursuant to such registration statement, Eagle Geophysical, Inc. will acquire
the remaining 81% of the outstanding shares of the Company, such acquisition
being a condition to the consummation of the offering.

F-32
<PAGE> 95

======================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER, THE ADDITIONAL SELLING
STOCKHOLDERS OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN
THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMPANY'S COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 8
The Company........................... 14
Use of Proceeds....................... 15
Capitalization........................ 17
Dividend Policy....................... 18
Dilution.............................. 19
Selected Pro Forma Financial
Information......................... 20
Selected Financial Information........ 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 22
Description of Business............... 29
Management............................ 39
Principal and Selling Stockholders.... 47
Certain Transactions.................. 49
Description of Capital Stock.......... 52
Shares Eligible for Future Sale....... 55
Underwriting.......................... 57
Legal Matters......................... 58
Experts............................... 58
Additional Information................ 59
Glossary.............................. 60
Index to Financial Statements......... F-1
</TABLE>

======================================================

5,880,000 Shares

[EAGLE GEOPHYSICAL, INC. LOGO]

EAGLE
GEOPHYSICAL, INC.

Common Stock

---------------------
PROSPECTUS
---------------------
PRUDENTIAL SECURITIES INCORPORATED
SIMMONS & COMPANY
INTERNATIONAL
, 1997
======================================================
<PAGE> 96

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The Registrant estimates that expenses in connection with the Offering
described in this Registration Statement will be as follows. All of the amounts
except the SEC registration fee, NASD fee and the Nasdaq National Market listing
fee are estimates.

<TABLE>
<CAPTION>
ITEM AMOUNT
---- -------
<S> <C>
SEC registration fee........................................ $30,750
NASD fee.................................................... 10,500
Nasdaq National Market listing fee.......................... 39,005
Legal fees and expenses..................................... **
Accounting fees and expenses................................ **
Printing expenses........................................... **
Fees and expenses for qualification under state securities
laws (including legal fees)............................... **
Transfer agent's and registrar's fees and expenses.......... **
Miscellaneous............................................... **
-------
Total............................................. $ *
=======
</TABLE>

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

* None of this amount is to be borne by the Selling Stockholder.
** To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant is incorporated under the laws of Delaware. Section 145 of
the Delaware General Corporation Law provides that a Delaware corporation may
indemnify any person against expenses, fines and settlements actually and
reasonably incurred by any such person in connection with a threatened, pending
or completed action, suit or proceeding in which he is involved by reason of the
fact that he is or was a director, officer, employee or agent of such
corporation, provided that (i) he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and (ii) with respect to any criminal action or proceeding, he had
no reasonable cause to believe his conduct was unlawful. If the action or suit
is by or in the name of the corporation, the corporation may indemnify any such
person against expenses actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interest of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the corporation, unless and only to the extent that the Delaware Court
of Chancery or the court in which the action or suit is brought determines upon
application that, despite the adjudication of liability but in light of the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.

As permitted by the Delaware General Corporation Law, the Registrants'
Certificate of Incorporation provides that the directors and officers of the
Registrant shall be indemnified by the Registrant against certain liabilities
that those persons may incur in their capacities as directors or officers. The
Certificate of Incorporation eliminates the liability of directors of the
Registrant, under certain circumstances, to the maximum extent permitted by the
Delaware General Corporation Law. See "Description of Capital Stock -- Special
Provisions of the Certificate of Incorporation and By-laws" included in the
Prospectus.

The Underwriting Agreement to be filed as Exhibit 1.1 hereto contains
reciprocal agreements of indemnity between the Registrant and the underwriters
as to certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"), and in certain circumstances provides
for indemnification of the Registrant's directors and officers.

II-1
<PAGE> 97

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

During the previous three years, the Registrant has issued and sold the
following securities without registration under the Securities Act (none of
which sales were underwritten):

The Company was formed in December 1996, at which time it issued 1,000 of
its shares of Common Stock for a cash purchase price of $1.00 per share to the
Selling Stockholder. Such issuance of shares was exempt from registration under
the Securities Act pursuant to Section 4(2) thereof as a transaction by the
issuer not involving any public offering.

On May 22, 1997, the Company effected a stock split pursuant to which the
1,000 outstanding shares of Common Stock were subdivided into 3,400,000 shares
of Common Stock. All such shares were issued to the Selling Stockholder as sole
stockholder of the Company. Such issuance was exempt from registration under the
Securities Act pursuant to Section 3(a)(9) thereof as securities exchanged by
the issuer with its existing security holders exclusively where no commission or
other remuneration was given directly or indirectly for soliciting such
exchange.

Prior to consummation of the Offering, the Company intends to issue 25,000
shares of Common Stock to Jay N. Silverman, President of the Company, at a
purchase price equal to the initial public offering price. Such purchase price
will be paid by delivery to the Company of a promissory note by Mr. Silverman.
This issuance of shares will be exempt from registration under the Securities
Act pursuant to Section 4(2) thereof as a transaction by the issuer not
involving any public offering.

Pursuant to an agreement dated June 2, 1997, contemporaneously with the
consummation of the Offering, the Company will issue an aggregate of 600,000
shares of Common Stock to Oliveira Limited, Dormera Limited, Balmedie Limited,
and Larlane Limited in exchange for the 81.0% of the outstanding shares of
Energy Research International owned by such entities. Gerald Harrison, George
Purdie, Neil Campbell, and David Burns, all of whom will be directors, officers
or employees of the Company after the consummation of the Offering, own all of
the issued and outstanding shares of Oliveira Limited, Dormera Limited, Balmedie
Limited, and Larlane Limited, respectively. This issuance of shares will be
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof as a transaction by the issuer not involving any public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

II-2
<PAGE> 98
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.3* -- Conditional Sales Agreement dated February 19, 1997,
between Input/Output, Inc. and Horizon Exploration
Limited ("HEL")
10.4* -- Installment Note ($306,180) by HEL in favor of Teledyne
Brown Engineering Marine Products
10.5.1* -- Loan and Security Agreement dated February 22, 1996,
between Seitel Geophysical, Inc. and MetLife Capital
Corporation
10.5.2* -- Assignment and Assumption Agreement dated December 31,
1996 between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.6.1* -- Master Equipment Lease Agreement dated May 20, 1994,
between Seitel Geophysical, Inc. and MetLife Capital,
Limited Partnership, as amended
10.6.2* -- Assignment and Assumption Agreement dated December 31,
1996 between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.7.1* -- Master Lease Agreement dated February 16, 1994 between
McCullagh Leasing (a unit of GE Capital Fleet Services)
and Seitel Geophysical, Inc., as amended
10.7.2* -- Partial Assignment dated April 8, 1997 among Seitel
Geophysical, Inc., Eagle Geophysical, Inc. and GE Capital
Fleet Services
10.8.1* -- Term Credit and Security Agreement dated July 15, 1993,
between Seitel Geophysical, Inc. and Compass Bank (f/k/a
Central Bank of the South), as amended
10.8.2* -- Loan Modification Agreement and Amendment to Loan
Documents dated December 28, 1995, between Compass Bank
(f/k/a Central Bank of the South) and Seitel Geophysical,
Inc.
10.8.3* -- Assumption and Loan Modification Agreement dated December
31, 1996, among Seitel Geophysical, Inc., Eagle
Geophysical, Inc., Compass Bank (f/k/a Central Bank of
the South) and Seitel, Inc.
10.9.1* -- Bareboat Charter by Way of Subdemise dated July 15, 1994,
between Simon-Horizon Limited ("Simon") and HEL
10.9.2* -- Management Agreement dated December 19, 1990 between
Simon and Ervik Marine Services A/S ("Ervik")
10.9.3* -- Side Letter Agreement dated December 19, 1990, between
Simon and Ervik
10.9.4* -- Assignment Agreement Relating to a Ship Management
Agreement dated December 19, 1990 (as amended) dated July
15, 1990, between Simon and HEL
10.9.5* -- Deed of Assignment of Insurances dated July 15, 1994,
between HEL and Simon
10.9.6* -- Deed of Continuing Inter-Company Cross Guarantee and
Indemnity dated July 15, 1994, by Horizon Seismic Inc.,
Exploration Holdings Limited and HEL in favor of Simon,
Simon Petroleum Technology Limited and Simon Engineering
Plc
10.9.7* -- Sublease Contract Number 1 dated July 15, 1994, between
Simon and HEL.
10.9.8* -- Sublease Contract Number 2 dated July 15, 1994, between
Simon and HEL.
10.9.9* -- Agreement dated July 15, 1994, among Simon, Simon
Petroleum Technology Limited, Simon Engineering Plc and
HEL.
10.10* -- Contribution and Assumption Agreement dated December 31,
1996, between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.11.1* -- Agreement to Extend the Charterparty of "Pacific Horizon"
dated July 11, 1994, by and between J. Marr Limited and
HEL
10.11.2* -- Deed of Novation m.v. "Pacific Horizon" dated July 11,
1994, by and among Simon, J. Marr Limited and HEL
10.12* -- Employment Agreement between Exploration Holdings Limited
("EHL") and Gerald Harrison, as amended
10.13* -- Employment Agreement between EHL and George Purdie, as
amended
10.14* -- Employment Agreement between EHL and Neil A.M. Campbell,
as amended
10.15 -- Form of Employment Agreement Amendment between EHL and
each of Messrs. Harrison, Purdie and Campbell
</TABLE>

II-3
<PAGE> 99
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.16* -- Form of Employment Agreement between Eagle Geophysical,
Inc. and Jay Silverman
10.17* -- Form of Employment Agreement between Eagle Geophysical,
Inc. and Richard McNairy
10.18* -- Commercial Lease dated March 10, 1994, between Ron Chase
dba Chase Properties and Eagle Geophysical, Inc./Seitel
Geophysical, Inc.
10.19* -- Modification and Ratification of Lease dated April 24,
1996, between Ron Chase dba Chase Properties and Eagle
Geophysical, Inc./Seitel Geophysical, Inc.
10.20* -- Lease dated May 28, 1996, between Partnership of
Perkins-Guidry-Beazley-Ostteen and Seitel Geophysical,
Inc.
10.21* -- Form of Sublease between Seitel, Inc. and its
subsidiaries and Eagle Geophysical, Inc.
10.22* -- Form of Master Separation Agreement between Seitel, Inc.
and Eagle Geophysical, Inc.
10.23* -- Form of Registration Rights Agreement between Seitel,
Inc. and Eagle Geophysical, Inc.
10.24* -- Form of Tax Indemnity Agreement between Seitel, Inc. and
Eagle Geophysical, Inc.
10.25* -- Form of Administrative Services Agreement between Seitel,
Inc. and Eagle Geophysical, Inc.
10.26* -- Promissory Note ($2,000,000) dated July 3, 1996 by Energy
Research International ("ERI") in favor of Seitel, Inc.
10.27* -- Promissory Note ($2,679,040) dated November 15, 1996 by
ERI in favor of Seitel, Inc.
10.28* -- Form of Bonus Agreement between Eagle Geophysical, Inc.
and Paul A. Frame
10.29* -- Form of Non-employee Directors Deferred Compensation Plan
10.30* -- Form of Independent Directors Stock Option Plan
10.31* -- Form of Stock Option Plan
10.32* -- Form of Promissory Note payable by Jay Silverman to Eagle
Geophysical, Inc.
23.1 -- Consent of Arthur Andersen LLP, Independent Public
Accountants
23.2 -- Consent of KPMG, Independent Public Accountants
23.3* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P.
(contained in exhibit 5.1 opinion)
</TABLE>

(b) Financial Statement Schedules

The following financial statement schedules are included in Part II of the
Registration Statement:

None

All other schedules are omitted because they are inapplicable or the
requested information is shown in the financial statements or noted therein.

II-4
<PAGE> 100

ITEM 17. UNDERTAKINGS.

(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(b) The undersigned Registrant hereby undertakes to provide to the
representatives of the underwriters at the closing specified in the Underwriting
Agreement certificates in such denominations and registered in such names as
required by the representatives of the underwriters to permit prompt delivery to
each purchaser.

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(d) If the Underwriters do not exercise their option to purchase additional
shares of Common Stock to cover over-allotments, if any, or if such option is
partially exercised, the Registrant hereby undertakes to file a post-effective
amendment to the Registration Statement deregistering all such shares as to
which such option shall not have been exercised.

II-5
<PAGE> 101

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on the 2nd day of June, 1997

EAGLE GEOPHYSICAL, INC.

By: /s/ JAY N. SILVERMAN
-----------------------------------------
Jay N. Silverman
President and Chief Executive Officer

POWER OF ATTORNEY

Each of the undersigned hereby appoints Jay N. Silverman and Gerald M.
Harrison and each of them (with full power to act alone) as attorneys and agents
for the undersigned, with full power of substitution, for and in the name, place
and stead of the undersigned, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 this Registration Statement, any
related Registration Statement pursuant to Rule 462(b) of the Securities and
Exchange Commission, any and all amendments and exhibits to this or such other
Registration Statement and any and all applications, instruments and other
documents to be filed with the Securities and Exchange Commission pertaining to
the registration of the securities covered hereby and thereby, with full power
and authority to do and perform any and all acts and things whatsoever requisite
or desirable.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ WILLIAM L. LURIE Chairman of the Board of June 2, 1997
- ----------------------------------------------------- Directors
William L. Lurie

/s/ JAY N. SILVERMAN President, Chief Executive June 2, 1997
- ----------------------------------------------------- Officer and Director (Principal
Jay N. Silverman Executive Officer)

/s/ GERALD M. HARRISON Executive Vice President and June 2, 1997
- ----------------------------------------------------- Director
Gerald M. Harrison

/s/ GEORGE PURDIE Senior Vice June 2, 1997
- ----------------------------------------------------- President -- Offshore Operations
George Purdie and Director

/s/ RICHARD W. MCNAIRY Vice President -- Chief June 2, 1997
- ----------------------------------------------------- Financial Officer and Secretary
Richard W. McNairy (Principal Financial and
Accounting Officer)

/s/ PAUL A. FRAME Director June 2, 1997
- -----------------------------------------------------
Paul A. Frame
</TABLE>

II-6
<PAGE> 102

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 -- Form of Underwriting Agreement
2.1 -- Stock Purchase Agreement dated June 2, 1997, among Gerald
Harrison, George Purdie, Neil Campbell, David Burns,
Olivera Limited, Dormera Limited, Balmedie Limited,
Larlane Limited and Registrant
3.1 -- Certificate of Incorporation, as amended
3.2 -- Amended and Restated Bylaws
4.1* -- Specimen Certificate for Registrant's common stock, par
value $0.01
5.1* -- Form of opinion of Gardere Wynne Sewell & Riggs, L.L.P.
10.1.1* -- Loan and Security Agreement dated July 9, 1996, between
Seitel Geophysical, Inc., as Debtor, and Nationsbanc
Leasing Corporation of North Carolina, as Secured Party
10.1.2* -- Assumption and Consent dated December 31, 1996, among
Seitel Geophysical, Inc., Eagle Geophysical, Inc.,
Nationsbanc Leasing Corporation of North Carolina and
Seitel, Inc.
10.2* -- Loan and Security Agreement dated February 6, 1997,
between Eagle Geophysical, Inc., as Debtor, and
Nationsbanc Leasing Corporation of North Carolina, as
Secured Party
10.3* -- Conditional Sales Agreement dated February 19, 1997,
between Input/Output, Inc. and Horizon Exploration
Limited ("HEL")
10.4* -- Installment Note ($306,180) by HEL in favor of Teledyne
Brown Engineering Marine Products
10.5.1* -- Loan and Security Agreement dated February 22, 1996,
between Seitel Geophysical, Inc. and MetLife Capital
Corporation
10.5.2* -- Assignment and Assumption Agreement dated December 31,
1996 between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.6.1* -- Master Equipment Lease Agreement dated May 20, 1994,
between Seitel Geophysical, Inc. and MetLife Capital,
Limited Partnership, as amended
10.6.2* -- Assignment and Assumption Agreement dated December 31,
1996 between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.7.1* -- Master Lease Agreement dated February 16, 1994 between
McCullagh Leasing (a unit of GE Capital Fleet Services)
and Seitel Geophysical, Inc., as amended
10.7.2* -- Partial Assignment dated April 8, 1997 among Seitel
Geophysical, Inc., Eagle Geophysical, Inc. and GE Capital
Fleet Services
10.8.1* -- Term Credit and Security Agreement dated July 15, 1993,
between Seitel Geophysical, Inc. and Compass Bank (f/k/a
Central Bank of the South), as amended
10.8.2* -- Loan Modification Agreement and Amendment to Loan
Documents dated December 28, 1995, between Compass Bank
(f/k/a Central Bank of the South) and Seitel Geophysical,
Inc.
10.8.3* -- Assumption and Loan Modification Agreement dated December
31, 1996, among Seitel Geophysical, Inc., Eagle
Geophysical, Inc., Compass Bank (f/k/a Central Bank of
the South) and Seitel, Inc.
10.9.1* -- Bareboat Charter by Way of Subdemise dated July 15, 1994,
between Simon-Horizon Limited ("Simon") and HEL
10.9.2* -- Management Agreement dated December 19, 1990 between
Simon and Ervik Marine Services A/S ("Ervik")
10.9.3* -- Side Letter Agreement dated December 19, 1990, between
Simon and Ervik
10.9.4* -- Assignment Agreement Relating to a Ship Management
Agreement dated December 19, 1990 (as amended) dated July
15, 1990, between Simon and HEL
</TABLE>
<PAGE> 103
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.9.5* -- Deed of Assignment of Insurances dated July 15, 1994,
between HEL and Simon
10.9.6* -- Deed of Continuing Inter-Company Cross Guarantee and
Indemnity dated July 15, 1994, by Horizon Seismic Inc.,
Exploration Holdings Limited and HEL in favor of Simon,
Simon Petroleum Technology Limited and Simon Engineering
Plc
10.9.7* -- Sublease Contract Number 1 dated July 15, 1994, between
Simon and HEL.
10.9.8* -- Sublease Contract Number 2 dated July 15, 1994, between
Simon and HEL.
10.9.9* -- Agreement dated July 15, 1994, among Simon, Simon
Petroleum Technology Limited, Simon Engineering Plc and
HEL.
10.10* -- Contribution and Assumption Agreement dated December 31,
1996, between Seitel Geophysical, Inc. and Eagle
Geophysical, Inc.
10.11.1* -- Agreement to Extend the Charterparty of "Pacific Horizon"
dated July 11, 1994, by and between J. Marr Limited and
HEL
10.11.2* -- Deed of Novation m.v. "Pacific Horizon" dated July 11,
1994, by and among Simon, J. Marr Limited and HEL
10.12* -- Employment Agreement between Exploration Holdings Limited
("EHL") and Gerald Harrison, as amended
10.13* -- Employment Agreement between EHL and George Purdie, as
amended
10.14* -- Employment Agreement between EHL and Neil A.M. Campbell,
as amended
10.15 -- Form of Employment Agreement Amendment between EHL and
each of Messrs. Harrison, Purdie and Campbell
10.16* -- Form of Employment Agreement between Eagle Geophysical,
Inc. and Jay Silverman
10.17* -- Form of Employment Agreement between Eagle Geophysical,
Inc. and Richard McNairy
10.18* -- Commercial Lease dated March 10, 1994, between Ron Chase
dba Chase Properties and Eagle Geophysical, Inc./Seitel
Geophysical, Inc.
10.19* -- Modification and Ratification of Lease dated April 24,
1996, between Ron Chase dba Chase Properties and Eagle
Geophysical, Inc./Seitel Geophysical, Inc.
10.20* -- Lease dated May 28, 1996, between Partnership of
Perkins-Guidry-Beazley-Ostteen and Seitel Geophysical,
Inc.
10.21* -- Form of Sublease between Seitel, Inc. and its
subsidiaries and Eagle Geophysical, Inc.
10.22* -- Form of Master Separation Agreement between Seitel, Inc.
and Eagle Geophysical, Inc.
10.23* -- Form of Registration Rights Agreement between Seitel,
Inc. and Eagle Geophysical, Inc.
10.24* -- Form of Tax Indemnity Agreement between Seitel, Inc. and
Eagle Geophysical, Inc.
10.25* -- Form of Administrative Services Agreement between Seitel,
Inc. and Eagle Geophysical, Inc.
10.26* -- Promissory Note ($2,000,000) dated July 3, 1996 by Energy
Research International ("ERI") in favor of Seitel, Inc.
10.27* -- Promissory Note ($2,679,040) dated November 15, 1996 by
ERI in favor of Seitel, Inc.
10.28* -- Form of Bonus Agreement between Eagle Geophysical, Inc.
and Paul A. Frame
</TABLE>
<PAGE> 104

<TABLE>
<C> <S>
10.29* -- Form of Non-employee Directors Deferred Compensation Plan
10.30* -- Form of Independent Directors Stock Option Plan
10.31* -- Form of Stock Option Plan
10.32* -- Form of Promissory Note payable by Jay Silverman to Eagle Geophysical, Inc.
23.1 -- Consent of Arthur Andersen LLP, Independent Public Accountants
23.2 -- Consent of KPMG, Independent Public Accountants
23.3* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (contained in exhibit 5.1 opinion)
</TABLE>

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

* To be filed by amendment.

<PAGE> 1
Eagle Geophysical, Inc.

5,880,000 Shares(1)

Common Stock

UNDERWRITING AGREEMENT

________ ___, 1997

PRUDENTIAL SECURITIES INCORPORATED
SIMMONS & COMPANY INTERNATIONAL
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292

Dear Sirs:

Each of Eagle Geophysical, Inc., a Delaware Corporation (the
"Company"), the selling securityholders set forth on Schedule 1 attached hereto
(the "Selling Securityholders") and Seitel, Inc., a Delaware corporation
("Seitel"), Gerald M. Harrison ("Harrison"), George Purdie ("Purdie"), Neil A.
M. Campbell ("Campbell") and David Burns ("Burns") hereby confirms its agreement
with the several underwriters named in Schedule 2 hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.

It is understood that prior to or concurrent with the Firm Closing
Date (as hereinafter defined), the Company will acquire 81% of the outstanding
shares of Energy Research International ("ERI"), a Cayman Islands corporation
and the ultimate parent corporation and owner of 100% of the issued and
outstanding capital stock of Exploration Holdings Limited ("EHL"), a United
Kingdom corporation and the owner of 100% of the issued and outstanding capital
stock of each of Eagle Geophysical Offshore, Inc. (formerly known as Horizon
Seismic, Inc.), a Texas corporation, and Horizon Exploration Ltd., a United
Kingdom corporation (the "Horizon Companies"), pursuant to an acquisition
agreement dated as of May , 1997 (the "ERI Acquisition Agreement"), whereby
ERI, EHL and the Horizon Companies will become wholly-owned

- -------------
(1) Plus options to purchase up to 882,000 additional shares to cover over-
allotments.

<PAGE> 2

subsidiaries of the Company (the "ERI Acquisition"). The Company currently owns
19% of the outstanding shares of ERI.

1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell, and EHI Holdings, Inc., a
Delaware corporation ("EHI") and an indirect, wholly-owned subsidiary of
Seitel, proposes to sell, to the several Underwriters an aggregate of 4,000,000
shares and 1,880,000 shares, respectively (the "Firm Securities"), of the
Company's Common Stock, par value $0.01 per share ("Common Stock"). The Company
also proposes to issue and sell and EHI, Oliveira Limited, a corporation
organized under the laws of the Isle of Man all of the outstanding capital
stock of which is owned by Harrison ("Oliveira"), Dormera Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Purdie ("Dormera"), Balmedie Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Campbell ("Balmedie") and Larlane Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Burns ("Larlane"), also propose to sell to
the several Underwriters not more than 602,000, 100,000, 56,400, 56,400, 56,400
and 10,800 additional shares of Common Stock, respectively, if requested by the
Representatives as provided in Section 4 of this Agreement. Any and all shares
of Common Stock to be purchased by the Underwriters pursuant to such options
are referred to herein as the "Option Securities"; and the Firm Securities and
any Option Securities are collectively referred to herein as the "Securities".

2. Representations and Warranties with respect to the Company.
The Company, EHI, Seitel, Harrison, Purdie, Oliveira and Dormera, jointly and
severally, represent and warrant to, and agree with, each of the several
Underwriters that:

(a) A registration statement on Form S-1 (File No. 333-_________) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter
defined) relating to the Securities, that shall identify the Preliminary
Prospectus (as hereinafter defined) that it supplements containing such
information as is required or permitted by Rules 434, 430A and 424(b) under the
Act or (B) if the Company does not rely on Rule 434 under the Act, a prospectus
in the form most recently included in an amendment to such registration
statement (or, if no such amendment shall have been filed, in such registration
statement), with such changes or insertions as are required by Rule 430A under
the Act or permitted by Rule 424(b) under the Act, and in the case of either
clause (i)(A) or (i)(B) of this sentence as have been provided to and approved
by the Representatives prior to the execution of this Agreement, or (ii) if
such registration statement, as it may have been amended, has not been declared
by the Commission to be effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior to
the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under the
Act for the purpose of registering certain additional Securities, which
registration shall be effective upon filing with the Commission. As used in
this Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as amended
at the time when it was or is declared effective, including all financial
schedules and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the

2
<PAGE> 3

Act and included in the Prospectus (as hereinafter defined); the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means each
prospectus subject to completion filed with such registration statement or any
amendment thereto (including the prospectus subject to completion, if any,
included in the Registration Statement or any amendment thereto at the time it
was or is declared effective); the term "Prospectus" means:

(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;

(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or

(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;

and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet. All
references to the Registration Statement, any Preliminary Prospectus, any
Prospectus or any amendments or supplement to any of the foregoing, shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("EDGAR").

(b) The Commission has not issued any order preventing or suspending
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement

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<PAGE> 4
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that
is a part thereof or any amendment or supplement to the Prospectus is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date and any Option Closing Date (as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.

(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective, (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act, or the Commission has received payment of such filing fee.

(d) The Company and each of its subsidiaries (as set forth on Schedule
3 hereto) have been duly organized and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of incorporation
and are duly qualified to transact business as foreign corporations and are in
good standing under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the Company
and its subsidiaries, taken as a whole.

(e) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.

(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares (if any) and as
otherwise set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, are owned beneficially by
the Company free and clear of any security interests, liens, encumbrances,
equities or claims.

(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no
holder of securities of the Company has any right which has not been fully
exercised or waived to require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this agreement.

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<PAGE> 5

(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.

(i) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to subscribe
for or purchase from the Company or any such subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.

(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company
and its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Information" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein.

(k) The pro forma financial statements and the related notes thereto
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) fairly
present the information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.

(l) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act and the applicable rules
and regulations thereunder.

(m) KPMG, who have certified certain financial statements relating to
ERI, and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Registration Statement and
the Prospectus with respect thereto (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public accountants as
required by the Act and the applicable rules and regulations thereunder.

(n) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'

5
<PAGE> 6
rights generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law);

(o) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the Company
or any of its subsidiaries or with respect to any of their respective
properties; and no contract or other document is required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or filed as
required.

(p) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties are bound, which conflict, breach,
violation or default could reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole (other than
conflicts, breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under agreements
governing or otherwise relating to indebtedness of the Company or its
subsidiaries that will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company hereunder), or
the charter documents or by-laws of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company or any
of its subsidiaries.

(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of the operations of the Company or
any of its subsidiaries, except in each case as described in or contemplated by
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.

(r) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or

6
<PAGE> 7

resale of the Securities or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities (except for the sale of the Securities by the
Company under this Agreement) or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company (except for the sale of Securities by the Selling Securityholders under
this Agreement).

(s) The Company has not distributed and, prior to the later of (i) the
Option Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.

(t) The Company and each of its subsidiaries have (i) good and
marketable title in fee simple to all real property owned by them and (ii) good
and marketable title to all personal property owned by them, in each case free
and clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely interfere with
the use made or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings and any personal property held
under lease or charter by the Company or any such subsidiary are held under
valid, subsisting and enforceable leases or charters, as the case may be, with
such exceptions as are not material and do not materially and adversely
interfere with the use made and proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).

(u) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (i) the Company
and its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).

(v) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).

(w) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or

7
<PAGE> 8
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).

(x) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as the Company believes are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).

(y) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except (i) for restrictions imposed by general
corporate law of the jurisdiction in which any such subsidiary may be organized
or (ii) as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or
(iii) for restrictions imposed in agreements governing or otherwise relating to
indebtedness of the Company or its subsidiaries that will be repaid on or
promptly after the Firm Closing Date from the proceeds of the sale of the
Securities by the Company hereunder, which agreements will be terminated after
repayment or (iv) restrictions which would not, singly or in the aggregate,
result in a material adverse change in the condition (financial or otherwise),
net worth, business prospects or results of operations of the Company and its
subsidiaries, taken as a whole.

(z) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
where a failure to possess any such items would not result in a material
adverse change in the condition (financial or otherwise), net worth, business
prospects or results of operations of the Company and its subsidiaries taken as
a whole, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).

(aa) The Company and each of its subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the Company and its
subsidiaries) and each has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except

8
<PAGE> 9

for any such assessment, fine or penalty that is currently being contested in
good faith, or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).

(ab) Neither the Company nor any of its subsidiaries is in violation
of any foreign, federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials; the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable foreign, federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses; and the Company and each such
subsidiary is in compliance with all terms and conditions of any such permit,
license or approval, except in each case any such violation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).

(ac) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.

(ad) Except (i) for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, (ii) as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) and (iii) for investments that are not
material to the Company and its subsidiaries taken as a whole, neither the
Company nor any such subsidiary owns any shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity.

(ae) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company to become an investment company subject to registration under such Act.

(af) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principals and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

(ag) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties is bound or may be affected, except for
any such default or event that has been waived or disclosed in the Prospectus
(or, if the Prospectus is not

9
<PAGE> 10

in existence, the most recent Preliminary Prospectus) or that will arise under
agreements governing or otherwise relating to indebtedness of the Company or
its subsidiaries that will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company hereunder, which
agreements will be terminated after repayment, or that will not, individually
or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), net worth, business prospects or results of
operations of the Company and its subsidiaries taken as a whole.

(ah) Upon consummation of the ERI Acquisition, the Warrant Certificate
to purchase 16,665 ordinary shares of ERI issued to Seitel dated July 3, 1996;
the Warrant Certificate to purchase 5,555 ordinary shares of ERI issued to
Harrison, dated July 3, 1996; the Warrant Certificate to purchase 5,555
ordinary shares of ERI issued to Purdie, dated July 3, 1996; the Warrant
Certificate to purchase 5,555 ordinary shares of ERI issued to Campbell dated
July 3, 1996; and the Shareholders Agreement among ERI, Seitel, Oliveira,
Harrison, Dormera, Purdie, Balmedie, Campbell, Larlane, and Burns, dated July
3, 1996; (collectively, the "Terminated Agreements") will be terminated, will
no longer be in force and effect, and the parties to the Terminated Agreements
will have executed waivers relinquishing and forfeiting any and all rights
granted under the Terminated Agreements.

(ai) Prior to or concurrent with the Firm Closing Date, the ERI
Acquisition Agreement will have been duly authorized, executed and delivered by
and will be a valid and binding agreement of the parties thereto.

(aj) Upon consummation of the ERI Acquisition, ERI, EHL and the
Horizon Companies will become wholly-owned subsidiaries of the Company.

3. Representations and Warranties with respect to the Selling
Securityholders. Each of the Selling Securityholders, and Seitel, Harrison,
Purdie, Campbell and Burns (solely with respect to EHI, Oliveira, Dormera,
Balmedie and Larlane, respectively), represents and warrants to, and agrees
with, each of the several Underwriters that:

(a) Such Selling Securityholder has full power (corporate and other)
to enter into this Agreement and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Securityholder hereunder
in accordance with the terms of this Agreement; the execution and delivery of
this Agreement have been duly authorized by all necessary corporate action of
such Selling Securityholder; and this Agreement has been duly executed and
delivered by such Selling Securityholder.

(b) Such Selling Securityholder has duly executed and delivered an
irrevocable power of attorney and custody agreement (with respect to such
Selling Securityholder, the "Power-of-Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the Representatives,
appointing and __________ as such Selling Securityholder's attorney-in-fact
(the "Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Securityholder and appointing the Company,
as custodian thereunder (the "Custodian"). Prior to or concurrent with the Firm
Closing Date, certificates in negotiable form, endorsed in blank or accompanied
by blank stock powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Securityholder hereunder
will be deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. Such Selling Securityholder

10
<PAGE> 11

has full power (corporate and other) to enter into the Custody Agreement and
the Power-of-Attorney and to perform its obligations under the Custody
Agreement. The execution and delivery of the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary corporate action
of such Selling Securityholder; the Custody Agreement and the Power-of-Attorney
have been duly executed and delivered by such Selling Securityholder and,
assuming due authorization, execution and delivery by the Custodian, are the
legal, valid, binding and enforceable instruments of such Selling
Securityholder. Such Selling Securityholder agrees that each of the Securities
represented by the certificates to be deposited with the Custodian is subject
to the interests of the Underwriters hereunder, that the arrangements made for
such custody, the appointment of the Attorney-in-Fact and the right, power and
authority of the Attorney-in-Fact to execute and deliver this Agreement, to
agree on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Securityholder hereunder shall not be terminated,
except as provided in this Agreement or the Custody Agreement, by any act of
such Selling Securityholder, by operation of law or otherwise, whether in the
case of any individual Selling Securityholder by the death or incapacity of
such Selling Securityholder, in the case of a trust or estate by the death of
the trustee or trustees or the executor or executors or the termination of such
trust or estate, or in the case of a corporate or partnership Selling
Securityholder by its liquidation or dissolution or by the occurrence of any
other event. If any individual Selling Securityholder, trustee or executor
should die or become incapacitated or any such trust should be terminated, or
if any corporate or partnership Selling Securityholder shall liquidate or
dissolve, or if any other event should occur, before the delivery of such
Securities hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the respective
terms and conditions of this Agreement as if such death, incapacity,
termination, liquidation or dissolution or other event had not occurred,
regardless of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.

(c) Prior to or concurrent with the Firm Closing Date, such Selling
Securityholder will be the lawful owner of and will have good and marketable
title to the Securities to be sold by such Selling Securityholder hereunder and
upon sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Securityholder will convey good and marketable title to
such Securities, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.

(d) Such Selling Securityholder has not, directly or indirectly, (i)
taken any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii) since the filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by such Selling
Securityholders under this Agreement).

(e) Such Selling Securityholder has reviewed the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) and
the Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate; and nothing has come to the attention
of such Selling Securityholder to make it believe that the Prospectus (or, if
the Prospectus is not in

11
<PAGE> 12

existence, the most recent Preliminary Prospectus) and the Registration
Statement contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.

(f) The sale by such Selling Securityholder of Securities pursuant
hereto is not prompted by any adverse information concerning the Company that
is not set forth in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).

(g) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws and,
if the registration statement filed with respect to the Securities (as amended)
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act
and the Exchange Act, or (ii) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which such Selling Securityholder or any of its subsidiaries is a party or by
which such Selling Securityholder or any of its subsidiaries or any of their
respective properties are bound, which conflict, breach, violation or default
could reasonably be expected to have a material adverse effect on the Selling
Stockholder and its subsidiaries (if any) taken as a whole (other than
conflicts, breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under agreements
governing or otherwise relating to indebtedness of the Company or its
subsidiaries that the Company has represented will be repaid on or promptly
after the Firm Closing Date from the proceeds of the sale of the Securities by
the Company), or the charter documents or by-laws of such Selling
Securityholder or any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental authority
or any arbitrator applicable to such Selling Securityholder or any of its
subsidiaries.

(h) Such Selling Securityholder has not distributed and, prior to the
later of (i) the Option Closing Date and (ii) the completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.

4. Purchase, Sale and Delivery of the Securities. (a) On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell, and EHI agrees to sell, to each of the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company and EHI, severally and not jointly, at a purchase price of $________
per share, the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule 2 hereto. One or more certificates in definitive form
for the Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Representatives request upon notice to the Company at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company and EHI to the Representatives for the respective accounts of the
Underwriters,

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<PAGE> 13

against payment by or on behalf of the Underwriters of the purchase price
therefor by wire transfer in same-day funds (the "Wired Funds") to the accounts
designated by the Company and EHI. Such delivery of and payment for the Firm
Securities shall be made at the offices of Brown & Wood LLP, One World Trade
Center, New York, New York 10048 at 9:30 A.M., New York time, on __________,
1997, or at such other place, time or date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 11 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company and EHI will make such
certificate or certificates for the Firm Securities available for checking and
packaging by the Representatives at the offices in New York, New York of the
Company's transfer agent or registrar or of Prudential Securities Incorporated
at least 24 hours prior to the Firm Closing Date.

(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, each of the Company, EHI, Oliveira, Dormera, Balmedie and Larlane
hereby grants to the several Underwriters an option to purchase, severally and
not jointly, the Option Securities in the amounts set forth on Schedule 1. If
such options are exercised, such Option Securities shall be purchased first
from Oliveira, Dormera, Balmedie and Larlane (up to a total of 180,000 shares
of Common Stock as set forth on Schedule 1 attached hereto) on a pro rata
basis, then from the Company (up to a total of 602,000 shares of Common Stock)
and then from EHI (up to a total of 100,000 shares of Common Stock.) The
purchase price to be paid for any Option Securities shall be the same price per
share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 4, plus if the purchase and sale of any Option
Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The options granted hereby may be exercised as to
all or any part of the Option Securities from time to time within thirty (30)
days after the date of the Prospectus (or, if such 30th day shall be a Saturday
or Sunday or a holiday, on the next business day thereafter when the New York
Stock Exchange is open for trading). The Underwriters shall not be under any
obligation to purchase any of the Option Securities prior to the exercise of
such options. The Representatives may from time to time exercise the options
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company setting forth the aggregate number of Option Securities
as to which the several Underwriters are then exercising the options and the
date and time for delivery of and payment for such Option Securities. Any such
date of delivery shall be determined by the Representatives but shall not be
earlier than two business days or later than five business days after such
exercise of the options and, in any event, shall not be earlier than the Firm
Closing Date. The time and date set forth in such notice, or such other time on
such other date as the Representatives and Company may agree upon or as the
Representatives may determine pursuant to Section 11 hereof, is herein called
the "Option Closing Date" with respect to such Option Securities. Upon exercise
of the options as provided herein, the Company and/or the Selling
Securityholders, as the case may be, shall become obligated, as set forth
above, to sell to each of the several Underwriters, and, subject to the terms
and conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company and/or the Selling
Securityholders, as the case may be, the same percentage of the total number of
the Option Securities as to which the several Underwriters are then exercising
the options as such Underwriter is obligated to purchase of the aggregate
number of Firm Securities, as adjusted by the Representatives in such manner as
they deem advisable to avoid fractional shares. If the options are exercised as
to all or any portion of the Option Securities, one or more certificates in
definitive form for such Option Securities, and payment therefor, shall be
delivered on the related Option Closing Date in the manner, and upon the terms

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<PAGE> 14
and conditions, set forth in paragraph (a) of this Section 4, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.

(c) The Company and the Selling Securityholders hereby acknowledge
that the wire transfer by or on behalf of the Underwriters of the purchase
price for any Securities does not constitute closing of a purchase and sale of
the Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the
Securities from the Company and the Selling Securityholders. Furthermore, in
the event that the Underwriters wire funds to the Company and the Selling
Securityholders prior to the completion of the closing of a purchase of
Securities, the Company and the Selling Securityholders hereby acknowledge that
until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company and the Selling Securityholders will not be
entitled to the wired funds and shall return the wired funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Securities is not
completed and the wired funds are not returned by the Company and the Selling
Securityholders to the Underwriters on the same day the wired funds were
received by the Company and the Selling Securityholders, the Company and the
Selling Securityholders agree to pay to the Underwriters in respect of each day
the wired funds are not returned by it, in same-day funds, interest on the
amount of such wired funds in an amount representing the Underwriters' cost of
financing as reasonably determined by Prudential Securities Incorporated.

(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.

5. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.

6. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:

(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act and the rules and regulations of the
Commission thereunder to the extent necessary to permit the continuance of
sales of or dealings in the Securities in accordance with the provisions hereof
and of the Prospectus, as then amended or supplemented, and (ii) will not file
with the Commission the Prospectus, Term Sheet or the amendment referred to in
the second sentence of Section 2(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement of which the Representatives previously have
been advised and furnished with a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall not have
given their consent.

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<PAGE> 15

The Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.

(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made
by the Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the Prospectus or
for additional information. The Company will use its best efforts to prevent
the issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.

(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.

(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 6(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.

(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as
a prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the

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<PAGE> 16
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 PM, New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 A.M., New York City time, on such date or (B)
2:00 PM, New York City time, on the business day following the date of
determination of the public offering price, if such determination occurred
after 10:00 A.M., New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date. The Company will provide or cause to be provided to each of the
Representatives, and to each Underwriter that so requests in writing, a copy of
each report on Form SR filed by the Company as required by Rule 463 under the
Act.

(f) The Company, as soon as practicable, will make generally available
to its securityholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.

(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.

(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the date hereof, except (i) pursuant to this
Agreement, (ii) for issuances pursuant to the exercise of employee or director
stock options and warrants outstanding on the date hereof and (iii) for the
grants of options pursuant to option plans existing on the date hereof.

(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling
Securityholders under this Agreement).

(j) The Company will obtain the agreements described in Section 9(m)
hereof prior to the date hereof.

(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to
the effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.

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<PAGE> 17
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. New York time on
the date of this Agreement and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2).

(m) The Company will cause the Securities to be duly included for
quotation on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") prior to the Firm Closing Date. The Company will ensure that the
Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.

7. Covenants of Selling Securityholders.

Each of the Selling Securityholders, and Seitel, Harrison, Purdie,
Campbell and Burns (solely with respect to EHI, Oliveira, Dormera, Balmedie and
Larlane, respectively), covenants and agrees with each of the Underwriters
that:

(a) Such Selling Securityholder will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, pledge, offer of sale, contract of sale, grant of any option
to purchase or other sale or disposition) of any shares of Common Stock legally
or beneficially owned by such Selling Securityholder or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the date hereof, except pursuant to this
Agreement.

(b) Such Selling Securityholder will not, directly or indirectly, (i)
take any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii)(A) sell, bid for, purchase, or pay anyone
any compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of Securities by the
Selling Securityholders under this Agreement).

8. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 13 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, this Agreement and any blue
sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association

17
<PAGE> 18
of Securities Dealers, Inc. relating to the Securities, (vii) any quotation of
the Securities on the Nasdaq National Market, (viii) any meetings with
prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (ix) advertising relating to the offering of the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 9 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 13 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any event
be liable to any of the Underwriters for the loss of anticipated profits from
the transactions covered by this Agreement.

9. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the parties hereto contained herein as of the
date hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company and the Selling
Securityholders made pursuant to the provisions hereof, to the performance by
the parties hereto of their respective covenants and agreements hereunder and to
the following additional conditions:

(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been filed
with the Commission and (ii) the time confirmations are sent or given as
specified by Rule 462(b)(2), or with respect to the Original Registration
Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to
the knowledge of the Company or the Representatives, shall be contemplated by
the Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).

(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Gardere Wynne Sewell & Riggs, L.L.P., counsel for the Company,
Seitel and EHI, to the effect that:

(i) the Company and each of Eagle Geophysical Onshore,
Inc., a Delaware corporation, and Eagle Geophysical Offshore, Inc.
(formerly known as Horizon Seismic,

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<PAGE> 19

Inc.), a Texas corporation (the "Subsidiaries"), have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and
are duly qualified to transact business as foreign corporations and
are in good standing under the laws of all other jurisdictions where,
to the knowledge of such counsel, the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to
the Company and its subsidiaries, taken as a whole;

(ii) the Company and each of the Subsidiaries have corporate
power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and
the Prospectus, and the Company has corporate power to enter into
this Agreement and to carry out all the terms and provisions hereof
to be carried out by it;

(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares
(if any) and as otherwise set forth in the Prospectus, are owned
beneficially by the Company free and clear of any perfected security
interests or, to the best knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims;

(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued
in compliance with all applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities; the
Firm Securities have been duly authorized by all necessary corporate
action of the Company and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable; the Securities have been duly
included for trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities; and no holders of securities of the Company, other than
the Selling Securityholders, are entitled to have such securities
registered under the Registration Statement;

(v) the statements set forth under the heading "Description
of Capital Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the capital stock of the
Company, provide a fair summary of such provisions; and the
statements set forth under the headings "Risk Factors - Potential
Conflicts of Interest," "Risk Factors - Environmental and Other
Regulations" and "Business - Environmental Matters/Governmental
Regulation" in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to
therein, provide a fair summary of such legal matters, documents and
proceedings;

(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and
Seitel and this Agreement has been duly executed and delivered by the
Company and Seitel;

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<PAGE> 20
(vii) (A) no legal or governmental proceedings are pending to
which the Company or any of the Subsidiaries is a party or to which
the property of the Company or any of the Subsidiaries is subject
that are required to be described in the Registration Statement or
the Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any
of their respective properties and (B) to the knowledge of such
counsel, no contract or other document is required to be described in
the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein
or filed as required;

(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement
and the consummation of the other transactions herein contemplated do
not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws (provided that such counsel shall not be required to
express any opinion as to the requirements of state securities or
blue sky laws), or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company
or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or any of their respective properties are bound,
which conflict, breach, violation or default could reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole (other than conflicts, breaches,
violations or defaults that have been waived by the other party
thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds
of the sale of the Securities by the Company), or the charter
documents or by-laws of the Company or any of the Subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to the Company or Subsidiaries;

(ix) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434
and 424(b); and, to such counsel's knowledge after due inquiry with
the Commission no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened
or, are contemplated by the Commission;

(x) the Registration Statement originally filed with respect
to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) appeared
on its face to comply as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of
the Commission thereunder;

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<PAGE> 21

(xi) The ERI Acquisition Agreement has been duly authorized
by all necessary corporate action of the Company and has been duly
executed and delivered by the Company; and, assuming due
authorization, execution and delivery by Harrison, Purdie, Campbell,
Burns, Oliveira, Dormera, Balmedie and Larlane, the ERI Acquisition
Agreement is the legal, valid, binding and enforceable instrument of
the Company, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law);

(xii) EHI has full corporate power to enter into this
Agreement, EHI has full corporate power to enter into the Custody
Agreement and the Power-of-Attorney and to sell, transfer and deliver
the Securities being sold by EHI hereunder in the manner provided in
this Agreement and to perform its obligations under the Custody
Agreement; the execution and delivery by EHI of this Agreement and
the Custody Agreement and the Power-of-Attorney by EHI have been duly
authorized by all necessary corporate action of EHI; this Agreement
has been duly executed and delivered by EHI and; assuming due
authorization, execution and delivery by the Custodian, the Custody
Agreement and the Power-of-Attorney is the legal, valid, binding and
enforceable instrument of EHI, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);

(xiii) the delivery by EHI to the several Underwriters of
certificates for the Securities being sold hereunder by EHI against
payment therefor as provided herein, will convey good and marketable
title to such Securities to the several Underwriters, free and clear
of all security interests, liens, encumbrances, equities, claims or
other defects; and

(xiv) the sale of the Securities to the Underwriters by EHI
pursuant to this Agreement, the compliance by EHI with the other
provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws (provided that such counsel shall not be required to
express any opinion as to the requirements of state securities or
blue sky laws), or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which EHI or any
of its subsidiaries is a party or by which EHI or any of its
subsidiaries or any of their respective properties are bound, which
conflict, breach, violation or default could reasonably be expected
to have a material adverse effect on EHI and its subsidiaries taken
as a whole (other than conflicts, breaches, violations or defaults
that have been waived by the other party thereto or conflicts,
breaches, violations or defaults under agreements governing or
otherwise relating to indebtedness of the Company or its subsidiaries
that the Company has represented will be repaid on or promptly after
the Firm Closing Date from the proceeds of the sale of the Securities
by the Company), or the charter documents or by-laws of EHI or any of
its subsidiaries or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator applicable to EHI or any of its subsidiaries.

21
<PAGE> 22
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, Seitel and EHI and public officials.

References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.

(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Griggs & Harrison, P.C., U.S. counsel for Harrison, Purdie,
Campbell, Burns, Oliveira, Dormera, Balmedie and Larlane to the effect that:

(i) The ERI Acquisition Agreement has been duly authorized by
all necessary action (corporate or otherwise) of Harrison, Purdie,
Campbell and Burns, and has been duly executed and delivered by
Harrison, Purdie, Campbell, Burns, Oliveira, Dormera, Balmedie and
Larlane; and, assuming due authorization, execution and delivery by
the Company, the ERI Acquisition Agreement is the legal, valid,
binding and enforceable instrument of Harrison, Purdie, Campbell,
Burns, Oliveira, Dormera, Balmedie and Larlane, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to public policy
considerations or federal or state securities laws limiting rights to
indemnity and to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);

(ii) Each of Harrison, Purdie, Campbell and Burns has full
power to enter into this Agreement, the Custody Agreement and the
Power-of-Attorney and to perform their obligations under each; this
Agreement has been duly executed and delivered by each of Harrison,
Purdie, Campbell, Burns, Oliveira, Dormera, Balmedie and Larlane;
assuming due authorization, execution and delivery by the Custodian,
the Custody Agreement and the Power-of-Attorney are the legal, valid,
binding and enforceable instruments of each of Harrison, Purdie,
Campbell, Burns, Oliveira, Dormera, Balmedie and Larlane, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
public policy considerations or federal or state securities laws
limiting rights to indemnity and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law); and

(iii) the compliance by each of Harrison, Purdie, Campbell
and Burns with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws (provided that such counsel shall
not be required to express any opinion as to the requirements of
state securities or blue sky laws), or (ii) conflict with or result
in a breach

22
<PAGE> 23

or violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which any of
Harrison, Purdie, Campbell or Burns is a party or by which or any of
their respective properties are bound, which conflict, breach,
violation or default could reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole
(other than conflicts, breaches, violations or defaults that have
been waived by the other party thereto or conflicts, breaches,
violations or defaults under agreements governing or otherwise
relating to indebtedness of the Company or its subsidiaries that the
Company has represented will be repaid on or promptly after the Firm
Closing Date from the proceeds of the sale of the Securities by the
Company), or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to any of Harrison,
Purdie, Campbell and Burns.

In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of Harrison,
Purdie, Campbell, Burns, Oliveira, Dormera, Balmedie and Larlane and public
officials.

References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.

(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Cains Advocates and Notaries, counsel for Oliveira, Dormera,
Balmedie and Larlane to the effect that:

(i) the ERI Acquisition Agreement has been duly authorized
by all necessary action (corporate or otherwise) of Oliveira, Dormera,
Balmedie and Larlane;

(ii) each of Oliveira, Dormera, Balmedie and Larlane has full
power to enter into this Agreement, the Custody Agreement and the
Power-of-Attorney and to sell, transfer and deliver the Securities
being sold by them hereunder in the manner provided in this Agreement
and to perform their obligations under the Custody Agreement; the
execution and delivery of this Agreement, the Custody Agreement and
the Power-of-Attorney have been duly authorized by all necessary
action (corporate or otherwise) of each of Oliveira, Dormera, Balmedie
and Larlane;

(iii) the delivery by each of Oliveira, Dormera, Balmedie and
Larlane to the several Underwriters of certificates for the Securities
being sold hereunder by each of Oliveira, Dormera, Balmedie and
Larlane against payment therefor as provided herein, will convey good
and marketable title to such Securities to the several Underwriters,
free and clear of all security interests, liens, encumbrances,
equities, claims or other defects; and

(iv) the sale of the Securities to the Underwriters by each
of Oliveira, Dormera, Balmedie and Larlane pursuant to this Agreement,
the compliance by each of Oliveira, Dormera, Balmedie and Larlane with
the other provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (ii) conflict with or result in a breach or
violation

23
<PAGE> 24

of any of the terms and provisions of, or constitute a default under
any indenture, mortgage, deed of trust, lease or other agreement or
instrument known to such counsel and to which any of Oliveira,
Dormera, Balmedie and Larlane is a party or by which or any of their
respective properties are bound, which conflict, breach, violation or
default could reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole (other
than conflicts, breaches, violations or defaults that have been
waived by the other party thereto or conflicts, breaches, violations
or defaults under agreements governing or otherwise relating to
indebtedness of the Company or its subsidiaries that the Company has
represented will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company), or
any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to any of Oliveira, Dormera, Balmedie and
Larlane; and

(v) the delivery by each of Oliveira, Dormera, Balmedie and
Larlane to the Company of certificates representing 81% of the issued
and outstanding capital stock of ERI pursuant to the ERI Acquisition
Agreement against payment therefor as provided therein, will convey
good and marketable title of such capital stock to the Company, free
and clear of all security interests, liens, encumbrances, equities,
claims or other defects.

References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.

(e) The Representatives shall have received an opinion, dated the Firm
Closing Date, of W.S. Walker & Company, counsel for ERI, to the effect that:

(i) ERI has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where, to the knowledge of such counsel, the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does
not amount to a material liability or disability to the Company and
its subsidiaries, taken as a whole;

(ii) ERI has corporate power to own or lease its properties
and conduct its business as described in the Registration Statement
and the Prospectus;

(iii) the issued shares of capital stock of ERI have been
duly authorized and validly issued, are fully paid and nonassessable
and, except for directors' qualifying shares (if any) and as otherwise
set forth in the Prospectus, are owned of record by the Company free
and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;

(iv) no legal or governmental proceedings are pending to
which ERI is a party or to which the property of ERI is subject that
are required to be described in the

24
<PAGE> 25

Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against ERI or with respect to any
of its properties;

(v) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known
to such counsel, to which ERI is a party or by which ERI or any of its
properties are bound, which conflict, breach, violation or default
could reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole (other than conflicts,
breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds of
the sale of the Securities by the Company), or the charter documents
or by-laws of ERI, or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to ERI; and

(vi) the delivery by each of Oliveira, Dormera, Balmedie and
Larlane to the Company of certificates representing 81% of the issued
and outstanding capital stock of ERI pursuant to the ERI Acquisition
Agreement against payment therefor as provided therein, will convey
good and marketable title of such capital stock to the Company, free
and clear of all security interests, liens, encumbrances, equities,
claims or other defects.

In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of ERI and public officials.

References to the Registration Statement and the Prospectus in this
paragraph (e) shall include any amendment or supplement thereto at the date of
such opinion.

(f) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Cooper & Burnett, counsel for Exploration Holdings Ltd. and
Horizon Exploration Ltd. (the "U.K. Subsidiaries") to the effect that:

(i) the U.K. Subsidiaries have been duly organized and are
validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where, to the knowledge of
such counsel, the ownership or leasing of their respective properties
or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and its
subsidiaries, taken as a whole;

(ii) each of the U.K Subsidiaries has corporate power to own
or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the
Prospectus;

25
<PAGE> 26

(iii) the issued shares of capital stock of each of the U.K.
Subsidiaries has been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares
(if any) and as otherwise set forth in the Prospectus, are owned
beneficially by ERI, in the case of Exploration Holdings Ltd., and by
Exploration Holdings Ltd., in the case of Horizon Exploration Ltd.,
free and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;

(iv) no legal or governmental proceedings are pending to
which the U.K. Subsidiaries is a party or to which the property of the
U.K. Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the U.K. Subsidiaries or with
respect to any of their respective properties;

(v) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known
to such counsel, to which the U.K. Subsidiaries are a party or by
which the U.K. Subsidiaries or any of their respective properties are
bound, which conflict, breach, violation or default could reasonably
be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole (other than conflicts, breaches,
violations or defaults that have been waived by the other party
thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds of
the sale of the Securities by the Company), or the charter documents
or by-laws of the U.K. Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to
the U.K. Subsidiaries;

In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the U.K. Subsidiaries and public officials.

References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.

(g) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Brown & Wood LLP, counsel for the Underwriters, with respect
to the issuance and sale of the Firm Securities, the Registration Statement and
the Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, such counsel may rely as to
all matters of Texas law upon the opinion of Gardere Wynne Sewell & Riggs,
L.L.P referred to in paragraph (b) above.

26
<PAGE> 27

(h) Prior to or concurrent with the Firm Closing Date, each condition
to the closing contemplated by the ERI Acquisition Agreement shall have been
satisfied or waived. There shall exist at and as of the Firm Closing Date no
conditions that would constitute a default (or an event that with notice or
lapse of time, or both, would constitute a default) under the ERI Acquisition
Agreement. Prior to or concurrent with the Firm Closing Date, (i) the Company
shall have consummated the ERI Acquisition pursuant to the ERI Acquisition
Agreement and on terms that conform to the description thereof in the
Registration Statement and the Prospectus and (ii) ERI, EHL and the Horizon
Companies shall be wholly-owned subsidiaries of the Company; and the Company
shall have delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, that the conditions specified in this
paragraph shall have been satisfied.

(i) Upon consummation of the ERI Acquisition, the Warrant Certificate
to purchase 16,665 ordinary shares of ERI issued to Seitel dated July 3, 1996;
the Warrant Certificate to purchase 5,555 ordinary shares of ERI issued to
Harrison, dated July 3, 1996; the Warrant Certificate to purchase 5,555
ordinary shares of ERI issued to Purdie, dated July 3, 1996; the Warrant
Certificate to purchase 5,555 ordinary shares of ERI issued to Campbell dated
July 3, 1996; and the Shareholders Agreement among ERI, Seitel, Oliveira,
Harrison, Dormera, Purdie, Balmedie, Campbell, Larlane, and Burns, dated July
3, 1996; (collectively, the "Terminated Agreements") will be terminated, will
no longer be in force and effect, and the parties to the Terminated Agreements
will have executed waivers relinquishing and forfeiting any and all rights
granted under the Terminated Agreements.

(j) The Representatives shall have received from Arthur Andersen LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:

(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the
Act and the applicable rules and regulations thereunder;

(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined
by them and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;

(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), a reading of the minute
books of the stockholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries, and
inquiries of certain officials of the Company and its consolidated
subsidiaries who have responsibility for financial and accounting
matters, nothing came to their attention that caused them to believe
that:

(A) the unaudited consolidated condensed financial statements
of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of

27
<PAGE> 28

the Act and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus; and

(B) at a specific date not more than five business days prior
to the date of such letter, there were any changes in the capital
stock or long-term debt of the Company and its consolidated
subsidiaries or any decreases in net current assets or stockholders'
equity of the Company and its consolidated subsidiaries, in each case
compared with amounts shown on the [insert date of the most recent
consolidated (condensed) balance sheet] [unaudited] consolidated
[condensed] balance sheet included in the Registration Statement and
the Prospectus, or for the period from [insert date one day after the
date inserted above] to such specified date there were any decreases,
as compared with the corresponding period in the preceding year, in
sales, net revenues, net income before income taxes or total or per
share amounts of net income of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases or
increases set forth in such letter;

(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus, and have compared such amounts,
percentages and financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such records and
have found them to be in agreement, excluding any questions of legal
interpretation;

(v) on the basis of a reading of the unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement and the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (v), inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the unaudited pro
forma consolidated condensed financial statements, nothing came to their
attention that caused them to believe that the unaudited pro forma consolidated
condensed financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.

In the event that the letter referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letter shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.

References to the Registration Statement and the Prospectus in this
paragraph (j) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.

28
<PAGE> 29

(k) The Representatives shall have received from KPMG, a letter or
letters dated, respectively, the date hereof and the Firm Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:

(i) they are independent accountants with respect to ERI and
its consolidated subsidiaries within the meaning of the Act and the
applicable rules and regulations thereunder;

(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement and the Prospectus with respect to ERI and its
consolidated subsidiaries comply in form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations;

(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of ERI
and its consolidated subsidiaries, carrying out certain specified
procedures (which do not constitute an examination made in accordance
with generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof of ERI
and each of its consolidated subsidiaries, and inquiries of certain
officials of ERI and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that:

(A) the unaudited consolidated condensed financial statements
of ERI and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus; and

(B) at a specific date not more than five business days prior
to the date of such letter, there were any changes in the capital
stock or long-term debt of ERI and its consolidated subsidiaries or
any decreases in net current assets or stockholders' equity of ERI and
its consolidated subsidiaries, in each case compared with amounts
shown on the [insert date of the most recent consolidated (condensed)
balance sheet] [unaudited] consolidated [condensed] balance sheet
included in the Registration Statement and the Prospectus, or for the
period from [insert date one day after the date inserted above] to
such specified date there were any decreases, as compared with the
corresponding period in the preceding year, in sales, net revenues,
net income before income taxes or total or per share amounts of net
income of ERI and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in such
letter;

(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of ERI and its consolidated subsidiaries and are included in
the Registration Statement and the Prospectus, and have compared such
amounts, percentages and financial information with such records of ERI
and its consolidated subsidiaries and with

29
<PAGE> 30

information derived from such records and have found them to be in agreement,
excluding any questions of legal interpretation.

In the event that the letter referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letter shall be accompanied by a
written explanation of ERI as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.

References to the Registration Statement and the Prospectus in this
paragraph (k) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.

(l) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:

(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date;

(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the best of the Company's knowledge, are contemplated by the
Commission; and

(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).

(m) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of each Selling Securityholder to the effect
that:

30
<PAGE> 31

(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on
and as of the Closing Date;

(ii) to the extent that any statements or omissions are made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by
such Selling Securityholder specifically for use therein, the
Registration Statement, as amended as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplements as of the Closing Date,
does not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and

(iii) such Selling Securityholder has performed all covenants
and agreements on its part to be performed or satisfied at or prior to
the Firm Closing Date.

(n) The Representatives shall have received from each person who is a
director, officer or stockholder of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 180
days after the date of this Agreement.

(o) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.

(p) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.

All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.

The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.

10. Indemnification and Contribution. (a) The Company, EHI,
Seitel and, subject to Section 10(f) below, Oliveira, Dormera, Harrison and
Purdie, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,

31
<PAGE> 32
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the Act,
the Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:

(i) any untrue statement or alleged untrue statement made by
the Company, EHI, Seitel, Oliveira, Dormera, Harrison and Purdie in
Section 2 of this Agreement,

(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),

(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, or

(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films and tape recordings,

and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and EHI,
Seitel, Oliveira, Dormera, Harrison and Purdie will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in such Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein; and provided, further that the
Company, EHI, Seitel, Oliveira, Dormera, Harrison and Purdie will not be liable
to any Underwriter or any person controlling such Underwriter with respect to
any such untrue statement or omission made in any Preliminary Prospectus that
is corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Sections 6(d) and (e) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company and
EHI, Seitel, Oliveira, Dormera, Harrison and Purdie may otherwise have. Neither
the Company nor EHI, Seitel, Oliveira, Dormera, Harrison and Purdie will,
without the prior written consent of the Underwriter

32
<PAGE> 33
or Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.

(b) Subject to Section 10(f) below, each of the Selling
Securityholders, Seitel, Harrison, Purdie, Campbell and Burns, severally and
not jointly, agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement or any
amendment thereto, each Underwriter and each person who controls the Company or
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which the Company, any such director, officer, such Underwriter or
any such controlling person may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement made by the Selling Securityholders,
Seitel, Harrison, Purdie, Campbell or Burns in Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or (iii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the written information
furnished to the Company by the Selling Securityholders, Seitel, Harrison,
Purdie, Campbell or Burns. Subject to the limitations set forth in the
immediately preceding sentence, the Selling Securityholders, Seitel, Harrison,
Purdie, Campbell or Burns, severally and not jointly, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company, any
such director, officer, such Underwriter or any such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which the Selling Securityholders, Seitel, Harrison,
Purdie, Campbell or Burns may otherwise have. The Selling Securityholders,
Seitel, Harrison, Purdie, Campbell or Burns will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.

(c) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Securityholders and each person,
if any, who controls the Company or the Selling Securityholders within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act

33
<PAGE> 34

against any losses, claims, damages or liabilities to which the Company, any
such director or officer of the Company, the Selling Securityholders or any
such controlling person of the Company or the Selling Securityholders may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein: and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company, any such director, officer or controlling person or the Selling
Securityholders in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.

(d) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 10 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 10, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the

34
<PAGE> 35
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.

(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 10 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or alleged omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Securityholders on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Selling Securityholders or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company, the Selling Securityholders and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (e). Notwithstanding any
other provision of this paragraph (e), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section II (f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (e), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company and the Selling Securityholders
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or the Selling
Securityholders.

35
<PAGE> 36
(f) The liability of each of Oliveira, Dormera, Balmedie and Larlane
under this Section 10 shall not exceed an amount equal to the initial public
offering price of the Securities sold by each of Oliveira, Dormera, Balmedie,
and Larlane to the Underwriters, and the liability of each of the controlling
stockholders of such entities (Harrison, Purdie, Campbell and Burns,
respectively) shall be limited as set forth immediately above in this Section
10(f).

11. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 12 hereof. In the event of any default by one or more Underwriters as
described in this Section 11, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 4 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 11. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.

12. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, Seitel
and the Selling Securityholders, their officers and the several Underwriters set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Underwriter or any controlling person referred to in Section 10
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 8
and 10 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.

13. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company and the Selling Securityholders
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company or the Selling Securityholders shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on

36
<PAGE> 37

its part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Firm Closing Date or such Option Closing Date, respectively,

(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or
any development involving a prospective material adverse change
(including without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto);

(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either such exchange or market system;

(iii) a banking moratorium shall have been declared by New
York or United States authorities; or

(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.

(b) Termination of this Agreement pursuant to this Section 13 shall be
without liability of any party to any other party except as provided in Section
12 hereof.

14. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page, in the stabilization legend
on the inside front cover page and in the table in the first full paragraph and
the third and seventh full paragraphs under the heading "Underwriting" in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 10 hereof. The Underwriters confirm that such statements (to
such extent) are correct.

15. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, One New York Plaza, New York, New York 10292,
Attention: Equity Transactions Group (facsimile: (212) 778-3621); if sent to
the Company, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at 50 Briar Hollow Lane,
6th Floor West, Houston, Texas 77027, Attention: Jay Silverman,

37
<PAGE> 38

President (facsimile: (713) 627-1020), if sent to EHI or Seitel, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to EHI or Seitel, as the case may be, at 50 Briar Hollow Lane, 9th
Floor West, Houston, Texas 77027, Attention: Paul A. Frame, President
(facsimile: (713) 622-2045) and if sent to any other Selling Securityholders,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to such Selling Securityholder at 6 Pembroke Road,
Sevenoaks, Kent TN13 1XR, England, Attention: Mr. Gerald M. Harrison
(facsimile: 011-44-1732-742746).

16. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, Seitel, the Selling
Securityholders, Harrison, Purdie, Campbell and Burns and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities contained in Section 10(a) of this Agreement shall also be for
the benefit of any person or persons who control any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, (ii) the
indemnities of the Underwriters contained in Section 10(c) of this Agreement
shall also be for the benefit of the directors of the Company, the officers of
the Company who have signed the Registration Statement and any person or persons
who control the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and shall also be for the benefit of any person or
persons who control the Selling Securityholders within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (iii) the indemnities contained
in Section 10(b) of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement or any amendment thereto and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.

17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.

18. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company, Seitel and the
Selling Securityholders accept for themselves and in connection with their
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waive any defense of forum non conveniens and irrevocably
agree to be bound by any judgment rendered thereby in connection with this
Agreement. Each Selling Securityholder (except EHI, which designates and
appoints Seitel) designates and appoints Mr. Gerald M. Harrison, and such other
persons as may hereafter be selected by the Selling Securityholders irrevocably
agreeing in writing to so serve, as their agent to receive on their behalf
service of all process in any such proceedings in any such court, such service
being hereby acknowledged by

38
<PAGE> 39

the Selling Securityholders to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered
mail to the Selling Securityholders at their address provided in Section 15
hereof; provided, however, that, unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by the Selling Securityholders refuses to
accept service, the Selling Securityholders hereby agree that service of
process sufficient for personal jurisdiction in any action against the Selling
Securityholders in the State of New York may be made by registered or certified
mail, return receipt requested, to the Selling Securityholders at their address
provided in Section 15 hereof, and the Selling Securityholders hereby
acknowledge that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Selling Securityholders in the courts of any other
jurisdiction.

19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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<PAGE> 40

If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the several Underwriters.

Very truly yours,

EAGLE GEOPHYSICAL, INC.

By
---------------------------------
Name: Jay Silverman
Title: President

------------------------------------
Gerald M. Harrison

------------------------------------
George Purdie

------------------------------------
Neil A.M. Campbell

------------------------------------
David Burns

EHI HOLDINGS, INC.

By
---------------------------------
Name: Paul A. Frame
Title: President

SEITEL, INC.

By
---------------------------------
Name: Paul A. Frame
Title: President

SELLING SECURITYHOLDERS:
Oliveira Limited
Dormera Limited
Balmedie Limited
Larlane Limited

By: Attorneys-in-Fact

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

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<PAGE> 41

The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.

PRUDENTIAL SECURITIES INCORPORATED
SIMMONS & COMPANY INTERNATIONAL

By PRUDENTIAL SECURITIES INCORPORATED

By
--------------------------------
Name: Jean-Claude Canfin
Title: Managing Director

For itself and on behalf of the Representatives and the several Underwriters.

41
<PAGE> 42

SCHEDULE 1

SELLING SECURITYHOLDERS

<TABLE>
<CAPTION>
Firm Option
Selling Securities to be Securities to be
Securityholder Wholly-Owned By Offered and Sold Offered and Sold
- ------------------ ------------------- ---------------- ----------------
<S> <C> <C> <C>
EHI Holdings, Inc. Seitel,Inc. 1,880,000 100,000
Oliveira Limited Gerald M. Harrison -- 56,400
Dormera Limited George Purdie -- 56,400
Balmedie Limited Neil A.M. Campbell -- 56,400
Larlane Limited David Burns -- 10,800
</TABLE>

S-1

<PAGE> 43

SCHEDULE 2

UNDERWRITERS

Number of Firm
Securities to
Underwriter be Purchased
- ----------- --------------

Prudential Securities Incorporated.......
Simmons & Company International..........

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

Total ..............

S-2

<PAGE> 44

SCHEDULE 3

SUBSIDIARIES

Name Jurisdiction of Incorporation
- ---- -----------------------------
<S> <C>
Eagle Geophysical Onshore, Inc. Delaware

Energy Research International Cayman Islands

Exploration Holdings Ltd. England

Eagle Geophysical Offshore, Inc.
(formerly known as Horizon Seismic, Inc.) Texas

Horizon Exploration Ltd. England
</TABLE>

S-3

<PAGE> 1
EXHIBIT 2.1

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

STOCK PURCHASE AGREEMENT

BY AND AMONG

GERALD HARRISON,

GEORGE PURDIE,

NEIL CAMPBELL,

DAVID BURNS,

OLIVEIRA LIMITED,

DORMERA LIMITED,

BALMEDIE LIMITED,

LARLANE LIMITED,

AND

EAGLE GEOPHYSICAL, INC.

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Dated as of June 2, 1997
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TABLE OF CONTENTS

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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Certain Additional Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3. Closing; Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Representations and Warranties of the Sellers and the Guarantors . . . . . . . . . . . . . 5
(a) Due Organization, Good Standing and Power of Sellers . . . . . . . . . . . . . 5
(b) Due Organization, Good Standing and Power of the Company and the
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Validity of Agreement; Capitalization . . . . . . . . . . . . . . . . . . . . 5
(d) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) No Approvals or Notices Required; No Conflict with Instruments . . . . . . . . 7
(f) Financial Information and Absence of Certain Changes . . . . . . . . . . . . . 7
(g) Title to Properties; Absence of Liens and Encumbrances . . . . . . . . . . . . 9
(h) Contracts, Permits and Other Data . . . . . . . . . . . . . . . . . . . . . . 9
(i) Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(k) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(m) Conduct of Business in Compliance with Regulatory and Contractual
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(n) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(o) Environmental, Health and Safety Compliance . . . . . . . . . . . . . . . . . 11
(p) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(q) Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(r) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(s) Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(t) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(u) Employee Benefit Plans and Arrangements . . . . . . . . . . . . . . . . . . . 13
(v) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 15
(w) U.S. Assets and Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(x) Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(y) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<TABLE>
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4.2 Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Due Organization; Good Standing and Power . . . . . . . . . . . . . . . . . . 17
(b) Authorization and Validity of Agreement . . . . . . . . . . . . . . . . . . . 17
(c) No Conflict with Instruments . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Authorized Capital; Buyer Stock . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Financial Information and Absence of Certain Changes . . . . . . . . . . . . . 18
(g) Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(i) Current Ownership of Company Shares . . . . . . . . . . . . . . . . . . . . . 20
4.3 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 20

5. Agreements and Covenants of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2 Conduct of Operations Pending Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.3 Conduct of Operations of Buyer Pending Closing . . . . . . . . . . . . . . . . . . . . . . 22
5.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.5 Restrictions on Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

6. Conditions to Closing, Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Buyer's Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(e) Third Party Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . 24
(f) Absence of Restraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(g) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.2 Sellers' and Guarantors' Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . 24
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(e) Cancellation of Seitel Warrant . . . . . . . . . . . . . . . . . . . . . . . . 25
(f) Absence of Restraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(g) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

7. Deliveries at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Mutual Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Employment Agreement Amendments . . . . . . . . . . . . . . . . . . . . . . . 26
(b) Termination of Shareholders Agreement . . . . . . . . . . . . . . . . . . . . 26
7.2 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3 Deliveries by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Indemnification by the Sellers and the Guarantors . . . . . . . . . . . . . . . . . . . . . 27
8.2 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>

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<TABLE>
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8.3 Limits on Indemnification Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.4 Indemnification Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.5 Time Limits on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Appointment of Seller Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

9. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.1 Harrison Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Purdie Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.3 Campbell Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4 Burns Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1 Payment of Certain Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.4 Binding Effect; Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.5 Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.6 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.7 Section Headings; Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.10 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.11 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.12 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(a) Good Faith Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(c) Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Consent to Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . . . . . 34
10.13 Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>

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LIST OF EXHIBITS TO AGREEMENT

Exhibit 1 - Allocation of Purchase Price

Exhibit 2 - Warrant Cancellation Agreement

Exhibit 3 - Employment Agreement Amendments

Exhibit 4 - Burns Employment Agreement

Exhibit 5 - Termination of Shareholders Agreement

Exhibit 6 - Opinion of Counsel to Buyer

Exhibit 7 - Opinions of Counsel to Sellers, Guarantors
and Company
<PAGE> 6
STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this "Agreement") is made and entered
into as of June 2, 1997 by and among Oliveira Limited, an Isle of Man
corporation ("Oliveira"), Dormera Limited, an Isle of Man corporation
("Dormera"), Balmedie Limited, an Isle of Man corporation ("Balmedie"), Larlane
Limited, an Isle of Man corporation ("Larlane, and collectively with Oliveira,
Dormera and Balmedie, the "Sellers," or individually, a "Seller"), Gerald
Harrison ("Harrison"), George Purdie ("Purdie"), Neil Campbell ("Campbell") and
David Burns ("Burns," and collectively with Harrison, Purdie and Campbell, the
"Guarantors" and individually, a "Guarantor") and Eagle Geophysical, Inc., an
Delaware corporation ("Buyer").

RECITALS:

1. The Sellers own 81% of the issued and outstanding ordinary
shares of US$0.001 (the "Shares") of Energy Research International, a Cayman
Islands corporation (the "Company"), which is engaged in the offshore seismic
data acquisition business (the "Business"), and Buyer, or its ultimate parent
corporation, owns the other 19% of the issued and outstanding Shares of the
Company; and

2. Oliveira desires to sell to Buyer 15,667 Shares, Dormera
desires to sell to Buyer 15,666 Shares, Balmedie desires to sell to Buyer
15,667 Shares, Larlane desires to sell to Buyer 3,000 Shares, and Buyer desires
to acquire from the Sellers such 50,000 Shares (the "Purchased Shares"), so
that Buyer will own all of the issued and outstanding Shares of the Company, in
consideration of the payment by Buyer of the purchase price provided for
herein, all upon the terms and subject to the conditions hereinafter set forth;

3. The sale and purchase of the Purchased Shares contemplated
herein will occur simultaneously with the consummation of an initial public
offering of shares of common stock by Buyer, and the sale and purchase
contemplated hereby is conditioned upon the consummation of such public
offering as set forth herein; and

4. Harrison is the owner of all of the issued and outstanding
shares of Oliveira, Purdie is the owner of all of the issued and outstanding
shares of Dormera, Campbell is the owner of all of the issued and outstanding
shares of Balmedie, and Burns is the owner of all of the issued and outstanding
shares of Larlane. The Guarantors join in the execution of this Agreement for
the purpose of guaranteeing the obligations of the Sellers hereunder and for
the purpose of making certain representations and warranties to and covenants
and agreements with Buyer.

AGREEMENT

In consideration of the premises and of the respective
representations, warranties, covenants, agreements and conditions of the
parties contained herein, it is hereby agreed as follows:
<PAGE> 7
1. Definitions.

1.1 Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:

"affiliate" means, with respect to any person, any other
person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with, such person.

"Applicable Law" means any statute, law, rule or regulation or
any judgment, order, writ, injunction or decree of any Governmental
Entity to which a specified person or property is subject.

"Code" means the Internal Revenue Code of 1986, as amended and
in effect on the Closing Date.

"Employee Warrants" means the warrants to purchase 5,555
Shares each granted to Harrison, Purdie and Campbell evidenced by
Warrant Certificates Nos. W-002, W-003 and W-004 dated July 3, 1996.

"Encumbrances" means liens, charges, pledges, options,
mortgages, deeds of trust, security interests, claims, restrictions
(whether on voting, sale, transfer, disposition or otherwise),
easements, licenses, sublicenses and other encumbrances of every type
and description, whether imposed by law, agreement, understanding or
otherwise.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental or
regulatory body, agency, department, commission, board, bureau or
other authority or instrumentality (domestic or foreign).

"Horizon Pension Plan" means the pension plan dated April 1,
1994 of Horizon Exploration Limited, a copy of which has been provided
by Sellers to Buyer.

"Intellectual Property" means patents, trademarks, service
marks, trade names, copyrights, trade secrets, know-how, inventions,
and similar rights, and all registrations, applications, licenses and
rights with respect to any of the foregoing.

"Permits" means licenses, permits, franchises, consents,
approvals and other authorizations of or from any Governmental Entity.

"Permitted Liens" means (i) liens for ad valorem Taxes not yet
due and payable or (ii) materialman's, mechanic's, repairman's,
employee's, contractor's, operator's or other similar liens,
encumbrances or charges arising in the ordinary course of business
incidental to construction, maintenance or operation of the Company's
or Subsidiary's assets, securing obligations not yet due.

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"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization or Governmental Entity.

"Proceedings" means all proceedings, actions, claims, suits,
investigations and inquiries by or before any arbitrator or
Governmental Entity.

"reasonable best efforts" means a party's best efforts in
accordance with reasonable commercial practice and without the
incurrence of unreasonable expense.

"Securities Act" means the Securities Act of 1933, as amended.

"Subsidiary" means any corporation more than 30 percent of
whose outstanding voting securities, or any partnership, joint
venture, or other entity more than 30 percent of whose total equity
interests is owned, directly or indirectly, by the Company.

"Taxes" means any income taxes or similar assessments or any
sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise or other tax
imposed by any United States federal, state or local, or any foreign
or provincial, taxing authority, including any interest, penalties or
additions attributable thereto.

"Tax Return" means any return or report, including any related
or supporting information, with respect to Taxes.

"United Kingdom Accounting Standards" means generally accepted
accounting principles in the United Kingdom as in effect on the date
of this Agreement.

"U.S. GAAP" means generally accepted accounting principles in
the United States as in effect on the date of this Agreement.

1.2 Certain Additional Defined Terms. In addition to such terms
as are defined in Section 1.1, the following terms are used in this Agreement
as defined in the Sections of this Agreement referenced opposite such terms:

<TABLE>
<CAPTION>
Defined Terms Reference
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Agreement Preamble
Audited Financial Statements Section 4.1(f)
Business Recital 1
Burns Employment Agreement Section 7.1(a)
Buyer Preamble
Buyer Stock Section 3.2
Buyer's Audited Financial Statements Section 4.2(f)
Buyer's Financial Statements Section 4.2(f)
Buyer's Latest Balance Sheet Section 4.2(f)
Buyer's Representatives Section 5.1(a)
Buyer's Unaudited Financial Statements Section 4.2(f)
</TABLE>

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<TABLE>
<S> <C>
Claim Section 8.4(a)
Closing Section 3.1
Closing Date Section 3.1
Company Recital 1
Damages Section 8.1
Dispose of Section 5.5
Dispute Section 10.12
Disputing Parties Section 10.12
EHL Section 7.1(a)
Employment Agreement Amendments Section 7.1(a)
Environmental Laws Section 4.1(o)
Financial Statements Section 4.1(f)
Guarantors Preamble
Hazardous Material Section 4.1(o)
Indemnified Party Section 8.4(a)
Indemnifying Party Section 8.4(a)
Latest Balance Sheet Section 4.1(f)
Pledged Stock Section 8.7
Public Offering Section 6.1(d)
Purchase Price Section 3.2
Purchased Shares Recital 2
Restricted Stock Section 5.5
Security Agreement - Pledge Section 7.1(d)
Sellers Preamble
Seller Stock Section 5.5
Sellers' Representatives Section 5.1(b)
Seitel Section 6.2(e)
Seitel Warrants Section 6.2(e)
Shareholders Agreement Section 7.1(b)
Shares Recital 1
Termination of Registration Rights Agreement Section 7.1(c)
Termination of Shareholders Agreement Section 7.1(b)
Unaudited Financial Statements Section 4.1(f)
Warrant Cancellation Agreement Section 6.2(e)
</TABLE>

2. Purchase and Sale. Subject to the terms and conditions of this
Agreement, Sellers shall sell and deliver to Buyer and Buyer shall purchase
from Sellers all of the Purchased Shares, free and clear of all Encumbrances.

3. Closing; Purchase Price.

3.1 Closing Date. The closing of the transactions provided for in
this Agreement (the "Closing") shall take place at the offices of Brown & Wood,
LLP, One World Trade Center, New York, New York, contemporaneously with the
closing of the Public Offering. The date on which the Closing takes place is
herein referred to as the "Closing Date".

3.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") for the Purchased Shares shall consist of six hundred thousand
(600,000) shares of common stock, $0.01

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<PAGE> 10
par value, of Buyer (the "Buyer Stock"), which shall be issued to Sellers at
the Closing and one hundred U.S. dollars (U.S.$100.00). The number of shares
of Buyer Stock issuable to each Seller and the amount of cash payable to each
Seller are set forth beside such Seller's name on Exhibit 1. At the Closing,
Buyer shall deliver share certificates representing the appropriate number of
shares of Buyer Stock to each Seller and a check in the appropriate amount
payable to each Seller. Sellers acknowledge and agree that the allocation of
the Purchase Price among them as set forth on Exhibit 1 is the sole
responsibility of the Sellers, and Buyer shall have no obligation or other
responsibility with respect to such allocation.

4. Representations and Warranties.

4.1 Representations and Warranties of the Sellers and the
Guarantors. The Sellers and the Guarantors, jointly and severally, represent
and warrant to Buyer, as of the date hereof and as of the Closing Date, as
follows:

(a) Due Organization, Good Standing and Power of Sellers.
Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of the Isle of Man. Each Seller has the
corporate power and authority to own, lease and operate its assets and
to conduct its business as now conducted. Each Seller is duly
authorized, qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which its
right, title or interest in or to its assets, or the conduct of its
business, requires such authorization, qualification or licensing,
except where the failure to so qualify or to be in good standing in
such other jurisdictions would not have a material adverse effect on
any of the assets, the business or the results of operations of such
Seller. No actions or Proceedings to dissolve any Seller are pending.

(b) Due Organization, Good Standing and Power of the Company
and the Subsidiaries. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Cayman
Islands. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its Subsidiaries has the
corporate power and authority to own, lease and operate its assets and
to conduct its business as now conducted. Each of the Company and its
Subsidiaries is duly authorized, qualified or licensed to do business
as a foreign corporation and is in good standing in each jurisdiction
in which its right, title or interest in or to its assets, or the
conduct of its business, requires such authorization, qualification or
licensing, except where the failure to so qualify or to be in good
standing in such other jurisdictions would not have a material adverse
effect on any of the assets, the business or the results of operations
of the Company or such Subsidiary. No actions or Proceedings to
dissolve the Company or any Subsidiary are pending. The Company has
delivered to Buyer true and complete copies of the minute books and
stock transfer books of the Company and each Subsidiary.

(c) Validity of Agreement; Capitalization. This Agreement
has been duly executed and delivered by the Sellers and the Guarantors
and constitutes a legal, valid and binding obligation of each of them,
enforceable against them in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or other similar laws

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<PAGE> 11
affecting creditors' rights generally and by general equity
principles. The Company's authorized capital consists of
U.S.$900,000.00 divided into 900,000,000 ordinary shares of U.S.$0.001
each, of which 61,728 shares are issued and outstanding. The
Purchased Shares have been duly authorized and validly issued, are
fully paid and nonassessable, have not been issued in violation of any
preemptive or similar rights, and have been issued in compliance with
all Applicable Laws. The Purchased Shares, together with the Shares
already owned of record by Buyer or its ultimate parent corporation,
constitute all shares of the outstanding capital stock of the Company.
There are (and as of the Closing Date there will be) outstanding (i)
no shares of capital stock or other voting securities of the Company
other than the 11,728 ordinary shares already owned of record by Buyer
or its ultimate parent corporation and the ordinary shares set forth
on Schedule 4.1(c), (ii) no securities of the Company convertible into
or exchangeable for shares of the capital stock or other voting
securities of the Company, (iii) no options or other rights to acquire
from the Company, and no obligation of the Company to issue or sell,
any shares of its capital stock or other voting securities (other than
the Seitel Warrants and the Employee Warrants, which are to be
cancelled upon consummation of the transactions contemplated herein),
or any securities of the Company convertible into or exchangeable for
such capital stock or voting securities, (iv) no equity equivalents,
interest in the ownership or earnings, or other similar rights of or
with respect to the Company, and (v) no shares of any entity other
than the Subsidiaries owned by the Company. There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire
any shares, securities, options, equity equivalents, interests or
rights. Each Seller is the record and beneficial owner of good, valid
and marketable title to the number of Shares set forth opposite the
name of such Seller on Schedule 4.1(c), free and clear of all
Encumbrances. Upon consummation of the transactions contemplated
hereby, Buyer will acquire good, valid and marketable title to, the
Purchased Shares, free and clear of all Encumbrances, other than (i)
those that may arise by virtue of any actions taken by or on behalf of
Buyer or its affiliates, or (ii) restrictions on transfer that may be
imposed by Applicable Law.

(d) Subsidiaries.

(i) The Company does not own, directly or
indirectly, any capital stock or other equity securities of
any corporation or have any direct or indirect equity or
ownership interest in any other person, other than the
Subsidiaries. Schedule 4.1(d) lists each Subsidiary, the
jurisdiction of incorporation or formation of each Subsidiary
and the authorized (in the case of capital stock) and
outstanding capital stock or other equity interests of each
Subsidiary.

(ii) Except as otherwise indicated on Schedule
4.1(d), all the outstanding capital stock or other equity
interests of each Subsidiary are owned directly or indirectly
by the Company, free and clear of all Encumbrances. All of
the issued and outstanding shares of each Subsidiary have been
duly authorized and validly issued, are fully paid and
nonassessable, have not been issued in violation of any
preemptive or similar rights, and have been issued in
compliance with all Applicable Laws.

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<PAGE> 12
(iii) Except as set forth on Schedule 4.1(d), there
are (and as of the Closing Date there will be) outstanding (A)
no shares of capital stock or other voting securities of any
Subsidiary, (B) no securities of the Company or any Subsidiary
convertible into or exchangeable for shares of capital stock
or other voting securities of any Subsidiary, (C) no options
or other rights to acquire from the Company or any Subsidiary,
and no obligation of the Company or any Subsidiary to issue or
sell, any shares of capital stock or other voting securities
of any Subsidiary or any securities convertible into or
exchangeable for such capital stock or voting securities, and
(D) no equity equivalents, interests in the ownership or
earnings, or other similar rights of or with respect to any
Subsidiary. As of the Closing Date there will be (and, except
as disclosed on Schedule 4.1(d), there are) no outstanding
obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any of the foregoing shares,
securities, options, equity equivalents, interests or rights.

(e) No Approvals or Notices Required; No Conflict with
Instruments. Except as described in Schedule 4.1(e) hereto, the
execution, delivery and performance of this Agreement by the Sellers
and the Guarantors and the consummation by them of the transactions
contemplated hereby (i) will not violate (with or without the giving
of notice or the lapse of time or both) or require any consent,
approval, filing or notice under, any provision of any Applicable Law,
and (ii) will not result in the creation of any Encumbrance on the
Shares under, conflict with, or result in the breach or termination of
any provision of, or constitute a default under, or result in the
acceleration of the performance of the obligations of the Sellers, the
Guarantors, or the Company under, or result in the creation of an
Encumbrance upon any portion of the assets of the Company or any
Subsidiary pursuant to, the Certificate of Incorporation, Articles of
Association, or other charter documents of the Company or any
Subsidiary, or any indenture, mortgage, deed of trust, lease,
licensing agreement, contract, instrument or other agreement to which
the Sellers, the Guarantors, the Company, or any Subsidiaries are a
party or by which any of them or any of their assets is bound or
affected other than violations of and defaults under the agreements
governing the existing indebtedness of the Company and/or its
Subsidiaries owed to The Bank of N.T. Butterfield & Son Ltd. that will
arise from or be caused by the transactions contemplated hereby (which
indebtedness is intended to be repaid with proceeds from the Public
Offering). Except as set forth in the Shareholders Agreement (which
will be terminated at the Closing), the Purchased Shares are
transferable and assignable to Buyer as contemplated by this Agreement
without the waiver of any right of first refusal or the consent of any
other party being obtained, and there exists no preferential right of
purchase in favor of any person with respect to any of the Shares or
the Business or any stock of any of the Subsidiaries or any of the
assets of the Company or any Subsidiary.

(f) Financial Information and Absence of Certain Changes.
The Company has delivered to Buyer accurate and complete copies of (i)
the audited balance sheets of the Company, as of December 31, 1996,
December 31, 1995, and December 31, 1994 and the related audited
statements of profit and loss and cash flows for each of the years
then ended, and the notes and schedules thereto, prepared in
conformity with U.S. GAAP, together with the unqualified reports
thereon of KPMG, independent public accountants (the "Audited
Financial Statements") and (ii) the unaudited balance sheet of the
Company

7
<PAGE> 13
as of March 31, 1997 (the "Latest Balance Sheet"), and the related
unaudited statements of profit and loss and cash flows for the three
month period then ended (together with the Latest Balance Sheet, the
"Unaudited Financial Statements," and the Unaudited Financial
Statements together with the Audited Financial Statements being
referred to herein collectively as the "Financial Statements"). The
Financial Statements (i) represent actual bona fide transactions, (ii)
have been prepared from the books and records of the Company and its
Subsidiaries in conformity with U.S. GAAP, applied on a basis
consistent with preceding years throughout the periods involved,
except that the Unaudited Financial Statements are not accompanied by
notes or other textual disclosure required by U.S. GAAP, and (iii)
accurately, completely and fairly present the financial position of
the Company and its Subsidiaries as of the respective dates thereof
and their results of operations and cash flows for the periods then
ended, except that the Unaudited Financial Statements are subject to
normal year-end adjustments consistent with past practice, which will
not be material in the aggregate. Neither the Company nor any
Subsidiary has any liability or obligation, whether accrued, absolute,
contingent, or otherwise, except for trade payables incurred in the
ordinary course of business since the date of the Latest Balance Sheet
or as set forth on the Latest Balance Sheet or on Schedule 4.1(f).
Except as disclosed on Schedule 4.1(f), since the date of the Latest
Balance Sheet, there has not been nor will there be any change in the
assets, liabilities, financial condition, or operations of the Company
and its Subsidiaries from that reflected in the Financial Statements,
other than changes in the ordinary course of business, none of which
individually or in the aggregate have had or will have a material
adverse effect on such assets, liabilities, financial condition, or
operations. Without limiting any of the foregoing, since December 31,
1996, except as disclosed on Schedule 4.1(f) or as expressly
contemplated herein, neither the Company nor any Subsidiary has:

(i) incurred or become subject to, or agreed to
incur or become subject to, any obligation or liability,
absolute or contingent, except current liabilities incurred in
the ordinary course of business;

(ii) mortgaged, pledged, or subjected to any
Encumbrance (or agreed to do so with respect to) any of its
assets, or discharged or satisfied any Encumbrance, or paid or
satisfied any obligation or liability other than in the
ordinary course of business and consistent with past practice;

(iii) sold or transferred, or agreed to sell or
transfer, any of its assets, or cancelled or agreed to cancel,
any debts due it or claims therefor, except, in each case, for
full consideration and in the ordinary course of business;

(iv) engaged in any transactions adversely affecting
the Business or its assets or suffered any extraordinary
losses or waived any rights of substantial value not in the
ordinary course of business;

(v) purchased or agreed to purchase any securities,
bonds, or any other capital stock or assets of any other
entity with cash or liquid assets, or used cash or liquid
assets to incur debts, for matters not within the ordinary
course of business or not for appropriate corporate purposes;

8
<PAGE> 14
(vi) increased any salaries or granted or agreed to
grant, or paid, or agreed to pay, any bonus, loan, incentive
payment or other item of value or made any other similar
agreement, to or with any of its directors, officers or agents
except as compensation in the ordinary course of business for
appropriate services performed;

(vii) declared or paid any dividend or made any
other distribution to its shareholders (other than
distributions by the Subsidiaries to the Company);

(viii) made or authorized any capital expenditures of
more than $50,000 in the aggregate;

(ix) made or agreed to make any changes in its
Memorandum and Articles of Association, bylaws, or similar
corporate documents, or its capital structure;

(x) entered into any representative,
distributorship, service, installation, support and
maintenance, agency or other similar agreement;

(xi) incurred or suffered any damage, destruction,
or loss, whether or not covered by insurance, materially
affecting the Business or any of its assets;

(xii) made or applied to make any change in
accounting methods or practices, including for Tax purposes;
or

(xiii) entered into any agreement, commitment or
understanding, whether or not in writing, with respect to any
of the foregoing.

(g) Title to Properties; Absence of Liens and Encumbrances.
Each of the Company and the Subsidiaries owns (except as described in
Schedule 4.1(g) hereto) good, marketable and indefeasible title to all
of its assets, free and clear of all Encumbrances, and other
restrictions of any kind and nature, other than (i) the Encumbrances
specifically set forth on Schedule 4.1(g) hereto, or (ii) Permitted
Liens.

(h) Contracts, Permits and Other Data.

(i) Schedule 4.1(h) hereto contains a complete and
correct list of all material contracts, maintenance and
service agreements, purchase commitments for materials and
other services, leases under which the Company or any
Subsidiary is a lessor or lessee and other agreements
pertaining to the Business to which the Company or any
Subsidiary is a party, the benefits of which are enjoyed in
the Business or to which any of the assets of the Company or
any Subsidiary is subject; and

(ii) Schedule 4.1(h) hereto contains a complete and
correct list of all Permits (other than sales and use Tax
Permits and franchise Tax registrations) held by the Company
or any of the Subsidiaries.

9
<PAGE> 15
True and complete copies of all documents (including all amendments
thereto) referred to in Schedule 4.1(h) hereto have been delivered to
or made available for inspection by Buyer. All rights, licenses,
leases, registrations, applications, contracts, commitments, Permits
and other arrangements by the Company or any Subsidiary referred to in
Schedule 4.1(h) are in full force and effect and are valid and
enforceable in accordance with their respective terms, except where
the failure to be in full force and effect and valid and enforceable
would not in the aggregate have a material adverse effect on the
assets of the Company or the applicable Subsidiary, or on its results
of operations. The Company and the Subsidiaries are not in breach or
default in the performance of any material obligation thereunder and
to the best knowledge of the Sellers and the Guarantors, no event has
occurred or has failed to occur whereby any of the other parties
thereto have been or will be released therefrom or will be entitled to
refuse to perform thereunder. Except as set forth in Schedule 4.1(h)
hereto, there are no contracts, agreements, licenses, Permits,
franchises or rights to which the Company or any of the Subsidiaries
is a party which are material to the ownership of any of the Company's
or Subsidiaries' assets or to the conduct of the Business as conducted
by the Company or a Subsidiary. Except as described on Schedule
4.1(h) hereto, each of the Company and the Subsidiaries has and will
have following the Closing, all licenses, Permits, consents,
approvals, authorizations, qualifications and orders of Governmental
Entities required for the conduct of the Business as presently
conducted. There are no outstanding powers of attorney relating to or
affecting the Company or any Subsidiary. Except as described on
Schedule 4.1(h) hereto, neither the Company nor any Subsidiary is a
guarantor or is otherwise liable for any liability or obligation
(including indebtedness) of any other person.

(i) Defects. Except as set forth on Schedule 4.1(i) hereto,
all of the equipment, fixtures and other real property improvements
owned or leased by the Company and the Subsidiaries are in good
operating condition and repair, ordinary wear and tear excepted, and
have been maintained by the Company and the Subsidiaries in accordance
with normal industry practices.

(j) Legal Proceedings. Except as described in Schedule
4.1(j) hereto, (i) there is no litigation, Proceeding, claim or
governmental investigation pending or, to the knowledge of any of the
Sellers or any of the Guarantors, threatened, seeking relief or
damages which, if granted, would adversely affect the Company or any
Subsidiary, any of their assets, or the ability of the Company or any
Subsidiary to use and operate their assets and (ii) neither the
Sellers, the Guarantors, the Company nor any Subsidiary has been
charged with any violation of or, to the knowledge of the Sellers or
the Guarantors, threatened with a charge or violation of, nor are any
of the Sellers or any of the Guarantors aware of any facts or
circumstances that, if discovered by third parties, could give rise to
a charge or a violation of, any provision of Applicable Law or
regulation which charge or violation, if determined adversely to the
Sellers, the Guarantors, the Company, or any Subsidiary, would
adversely affect the Business or the results of operations of the
Company or any Subsidiary or might reasonably be expected to affect
the right of Buyer to own the Purchased Shares or operate the Business
after the Closing Date in substantially the manner in which it is
currently operated. To the best knowledge of the Sellers and the
Guarantors, none of the Company, any Subsidiary, or any director,
officer, employee or agent of the Company or any Subsidiary has,
directly or indirectly,

10
<PAGE> 16
paid or delivered any fee, commission or other sum of money or item of
property however characterized to any broker, finder, agent,
government official or other person, in the United States or any other
country, in any matter related to the Business of the Company or any
Subsidiary, which the Company, any such Subsidiary, or any such
director, officer, employee or agent knows or has reason to believe to
have been illegal under any Applicable Law.

(k) Insurance. Schedule 4.1(k) hereto sets forth a list and
brief description of the insurance policies relating to the insurable
properties of the Company and the Subsidiaries and the conduct of the
Business of the Company and the Subsidiaries. All premiums due and
arising thereon have been paid and such policies are in full force and
effect.

(l) Intellectual Property. Except as described on Schedule
4.1(l) hereto, the Company and the Subsidiaries own and possess all of
the Intellectual Property needed for the conduct of the Business as
presently conducted. Except as described on Schedule 4.1(l) hereto,
to the best knowledge of the Sellers and the Guarantors, there is no
basis for the assertion by any person of any claim against Buyer, the
Company, or any Subsidiary with respect to the use by the Company or
any Subsidiary of any of the Intellectual Property. Except as
described on Schedule 4.1(l) hereto, none of the Sellers, any
Subsidiary, or the Company is infringing or violating, and to the best
knowledge of the Sellers and the Guarantors, none of the Sellers, any
Subsidiary, or the Company have infringed or violated, any rights of
any person with respect to any of the Intellectual Property, and the
Intellectual Property is not subject to any order, injunction or
agreement respecting its use.

(m) Conduct of Business in Compliance with Regulatory and
Contractual Requirements. Except as described on Schedule 4.1(m)
hereto, the Company and the Subsidiaries have conducted the Business
so as to comply with all Applicable Laws, rights of concession,
licenses, know-how or other proprietary rights of others, the failure
to comply with which would individually or in the aggregate have a
material adverse effect on the Business or the results of operations
of the Company or any Subsidiary.

(n) Certain Fees. None of the Company, any Subsidiary, or
their officers, directors or employees, the Guarantors, or the
Sellers, on behalf of the Company, any Subsidiary, or themselves, has
employed any broker or finder or incurred any other liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby.

(o) Environmental, Health and Safety Compliance. Except as
described on Schedule 4.1(o) hereto,

(i) the Company and the Subsidiaries are, and have
continuously been, in compliance with all Environmental Laws;

(ii) all material notices, Permits, licenses or
similar authorizations, if any, required to be obtained or
filed under any Environmental Law in connection with the
operation of the Business have been obtained or filed; and

11
<PAGE> 17
(iii) there are no past, pending or, to the
knowledge of the Sellers or the Guarantors, threatened
investigations, Proceedings or claims against the Company or
any Subsidiary relating to the presence, release or
remediation of any Hazardous Material or for non-compliance
with any Environmental Law.

For purposes of this Agreement, the term "Environmental Laws" shall
mean, as to any given asset or operation of the Company or a
Subsidiary, all applicable laws, statutes, ordinances, rules and
regulations of any Governmental Entity pertaining to protection of the
environment in effect as of the Closing Date. For purposes of this
Agreement, the term "Hazardous Material" shall mean any substance
which is listed or defined as a hazardous substance, hazardous
constituent or solid waste pursuant to any Environmental Law.

(p) Inventories. The inventories and work in progress
reflected on the Latest Balance Sheet and those items of inventory
constructed or acquired by the Company or any Subsidiary and the work
performed by the Company or any Subsidiary after the date of the
Latest Balance Sheet, except to the extent disposed of or billed since
such date in the ordinary conduct of the Business by the Company or
such Subsidiary, are, in the case of such inventory, in good,
merchantable and usable condition and, in the case of such work in
progress, represent work completed in accordance with the requirements
of any applicable contract, and in each case, have been reflected on
the books of the Company and the applicable Subsidiary in accordance
with U.S. GAAP. Except as set forth on Schedule 4.1(g) hereto, all
such inventories and work in progress are owned by the Company or a
Subsidiary free and clear of any liens or Encumbrances.

(q) Books and Records. All of the books and records of the
Company and each Subsidiary have been prepared and maintained in
accordance with good business practices and, where applicable, in
conformity with United Kingdom Accounting Standards and, to the best
of the Guarantors' and the Sellers' knowledge, in compliance with all
Applicable Laws and other requirements.

(r) Taxes. The Company, the Subsidiaries, and the Sellers
have caused to be timely filed with appropriate federal, state, local
and other Governmental Entities all tax returns required to be filed
with respect to the Company, the Subsidiaries, or the conduct of the
Business, and have paid, caused to be paid, or adequately reserved in
the Financial Statements all Taxes due or claimed to be due from or
with respect to such tax returns. Except as set forth on Schedule
4.1(r), no extension of time has been requested or granted with
respect to the filing of any Tax Return or payment of any Taxes, and
no issue has been raised or adjustment proposed by the Internal
Revenue Service or any other taxing authority in connection with any
of the Company's or the Subsidiaries' tax returns which has not yet
been resolved or paid, and there are no outstanding agreements or
waivers that extend any statutory period of limitations applicable to
any federal, state or local tax returns that include or reflect the
use and operation of the Company or any Subsidiary or the conduct of
the Business. Except as set forth on Schedule 4.1(r), neither the
Sellers, the Guarantors, any Subsidiary, nor the Company has received
any notice of deficiency, assessment, audit, investigation, or
proposed deficiency, assessment or audit with respect to the Company
or any Subsidiary or the conduct of the Business from any taxing
authority, and neither the Sellers nor the Guarantors have any
knowledge

12
<PAGE> 18
of any such deficiency, assessment, audit, investigation or proposed
deficiency, assessment or audit. Neither the Company nor any
Subsidiary has taken any action which is not in accordance with past
practice that could defer any liability for Taxes from any taxable
period ending on or before the Closing Date to any taxable period
ending after such date. Neither the Company nor any Subsidiary has
consented to the application of Section 341(f) of the Code.

(s) Additional Information. Schedule 4.1(s) hereto contains
accurate lists and summary descriptions of the following:

(i) the name and address of every bank and other
financial institution at which the Company or any of the
Subsidiaries maintains an account (whether checking, savings
or otherwise), lock box or safe deposit box for the Business,
and the account numbers and names of persons having signing
authority or other access thereto;

(ii) the names and titles of and current hourly
rates or salaries for all employees of the Company and each
Subsidiary, together with the vacation and severance benefits
to which each such person is entitled; and

(iii) all names under which the Company and each
Subsidiary has conducted any business or, which it has
otherwise used.

(t) Labor Matters. Neither the Company nor any Subsidiary
has suffered any strike, slowdown, picketing or work stoppage by any
union or other group of employees. Neither the Company nor any
Subsidiary is a party to any collective bargaining agreement; no such
agreement determines the terms and conditions of employment of any
employee of the Company or any Subsidiary; no collective bargaining
agent has been certified as a representative of any of the employees
of the Company or any Subsidiary; and no representation campaign or
election is now in progress with respect to any of the employees of
the Company or any Subsidiary. None of the Sellers, the Guarantors,
any Subsidiary, or the Company has taken or failed to take any action
that would cause the Company or any Subsidiary to incur any liability
in the event the Company or any Subsidiary chooses to dismiss from its
employment any of the its employees following the Closing (other than
pursuant to the terms of the Employment Agreement Amendments). The
Company and each Subsidiary have complied in all material respects
with all laws relating to the employment of labor in the conduct of
the Business, including provisions thereof relating to wages, hours,
equal opportunity and the payment of pension contributions, social
security and other Taxes.

(u) Employee Benefit Plans and Arrangements.

(i) Schedule 4.1(u) hereto lists all employee
benefit plans and collective bargaining, labor and employment
agreements and severance agreements or other similar
arrangements, whether or not in writing (together with all
documents or instruments establishing or constituting any
related trust, annuity contract or other funding instrument)
to which the Company or any Subsidiary is (or ever has been) a
party or by which the Company or any Subsidiary is (or ever
has been)

13
<PAGE> 19
bound, including, without limitation, a) any profit-sharing,
deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, or
incentive compensation plan, agreement or arrangement, b) any
welfare benefit plan, agreement or arrangement or any plan,
agreement or arrangement providing for "fringe benefits" or
perquisites to employees, officers, directors or agents,
including but not limited to benefits relating to automobiles,
clubs, vacation, child care, parenting or maternity leave,
sabbaticals, sick leave, medical expenses, dental expenses,
disability, accidental death or dismemberment,
hospitalization, life insurance and other types of insurance,
c) any employment agreement, or d) any other "employee benefit
plan" (within the meaning of Section 3(3) of ERISA).

(ii) The Company and the Subsidiaries have delivered
to Buyer true, correct and complete copies of all plan
documents and/or contracts (including, where applicable, any
documents and/or instruments establishing or constituting any
related trust, annuity contract or funding instrument) and
summary plan descriptions with respect to the plans,
agreements and arrangements listed in Schedule 4.1(u) hereto,
or summary descriptions of any such plans, agreements or
arrangements not otherwise in writing. The Company and the
Subsidiaries have provided Buyer with true, correct and
complete copies of all filings made with any Governmental
Entity with respect to each plan identified in Schedule 4.1(u)
hereto that was required to make such filings for the plan
year immediately preceding the Closing Date. Each of such
filings is accurate and complete as of the dates specified
therein. In addition, the Company and the Subsidiaries have
provided Buyer with a) true, correct and complete copies of
any and all written communications notices or claims that the
Sellers, the Guarantors, any Subsidiary, or the Company has
received from any Governmental Entity concerning any plan,
arrangement or agreements identified in Schedule 4.1(u) hereto
that give notice of possible imposition of a fine, penalty or
liability with respect to such plan, arrangement or agreement
and b) true, correct and complete copies of any complaints,
petitions, claims or other notices of liability relating to
any such plan, arrangement or agreement that have been filed
by any other party.

(iii) For each of the plans, agreements and
arrangements identified in Schedule 4.1(u) hereto, there are
no negotiations, demands or proposals that are pending or have
been made since the dates of the respective items furnished
pursuant to Section 4.1(u)(ii) hereto which concern matters
now covered, or that would be covered, by plans, agreements or
arrangements of the type described in this Section, except as
expressly contemplated in this Agreement.

(iv) The Company and each of the plans, agreements
and arrangements identified in Schedule 4.1(u) hereto are and
have at all times been operated in compliance in all material
respects with all Applicable Laws. There has been no act or
omission by the Company, any Subsidiary, any Guarantor, or any
Seller or any ERISA affiliate in connection with any of the
plans, agreements and arrangements identified in Schedule
4.1(u) hereto that has given rise to or may give rise to
fines, penalties, Taxes, or related charges under any
Applicable Law. The Company and the Subsidiaries have
performed all of their respective

14
<PAGE> 20
obligations under all such plans, agreements and arrangements
including, but not limited to, the full payment when due of
all amounts required to be made as contributions thereto or
otherwise, and no transaction has occurred which could give
rise to a material liability under any Applicable Law. There
are no actions, suits or claims (other than routine claims for
benefits) pending or, to the knowledge of the Sellers or the
Guarantors, threatened against such plans or their assets, or
arising out of such plans, agreements or arrangements, and, to
the best knowledge of the Sellers and the Guarantors, no facts
exist which could give rise to any such actions, suits or
claims that might have a material adverse effect on such
plans, agreements or arrangements.

(v) Except to the extent required by Applicable Law
or pursuant to the Horizon Pension Plan, neither the Company
nor any Subsidiary provides health or welfare benefits
(through the purchase of insurance or otherwise) for any
retired or former employees.

(vi) Except as specifically identified in Schedule
4.1(u) hereto, a) neither the Company nor any Subsidiary has
or has at any time previously maintained, a stock bonus,
pension or profit-sharing plan which is or was intended to
meet the requirements of Section 401(a) of the Code; b)
neither the Company nor any Subsidiary has or has at any time
previously maintained, a plan subject to Title IV of ERISA;
and c) no such plan is or ever has been a "multiemployer plan"
(within the meaning of Section 3(37) of ERISA).

(v) Transactions with Affiliates. None of the Sellers or the
Guarantors nor any associate of any such Seller or Guarantor is
currently, directly or indirectly, a party to any transaction with the
Company or any Subsidiary, including any agreement, arrangement or
understanding, written or oral, providing for the employment of,
furnishing of services by, rental of real or personal property from,
or otherwise requiring payment to any such Seller, Guarantor or
associate, except for the Employment Agreement Amendments, the Burns
Employment Agreement and the employment agreements amended thereby or
as disclosed on Schedule 4.1(v). None of the Sellers or the
Guarantors nor any associate of any such Seller or Guarantor owns,
directly or indirectly, any interest in, or serves as a director,
officer, or employee of, any customer, supplier or competitor of the
Company or any Subsidiary. For the purposes of this Section 4.1(v)
only, an "associate" of any Seller or Guarantor means a member of the
immediate family of such Seller or Guarantor or any corporation,
partnership, trust or other entity in which such Seller or Guarantor
has a substantial ownership or beneficial interest or is a director,
officer, partner or trustee, or person holding a similar position,
excluding Buyer.

(w) U.S. Assets and Revenues. The aggregate book value as of
December 31, 1996 of all assets located in the United States held by
the Company and its Subsidiaries was less than $15 million, and the
aggregate amount of sales in or into the United States by the Company
and its Subsidiaries for the fiscal year ended December 31, 1996 was
less than $25 million, as such asset value and sales amounts are
required to be calculated pursuant to Rule Section 802.50 and the
other applicable provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

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<PAGE> 21
(x) Investment Representations.

(i) Each Seller, and, to the extent that a Guarantor
may be deemed to beneficially own the Buyer Stock being
acquired by a Seller, such Guarantor, is acquiring the Buyer
Stock for its own account for investment and not with a view
to, or for sale or other disposition in connection with, any
distribution of all or any part thereof, except pursuant to an
applicable exemption under the Securities Act or in an
offering covered by an effective registration statement under
the Securities Act relating to the Buyer Stock. In acquiring
the Buyer Stock, each Seller and Guarantor is not offering or
selling, and will not offer or sell, for Buyer in connection
with any distribution of the Buyer Stock, and no Seller or
Guarantor has a participation or will participate in any such
undertaking or in any underwriting of such an undertaking,
except in compliance with applicable federal and state
securities laws.

(ii) Each Seller and Guarantor acknowledges that it
or its representatives have been furnished with substantially
the same kind of information regarding Buyer and its business,
assets, results of operations and financial condition as would
be contained in a registration statement prepared in
connection with a public sale of the Buyer Stock. Each Seller
and Guarantor further represents that it has had an
opportunity to ask questions of and receive answers from Buyer
regarding Buyer and its business, assets, results of
operations and financial condition and the terms and
conditions of the issuance of the Buyer Stock. The foregoing,
however, shall not limit or modify the representations and
warranties of Buyer in Section 4.2, and shall not limit the
disclosure requirements of applicable federal and state
securities laws.

(iii) Each Seller and Guarantor acknowledges that it
is able to fend for itself, can bear the economic risk of its
investment in the Buyer Stock, and has such knowledge and
experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in
the Buyer Stock.

(iv) Each Seller and Guarantor understands that the
Buyer Stock, when issued to each Seller, will not have been
registered pursuant to the Securities Act or any applicable
state securities laws (except insofar as the Sellers or
Guarantors constitute selling stockholders upon exercise of
the over- allotment options granted to the underwriters in
connection with the Public Offering), that the Buyer Stock
will be characterized as "restricted securities" under federal
securities laws, and that under such laws and applicable
regulations the Buyer Stock cannot be sold or otherwise
disposed of without registration under the Securities Act or
an exemption therefrom. In this connection, each Seller and
Guarantor represents that it is familiar with Rule 144
promulgated under the Securities Act, as currently in effect,
and understands the resale limitations imposed thereby and by
the Securities Act. Stop transfer instructions may be issued
accordingly to the transfer agent for the Buyer Stock.

(v) It is agreed and understood by each Seller and
Guarantor that the certificates representing the Buyer Stock
shall each conspicuously set forth on the

16
<PAGE> 22
face or back thereof, in addition to any legends required by
Applicable Law or other agreement, a legend in substantially
the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH
SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT, OR (ii) IN ACCORDANCE WITH
RULE 144 UNDER SUCH ACT, UNLESS THE CORPORATION
RECEIVES A WRITTEN OPINION OF COUNSEL, WHICH OPINION
AND COUNSEL ARE SATISFACTORY TO THE CORPORATION, TO
THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

(y) Disclosure. No representation or warranty in this
Section 4.1 or in any Schedule or Exhibit to this Agreement, or in any
written statement, certificate or other document furnished to Buyer
contains or will contain any untrue statement of a material fact or
omits or will omit a material fact necessary to make the statements
therein not misleading. Except for facts generally affecting
companies engaged in the seismic data acquisition business, there is
no fact known to the Sellers or the Guarantors that has, or in the
future may have, a material adverse effect on the Business or the
results of operations of the Company or any Subsidiary, which fact has
not been set forth in this Agreement or in the Schedules hereto.

4.2 Representations and Warranties of Buyer. Buyer represents and
warrants to the Sellers, as of the date hereof and as of the Closing Date, as
follows:

(a) Due Organization; Good Standing and Power. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware. Buyer has all requisite corporate power
and authority to enter into this Agreement and each other agreement
expressly provided for herein, to perform its respective obligations
hereunder and thereunder and to own, lease and operate its assets and
to conduct its business as now conducted.

(b) Authorization and Validity of Agreement. The execution,
delivery and performance of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby has been
duly authorized by all requisite corporate action on its part. No
other corporate action is necessary for the authorization, execution,
delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by general equity
principles.

(c) No Conflict with Instruments. The execution, delivery
and performance of this Agreement by Buyer and the consummation by it
of the transactions contemplated hereby (i) will not violate (with or
without the giving of notice or the lapse of time or

17
<PAGE> 23
both), or require any consent, approval, filing or notice under any
provision of any law, rule or regulation, court order, judgment or
decree applicable to Buyer, and (ii) will not result in the creation
of any Encumbrance on the Buyer Stock under, conflict with, or result
in the breach or termination of any provision of, or constitute a
default under, or result in the acceleration of the performance of the
obligations of Buyer, under, the Certificate of Incorporation or
bylaws of Buyer or any indenture, mortgage, deed of trust, lease,
licensing agreement, contract, instrument or other agreement to which
Buyer is a party or by which Buyer or any of its assets or properties
is bound.

(d) Authorized Capital; Buyer Stock. Buyer's authorized
capital consists of 25,000,000 shares of Common Stock, par value $0.01
per share, 3,400,000 of which are issued and outstanding as of the
date hereof, and 5,000,000 shares of Preferred Stock, par value $0.01
per share, none of which are currently issued and outstanding as of
the date hereof. As of the Closing Date, no shares of Preferred Stock
will be issued and outstanding, and a total of between 8,000,000 and
8,025,000 shares of Common Stock will be issued and outstanding,
comprised of the 3,400,000 shares issued and outstanding as of the
date hereof, the 600,000 shares of Buyer Stock to be issued to Sellers
hereunder, 4,000,000 shares to be issued in the Public Offering, and
up to 25,000 shares to be issued to Jay Silverman at the Public
Offering price. There are (and as of the Closing Date there will be)
outstanding (i) no securities of Buyer convertible into or
exchangeable for shares of the capital stock or other voting
securities of the Company, (ii) no options or other rights to acquire
from Buyer, and no obligation of Buyer to issue or sell, any shares of
its capital stock or other voting securities (other than the options
and warrants to purchase Common Stock of Buyer disclosed or to be
disclosed in the registration statement filed with the Securities and
Exchange Commission in connection with the Public Offering, including
both over-allotment options and options granted to officers,
directors, and key employees), or any securities of Buyer convertible
into or exchangeable for such capital stock or voting securities, and
(iii) no equity equivalents, interest in the ownership or earnings, or
other similar rights of or with respect to Buyer. There are no
outstanding obligations of Buyer to repurchase, redeem or otherwise
acquire any shares, securities, options, equity equivalents, interests
or rights. The Buyer Stock has been duly authorized for issuance and,
if and when issued and delivered by the Buyer in accordance with the
provisions of this Agreement, will be validly issued, fully paid, and
nonassessable. The Buyer has applied for quotation of the Buyer Stock
on the Nasdaq National Market System. The issuance of the Buyer Stock
under this Agreement is not subject to any preemptive or similar
rights. Upon consummation of the transactions contemplated hereby,
each Seller will acquire good, valid and marketable title to the
shares of Buyer Stock issued to such Seller hereunder, free and clear
of all Encumbrances, other than (i) those that may arise by virtue of
any actions taken by or on behalf of any Seller or its affiliates, or
(ii) restrictions on transfer that may be imposed by Applicable Law.

(e) Certain Fees. Neither Buyer nor any of its respective
officers, directors or employees, on behalf of it, has employed any
broker or finder or incurred any other liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby.

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<PAGE> 24
(f) Financial Information and Absence of Certain Changes.
The Buyer has delivered to Sellers accurate and complete copies of (i)
the audited balance sheets of the Buyer as of December 31, 1996,
December 31, 1995, and December 31, 1994, and the related audited
statements of profit and loss and cash flows for each of the years
then ended, and the notes and schedules thereto, prepared in
conformity with U.S. GAAP, together with the unqualified reports
thereon of Arthur Andersen LLP, independent public accountants (the
"Buyer's Audited Financial Statements") and (ii) the unaudited balance
sheet of the Buyer as of March 31, 1997 (the "Buyer's Latest Balance
Sheet"), and the related unaudited statements of profit and loss and
cash flows for the three month period then ended (together with the
Buyer's Latest Balance Sheet, the "Buyer's Unaudited Financial
Statements," and the Buyer's Unaudited Financial Statements together
with the Buyer's Audited Financial Statements being referred to herein
collectively as the "Buyer's Financial Statements"). The Buyer's
Financial Statements (i) represent actual bona fide transactions, (ii)
have been prepared from the books and records of the Buyer and its
subsidiaries in conformity with U.S. GAAP, applied on a basis
consistent with preceding years throughout the periods involved,
except that the Buyer's Unaudited Financial Statements are not
accompanied by notes or other textual disclosure required by U.S.
GAAP, and (iii) accurately, completely and fairly present the
financial position of the Buyer and its subsidiaries as of the
respective dates thereof and their results of operations and cash
flows for the periods then ended, except that the Buyer's Unaudited
Financial Statements are subject to normal year-end adjustments
consistent with past practice, which will not be material in the
aggregate. Neither the Buyer nor any of its current subsidiaries has
any material liability or obligation, whether accrued, absolute,
contingent, or otherwise, except for trade payables incurred in the
ordinary course of business since the date of the Buyer's Latest
Balance Sheet or as set forth on the Buyer's Latest Balance Sheet or
as contemplated herein or in connection with the Public Offering.
Since the date of the Buyer's Latest Balance Sheet, there has not been
nor will there be any material change in the assets, liabilities,
financial condition, or operations of the Buyer and its subsidiaries
from that reflected in the Financial Statements, other than (i)
changes in the ordinary course of business, none of which individually
or in the aggregate have had or will have a material adverse effect on
such assets, liabilities, financial condition, or operations, or (ii)
as contemplated herein or in connection with the Public Offering.

(g) Legal Proceedings. There is no litigation, Proceeding,
claim or governmental investigation pending or, to the knowledge of
the Buyer or any of its subsidiaries, threatened, seeking relief or
damages which, if granted, would materially adversely affect the Buyer
or any of its subsidiaries, any of their assets, or the ability of the
Buyer or any of its subsidiaries to use and operate their assets.
Neither the Buyer nor any of its subsidiaries has been charged with
any violation of or, to the knowledge of the Buyer or its
subsidiaries, threatened with a charge or violation of, nor is the
Buyer or any of its subsidiaries aware of any facts or circumstances
that, if discovered by third parties, could give rise to a charge or a
violation of, any provision of Applicable Law or regulation which
charge or violation, if determined adversely to the Buyer or its
subsidiaries, would materially adversely affect their business or
results of operations.

(h) Disclosure. No representation or warranty in this
Section 4.2 or in any Schedule or Exhibit to this Agreement, or in any
written statement, certificate or other

19
<PAGE> 25
document furnished to Sellers contains or will contain any untrue
statement of a material fact or omits or will omit a material fact
necessary to make the statements therein not misleading. Except for
facts generally affecting companies engaged in the seismic data
acquisition business, there is no fact known to the Buyer that has, or
in the future may have, a material adverse effect on the business or
the results of operations of the Buyer, which fact has not been or
will not be set forth in the registration statement filed with the
Securities and Exchange Commission in connection with the Public
Offering.

(i) Current Ownership of Company Shares. Buyer, or its
ultimate parent corporation, is the record owner of 11,728 ordinary
shares of the Company.

4.3 Survival of Representations and Warranties. Subject to
Section 8.5, the respective representations and warranties of the parties
contained herein shall survive the Closing.

5. Agreements and Covenants of the Parties.

5.1 Access to Information.

(a) Until the Closing, Sellers and Guarantors shall, and
shall cause the Company to:

(i) furnish to Buyer and their employees, officers,
accountants, attorneys, agents, and other authorized
representatives ("Buyer's Representatives") all financial,
operating and other data and information concerning the
Company and its Subsidiaries as Buyer or Buyer's
Representatives shall from time to time reasonably request;

(ii) afford Buyer and Buyer's Representatives
reasonable access to the Company's offices, properties, books,
records, contracts, and documents (including tax returns filed
and those in preparation) during ordinary business hours; and

(iii) give Buyer and Buyer's Representatives the
opportunity to ask questions of, and receive answers from
authorized representatives of Sellers, Guarantors and the
Company.

No investigations by Buyer or Buyer's Representatives shall reduce or
otherwise affect the obligations or liabilities of Sellers or
Guarantors with respect to any representations, warranties, covenants,
or agreements made herein or in any other document executed and
delivered in connection with the transactions contemplated hereby.
Sellers and Guarantors will cooperate with Buyer and Buyer's
Representatives in the preparation of any documents or other materials
that may be required by any governmental or regulatory agency.

(b) Until the Closing, Buyer shall:

(i) furnish to Sellers and their accountants,
attorneys, agents, and other authorized representatives
("Sellers' Representatives") all financial, operating and

20
<PAGE> 26
other data and information concerning Buyer as Seller or
Sellers' Representatives shall from time to time reasonably
request;

(ii) afford Sellers and Sellers' Representatives
access to Buyer's offices, properties, books, records,
contracts, and documents; and

(iii) give Sellers and Sellers' Representatives the
opportunity to ask questions of, and receive answers from
authorized representatives of Buyer.

No investigations by Sellers or Sellers' Representatives shall reduce
or otherwise affect the obligations or liabilities of Buyer with
respect to any representations, warranties, covenants, or agreements
made herein or in any other document executed and delivered in
connection with the transactions contemplated hereby. Buyer and
Buyer's Representatives will cooperate with Sellers and Guarantors in
the preparation of any documents or other materials that may be
required by any governmental or regulatory agency.

5.2 Conduct of Operations Pending Closing. From the date hereof
until the Closing, except as otherwise permitted or contemplated by this
Agreement, Sellers and Guarantors will cause the Company and its Subsidiaries
to:

(a) conduct their operations only in the usual, regular and
ordinary manner and use their reasonable best efforts to maintain and
preserve their present business organization intact and to keep
available the services of their present officers and employees and
preserve their present relationships with suppliers, customers and
other Persons having business relations with them;

(b) maintain their books, accounts, and records on a basis
consistent with past practices and in a businesslike manner in
accordance with sound commercial practice, and will not institute or
introduce any new methods of purchase, sale, lease, management,
accounting, billing, or operation that are not consistent with their
past practices;

(c) not increase the compensation payable or to become
payable to any officer, employee, or agent except as specifically
contemplated hereby, or change any insurance, pension, or other
employee benefit plan, or pay any commission or bonus to any of such
officers, employees, or agents, other than normal increases or
payments consistent with past business practices or as contemplated by
the Employment Agreement Amendments or the Burns Employment Agreement;

(d) not incur or agree to incur any obligation or liability
(whether absolute, accrued, contingent or otherwise), other than
obligations and liabilities incurred in the ordinary course of
business consistent with past business practices;

(e) not assume, guarantee, endorse, or otherwise become
responsible for the liabilities or obligations of any other Person;

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<PAGE> 27
(f) not create, assume or permit to exist any Lien upon any
of their Assets other than Permitted Liens and the Liens described in
Schedule 4.1(g);

(g) not sell, assign, lease, or otherwise transfer or dispose
of any of their Assets, except in the ordinary course of business
consistent with past business practices;

(h) not incur any capital expenditures other than normal
items in the ordinary course of business consistent with past business
practices;

(i) not enter into any other contract or commitment or engage
in any other transaction not in the usual and ordinary course of its
business consistent with past business practices;

(j) maintain all their tangible property in good operating
order, condition and repair, ordinary wear and tear excepted;

(k) maintain in full force and effect insurance coverage
substantially equivalent to the coverage provided by the policies of
insurance described in Schedule 4.1(k);

(l) not declare a dividend or distribution of any monies,
properties or assets of the Company to its shareholders;

(m) comply in all material respects with all Applicable Laws;

(n) not make any loans or advances to or enter into any
agreements with any Affiliates other than as specifically contemplated
herein; and

(o) not take any other action that would cause or permit the
representations and warranties of the Sellers and the Guarantors made
in Section 4.1 hereof to be inaccurate at the time of Closing or
preclude the Sellers and the Guarantors from making such
representations and warranties at and as of the time of the Closing.

Notwithstanding the foregoing, Buyer acknowledges and agrees that, prior to
Closing, the Company may pay any indebtedness for borrowed money incurred prior
to the date hereof in the ordinary course of business or on or after the date
hereof in accordance with this Section 5.2 in accordance with its scheduled
amortization.

5.3 Conduct of Operations of Buyer Pending Closing. From the date
hereof until the Closing, except as otherwise permitted or contemplated by this
Agreement, as disclosed or to be disclosed in the registration statement filed
with the Securities and Exchange Commission in connection with the Public
Offering, or otherwise in connection with the Public Offering, Buyer will:

(a) conduct its operations only in the usual, regular and
ordinary manner;

(b) not enter into any material contract or commitment with
its affiliates;

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<PAGE> 28
(c) not declare, make or pay any dividend or distribution of
monies, properties, or other assets of Buyer to its stockholders; and

(d) not take any action that would cause or permit the
representations and warranties of Buyer made in Section 4.2 hereof to
be inaccurate at the time of Closing or preclude the Buyer from making
such representations and warranties at and as of the time of the
Closing.

5.4 Consents. Sellers shall use all reasonable efforts to obtain,
when required, the agreement or consent of all third parties to their
consummation of the transactions contemplated herein required by the terms of
any contracts or agreements to which the Company or any of the Subsidiaries are
party or by which their assets are bound.

5.5 Restrictions on Transfer of Stock. Each Seller hereby
covenants and agrees that it will not, directly or indirectly, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose of (collectively, "Dispose of") (i) any shares of the
Buyer Stock other than shares of the Buyer Stock sold to the Underwriters in
connection with the over-allotment options granted in connection with the
Offering (the "Restricted Stock") prior to the first anniversary of the Closing
Date or (ii) more than 50% of the Restricted Stock during the period beginning
on the first anniversary of the Closing Date and ending on the second
anniversary of the Closing Date; provided, however, that the Sellers may pledge
the Restricted Stock in connection with a bona fide lending transaction. Each
Guarantor hereby covenants and agrees that it will not, directly or indirectly,
Dispose of (i) any shares of the capital stock of the applicable Seller (the
"Seller Stock") prior to the first anniversary of the Closing Date or (ii) more
than 50% of the Seller Stock during the period beginning on the first
anniversary of the Closing Date and ending on the second anniversary of the
Closing Date; provided, however, that the Guarantors may pledge the Seller
Stock in connection with a bona fide lending transaction. Notwithstanding the
foregoing, any Seller may transfer the Restricted Stock to the Guarantor who
owns all of the issued and outstanding shares of such Seller, provided that
such Guarantor may not Dispose of (i) any such Restricted Stock prior to the
first anniversary of the Closing Date or (ii) more than 50% of the Restricted
Stock during the period beginning on the first anniversary of the Closing and
ending on the second anniversary of the Closing; provided, however, that the
Guarantors may pledge the Restricted Stock in connection with a bona fide
lending transaction.

6. Conditions to Closing, Termination.

6.1 Buyer's Conditions to Closing. The obligations of Buyer to
purchase the Purchased Stock from Sellers and of Buyer to perform its
obligations under this Agreement are, at the option of the Buyer, subject to
the satisfaction on or before the Closing Date of the conditions set forth
below, any of which may be waived by Buyer in writing; provided, however,
Buyer's election to proceed with the Closing of the transactions contemplated
hereby shall not be deemed a waiver of any breach of any representation,
warranty or covenant herein, whether or not known to Buyer or existing on the
Closing Date, and such action shall not prejudice Buyer's right to recover
damages for such breach.

(a) Representations and Warranties. The representations and
warranties of Sellers and Guarantors contained in this Agreement shall
be true and correct (if the same

23
<PAGE> 29
is already qualified by a materiality standard) or shall be true and
correct in all material respects (if the same is not already qualified
by a materiality standard) on the date hereof, and shall be true and
correct (if the same is already qualified by a materiality standard)
or true and correct in all material respects on the Closing Date (if
the same is already qualified by a materiality standard) with the same
force and effect as if they had been made on and as of the Closing
Date.

(b) Covenants. The agreements and covenants of Sellers and
Guarantors to be performed or complied with on or before the Closing
Date pursuant to this Agreement shall have been performed or complied
with by them in all material respects.

(c) Material Adverse Change. No change having or reasonably
expected to have a Material Adverse Effect on the assets, Business,
condition (financial or otherwise) or operations of the Company and
its Subsidiaries shall have occurred since March 31, 1997.

(d) Public Offering. Contemporaneously with the Closing,
there shall occur the consummation of a registered public offering of
approximately 4,000,000 shares of the Buyer's common stock (the
"Public Offering").

(e) Third Party Consents and Approvals. The consents and
approvals of all third parties necessary to transfer the Purchased
Shares to Buyer shall have been obtained (other than the consent or
approval of the Bank of N. T. Butterfield and Son Ltd.).

(f) Absence of Restraint. No order to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the
transactions in connection herewith shall have been entered and, on
the Closing Date, there shall not be any pending or threatened
litigation in any court, or any proceeding by or before any
governmental commission, board or agency, with a view to seeking to
restrain or prohibit consummation of the transactions contemplated
hereby or in which divestiture, recision or significant damages are
sought in connection with the transactions contemplated hereby and no
investigation by any governmental agency shall be pending or
threatened that might result in any such litigation or other
proceeding.

(g) Certificates. Sellers and Guarantors shall have
delivered to Buyer one or more certificates dated as of the Closing
Date executed by Sellers and Guarantors (i) certifying to the effect
set forth in Sections 6.1(a) and (b) hereof and (ii) certifying to all
corporate action taken by Sellers authorizing the transactions
contemplated hereby, copies of which shall be attached to such
certificate.

6.2 Sellers' and Guarantors' Conditions to Closing. The
obligations of Sellers to transfer the Purchased Stock and of Sellers and
Guarantors to perform their obligations under this Agreement are, at the option
of the Sellers and Guarantors, subject to the satisfaction on or before the
Closing Date of the conditions set forth below, any of which may be waived by
Sellers and Guarantors in writing; provided, however, Sellers' and Guarantors'
election to proceed with the Closing of the transactions contemplated hereby
shall not be deemed a waiver of any breach of any representation, warranty or
covenant herein, whether or not known to

24
<PAGE> 30
Sellers or Guarantors or existing on the Closing Date, and such action shall
not prejudice Sellers' or Guarantors' right to recover damages for such breach.

(a) Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and
correct (if the same is already qualified by a materiality standard)
or shall be true and correct in all material respects (if the same is
not already qualified by a materiality standard) on the date hereof,
and shall be true and correct (if the same is already qualified by a
materiality standard) or true and correct in all material respects on
the Closing Date (if the same is already qualified by a materiality
standard) with the same force and effect as if they had been made on
and as of the Closing Date.

(b) Covenants. The agreements and covenants of Buyer to be
performed or complied with on or before the Closing Date pursuant to
this Agreement shall have been performed or complied with in all
material respects.

(c) Material Adverse Change. No material adverse change
shall have occurred since March 31, 1997 in the condition (financial
or otherwise), business or operations of Buyer.

(d) Public Offering. Contemporaneously with the Closing,
there shall occur the consummation of the Public Offering.

(e) Cancellation of Seitel Warrant. Seitel, Inc. ("Seitel"),
the ultimate parent corporation of Buyer, shall have entered into an
agreement canceling the warrants to purchase 16,665 Shares (the
"Seitel Warrants") represented by Warrant Certificate No. W-001 dated
July 3, 1996 granted by the Company to Seitel (the "Warrant
Cancellation Agreement") in the form attached as Exhibit 2.

(g) Certificates. Buyer shall deliver to Sellers and
Guarantors one or more certificates dated as of the Closing Date
executed by Buyer (i) certifying to the effect set forth in Sections
6.2(a) and (b) hereof and (ii) certifying to all corporate action
taken by Buyer authorizing the transactions contemplated hereby,
copies of which shall be attached to such certificate.

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<PAGE> 31
6.3 Termination.

(a) General. This Agreement may be terminated and the
transactions contemplated herein may be abandoned (a) by mutual
consent of Buyer and the Sellers or (b) by any party by notice to the
other parties in the event that the Closing Date shall not have
occurred on or before December 31, 1997.

(b) No Liabilities in Event of Termination. In the event of
any termination of this Agreement as provided in this Section 6.3,
this Agreement shall forthwith become wholly void and of no further
force or effect and there shall be no liability on the part of Buyer,
any Seller, any Guarantor or their respective officers, directors, or
agents, except that the provisions of Section 10.1, 10.10 and 10.12
hereof shall remain in full force and effect, and provided that
nothing contained herein shall release any party from liability for
any failure to comply with any provision, covenant or agreement
contained herein.

7. Deliveries at Closing.

7.1 Mutual Deliveries. At the Closing:

(a) Employment Agreement Amendments. Exploration Holdings
Limited, an English corporation and subsidiary of the Company ("EHL"),
and Harrison, Purdie and Campbell shall enter into amendments in the
form attached as Exhibit 3 (the "Employment Agreement Amendments") to
the current employment agreements between EHL and Harrison, Purdie and
Campbell, and Eagle Geophysical Offshore, Inc., a Texas corporation
and indirect subsidiary of the Company, and Burns shall enter into an
Employment Agreement in the form attached as Exhibit 4 (the "Burns
Employment Agreement").

(b) Termination of Shareholders Agreement. Each Seller, each
Guarantor, Buyer (as assignee of Seitel, Inc.) and the Company shall
enter into an agreement (the "Termination of Shareholders Agreement")
terminating the Shareholders Agreement among such parties dated July
3, 1996, as amended (the "Shareholders Agreement") in the form
attached as Exhibit 5.

7.2 Deliveries by Buyer. At the Closing the Buyer shall deliver
to the Sellers:

(a) Share certificates representing the Buyer Stock.

(b) A written legal opinion of Gardere Wynne Sewell & Riggs,
L.L.P., counsel to Buyer, in the form attached as Exhibit 6.

7.3 Deliveries by Sellers. At the Closing the Sellers shall
deliver to the Buyer:

(a) Original share certificates representing the Purchased
Shares and duly executed share transfer certificates effecting the
transfer of the Purchased Shares to the Buyer.

26
<PAGE> 32
(b) Written legal opinions of Griggs & Harrison, P.C., U.S.
counsel to Sellers, Guarantors, the Company, and certain Subsidiaries,
W. S. Walker & Co., Cayman Island counsel to the Company, Cooper &
Burnett, U.K. counsel to certain Subsidiaries, and Cains Advocates and
Notaries, Isle of Man counsel to the Sellers, addressing the matters
set forth in the form attached as Exhibit 7.

8. Indemnification.

8.1 Indemnification by the Sellers and the Guarantors. Subject to
the provisions of this Section 8, the Sellers and Guarantors, jointly and
severally, shall protect, indemnify and hold harmless Buyer, each officer,
director and agent of Buyer and each person who controls Buyer in respect of
any losses, claims, damages, liabilities, deficiencies, delinquencies,
defaults, assessments, fees, penalties or related costs or expenses, including,
but not limited to, court costs, attorneys' and accountants' fees and
disbursements, and any federal, state or local income or franchise Taxes
payable in respect of the receipt of cash or money in discharge of the
foregoing, but reduced by any net amount paid to Buyer on account of such loss
by any insurance policies (collectively referred to herein as "Damages") to
which Buyer (or such related parties) may become subject if such Damages arise
out of or are based upon the breach of any of the representations, warranties,
covenants or agreements made by the Sellers or the Guarantors in this
Agreement, including the Exhibits and Schedules hereto, or in any certificate
or instrument delivered by or on behalf of the Sellers, the Guarantors or the
Company pursuant to this Agreement.

8.2 Indemnification by Buyer. Subject to the provisions of this
Section 8, Buyer shall protect, indemnify and hold harmless the Sellers, each
officer, director and agent of Sellers and each person who controls Sellers, in
respect of any Damages to which the Sellers (or such related parties) may
become subject if such Damages arise out of or are based upon the breach of any
of the representations, warranties, covenants or agreements made by Buyer in
this Agreement, including the Exhibits and Schedules hereto, or in any
certificate delivered by or on behalf of Buyer pursuant to this Agreement.

8.3 Limits on Indemnification Liability. Notwithstanding any
other provisions to the contrary in this Agreement:

(a) The liabilities of each Seller and such Seller's
respective Guarantor under Section 8.1 shall be limited to the amount
determined by multiplying the number of shares of Buyer Stock to be
received by such Seller hereunder by the initial public offering price
of a share of Buyer Stock pursuant to the Public Offering, and the
aggregate liabilities of all Sellers and Guarantors under Section 8.1
shall be limited to the amount determined by multiplying the total
number of shares of Buyer Stock to be received by all Sellers
hereunder by the initial public offering price of a share of Buyer
Stock pursuant to the Public Offering.

(b) The liabilities of Buyer under Section 8.2 to each Seller
shall be limited to the amount determined by multiplying the number of
shares of Buyer Stock to be received by such Seller hereunder by the
initial public offering price of a share of Buyer Stock pursuant to
the Public Offering, and the aggregate liabilities of Buyer to all
Sellers under Section 8.2 shall be limited to the amount determined by
multiplying the total

27
<PAGE> 33
number of shares of Buyer Stock to be received by all Sellers
hereunder by the initial public offering price of a share of Buyer
Stock pursuant to the Public Offering.

(c) Neither the Sellers and Guarantors, under Section 8.2,
nor the Buyer, under Section 8.1, shall be entitled to seek
indemnification from the other until such time as the aggregate amount
of Damages for which the other party would otherwise be liable under
such sections exceeds $50,000; provided, however, that in the event
the aggregate amount of Damages exceeds $50,000, the Sellers and the
Guarantors or the Buyer, as applicable, shall be liable under Section
8.1 or 8.2, as applicable, only for the amount of Damages exceeding
$25,000; and

(d) The indemnification obligations of Buyer, the Sellers,
and the Guarantors set forth in this Agreement shall be limited to
indemnification for actual damages, and shall not include incidental,
consequential, or punitive damages. Buyer acknowledges that it is
purchasing only 81% of the outstanding shares of the Company
hereunder, and that any damages it may be entitled to hereunder shall
be with regard to such shares being purchased and not with regard to
the 19% of the outstanding shares of the Company that it already owns.

8.4 Indemnification Procedures. The obligations and liabilities
of each indemnifying party hereunder with respect to claims resulting from the
assertion of liability by the other party or third parties shall be subject to
the following terms and conditions:

(a) If any person shall notify an indemnified party (the
"Indemnified Party") with respect to any matter which may give rise to
a claim for indemnification (a "Claim") against Buyer or the Sellers
and the Guarantors (the "Indemnifying Party") under this Section 8,
then the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; provided, however, that no delay on the part
of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is
prejudiced.

(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within 15
days after the Indemnified Party has given notice of the Claim that
the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Damages the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by, the Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Claim and fulfill its indemnification
obligations hereunder, (iii) the Claim involves only money damages and
does not seek an injunction or other equitable relief, (iv) settlement
of, or an adverse judgment with respect to, the Claim is not, in the
good faith judgment of the Indemnifying Party, likely to establish a
precedential custom or practice materially adverse to the continuing
business interests of the Indemnified Party, and (v) the Indemnifying
Party conducts the defense of the Claim actively and diligently and in
good faith.

28
<PAGE> 34
(c) So long as the Indemnifying Party is conducting the
defense of the Claim in accordance with Section 8.4(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Claim without the prior
written consent of the Indemnifying Party (not to be withheld
unreasonably), and (iii) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to
the Claim without the prior written consent of the Indemnified Party
(not to be withheld unreasonably).

(d) In the event any of the conditions in Section 8.4(b)
above is or becomes unsatisfied, however, (i) the Indemnified Party
may defend against, and consent to the entry of any judgment or enter
into any settlement with respect to, the Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), and (ii) the Indemnifying Party will remain
responsible for any damages the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by, the
Claim to the fullest extent provided in this Section 8.

8.5 Time Limits on Liability. Anything contained in this
Agreement to the contrary notwithstanding, the indemnity liability of any
party, other than the liability of any Buyer for claims arising under or in
connection with Section 5.5 hereof, shall only extend to matters for which a
bona fide claim has been asserted by written notice of such claim delivered to
the Indemnifying Party on or before the first anniversary of the Closing Date.

8.6 Appointment of Seller Representative. The Sellers and
Guarantors hereby appoint Gerald Harrison as their representative, who shall
have full power and authority to make all decisions relating to the defense
and/or settlement of any claims for which the Sellers or Guarantors may be
required to indemnify Buyer (and vice versa) and to take such other actions
(and any other actions reasonably related or ancillary thereto) provided to be
taken after the Closing by the Sellers or the Guarantors. Decisions and
actions by Gerald Harrison, including, without limitation, any agreement
between Gerald Harrison and Buyer relating to the defense or settlement of any
claims for which the Sellers or Guarantors may be required to indemnify Buyer,
shall be binding upon all of the Sellers and Guarantors, and no Seller or
Guarantor shall have the right to object, dissent, protest or otherwise contest
the same. If Gerald Harrison shall die or become incapacitated then the other
Sellers and Guarantors (acting by a majority vote) shall select another
representative from among the Sellers and Guarantors (or their heirs,
executors, administrators or personal representatives) to replace Gerald
Harrison, which representative shall have the same rights and authorities as
Gerald Harrison hereunder. By their execution of this Agreement, the Sellers
and Guarantors shall be deemed to have agreed that (a) the provisions of this
Section 8.6 are independent and separable, irrevocable and coupled with an
interest and shall be enforceable notwithstanding any rights or remedies that
any Seller or Guarantor may have in connection with the transactions
contemplated by this Agreement, (b) the remedy at law for any breach of the
provisions of this Section 8.6 would be inadequate, (c) Buyer shall be entitled
to temporary and permanent injunctive relief without the necessity of proving
damages if it brings an action to enforce the provisions of this Section 8.6,
(d) the provisions of this Section 8.6 shall be binding upon the heirs,
executors, administrators, personal representatives and successors of each
Seller and Guarantor, and (e) any reference in this

29
<PAGE> 35
Agreement to a Seller or Guarantor shall mean and include the successors to the
Seller's or Guarantor's rights hereunder, whether pursuant to a testamentary
disposition, the laws of descent and distribution, or otherwise.

9. Guarantees.

9.1 Harrison Guarantee. Harrison irrevocably and unconditionally
guarantees as primary obligor the due and punctual performance by Oliveira of
the agreements and obligations of Oliveira, and the completeness and accuracy
of the representations and warranties made by Oliveira, under this Agreement
and all agreements and instruments to be executed by Oliveira hereunder,
including without limitation, Section 8, Indemnification. This guaranty shall
survive the Closing and the liquidation of Oliveira.

9.2 Purdie Guarantee. Purdie irrevocably and unconditionally
guarantees as primary obligor the due and punctual performance by Dormera of
the agreements and obligations of Dormera, and the completeness and accuracy of
the representations and warranties made by Dormera, under this Agreement and
all agreements and instruments to be executed by Dormera hereunder, including
without limitation, Section 8, Indemnification. This guaranty shall survive
the Closing and the liquidation of Dormera.

9.3 Campbell Guarantee. Campbell irrevocably and unconditionally
guarantees as primary obligor the due and punctual performance by Balmedie of
the agreements and obligations of Balmedie, and the completeness and accuracy
of the representations and warranties made by Balmedie, under this Agreement
and all agreements and instruments to be executed by Balmedie hereunder,
including without limitation, Section 8, Indemnification. This guaranty shall
survive the Closing and the liquidation of Balmedie.

9.4 Burns Guarantee. Burns irrevocably and unconditionally
guarantees as primary obligor the due and punctual performance by Larlane of
the agreements and obligations of Larlane, and the completeness and accuracy of
the representations and warranties made by Larlane, under this Agreement and
all agreements and instruments to be executed by Larlane hereunder, including
without limitation, Section 8, Indemnification. This guaranty shall survive
the Closing and the liquidation of Larlane.

10. Miscellaneous.

10.1 Payment of Certain Fees and Expenses. Each of the parties
hereto shall pay the fees and expenses incurred by it in connection with the
negotiation, preparation, execution and performance of this Agreement,
including, without limitation, brokers' fees, attorneys' fees and accountants'
fees.

10.2 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or by courier, or mailed by first class mail, postage prepaid, return receipt
requested, or sent by facsimile, as follows:

30
<PAGE> 36
(a) If to Sellers or Guarantors:

Mr. Gerald Harrison and Oliveira
34 The Middlings
Sevenoaks
Kent, TN13 2NW
United Kingdom
Facsimile 011-44-1732-742-746

Mr. George Purdie and Dormera
Merlins Brook
Park Road
Addington
West Malling
Kent ME19 5BQ
United Kingdom
Facsimile 011-44-1732-742-746

Mr. Neil Campbell and Balmedie
6 St. Johns Lane
Hartley
Kent DA3 8ET
United Kingdom
Facsimile 011-44-1732-742-746

Mr. David Burns and Larlane
2203 Crystal Hills Drive
Houston, Texas 77077
Facsimile (281) 556-5148

with a copy to:

Griggs & Harrison, P.C.
1301 McKinney, Suite 3200
Houston, Texas 77010
Attention: Carolyn Campbell, Esq.
Facsimile (713) 651-1944

(b) If to Buyer:

Mr. Jay Silverman, President
Eagle Geophysical, Inc.
50 Briar Hollow Lane, 6th Floor West
Houston, Texas 77027
Facsimile (713) 627-1020

31
<PAGE> 37
with a copy to:

Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay, Suite 800
Houston, Texas 77002
Attention: N.L. Stevens III, Esq.
Facsimile (713) 308-5807

or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on the earlier of the date
of delivery or on the fifth business day after the mailing thereof.

10.3 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) constitutes the entire agreement between the parties hereto
and supersedes all prior agreements and understandings, oral and written,
between the parties hereto with respect to the subject matter hereof.

10.4 Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
permitted heirs, personal representatives, successors and assigns. Nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto or their respective heirs, personal representatives,
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

10.5 Assignability. This Agreement shall not be assignable by the
Sellers without the prior written consent of Buyer or by Buyer without the
prior written consent of the Sellers; provided, however, that Buyer shall be
entitled to assign this Agreement to an affiliate without the consent of
Sellers.

10.6 Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument executed by the
parties hereto. No waiver by any party of any of the provisions hereof shall
be effective unless explicitly set forth in writing and executed by the party
so waiving or his or her personal representative under Section 8.6. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained herein, and in any documents delivered or to be delivered pursuant to
this Agreement and in connection with the Closing hereunder. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.

10.7 Section Headings; Index. The section headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

10.8 Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect.

32
<PAGE> 38
10.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

10.10 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas.

10.11 References. All references in this Agreement to Sections,
paragraphs and other subdivisions refer to the Sections, paragraphs and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes" and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Each reference herein
to a Schedule, Exhibit or Annex refers to the item identified separately in
writing by the parties hereto as the described Schedule, Exhibit or Annex to
this Agreement. All Schedules, Exhibits and Annexes are hereby incorporated in
and made a part of this Agreement as if set forth in full herein.

10.12 Dispute Resolution. Any dispute, difference or question
("Dispute") between Buyer on one hand and the Sellers and Guarantors on the
other ("Disputing Parties"), arising with respect to this Agreement shall be
resolved in accordance with the following dispute resolution procedures:

(a) Good Faith Negotiations. The Disputing Parties shall
endeavor, in good faith, to resolve the Dispute through negotiations.
If the Disputing Parties fail to resolve the Dispute within a
reasonable time, Buyer shall nominate a senior officer or officers of
its management to meet with the Seller Representative appointed
pursuant to Section 8.6 hereof at any mutually agreed location to
resolve the Dispute.

(b) Mediation. In the event that the negotiations do not
result in a mutually acceptable resolution, either Disputing Party may
require that the Dispute shall be referred to mediation in Houston,
Texas. One mediator shall be appointed by the agreement of the
Parties. The mediator shall be suitably qualified person having no
direct or personal interest in the outcome of the Dispute. Mediation
shall be held within thirty (30) days of referral to mediation. In
the event the Disputing Parties are unable to agree to a mediator, the
Parties agree to the appointment of a mediator pursuant to the
Commercial Mediation Rules of the American Arbitration Association.

(c) Arbitration. In the event the Parties are unsuccessful
in their mediation of the Dispute, either Disputing Party may request
that the Dispute will be settled by arbitration by an arbitrator
mutually acceptable to the Disputing Parties in an arbitration
Proceeding conducted in Houston, Texas in accordance with the rules
existing at the date hereof of the American Arbitration Association.
If the Disputing Parties hereto cannot agree on an arbitrator within
ten (10) business days of the initiation of the arbitration
Proceeding, an arbitrator shall be selected for the Disputing Parties
by the American Arbitration Association. The Disputing Parties shall
use their reasonable best efforts to have the arbitral Proceeding
concluded and a judgment rendered by the arbitrator within forty (40)
business days of the initiation of the arbitration Proceeding. The
decision of

33
<PAGE> 39
such arbitrator shall be final, and judgment upon the award rendered
by the arbitration may be entered in any court having jurisdiction
thereof, and the costs (including, without limitation, reasonable fees
and expenses of counsel and experts for the Disputing Parties) of such
arbitration (including the costs to enforce or preserve the rights
awarded in the arbitration) shall be borne by the Disputing Party whom
the decision of the arbitrator is against. If the decision of the
arbitrator is not clearly against one of the disputing Parties or the
decisions of the arbitrator is against more than one Disputing Party
on one or more issues, the costs of such arbitration shall be borne
equally by the Disputing Parties. Notwithstanding the foregoing,
Buyer may apply to any court of competent jurisdiction for injunctive
relief under Section 8.6 without breach of this arbitration provision.

(d) Consent to Jurisdiction; Venue. The parties hereto agree
that all actions relating to Section 8.6 or to the enforcement of this
Section 10.12 or any award rendered hereunder, and over which the
United States federal courts have subject matter jurisdiction, shall
be litigated, if at all, exclusively in the United States District
Court for the Southern District of Texas, Houston Division, and, if
necessary, the corresponding appellate courts. The parties further
agree that all actions relating to Section 8.6 or to the enforcement
of this Section 10.12 or any award rendered hereunder, and over which
the United States federal courts do not have subject matter
jurisdiction, shall be litigated, if at all, exclusively in the Courts
of the State of Texas, in Harris County, and, if necessary, the
corresponding appellate courts. Each party hereto hereby submits
itself to the personal jurisdiction of, and consents to venue in, any
such court, and hereby waives any claim it may otherwise have that
such court lacks personal jurisdiction over it, or that such court is
an inconvenient forum, with respect to any such matter or proceeding.
Each party hereto further agrees to voluntarily appear and to enter a
general appearance in any such proceeding which is brought in any such
court. Each party hereto other than Buyer hereby appoints Carolyn
Campbell and/or Griggs & Harrison, P.C. of Houston, Texas as its agent
for service of process in any such matter or proceeding.

10.13 Public Announcements. Except as may be required by Applicable
Law, neither Buyer, on the one hand, nor Sellers, Guarantors, the Company, or
any Subsidiary, on the other, shall issue any press release or otherwise make
any public statements with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the other party.

[THE NEXT PAGE IS THE SIGNATURE PAGE TO THIS AGREEMENT]

34
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the date first above written.

SELLERS:

OLIVEIRA LIMITED

BY: s/Gerald Harrison
----------------------------------------
Gerald Harrison, Attorney-in-Fact

DORMERA LIMITED

BY: s/George Purdie
----------------------------------------
George Purdie, Attorney-in-Fact

BALMEDIE LIMITED

BY: s/Neil Campbell
----------------------------------------
Neil Campbell, Attorney-in-Fact

LARLANE LIMITED

BY: s/ David Burns
----------------------------------------
David Burns, Attorney-in-Fact

GUARANTORS:

s/Gerald Harrison
-------------------------------------------
GERALD HARRISON

s/George Purdie
-------------------------------------------
GEORGE PURDIE

s/Neil Campbell
-------------------------------------------
NEIL CAMPBELL

35
<PAGE> 41
s/David Burns
-------------------------------------------
DAVID BURNS

BUYER:

EAGLE GEOPHYSICAL, INC.

BY: s/Jay N. Silverman
----------------------------------------
JAY N. SILVERMAN, President

36
<PAGE> 42
EXHIBIT 1

ALLOCATION OF PURCHASE PRICE

<TABLE>
<CAPTION>
NUMBER OF PURCHASED
SHARES TRANSFERRED AMOUNT OF NUMBER OF SHARES
SELLER TO BUYER CASH OF BUYER STOCK
------ -------- ---- ----------------
<S> <C> <C> <C>
Oliveira Limited 15,667 $31.34 188,000

Dormera Limited 15,666 $31.33 188,000

Balmedie Limited 15,667 $31.33 188,000

Larlane Limited 3,000 $ 6.00 36,000
</TABLE>

37
<PAGE> 43
EXHIBIT 2

WARRANT CANCELLATION AGREEMENT

This Warrant Cancellation Agreement (this "Agreement") is entered into
as of __________, 1997 (the "Effective Date") by and between Energy Research
International, a Cayman Islands corporation (the "Company"), and Seitel, Inc.,
a Delaware corporation ("Holder").

RECITALS:

1. Holder is the registered holder of 16,665 Ordinary Share
Purchase Warrants (the "Warrants") to purchase Ordinary Shares of $0.001 of the
Company (the "Ordinary Shares"), pursuant to that certain Warrant Certificate
No. W-001 (the "Certificate") dated July 3, 1996.

2. In connection with the consummation of the transactions
contemplated under that certain Stock Purchase Agreement dated May __, 1997 by
and among Eagle Geophysical, Inc., a Delaware corporation and wholly-owned,
indirect subsidiary of Holder, the Company and others, Holder and the Company
desire to terminate the Warrants and cancel the Certificate.

AGREEMENT

1. The Certificate is hereby terminated and the Warrants hereby
cancelled effective as of the Effective Date.

2. Effective as of the Effective Date, Holder and the Company
agree that Holder shall have no further rights to acquire the Ordinary Shares
pursuant to the Warrants, and the Company shall be under no further obligation
to issue the ordinary shares in connection with the Warrants. Holder shall
surrender the Certificate to the Company contemporaneously with the execution
hereof.

3. This Agreement constitutes the final and complete agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes any prior agreements, whether oral or written, between the parties
with respect to the subject matter hereof. This Agreement shall be governed by
the laws of the State of Texas, without giving effect to any conflict of law
rules or provisions.

IN WITNESS WHEREOF, the parties have executed this Agreement, which
may executed in multiple counterparts, through their duly authorized
representatives.

ENERGY RESEARCH INTERNATIONAL

By:
---------------------------------
Name:
----------------------
Title:
---------------------

<PAGE> 44

SEITEL, INC.

By:
---------------------------------
Name:
----------------------
Title:
---------------------

<PAGE> 45
EXHIBIT 3

EMPLOYMENT AGREEMENT AMENDMENT

This Employment Agreement Amendment ("Amendment") is entered into this
____ day of ____________, 1997, by and between Exploration Holdings Limited
(the "Company") and __________________ ("Executive").

Recitals

WHEREAS, the Company and Executive have previously entered into a
Service Agreement for Senior Directors relating to the employment of Executive
by the Company, which has been amended by an Employment Agreement Amendment
dated July 3, 1996 (as so amended, the "Agreement");

WHEREAS, Executive and the Company have agreed to enter into this
Amendment and hereby amend certain terms of the Agreement as set forth herein;

Agreement

NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, the parties hereby agree as follows:

1. Executive and the Company hereby agree that the warrants to
purchase up to 5,555 ordinary shares of US$0.001 of Energy Research
International, a Cayman Islands corporation and the parent corporation of the
Company, at a price of US$300.03 per ordinary share, granted to the Executive
on July 3, 1996 pursuant to the Agreement are hereby cancelled.

2. Executive is hereby granted stock options to purchase up to
75,000 shares of Common Stock, $0.01 par value per share, of Eagle Geophysical,
Inc., a Delaware corporation and the ultimate parent corporation of the Company
("Eagle"), pursuant to Eagle's stock option plan at a price per share equal to
the initial public offering price of such stock pursuant to Eagle's initial
public offering being consummated on or about the date hereof. Such stock
options shall vest in cumulative installments of one-third of the total shares
subject thereto on each of the first, second and third anniversaries of the
date hereof and will expire ten years from the date of grant or such earlier
date as may be specified pursuant to Eagle's stock option plan. In addition,
any such options that are not vested as of any date on which the Company
terminates the Executive's employment not in accordance with this Agreement
shall become fully vested on the date of such termination.

3. The annual review date set forth in paragraph 7 of the Terms
and Conditions of Employment, Particulars, is hereby amended to be each
subsequent anniversary of the date hereof.

4. Subsection 1.4.2 of the Agreement is hereby amended to read in
its entirety as follows:
<PAGE> 46
"1.4.2 the relocation shall be within England or the United
States of America; provided, however, any such
relocation to the United States shall be only with
the consent of Executive, which consent may not be
unreasonably withheld by the Executive."

5. Subsection 5.2 of the Agreement is hereby amended to read in
its entirety as follows:

"5.2 Any change in salary will be made at the Company's absolute
discretion; provided, however in no event may the salary be
reduced below the Salary reflected as item 6 of the Terms &
Conditions of Employment attached as a part of the Agreement."

6. The Company Executive Incentive Scheme contemplated in
paragraph 13.1 of the Agreement is hereby amended for the calendar year ending
December 31, 1997 to provide that the Executive shall be entitled to receive an
amount equal to 50% of his base salary for such year under the Scheme if and
only if the Operating Profit Margin (as defined in Paragraph 13.2 of the
Agreement) of the Marine Business (as defined in Paragraph 13.2 of the
Agreement) for such year equal or exceed 24% of revenues from the Marine
Business.

7. Section 13 of the Agreement is hereby amended by adding a new
paragraph 13.2 thereto as follows:

13.2 Additional Incentive Bonus

13.2.1 Additional Incentive Bonus. The Executive shall
receive additional incentive bonuses, if earned,with
respect to the fiscal years ending during the Term
pursuant to Subsection 13.2.3 and/or 13.2.4 (each an
"Additional Incentive Bonus"); provided, however,
that no Additional Incentive Bonus for a fiscal year
shall be payable if the Net After-Tax Profits (as
hereinafter defined) for such fiscal year do not
exceed Base Profits (as hereinafter defined).

13.2.2 Definitions.

"Base Profits" shall mean 5% of gross revenues from
the Marine Business.

"Chief Financial Officer" means the chief financial
officer of Eagle Geophysical.

"Eagle Geophysical" means Eagle Geophysical, Inc., a
Delaware corporation and the indirect parent
corporation of the Company.

"Operating Profit Margin" means the amount of revenue
less cost of sales of the Marine Business calculated
<PAGE> 47
by the Chief Financial Officer applying U.S. GAAP and
such other accounting principles and assumptions as
may be reasonable.

"Marine Business" means the marine seismic data
acquisition business of the Company and its wholly
owned subsidiaries and of any other company that is a
direct or indirect wholly owned subsidiary of Eagle
Geophysical.

"Net After-Tax Profits" shall, for the purposes
hereof, mean the amount of net profits of the Marine
Business calculated by the Chief Financial Officer
applying U.S. GAAP and such other accounting
principles and assumptions as may be reasonable and
taking into account expenses attributable to
allocable overhead (based on revenues) from all other
companies controlled by or under common control with
the Company engaged in the Marine Business and of
such companies' parent corporation(s), and
subtracting therefrom all income tax liabilities
attributable to the Marine Business.

13.2.3 Applicable Percentage Bonus. If Net After-Tax
Profits for a fiscal year exceed Base Profits for
such fiscal year, the Executive shall receive an
Additional Incentive Bonus (in addition to any
Additional Incentive Bonus pursuant to Subsection
13.2.4) equal to the Applicable Percentage set forth
in the table below multiplied by the difference
between actual Net After- Tax Profits and Base
Profits.

<TABLE>
<CAPTION>
Net After-Tax Profits
(percent of gross revenues) Applicable Percentage
--------------------------- ---------------------
<S> <C>
greater than 5%, but less than 2.0%
or equal to 6%

greater than 6%, but less than 2.5%
or equal to 7%

greater than 7% 3.0%
</TABLE>

13.2.4 Significant Increase in Revenues Bonus. If Net
After-Tax Profits for a fiscal year after 1997 exceed
Base Profits for such fiscal year, and if gross
revenues of the Marine Business for such fiscal year
increase by an amount of 20% or more as compared to
the gross revenues of the Marine Business for the
previous fiscal year, the Executive shall receive an
Additional Incentive Bonus equal to 3% multiplied by
the excess, if any, of the Net After-Tax Profits for
such fiscal year over the greater of (i) the Net
After-Tax Profits for the prior fiscal year or (ii)
Base Profits for the prior fiscal year.

13.2.5 Payment of Additional Incentive Bonus. The Chief
Financial Officer shall calculate the Net After-Tax
Profits, and any
<PAGE> 48
Additional Incentive Bonus payable to the Executive
in connection therewith, shall certify such
calculations and shall deliver such calculations to
the Executive as soon as reasonably practicable after
the end of each fiscal year, but in any event within
seventy-five (75) days following the end of such
fiscal year. Any Additional Incentive Bonus payable
hereunder shall be paid by the Company to the
Executive within seven (7) days of delivery of such
calculations by the Chief Financial Officer and in
any event within eighty-two (82) days following the
end of the applicable fiscal year.

8. Section 28 of the Agreement is hereby amended to read in its
entirety as follows:

"28. DISPUTES

28.1 Arbitration. Any dispute, difference or question ("Dispute")
between Executive and the Company ("Disputing Parties"),
arising with respect to the Agreement or Executive's
employment under the Agreement that is not resolved promptly
by the Disputing Parties shall be resolved by binding
arbitration as follows. In the event the Parties are unable
to resolve the Dispute within 14 days following written notice
from one Disputing Party to the other setting forth the basis
of the Dispute, then either Disputing Party may request that
the Dispute be settled by binding arbitration by an arbitrator
mutually acceptable to the Disputing Parties in an arbitration
proceeding conducted in Houston, Texas in accordance with the
rules existing at the date hereof of the American Arbitration
Association. If the Disputing Parties hereto cannot agree on
an arbitrator within ten (10) business days of the initiation
of the arbitration proceeding, an arbitrator shall be selected
for the Disputing Parties by the American Arbitration
Association. The Disputing Parties shall use their reasonable
best efforts to have the arbitration proceeding concluded and
a judgment rendered by the arbitrator within forty (40)
business days of the initiation of the arbitration proceeding.
The decision of such arbitrator shall be final, and judgment
upon the award rendered by the arbitration may be entered in
any court having jurisdiction thereof, and the costs
(including, without limitation, reasonable fees and expenses
of counsel and experts for the Disputing Parties) of such
arbitration (including the costs to enforce or preserve the
rights awarded in the arbitration) shall be borne by the
Disputing Party whom the decision of the arbitrator is
against. If the decision of the arbitrator is not clearly
against one of the Disputing Parties or the decisions of the
arbitrator is against more than one Disputing Party on one or
more issues, the costs of such arbitration shall be borne
equally by the Disputing Parties.

28.2 Consent to Jurisdiction; Venue. The parties hereto agree that
all actions relating to the enforcement of this Section or any
award rendered hereunder, and over which the United States
federal courts have subject matter jurisdiction, shall be
litigated, if at all, exclusively in the United States
District Court for the Southern District of Texas, Houston
Division, and, if necessary, the corresponding appellate
courts. The parties further agree that all actions relating
to the enforcement of this Section or any award rendered
hereunder, and over which the
<PAGE> 49
United States federal courts do not have subject matter
jurisdiction, shall be litigated, if at all, exclusively in
the Courts of the State of Texas, in Harris County, and, if
necessary, the corresponding appellate courts. Each party
hereto hereby submits itself to the personal jurisdiction of,
and consents to venue in, any such court, and hereby waives
any claim it may otherwise have that such court lacks personal
jurisdiction over it, or that such court is an inconvenient
forum, with respect to any such matter or proceeding. Each
party hereto further agrees to voluntarily appear and to enter
a general appearance in any such proceeding which is brought
in any such court. Executive hereby appoints Carolyn Campbell
and/or Griggs & Harrison, P.C. of Houston, Texas as its agent
for service of process in any such matter or proceeding."

28.3 Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the United
Kingdom, without regard to the conflicts of laws provisions
thereunder.

9. Except as specifically amended hereby, the terms and
provisions of the Agreement shall continue in full force and effect.

SIGNED as a Deed )
by the Company )
acting by its ) -------------------------------------
--------- ----------------------

SIGNED as a Deed )
by the Executive )
-------------------------------------

<PAGE> 50
EXHIBIT 4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into as of
___________, 1997 (the "Effective Date"), by and between EAGLE GEOPHYSICAL
OFFSHORE, INC., a Texas corporation (the "Company"), and DAVID BURNS (the
"Executive").

The Company desires to employ the Executive and the Executive desires
to accept employment with the Company, on the terms and conditions of this
Agreement.

Accordingly, the parties agree as follows:

1. Employment Duties and Acceptance.

1.1 Employment by the Company; Duties. The Company
hereby agrees to employ the Executive for a term commencing on the Effective
Date, and expiring at the end of the day twenty-four (24) months from the
Effective Date (such date, or later date to which this Agreement is extended in
accordance with the terms hereof, the "Termination Date"), unless earlier
terminated as provided in Section 4 or unless extended as provided herein (the
"Term"). The Term shall be automatically extended commencing on the second
anniversary of the Effective Date and on each anniversary of the Effective Date
thereafter (such date and each anniversary of such date being a "Renewal
Date"), so as to terminate twelve (12) months from such Renewal Date, unless
and until at least six (6) months prior to a Renewal Date either party hereto
gives written notice to the other that the Term should not be extended beyond
the next Renewal Date, in which event the Termination Date shall be the Renewal
Date following such notice. During the Term, the Executive shall serve in the
capacity of Vice President - U.S. Offshore Operations of the Company and shall
also serve in those offices and directorships of subsidiary and parent
corporations or entities of the Company to which he may from time to time be
appointed or elected. During the Term, the Executive shall devote all
reasonable efforts and all of his business time and services to the Company,
subject to the direction of the Board of Directors of the Company (the
"Board"). The Executive shall not engage in any other business activities
except for passive investments in corporations or partnerships not engaged in
the Company Business (as hereinafter defined) pursuant to Section 3 hereof.

1.2 Acceptance of Employment by the Executive. The
Executive hereby accepts such employment and shall render the services and
perform the duties described above.

2. Compensation and Other Benefits.

2.1 Annual Salary. The Company shall pay to the
Executive an annual salary at a rate of not less than one hundred forty
thousand dollars ($140,000) per year (the "Annual Salary"), subject to increase
at the sole discretion of the Board. The Annual Salary shall be payable in
accordance with the payroll policies of the Company as from time to time in
effect,
<PAGE> 51
but in no event less frequently than once each month, less such deductions as
shall be required to be withheld by applicable law and regulations.

2.2 Incentive Bonus.

Executive Incentive Scheme. The Executive shall be
entitled to participate in a Company Executive Incentive Scheme (the "Incentive
Scheme") which, subject to the conditions below, shall give the Executive the
potential to receive additional remuneration of up to 50% of salary each year.

2.2.1 The Company shall define the Incentive Scheme
annually on or before February 28th in each year for the Calendar year to which
it relates.

2.2.2 The Incentive Scheme may take the form of a
single Company goal, for example profit performance or several individual
targets such as productivity, etc., and may be varied each year.

2.2.3 Any remuneration earned under the Incentive
Scheme for a particular year shall be paid on or before 1st June of the
following calendar year.

2.2.4 The Executive shall receive remuneration
under the Incentive Scheme for 1997 equal to 50% of his base salary if and only
if the Operating Profit Margin (as defined in Section 2.3 of this Agreement) of
the Marine Business (as defined in Section 2.3 of this Agreement) for such year
equal or exceed 24% of revenues from the Marine Business.

2.3 Additional Incentive Bonus.

2.3.1 Grant of Additional Incentive Bonus. The
Executive shall receive an additional incentive bonus, if earned, with respect
to the fiscal years ending during the Term (the "Additional Incentive Bonus");
provided, however, that an Additional Incentive Bonus for a fiscal year shall
only be payable if the Net After-Tax Profits (as hereinafter defined) for such
fiscal year exceed Base Profits (as hereinafter defined).

2.3.2 Definitions.

"Base Profits" shall mean 5% of gross revenues from
the Marine Business.

"Chief Financial Officer" means the chief financial
officer of Eagle.

"Eagle" shall mean Eagle Geophysical, Inc., a
Delaware corporation.

"Operating Profit Margin" means the amount of revenue
less cost of sales of the Marine Business calculated by the Chief Financial
Officer applying U.S. generally accepted accounting principles and such other
accounting principles and assumptions as may be reasonable.
<PAGE> 52
"Marine Business" means the marine seismic data
acquisition business of the Company and its wholly owned subsidiaries and of
any other company that is a direct or indirect wholly owned subsidiary of
Eagle.

"Net After-Tax Profits" means the amount of net
profits of the Marine Business calculated by the Chief Financial Officer
applying U.S. generally accepted accounting principles and such other
accounting principles and assumptions as may be reasonable and taking into
account expenses attributable to allocable overhead (based on revenues) from
all other companies controlled by or under common control with the Company
engaged in the Marine Business and of such companies' parent corporation(s),
and subtracting therefrom all income tax liabilities attributable to the Marine
Business.

2.3.3 Calculation of Bonus. If Net After-Tax
Profits for a fiscal year exceed Base Profits for such fiscal year, the
Executive shall receive an Additional Incentive Bonus equal to the Applicable
Percentage set forth in the table below multiplied by the difference between
actual Net After-Tax Profits and Base Profits.
<TABLE>
<CAPTION>
Net After-Tax Profits
(percent of gross revenues) Applicable Percentage
--------------------------- ---------------------
<S> <C>
greater than 5%, but less than 1.0%
or equal to 6%

greater than 6%, but less than 1.5%
or equal to 7%

greater than 7% 2.0%
</TABLE>

2.3.4 Applicable Percentage if Significant Increase
in Revenues. Notwithstanding the determination of Applicable Percentage in the
table set forth in Subsection 2.3.3 above, if gross revenues for a fiscal year
of the Marine Business increase by an amount of 20% or more as compared to
gross revenues for the previous fiscal year of the Marine Business, then the
Applicable Percentage for such fiscal year will be 2.0% so long as Net After
Tax Profits for such fiscal year exceed Base Profits for such fiscal year.

2.3.5 Payment of Additional Incentive Bonus. The
Chief Financial Officer shall calculate the Net After-Tax Profits, and any
Additional Incentive Bonus payable to the Executive in connection therewith,
shall certify such calculations and shall deliver such calculations to the
Executive as soon as reasonably practicable after the end of each fiscal year,
but in any event within seventy-five (75) days following the end of such fiscal
year. Any Additional Incentive Bonus payable hereunder shall be paid by the
Company to the Executive within seven (7) days of delivery of such calculations
by the Chief Financial Officer and in any event within eighty-two (82) days
following the end of the applicable fiscal year. The additional remuneration
payable pursuant to Section 2.2 hereof and the Additional Incentive Bonus
payable pursuant to this Section 2.3 are hereinafter collectively referred as
the "Bonuses."

2.4 Grant of Option. The Company agrees to grant the
Executive, pursuant to the terms of Eagle's Option Plan created in connection
with the initial public offering (the "IPO") of Eagle's common stock, options
to acquire seventy-five thousand (75,000) shares of
<PAGE> 53
Eagle's common stock, at an exercise price equal to the IPO issue price. Such
stock options shall vest over a period of three years, with stock options to
acquire 25,000 shares vesting on each of the first three anniversaries of the
Effective Date, subject to the terms of the Company's Option Plan. The Company
agrees to use all reasonable efforts, consistent with the foregoing, to ensure
that such stock options meet all requirements for treatment as Incentive Stock
Options under the Internal Revenue Code of 1986, as amended, and that such
stock option plan meets the requirements of Rule 16b-3, promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended (the "Act").

2.5 Vacation Policy. The Executive shall be entitled to
a paid vacation of five weeks during each year of the Term.

2.6 Participation in Employee Benefit Plans. The Company
agrees to permit the Executive during the Term, if and to the extent eligible,
to participate in any group life, hospitalization or disability insurance plan,
health program, pension plan, similar benefit plan or other so-called "fringe
benefits" of the Company (collectively, "Benefits") which may be available to
other executives of the Company on terms no less favorable to the Executive
than the terms offered to such other executives. The Company agrees to use its
best efforts to obtain immediate coverage for the Executive upon the
commencement of the Term under its existing or newly adopted medical expense
and hospitalization plan for employees without premium surcharge and without
exclusions for disclosed preexisting conditions. The Executive shall cooperate
with the Company in applying for such coverage, including submitting to a
physical exam and providing all relevant health and personal data.

2.7 General Business Expenses. The Company shall pay or
reimburse the Executive for all expenses reasonably and necessarily incurred by
the Executive during the Term in the performance of the Executive's services
under this Agreement. Such payment shall be made upon presentation of such
documentation as the Company customarily requires of its senior executive
employees prior to making such payments or reimbursements.

2.8 Company Car and Cellular Telephone. The Company
shall pay the Executive a car allowance of five hundred and no/100 dollars
($500.00) per month, which the Executive may apply, in his discretion, to the
cost associated with purchasing or leasing, insuring, operating and maintaining
an automobile of the Executive's choice. The Executive may use the automobile
for personal as well as business purposes. The Company shall also furnish the
Executive with a cellular telephone of his choice and the Company shall pay all
charges in connection with the use thereof, other than charges for calls not
related to the Executive's duties hereunder.

3. Non-Competition, Confidentiality and Company Property.

3.1 Covenants Against Competition. The Executive
acknowledges that (i) the Company is currently engaged in the business of
owning, managing and operating seismic data acquisition equipment and hiring
and managing crews to operate such equipment, which equipment and crews are
contracted or hired for the purpose of performing geological surveys onshore
and offshore (the "Company Business"); (ii) his work for the Company will give
him access to trade secrets of and confidential information concerning the
Company; and (iii) the
<PAGE> 54
agreements and covenants contained in this Agreement are essential to protect
the business and goodwill of the Company. Accordingly, the Executive covenants
and agrees as follows:

3.1.1 Non-Compete. As an independent covenant, and
in order to enforce the provisions of Sections 3.1.3 and 3.1.5 hereof and the
other provisions of this Agreement, the Executive agrees that he shall not
during the Restricted Period (as hereinafter defined) within a one hundred
(100) mile radius of any office of the Company or any of its affiliates,
including, without limitation, the locations specified from time to time
pursuant to Section 7.2 hereof and any field offices, directly or indirectly
(except in the Executive's capacity as an officer of the Company), (i) engage
or participate in the Company Business; (ii) enter the employ of, or render any
other services to, any person engaged in the Company Business except as
permitted hereunder; or (iii) become interested in any such person in any
capacity, including, without limitation, as an individual, partner,
shareholder, lender, officer, director, principal, agent or trustee except as
permitted hereunder; provided, however, that the Executive may own, directly or
indirectly, solely as an investment, securities of any person traded on any
national securities exchange or listed on the National Association of
Securities Dealers Automated Quotation System if the Executive is not a
controlling person of, or a member of a group which controls, such person and
the Executive does not, directly or indirectly, own 5% or more of any class of
equity securities, or securities convertible into or exercisable or
exchangeable for 5% or more of any class of equity securities, of such person.
As used herein, the "Restricted Period" shall mean a period commencing on the
date hereof and terminating upon the first to occur of (a) the date on which
the Company terminates or is deemed to terminate the Executive's employment
without Cause (as hereinafter defined), (b) the date the Executive terminates
or is deemed to terminate his employment pursuant to Section 4.6 hereof or (c)
the date of termination of this Agreement; provided, however, that if the
Company shall have terminated the Executive's employment for Cause and such
Cause in fact exists or if the Executive shall have terminated his employment
with the Company in breach of the terms of this Agreement, the Restricted
Period shall end one (1) year following the termination of the Executive's
employment hereunder.

3.1.2 Customers. As an independent covenant, the
Executive also agrees to refrain during the Restricted Period, without written
permission from the Company, from diverting, taking, soliciting and/or
accepting on his own behalf or on the behalf of another person, firm, or
company, the business of any past or present customer of the Company, its
divisions, subsidiaries and/or other affiliated entities, or any identified
prospective or potential customer of the Company, its divisions, subsidiaries
and/or affiliated entities, whose identity became known to the Executive
through his employment by the Company.

3.1.3 Confidential Information.

3.1.3.1 The Executive acknowledges that the
Company has a legitimate and continuing proprietary interest in the protection
of its confidential information and that it has invested substantial sums and
will continue to invest substantial sums to develop, maintain and protect
confidential information. The Company agrees to provide the Executive access
to confidential information in conjunction with the Executive's duties,
including, without limitation, information of a technical and business nature
regarding the Company's past, current or anticipated business that may
encompass financial information, financial figures, trade secrets,
<PAGE> 55
customer lists, details of client or consultant contracts, pricing policies,
operational methods, marketing plans or strategies, product development
techniques or plans, business acquisition plans, Company employee information,
organizational charts, new personnel acquisition plans, technical processes,
designs and design projects, inventions and research projects, ideas,
discoveries, inventions, improvements, trade secrets, design specifications,
writings and other works of authorship. In exchange, as an independent
covenant, the Executive agrees not to make any unauthorized use, publication,
or disclosure, during or subsequent to his employment by the Company, of any
Intellectual Property of a confidential or trade secret nature, generated or
acquired by him during the course of his employment, except to the extent that
the disclosure of Intellectual Property Information is necessary to fulfill his
responsibilities as an employee of the Company. The Executive understands that
confidential matters and trade secrets include information not generally known
by or available to the public about or belonging to the Company, its divisions,
subsidiaries, and related affiliates, or belonging to other companies to whom
the Company, its divisions, subsidiaries, and related affiliates, may have an
obligation to maintain information in confidence, and that authorization for
public disclosure may only be obtained through the Company's written consent.

3.1.3.2 The Executive further agrees not to
disclose to the Company, or induce any personnel of the Company to use, any
confidential information, trade secret, or confidential material belonging to
others.

3.1.3.3 The Executive agrees that the
covenants set forth in Sections 3.1.3.1 and 3.1.3.2 are independent covenants
and indefinite obligations binding upon the Executive both during and after the
termination of the Executive's relationship with the Company.

3.1.4 Property of the Company. All memoranda,
notes, lists, records, engineering drawings, technical specifications and
related documents and other documents or papers (and all copies thereof)
relating to the Company, including such items stored in computer memories,
microfiche or by any other means, made or compiled by or on behalf of the
Executive after the date hereof, or made available to the Executive after the
date hereof relating to the Company, its affiliates or any entity which may
hereafter become an affiliate thereof, shall be the property of the Company,
and shall be delivered to the Company promptly upon the termination of the
Executive's employment with the Company or at any other time upon request;
provided, however, that the Executive's address books, diaries, chronological
correspondence files and rolodex files shall be deemed to be property of the
Executive.

3.1.5 Original Material. The Executive agrees that
any inventions, discoveries, improvements, ideas, concepts or original works of
authorship relating directly to the Company Business, including without
limitation information of a technical or business nature such as ideas,
discoveries, designs, inventions, improvements, trade secrets, know-how,
manufacturing processes, product formulae, design specifications, writings and
other works of authorship, computer programs, financial figures, marketing
plans, customer lists and data, business plans or methods and the like, which
relate in any manner to the actual or anticipated business or the actual or
anticipated areas of research and development of the Company and its divisions,
subsidiaries, affiliates, or related entities, whether or not protectable by
patent or copyright, that have been originated, developed or reduced to
practice by the Executive alone
<PAGE> 56
or jointly with others during the Executive's employment with the Company shall
be the property of and belong exclusively to the Company. The Executive shall
promptly and fully disclose to the Company the origination or development by
the Executive of any such material and shall provide the Company with any
information that it may reasonably request about such material. Either during
the subsequent to the Executive's employment, upon the request and at the
expense of the Company or its nominee, and for no remuneration in addition to
that due the Executive pursuant to his employment by the Company, but at no
expense to him, the Executive agrees to execute, acknowledge, and deliver to
the Company or its attorneys any and all instruments which, in the judgment of
the Company or its attorneys, may be necessary or desirable to secure or
maintain for the benefit of the Company adequate patent, copyright, and other
property rights in the United States and foreign countries with respect to any
such inventions, improvements, ideas, concepts, or original works of authorship
embraced within this Agreement.

3.1.6 Employees of the Company and its Affiliates.
As an independent covenant, the Executive agrees to refrain during his
employment by the Company, and in the event of the termination of his
employment for any reason for a period of one year thereafter, from inducing or
attempting to influence any employee of the Company, its divisions,
subsidiaries and/or affiliated entities to terminate his employment.

3.1.7 Company's Interest. The Executive further
agrees that these covenants are made to protect the legitimate business
interests of the Company, including interests in the Company's property
described in and pursuant to Section 3.1.4 and Section 3.1.5, and not to
restrict his mobility or to prevent him from utilizing his general technical
skills. The Executive understands as a part of these covenants that the
Company intends to exercise whatever legal recourse against him for any breach
of this Agreement and, in particular, for any breach of these covenants.

3.2 Rights and Remedies Upon Breach. If the Executive
breaches, or threatens to commit a breach of, any of the provisions contained
in Section 3.1 of this Agreement (the "Restrictive Covenants"), the Company
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the others and severally enforceable, and each of which
is in addition to, and not in lieu of, any other rights and remedies available
to the Company under law or in equity:

3.2.1 Specific Performance. The right and remedy
to have the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened breach of
the Restrictive Covenants would cause irreparable injury to the Company and
that money damages would not provide an adequate remedy to the Company.

3.2.2 Accounting. The right and remedy to require
the Executive to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Executive as the result of any action constituting a breach of the
Restrictive Covenants.

3.3 Severability of Covenants. The Executive
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in duration and geographical scope and in all
<PAGE> 57
other respects. If any court determines that any of the Restrictive Covenants,
or any part thereof, is invalid or unenforceable, the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given full
effect without regard to the invalid portions.

3.4 Court Review. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of, or scope of activities restrained by, such
provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.

3.5 Enforceability in Jurisdictions. The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
such Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants unenforceable by reason of the
breadth of such scope or otherwise, it is the intention of the Company that
such determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.

4. Termination.

4.1 Termination Upon Death. If the Executive dies during
the Term, this Agreement shall terminate, provided, however, that in any such
event, the Company shall pay to the Executive, or to his estate, any portion of
the Annual Salary that shall have been earned by the Executive prior to the
termination but not yet paid, any Benefits that have vested in the Executive at
the time of such termination as a result of his participation in any of the
Company's benefit plans shall be paid to the Executive, or to his estate or
designated beneficiary, in accordance with the provisions of such plan; and the
Company shall reimburse the Executive, or his estate, for any expenses with
respect to which the Executive is entitled to reimbursement pursuant to Section
2.7 of this Agreement, and the Executive's right to indemnification, payment or
reimbursement pursuant to Section 6 of this Agreement shall not be affected by
such termination and shall continue in full force and effect, both with respect
to proceedings that are threatened, pending or completed at the date of such
termination and with respect to proceedings that are threatened, pending or
completed after that date.

4.2 Termination With Cause. The Company has the right,
at any time during the Term, subject to all of the provisions hereof,
exercisable by serving notice, effective on or after the date of service of
such notice as specified therein, to terminate the Executive's employment under
this Agreement and discharge the Executive with Cause. If such right is
exercised, the Company's obligation to the Executive shall be limited solely to
the payment of unpaid Annual Salary accrued, together with unpaid Bonuses, if
any, and Benefits vested up to the effective date specified in the Company's
notice of termination. As used in this Agreement, the term "Cause" shall mean
and include (i) chronic alcoholism or controlled substance abuse as determined
by a doctor reasonably selected by the Company, (ii) an act of proven fraud or
dishonesty on the part of the Executive with respect to the Company or its
subsidiaries; (iii)
<PAGE> 58
knowing and material failure by the Executive to comply with material
applicable laws and regulations relating to the business of the Company or its
affiliates; (iv) the Executive's continuing failure to satisfactorily perform
his duties hereunder (as reasonably determined by the Board) or a material
breach by the Executive of this Agreement except, in each case, where such
failure or breach is caused by the illness or other similar incapacity or
disability of the Executive; or (v) conviction of a crime involving moral
turpitude or a felony. Prior to the effectiveness of termination for Cause
under subclause (i), (ii), (iii) or (iv) above, the Executive shall be given 30
days' prior notice from the Board specifically identifying the reasons which
are alleged to constitute Cause for any termination hereunder and an
opportunity to be heard by the Board in the event the Executive disputes such
allegations.

4.3 Termination Without Cause. The Company has the
right, at any time during the Term, subject to all of the provisions hereof,
exercisable by serving notice, effective on or after the date of service of
such notice as specified therein, to terminate the Executive's employment under
this Agreement and discharge the Executive without Cause. If the Executive is
terminated during the Term without Cause (including any termination which is
deemed to be a constructive termination without Cause under Section 4.6
hereof), the Company's obligation to the Executive shall be limited solely to
(i) the payment, at the times and upon the terms provided for herein, of (A)
the Executive's Annual Salary and car allowance (as set forth in Section 2.8
hereof) for the months remaining in the Term at the time of such termination,
based on the Annual Salary of the Executive in effect on the date of
termination (or, if the Company has reduced the Executive's Annual Salary in
breach of this Agreement, the Executive's Annual Salary before such reduction),
and (B) all unpaid bonuses and Benefits awarded or accrued up to the date of
termination, and (ii) the vesting of any unvested stock options granted by the
Company pursuant to Section 2.4 hereof. In the event of a termination by the
Company without Cause within 180 days after Change of Control (as hereinafter
defined), including a constructive termination without Cause pursuant to
Section 4.6, the amounts due to the Executive pursuant to this Section 4.3
shall be due and payable in one lump-sum payment within 60 days after such
termination. In all other cases, any amounts due to the Executive pursuant to
this Section 4.3 shall be due and payable as and when they would have become
due and payable absent such termination.

4.4 Termination by the Executive. Any termination of
this Agreement by the Executive during the Term, except such termination as is
deemed to be a constructive termination without Cause by the Company under
Section 4.6 of this Agreement, shall be deemed to be a breach of the terms of
this Agreement for the purposes of Section 3.1.1 hereof and shall entitle the
Company to discontinue payment of all Annual Salary, Bonuses and Benefits
accruing from and after the date of such termination.

4.5 Termination upon Disability. If during the Term the
Executive becomes physically or mentally disabled, whether totally or
partially, as determined by a physician reasonably selected by the Company, so
that the Executive is unable substantially to perform his services hereunder
for (i) a period of four consecutive months, or (ii) for shorter periods
aggregating six months during any twelve-month period, the Company may at any
time after the last day of the four consecutive months of disability or the day
on which the shorter periods of disability equal an aggregate of six months, by
written notice to the Executive, terminate the Executive's employment hereunder
and discontinue payments of the Annual Salary, Bonuses and
<PAGE> 59
Benefits accruing from and after the date of such termination. The Executive
shall be entitled to the full compensation payable to him hereunder for periods
of disability shorter than the periods specified in clauses (i) and (ii) of the
previous sentence.

4.6 Constructive Termination Without Cause.
Notwithstanding any other provision of this Agreement, the Executive's
employment under this Agreement may be terminated during the Term by the
Executive, which shall be deemed to be constructive termination by the Company
without Cause, if one of the following events shall occur without the consent
of the Executive: (i) a failure to elect or reelect or to appoint or reappoint
the Executive to the office of Vice President - U.S. Offshore Operations of the
Company or other material change by the Company of the Executive's functions,
duties or responsibilities which change would reduce the ranking or level,
dignity, responsibility, importance or scope of the Executive's position with
the Company from the position and attributes thereof described in Section 1
above; (ii) the liquidation, dissolution, consolidation or merger of the
Company, or transfer of all or substantially all of its assets, other than a
transaction in which a successor corporation with a net worth at least equal to
that of the Company assumes this Agreement and all obligations and undertakings
of the Company hereunder; (iii) a reduction in the Executive's fixed salary;
(iv) the failure of the Company to continue to provide the Executive with
office space, related facilities and secretarial assistance that are
commensurate with the Executive's responsibilities to and position with the
Company; (v) the notification by the Company of the Company's intention not to
observe or perform one or more of the obligations of the Company under this
Agreement; (vi) the failure by the Company to indemnify, pay or reimburse the
Executive at the time and under the circumstances required by Section 6 of this
Agreement; or (vii) the occurrence of any other material breach of this
Agreement by the Company or any of its subsidiaries. Any such termination
shall be made by written notice to the President of the Company, specifying the
event relied upon for such termination and given within 60 days after such
event. Any constructive termination shall be effective 60 days after the date
the President of the Company has been given such written notice setting forth
the grounds for such termination with specificity; provided, however, that the
Executive shall not be entitled to terminate this Agreement in respect of any
of the grounds set forth above if within 60 days after such notice the action
constituting such ground for termination is no longer continuing. A
constructive termination by the Company without Cause shall terminate the
Restrictive Period hereunder.

4.7 For the purposes hereof, a "Change of Control of the
Company" shall be deemed to have occurred if after the effective date and the
IPO (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding securities
without the prior approval of at least a majority of the members of the Board
in office immediately prior to such person attaining such percentage interest;
(ii) there occurs a proxy contest or a consent solicitation, or the Company is
a party to a merger, consolidation, sale of assets, plan of liquidation or
other reorganization not approved by at least a majority of the members of the
Board in office, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a majority
of the Board thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (ii) of this Section
4.7, individuals who at the beginning of such period constituted the Board
(including for this purpose any new director whose election or nomination
<PAGE> 60
for election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a
majority of the Board.

5. Insurance. The Company may, from time to time, apply for and
take out, in its own name and at its own expense, naming itself or one or more
of its affiliates as the designated beneficiary (which it may change from time
to time), policies for life, health, accident, disability or other insurance
upon the Executive in any amount or amounts that it may deem necessary or
appropriate to protect its interest. The Executive agrees to aid the Company
in procuring such insurance by submitting to medical examinations and by
filling out, executing and delivering such applications and other instruments
in writing as may reasonably be required by an insurance company or companies
to which any application or applications for insurance may be made by or for
the Company.

6. Indemnification.

6.1 The Company shall, to the maximum extent not
prohibited by law, indemnify the Executive if he is made, or threatened to be
made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
an action by or in the right of the Company to procure a judgment in its favor
(collectively, a "Proceeding"), by reason of the fact that the Executive is or
was a director or officer of the Company, or is or was serving in any capacity
at the request of the Company for any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against judgments,
fines, penalties, excise taxes, amounts paid in settlement and costs, charges
and expenses (including attorneys' fees and disbursements) paid or incurred in
connection with any such Proceeding.

6.2 The Company shall, from time to time, reimburse or
advance to the Executive the funds necessary for payment of expenses, including
attorneys' fees and disbursements, incurred in connection with any Proceeding
in advance of the final disposition of such Proceeding; provided, however,
that, if required by the Texas Business Corporation Act, such expenses incurred
by or on behalf of the Executive may be paid in advance of the final
disposition of a Proceeding only upon receipt by the Company of an undertaking,
by or on behalf of the Executive, to repay any such amount so advanced if it
shall ultimately be determined by final judicial decision from which there is
no further right of appeal that the Executive is not entitled to be indemnified
for such expenses.

6.3 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall not be deemed exclusive of any other rights which the Executive may now
or hereafter have under any law, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.

6.4 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall continue as to the Executive after he has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of the Executive.
<PAGE> 61
6.5 The Company shall purchase and maintain director and
officer liability insurance on such terms and providing such coverage as the
Board determines is appropriate, and the Executive shall be covered by such
insurance on the same basis as the other directors and executive officers of
the Company.

6.6 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall be enforceable by the Executive in any court of competent jurisdiction.
The burden of proving that such indemnification or reimbursement or advancement
of expenses is not appropriate shall be on the Company. Neither the failure of
the Company (including its board of directors, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement of
such action that such indemnification or reimbursement or advancement of
expenses is proper in the circumstances nor an actual determination by the
Company (including its board of directors, independent legal counsel, or its
stockholders) that the Executive is not entitled to such indemnification or
reimbursement or advancement of expenses shall constitute a defense to the
action or create a presumption that the Executive is not so entitled. The
Executive shall also be indemnified for any expenses incurred in connection
with successfully establishing his right to such indemnification or
reimbursement or advancement of expenses, in whole or in part, in any such
proceeding.

6.7 If the Executive serves (i) another corporation of
which a majority of the shares entitled to vote in the election of its
directors is held by the Company, (ii) another corporation which owns a
majority of the shares entitled to vote in the election of the directors of the
Company (a "Parent Corporation") or of which a majority of the shares entitled
to vote in the election of its directors is held by the Parent Corporation or
(iii) any employee benefit plan of the Company or any corporation referred to
in clause (i) or (ii), in any capacity, then he shall be deemed to be doing so
at the request of the Company.

6.8 The right to indemnification or reimbursement or
advancement of expenses shall be interpreted on the basis of the applicable law
in effect at the time of the occurrence of the event or events giving rise to
the applicable Proceeding.

7. Other Provisions.

7.1 Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:

(i) "affiliate" with respect to the Company means any
other person controlled by or under common control with the Company
but shall not include any stockholder or director of the Company, as
such.

(ii) "person" means any individual, corporation,
partnership, firm, joint Company, association, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or
other entity.

(iii) "subsidiary" means any corporation 50% or more
of the voting securities of which are owned directly or indirectly by
the Company.
<PAGE> 62
7.2 Notices. Any notice or other communication required
or permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, on the date of actual receipt thereof, as follows:

(i) if to the Company, to:

Eagle Geophysical Offshore, Inc.
50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
Attention: President

with a copy to:

Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, Suite 800
Houston, Texas 77002
Attention: N. L. Stevens III

(ii) if to the Executive, to:

David Burns
2203 Crystal Hills Drive
Houston, Texas 77077

Any party may change its address for notice hereunder by notice to the other
party hereto.

7.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.

7.4 Waivers and Amendments. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof. Nor shall any waiver on the part of any
party of any such right, power or privilege hereunder, nor any single or
partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder.

7.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas (without giving
effect to the choice of law provisions thereof) where the employment of the
Executive shall be deemed, in part, to be performed and enforcement of this
Agreement or any action taken or held with respect to this Agreement shall be
taken in the courts of appropriate jurisdiction in Houston, Texas.
<PAGE> 63
7.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by the Executive and may be assigned
by the Company (subject to Section 4.6 (iii) hereof) only to a successor by
merger or purchasers of substantially all of the assets of the Company.

7.7 Counterparts. This Agreement may be executed in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

7.8 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

7.9 Validity Contest. The Company shall promptly pay any
and all legal fees and expenses incurred by the Executive from time to time as
a direct result of the Company's contesting the due execution, authorization,
validity or enforceability of this Agreement.

7.10 Binding Agreement. This Agreement shall inure to the
benefit of and bit binding upon the Company and its respective successors and
assigns and the Executive and his legal representatives.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

EAGLE GEOPHYSICAL OFFSHORE, INC.

By:
-----------------------------------
Name:
-------------------------
Title:
------------------------

EXECUTIVE

--------------------------------------
David Burns

<PAGE> 64
EXHIBIT 5

TERMINATION OF SHAREHOLDER'S AGREEMENT

This Agreement (this "Agreement") is dated effective as of _______,
1997 (the "Effective Date"), by and among Energy Research International, a
Cayman Islands corporation (the "Company"), Eagle Geophysical, Inc., a Delaware
corporation (as assignee of Seitel, Inc., a Delaware corporation), Oliveira
Limited, an Isle of Man corporation, Gerald Harrison, Dormera Limited, an Isle
of Man corporation, George Purdie, Balmedie Limited, an Isle of Man
corporation, Neil Campbell, Larlane Limited, an Isle of Man corporation, and
David Burns (hereinafter collectively called the "Shareholders" and
individually called a "Shareholder").

RECITALS:

1. The Shareholders and the Company have entered into that certain
Shareholders Agreement dated as of July 3, 1996, as amended by that certain
Waiver and Amendment to Shareholders Agreement dated as of November 15, 1996
(the "Shareholders Agreement").

2. The Shareholders and the Company desire to terminate the Shareholders
Agreement without further liability or obligation among the parties.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises in the mutual
covenants and agreements contained therein, the parties hereto do hereby agree
as follows:

1. The Shareholders Agreement is hereby terminated effective as
of the Effective Date.

2. Effective as of the Effective Date, each party hereto does
hereby release and forever discharge each other party hereto from any and all
liabilities or obligations such party may have under or in connection with the
Shareholders Agreement.

3. From and after the Effective Date, upon surrender to the
Company by any Shareholder of a stock certificate representing shares of stock
owned in the Company by such Shareholder, the Company will issue a replacement
stock certificate for such shares which deletes the reference to the
Shareholders Agreement.

4. This Agreement constitutes the final and complete agreement
among the parties hereto with respect to the subject matter hereof, and
supersedes any prior agreements, whether oral or written, among the parties
with respect to the subject matter hereof. This Agreement shall be governed by
the laws of the State of Texas, without giving effect to any conflict of law
rules or provisions.
<PAGE> 65
IN WITNESS WHEREOF, the parties have executed this Agreement, which
may be executed in multiple counterparts, through their duly authorized
representatives.

ENERGY RESEARCH INTERNATIONAL

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

EAGLE GEOPHYSICAL, INC.

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

OLIVEIRA LIMITED

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

-------------------------------------------
GERALD HARRISON

DORMERA LIMITED

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

-------------------------------------------
GEORGE PURDIE

<PAGE> 66
BALMEDIE LIMITED

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

-------------------------------------------
NEIL CAMPBELL

LARLANE LIMITED

By:
---------------------------------------
Name:
-----------------------------
Title:
----------------------------

-------------------------------------------
DAVID BURNS

<PAGE> 67
EXHIBIT 6

OPINION OF COUNSEL TO BUYER

1. Eagle Geophysical, Inc. ("Eagle") is a corporation duly organized,
validly existing and in good standing under the laws of Delaware.
Eagle has all necessary corporate power and authority to own and lease
the assets it currently owns and leases and to carry on its business
as such business is currently conducted.

2. Eagle has the corporate power and authority to execute, deliver and
perform the obligations under the Stock Purchase Agreement and all
Related Agreements.

3. The Stock Purchase Agreement and the Related Agreements have been duly
authorized by all necessary corporate action of Eagle and have been
duly executed and delivered by Eagle.

4. The Stock Purchase Agreement and the Related Agreements are
enforceable against Eagle.

5. The execution and delivery by Eagle of the Stock Purchase Agreement
and the Related Agreements, and the performance by Eagle of the
agreements contained therein, will not (i) violate Eagle's Constituent
Documents, (ii) violate applicable provisions of statutory law or
regulation applicable to Eagle, (iii) result in any violation or
breach of, or constitute a default under, any existing obligation of
Eagle under any note, bond, mortgage, loan agreement, indenture or any
other agreement evidencing borrowed money of which we are aware and to
which Eagle is a party or by which Eagle is bound or to which any of
its assets is subject, which conflict, breach, violation or default
could reasonably be expected to have a material adverse effect on
Eagle and its subsidiaries taken as a whole (other than conflicts,
breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of Eagle or
its subsidiaries that Eagle has represented will be repaid at or
promptly after the Closing from the proceeds of the Public Offering),
or (iv) violate any order, writ, injunction or decree of any public
body applicable to Eagle of which we are aware, except where such
breach, default or violation would not have a material adverse effect
on Eagle.

6. To our knowledge, no consent, approval, waiver, order, authorization
of, or registration, declaration of filing with, any Governmental
Entity is required to be obtained or made in connection with the
delivery of the Stock Purchase Agreement or any Related Agreement by
Eagle or the consummation by Eagle of the transactions contemplated
thereby, except where the failure to make any such filing or obtain
such consent, authorization or approval would not have a material
adverse effect on Eagle.

7. The Buyer Stock has been duly authorized for issuance and, if and when
delivered by Eagle to Sellers in accordance with the provisions of the
Stock Purchase Agreement, will be validly issued, fully paid and
nonassessable. The issuance of the Buyer Stock under the Stock
Purchase Agreement is not subject to any preemptive or similar rights.
<PAGE> 68
EXHIBIT 7

OPINION OF UNITED STATES COUNSEL TO SELLERS

1. Eagle Geophysical Offshore, Inc., a Texas corporation (f/k/a Horizon
Seismic, Inc.) ("EGO"), is a corporation duly incorporated, legally
existing and in good standing under the laws of the State of Texas and
has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as currently
conducted.

2. Exploration Holdings Limited is the record, and to our knowledge the
beneficial, owner of all of the outstanding shares of capital stock of
EGO. All of the issued and outstanding shares of EGO have been duly
authorized and validly issued, and are fully paid and nonassessable,
and have not been issued in violation of any preemptive rights.

3. The Transaction Documents have been duly executed and delivered by
each Seller and each Guarantor, to the extent that each is a party
thereto.

4. The Transaction Documents constitute legal, valid and binding
obligations of each Seller and each Guarantor, to the extent that each
is a party thereto, enforceable against each Seller and each Guarantor
to the extent that each is a party thereto in accordance with their
respective terms except to the extent the enforceability may be
limited by laws and judicial decisions relating to bankruptcy,
insolvency, fraudulent transfer, preferential conveyance,
rearrangement, moratorium, reorganization, liquidation and
conservatorship and other laws and judicial decisions affecting the
enforcement of creditors' rights or the collection of debtors'
obligations generally, or by general principles of equity and
standards of commercial reasonableness (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and
except as rights to indemnity thereunder may be limited by federal or
state securities laws or principles of public policy.

5. The execution, delivery and performance by Sellers and Guarantors of
the Transaction Documents (to the extent that each is a party thereto)
(a) does not and will not breach or constitute a default under any
provision of (i) applicable Texas or federal law, or (ii) to the best
of our knowledge, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument for the repayment of
borrowed money to which ERI or its subsidiaries are a party or by
which they or their properties may be presently bound or encumbered,
which breach or default could reasonably be expected to have a
material adverse effect on ERI and its subsidiaries taken as a whole
(other than breaches or defaults that have been waived by the other
party thereto or breaches or defaults under agreements governing or
otherwise relating to indebtedness of ERI or its subsidiaries that
Buyer has represented will be repaid at or promptly after the Closing
from the proceeds of the Public Offering).

6. No consents, approvals, orders or authorizations of and no
registrations or filings with any U.S. governmental or regulatory
authority or body on the part of the Sellers or the Guarantors is
required in connection with the execution, delivery and performance of
the Transaction Documents to which they are a party.
<PAGE> 69
7. Except as set forth in Schedule __ to the Stock Purchase Agreement,
the best of our knowledge, there is no litigation and there are no
arbitration proceedings or governmental proceedings, suits or
investigations pending, instituted or overtly threatened against any
Seller, any Guarantor, ERI or its subsidiaries and relating to the
Business that could reasonably be expected to have a material adverse
effect on the Business taken as a whole.

8. The submission by each Seller and each Guarantor in connection with
the Transaction Documents to the jurisdiction of federal or state
courts sitting in the State of Texas and the appointment by each
Seller and each Guarantor of the agent for service of process as set
forth in the Transaction Documents should be valid and binding on each
Seller and each Guarantor.
<PAGE> 70
EXHIBIT 7

OPINION OF ISLE OF MAN COUNSEL TO SELLERS

1. Each of Balmedie Limited, Dormera Limited, Oliveira Limited and
Larlane Limited (the "Companies") was incorporated in the Isle of Man
on 9th July, 1993 for an indefinite period as a company limited by
guarantee and not having a share capital and is a separate legal
entity which is subject to suit in its own name;

2. Each of the Companies has the necessary power and authority and all
necessary corporate and other action has been taken to enable them to
execute and deliver the Documents and to perform their obligations
thereunder and the implementation by the Companies of the foregoing
will not cause:

(a) any limit on the Companies or (as the case may be) their
directors (whether imposed by the documents constituting the
Companies or (as the case may be) statute or regulation, or by
agreement or otherwise) to be exceeded;

(b) any law or order to be contravened;

3. (a) Balmedie Limited's authorized capital consists of _______
shares of _____________, of which all shares are issued. The
company registers show and to our knowledge, the beneficial
owner of the shares at the date thereof is set out in the
schedule attached hereto.

(b) Dormera Limited's authorized capital consists of _______
shares of _____________, of which all shares are issued. The
company registers show and to our knowledge, the beneficial
owner of the shares at the date thereof is set out in the
schedule attached hereto.

(c) Oliveira Limited's authorized capital consists of _______
shares of _____________, of which all shares are issued. The
company registers show and to our knowledge, the beneficial
owner of the shares at the date thereof is set out in the
schedule attached hereto.

(d) Larlane Limited's authorized capital consists of _______
shares of _____________, of which all shares are issued. The
company registers show and to our knowledge, the beneficial
owner of the shares at the date thereof is set out in the
schedule attached hereto.

4. No consents, licenses, approvals and registrations are necessary or
desirable to be obtained from governmental or other regulatory
authorities in the Isle of Man to enable the Companies to enter into
and perform the transactions contemplated by the Documents;

5. It is not necessary or desirable to ensure the priority, validity and
enforceability of the obligations of the Companies under the Documents
that the Documents be filed,
<PAGE> 71
registered, recorded or notarized in any public office or elsewhere or
that any other instrument relating thereto be signed, delivered,
filed, registered or recorded, that any tax or duty be paid or that
any other action whatsoever be taken;

6. Except as set forth in Schedule __ to the Stock Purchase Agreement to
the best of our knowledge, information and belief, after making such
searches of public registers in the Isle of Man as we deemed
appropriate the Companies are not in breach of any applicable law in
the Isle of Man and no litigation, arbitration or administrative
proceedings are present, current or pending in the Isle of Man, and no
steps have been, or are being taken to appoint a receiver or
liquidator over, or to wind up, the Companies;

7. The documents have been properly executed by the Companies and the
obligations on the part of the Companies contained therein are valid
and legally binding on and enforceable against the Companies under the
laws of the Isle of Man;

8. The obligations of the Companies under the Documents rank at least
equally and rateably (pari passu) in point of priority and security
with all other unsecured non preferential obligations of the
Companies;

9. The choice of the law of the State of Texas to govern the Documents
will be upheld as a valid choice of law in any action in the Isle of
Man courts;

10. The submission by each of the Companies in the Documents to the
jurisdiction of federal or state courts sitting in the State of Texas
and the appointment by each of the Companies of any agent for service
of process in the Stock Purchase Agreement should be valid and binding
on each of the Companies; and

11. A judgment of a federal or state court sitting in the State of Texas
would be recognized and capable of enforcement in the Isle of Man by
common law action upon the judgment.
<PAGE> 72
EXHIBIT 7

OPINION OF CAYMAN ISLANDS COUNSEL TO SELLERS

1. Energy Research International (the "Company") is a company duly
incorporated, validly existing and in good standing under the laws of
the Cayman Islands and has full power and legal right to execute and
deliver the Documents to be executed by it and to perform the
provisions of the Documents to be performed on its part.

2. The Company's authorized capital consists of US$900,000 divided into
900,000,000 Ordinary Shares of US$0.001 each of which 61,728 Ordinary
Shares are issued (the "Outstanding Shares"). All of the Outstanding
Shares have been duly authorized and validly issued as fully paid and
non-assessable and have not been issued in violation of any
pre-emptive rights contained in the Memorandum and Articles of
Association of the Company. The registered owners of the Outstanding
Shares are recorded in the Register of Members of the Company, a copy
of which is attached as Exhibit A.

3. The execution, delivery and performance of the Documents by the
Sellers and the Guarantors, the consummation of the transactions
contemplated thereby and the compliance by the Sellers and the
Guarantors with the terms and provisions thereof do not:

(i) contravene any law or regulation of the Cayman Islands
applicable to the Sellers, the Guarantors or the Company; or

(ii) contravene the Memorandum and Articles of Association of the
Company.

4. Neither the execution, delivery or performance of any of the Documents
to which any of the Sellers and the Guarantors is party nor the
consummation or performance of any of the transactions contemplated
thereby by the Sellers and the Guarantors requires the consent or
approval of, the giving of notice to, or the registration with, or the
taking of any other action in respect of any Cayman Islands
governmental or judicial authority or agency.

5. The law chosen by each of the Documents to govern its interpretation
would be upheld as a valid choice of law in any action on that
document in the courts of the Cayman Islands.

6. There are no stamp duties, income taxes, withholdings, levies,
registration taxes, or other duties or similar taxes or charges now
imposed, or which under the present laws of the Cayman Islands could
in the future become imposed, in connection with the enforcement or
admissibility in evidence of the Documents or on any payment to be
made by any person pursuant to the Documents.

7. None of the parties to the Documents is or will be deemed to be
resident, domiciled or carrying on business in the Cayman Islands by
reason only of the execution, delivery, performance or enforcement of
the Documents to which any of them is party.
<PAGE> 73
8. A judgment obtained in a foreign court will be enforced in the courts
of the Cayman Islands without any re- examination of the merits.

9. A judgment of a court in the Cayman Islands may be expressed in a
currency other than Cayman Islands dollars.
<PAGE> 74
EXHIBIT 7

OPINION OF UNITED KINGDOM COUNSEL TO SELLERS

1. Exploration Holdings Limited ("EHL") and Horizon Exploration Limited
("HEL") have been duly incorporated and are validly existing as
companies of good standing under the laws of England and have the
necessary power and authority to own, lease and operate their
properties and carry on their business as it is now conducted.

2. (a) EHL's authorized capital consists of 1,000 ordinary shares of
L.1.00 each, of which all shares are issued. The company
registers show and to our knowledge, the beneficial owners of
the shares at the date thereof are set out in the First
Schedule hereto. All shares have been duly authorized and
validly issued and are fully paid and non-assessable and have
not been issued in violation of any pre-emptive rights.

(b) HEL's authorized capital consists of 2,500,000 ordinary shares
of L.1.00 each, of which all shares are issued. The company
registers show and to our knowledge, the beneficial owners of
the shares at the date hereof are set out in the First
Schedule hereto. All shares have been duly authorized and
validly issued and are fully paid and non-assessable and have
not been issued in violation of any pre-emptive rights.

3. EHL and HEL have the necessary power and authority to execute, deliver
and perform the obligations under the agreements to which they are
parties.

4. The agreements to which they are parties have or will be duly
authorized by the Directors of EHL and HEL.

5. The agreements to which they are parties have or will be duly and
validly executed and delivered.

6. The agreements to which they are parties do or will create legal,
valid and binding obligations of EHL and HEL enforceable against them
in accordance with their terms, except that such enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar facts or laws now or hereafter in effect relating to
creditors' rights or remedies generally and subject to general legal
and equitable principles regardless of whether enforcement is sought
in a proceeding at law or in equity.

7. The execution and delivery of the agreements to which they are parties
by EHL and HEL do not, and the completion by them of the transactions
contemplated by the agreements to which they are parties will not, (i)
breach any provision of their respective Memorandum and Articles of
Association, (ii) breach applicable provisions of statutory law or
regulation, or (iii) constitute or result in a breach, or a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument advised to us to which EHL and HEL are a party
or by which they or their properties are
<PAGE> 75
bound, which breach or default could reasonably be expected to have a
material adverse effect on EHL or HEL (other than breaches or defaults
that have been waived by the other party thereto or conflicts,
breaches, violations or defaults under agreements governing or
otherwise relating to indebtedness of EHL or HEL that Buyer has
represented will be repaid at or promptly after the Closing from the
proceeds of the Public Offering).

8. All consents and approvals on the part of EHL and HEL required as of
the date of this opinion in connection with the execution, delivery
and performance of the agreements to which they are parties have been
obtained and are in effect.

9. Except as may be set forth in Schedule __ to the Stock Purchase
Agreement, to the best of our knowledge, there is no litigation and
there are no arbitration proceedings or governmental proceedings,
suits or investigations pending, instituted or overtly threatened
against EHL and HEL and relating to their Businesses that could
reasonably be expected to have a material adverse effect on their
Businesses taken as a whole.

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF INCORPORATION

EAGLE HORIZON, INC.

1. The name of the corporation is Eagle Horizon, Inc.

2. The address of its registered office in the State of Delaware
is 1209 Orange Street, the City of Wilmington, County of New Castle, 19801.
The name of its registered agent at such address is The Corporation Trust
Company.

3. The nature of the business or purposes to be conducted or
promoted is:

To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.

4. The total number of shares of common stock which the
corporation shall have authority to issue is 10,000 and the par value of each
such share is $1.00.

5. The name and mailing address of each incorporator is as
follows:

NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002

6. The corporation is to have perpetual existence.

7. The name and mailing address of the initial director of the
corporation is as follows:

NAME ADDRESS
---- -------
Paul A. Frame 50 Briar Hollow Lane West
7th Floor
Houston, Texas 77027

8. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to adopt, amend or
repeal the by-laws of the corporation.

9. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation
may be kept (subject to any provision
<PAGE> 2
contained in the statutes) outside the State of Delaware at such place or
places as may be designated from time to time by the board of directors or in
the by-laws of the corporation. Elections of directors need not be by written
ballot unless the by-laws of the corporation shall so provide.

10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.

11. Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.

I, THE UNDERSIGNED, being the incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and
certifying that this is my act and deed and the facts herein stated are true,
and accordingly have hereunto set my hand this 17th day of December, 1996.

_________________________________
William Mark Young

2
<PAGE> 3
EXHIBIT 3.1

CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
EAGLE HORIZON, INC.

Pursuant to the provisions of Section 242 of the General Corporation
Law of Delaware, Eagle Horizon, Inc. (the "Company"), a corporation organized
and existing under and by virtue of the General Corporation Law of Delaware,
does hereby certify:

FIRST: That the Board of Directors of the Company, by written consent
pursuant to Section 141(f) of the General Corporation Law of Delaware, adopted
a resolution setting forth and declaring advisable the following proposed
amendments to the Certificate of Incorporation of the Company.

Paragraph 1 of the Certificate of Incorporation of the Company shall
be amended to read in its entirety as follows:

"The name of the corporation is Eagle Geophysical,
Inc."

Paragraph 4 of the Certificate of Incorporation of the Company shall
be amended to read in its entirety as follows:

"The aggregate number of shares of stock which the
Company shall have authority to issue is 30,000,000,
consisting of and divided into:

(i) one class of 25,000,000 shares of Common
Stock, par value $0.01 per share; and

(ii) one class of 5,000,000 shares of Preferred
Stock, par value $0.01 per share, which may be
divided into and issued in series, as hereinafter
provided.

The Board of Directors is authorized, subject to
limitations prescribed by law and the provisions of this
Paragraph 4, to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate
pursuant to the applicable law of Delaware, to establish from
time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and
rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
<PAGE> 4
At the time the provisions included herein become
effective (the "Effective Date"), each share of Common Stock,
par value $1.00 per share, issued and outstanding or held as
treasury stock immediately prior to the Effective Date ("Old
Common Stock") shall be reclassified and become 3,400 shares
of Common Stock, par value $0.01 per share ("New Common
Stock"). Each holder of a certificate or certificates which
immediately prior to the Effective Date represented issued
shares of Old Common Stock (the "Old Certificates," whether
one or more) shall be entitled to receive, upon surrender of
such Old Certificates to the corporation for cancellation, a
certificate or certificates (the "New Certificates," whether
one or more) representing the number of shares of the New
Common Stock into which and for which the shares of Old Common
Stock formerly represented by such Old Certificates so
surrendered, are reclassified under the terms hereof."

Paragraph 10 of the Certificate of Incorporation of the Company shall
be deleted and a new Paragraph 10 shall be added to the Certificate of
Incorporation to read in its entirety as follows:

"A director of the corporation shall not, to the
fullest extent permitted by the General Corporation Law of
Delaware as the same exists or may hereafter be amended, be
liable to the corporation or its stockholders for monetary
damages for breach of his or her fiduciary duty to the
corporation or its stockholders. The corporation is required
to indemnify its directors and officers as provided in the
By-laws of the corporation. The affirmative vote of the
holders of two-thirds or more of the outstanding stock of the
corporation that gives the holder thereof the right to vote
for directors and other matters ("Voting Stock") shall be
required to amend this Paragraph 10."

A new Paragraph 12 shall be added to the Certificate of Incorporation
of the Company to read in its entirety as follows:

"If at any time the corporation has more than ten
stockholders, at that time, no action required by the General
Corporation Law of Delaware to be taken at an annual or
special meeting of the stockholders of the corporation may be
taken without a meeting, without prior notice or without a
vote. This Paragraph 12 may not be amended without the
affirmative vote of holders of at least 80% of the
corporation's outstanding Voting Stock."

A new Paragraph 13 shall be added to the Certificate of Incorporation
of the Company to read in its entirety as follows:

"It shall be a proper corporate purpose, reasonably
calculated to benefit stockholders, for the Board of Directors
to base the response of the corporation to any "Acquisition
Proposal" on the evaluation by the Board of Directors of what

2
<PAGE> 5
response is in the best interests of the corporation, and for
the Board of Directors, in evaluating what response is in the
best interests of the corporation, to consider: (i) the best
interests of the stockholders and, for this purpose, the Board
of Directors shall consider, among other factors, not only the
consideration being offered in the Acquisition Proposal, in
relation to the market price, but also in relation to the
value of the corporation in a freely negotiated transaction
and in relation to the estimate by the Board of Directors of
the future value of the corporation as an independent entity;
and (ii) such other factors as the Board of Directors
determines to be relevant, including, among other factors, the
social, legal and economic effects upon the corporation's
employees, suppliers, customers and business and the
communities in which the corporation operates. For purposes
of this Paragraph 13, "Acquisition Proposal" means any
proposal of any person or entity (a) for a tender offer or
exchange offer for any equity security of the corporation, (b)
to merge or consolidate the corporation with another
corporation, or (c) to purchase or otherwise acquire all or
substantially all of the properties and assets of the
corporation. The affirmative vote of the holders of
two-thirds or more of the outstanding Voting Stock of the
corporation shall be required to amend this Paragraph 13."

A new paragraph 14 shall be added to the Certificate of Incorporation
of the Company to read in its entirety as follows:

"Certain Business Combinations.

Section 1. Approval of Certain Business Combinations. A
Business Combination (as hereinafter defined) shall require
(i) only such affirmative vote as is required by law and any
other provision of this Certificate of Incorporation, if all
of the conditions specified in either of Paragraph A or
Paragraph B of this Section 1 are met or (ii) if all of the
conditions specified in either of Paragraph A or Paragraph B
of this Section 1 are not met, in addition to any affirmative
vote required by law or this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of the
outstanding shares of the Voting Stock of the corporation,
voting together as a single class, which affirmative vote
shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by
law.

A. Approval by Disinterested Directors. The
Business Combination shall have been approved by a majority of
the Disinterested Directors (as hereinafter defined).

3
<PAGE> 6
B. Price and Procedure Requirements. All of the
following conditions shall have been met:

(i) The aggregate amount of the cash and
the Fair Market Value (as hereinafter defined) as of the date
of the consummation of the Business Combination of
consideration other than cash to be received per share by
holders of shares of Common Stock in such Business Combination
shall be at least equal to the higher of the following:

(a) (if applicable) the highest
price per share (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the Interested
Stockholder (as hereinafter defined) for any shares of Common
Stock or the common stock of any Predecessor Corporation (as
hereinafter defined) acquired by it (1) within the two-year
period immediately prior to the first public announcement of
the terms of the proposed Business Combination (the
"Announcement Date") or (2) in the transaction in which it
became an Interested Stockholder, whichever is higher; or

(b) the Fair Market Value per share
of Common Stock on the Announcement Date or on the date on
which the Interested Stockholder became an Interested
Stockholder (such later date is referred to in this Paragraph
14 as the "Determination Date"), whichever is higher.

(ii) The aggregate amount of the cash and
Fair Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of shares of any other class of
outstanding Voting Stock shall be at least equal to the
highest of the following (it being intended that the
requirements of this Paragraph B(ii) shall be required to be
met with respect to every class of outstanding Voting Stock,
whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock);

(a) (if applicable) the highest
price per share (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of such class of Voting Stock or a
substantially identical class of stock of any Predecessor
Corporation acquired by it (1) within the two-year period
immediately prior to the Announcement Date or (2) in the
transaction in which it became an Interested Stockholder,
whichever is higher;

(b) (if applicable) the highest
preferential amount per share to which the holders of shares
of such class of Voting Stock are entitled in the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the corporation; or

4
<PAGE> 7
(c) the Fair Market Value per share
of such class of Voting Stock on the Announcement Date or on
the Determination Date, whichever is higher.

(iii) The consideration to be received by
holders of a particular class of outstanding Voting Stock
(including Common Stock) shall be in cash or in the same form
as the Interested Stockholder has previously paid for shares
of such class of Voting Stock or stock of a Predecessor
Corporation. If the Interested Stockholder has paid for
shares of any class of Voting Stock or stock of a Predecessor
Corporation with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either
cash or the form used to acquire the largest number of shares
of such class of Voting Stock or stock of a Predecessor
Corporation previously acquired by it. The price determined
in accordance with Paragraphs B(i) and B(ii) of this Section 1
shall be subject to appropriate adjustment in the event of any
special dividend or other disposition of material assets other
than in the ordinary course of business, stock dividend, stock
split, combination of shares or similar event. Whether
specific consideration satisfies this subsection shall be
determined by vote of a majority of the Disinterested
Directors.

(iv) After such Interested Stockholder
has become an Interested Stockholder and prior to the
consummation of such Business Combination: (a) except as
approved by a majority of the Disinterested Directors, there
shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over
the Common Stock as to dividends or upon liquidation; (b)
there shall have been (1) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as
approved by a majority of the Disinterested Directors, and (2)
an increase in such annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction that has the effect of reducing the number of
outstanding shares of the Common Stock, unless the failure so
to increase such annual rate is approved by a majority of the
Disinterested Directors; and (c) such Interested Stockholder
shall not have become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction that
results in such Interested Stockholder's becoming an
Interested Stockholder.

(v) After such Interested Stockholder
has become an Interested Stockholder, such Interested
Stockholder shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder), of any
loans, advances, guaranties, pledges or other financial
assistance or any tax credits or other tax advantages provided
to or by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.

5
<PAGE> 8
(vi) A proxy or information statement
describing the proposed Business Combination and complying
with the requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be
mailed to public stockholders of the corporation at least 30
days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).

Section 2. Certain Definitions. For purposes of this
Paragraph 14:

A. "Business Combination" shall mean any
transaction that is referred to in any one or more of the
following clauses (i) through (v):

(i) any merger or consolidation of the
corporation or any Subsidiary (as hereinafter defined) with
(a) any Interested Stockholder or (b) any other corporation
(whether or not itself an Interested Stockholder) that is, or
after such merger or consolidation would be, an Affiliate (as
hereinafter defined) of an Interested Stockholder; or

(ii) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested Stockholder
or any Affiliate of any Interested Stockholder of any assets
of the corporation or any Subsidiary having an aggregate Fair
Market Value of $5 million or more; or

(iii) the issuance or transfer by the
corporation or any Subsidiary (in one transaction or series of
transactions) of any securities of the corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate
Fair Market Value of $5 million or more; or

(iv) the adoption of any plan or proposal
for the liquidation or dissolution of the corporation proposed
by or on behalf of any Interested Stockholder or any Affiliate
of any Interested Stockholder; or

(v) any reclassification of securities
(including any reverse stock split), or recapitalization of
the corporation, or any merger or consolidation of the
corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) that has the effect,
directly or indirectly, of increasing the proportionate share
of the outstanding shares of any class of Equity Security (as
hereinafter defined) of the corporation or any Subsidiary that
is directly or indirectly owned by any Interested Stockholder
or any Affiliate of any Interested Stockholder.

6
<PAGE> 9
B. "Person" shall mean any individual, firm,
corporation or other entity.

C. "Interested Stockholder" shall mean any
Person (other than the corporation or any Subsidiary or
employee benefit plan of the corporation or any Subsidiary)
that:

(i) is the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the
outstanding Voting Stock; or

(ii) at any time within the two-year
period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10% or more of
the voting power of the then outstanding Voting Stock; or

(iii) is an assignee of or has otherwise
succeeded to any shares of Voting Stock or of capital stock of
any Predecessor Corporation that were at any time within the
two-year period immediately prior to the date in question
beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.

D. A person shall be a "beneficial owner" of any
stock that:

(i) such Person or any of its Affiliates
or Associates (as hereinafter defined) beneficially owns
directly or indirectly; or

(ii) such Person or any of its Affiliates
or Associates has (a) the right to acquire (whether such right
is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote
pursuant to any agreement, arrangement or understanding; or

(iii) is beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of such stock.

E. For the purpose of determining whether a
Person is an Interested Stockholder pursuant to Paragraph C of
this Section 2, the number of shares of Voting Stock deemed to
be outstanding shall include shares deemed owned through
application of Paragraph D of this Section 2 but shall not
include any other shares of Voting Stock that may be issuable
pursuant to any agreement,

7
<PAGE> 10
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.

F. "Affiliate" and "Associate" shall have the
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as amended, as in effect on May 1, 1997.

G. "Subsidiary" means any corporation of which a
majority of any class of Equity Security is owned, directly or
indirectly, by the corporation, provided, however, that for
purposes of the definition of Interested Stockholder set forth
in Paragraph C of this Section 2, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
Equity Security is owned, directly or indirectly, by the
corporation.

H. "Disinterested Director" means any member of
the Board of Directors who is unaffiliated with the Interested
Stockholder and was a member of the Board of Directors
immediately before the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested
Stockholder and is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the
Board of Directors.

I. "Fair Market Value" means: (i) in the case
of stock, the highest closing sale price during the 30-day
period immediately preceding the date in question of a share
of stock (a) on the principal United States securities
exchange registered under the Securities Exchange Act of 1934
on which such stock is listed, or, (b) if such stock is not
listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period
preceding the date in question on The Nasdaq Stock Market or
any system then in use, or, (c) if no such quotations are
available, the fair market value on the date in question of a
share of such stock as determined by a majority of the
Disinterested Directors in good faith; or (ii) in the case of
property other than cash or stock, the fair market value of
such property on the date in question as determined by a
majority of the Disinterested Directors in good faith.

J. In the event of any Business Combination in
which the corporation survives, the phrase "consideration
other than cash to be received" as used in Paragraphs B(i) and
B(ii) of Section 1 of this Paragraph 14 shall include the
shares of Common Stock and the shares of any other class of
outstanding Voting Stock retained by the holders of such
shares.

K. "Equity Security" shall have the meaning
ascribed to such term in Section 3(a)(11) of the Securities
Exchange Act of 1934, as amended, as in effect on April 1,
1996.

8
<PAGE> 11
L. A "Predecessor Corporation" includes any
corporation of which the corporation was at one time a
wholly-owned subsidiary, or of which the corporation would be
deemed to be a legal successor in interest (by contract or by
merger or other operation of law).

Section 3. Powers of the Board of Directors. A majority
of the Disinterested Directors shall have the power and duty
to determine for the purposes of this Paragraph 14, on the
basis of information known to them after reasonable inquiry,
(i) whether a Person is an Interested Stockholder, (ii) the
number of shares of Voting Stock beneficially owned by any
Person, (iii) whether a Person is an Affiliate or Associate of
another, (iv) whether the assets that are the subject of any
Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the corporation
or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $5 million or more. A majority
of the Disinterested Directors shall have the further power to
interpret all of the terms and provisions of this Paragraph
14.

Section 4. No Effect on Fiduciary Obligations of
Interested Stockholders. Nothing contained in this Paragraph
14 shall be construed to relieve any Interested Stockholder
from any fiduciary obligation imposed by law.

Section 5. Amendment of Paragraph 14. Notwithstanding
any other provisions of this Certificate of Incorporation, or
the Bylaws (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of
Incorporation or the Bylaws), the affirmative vote of the
holders of 80% or more of the outstanding shares of the Voting
Stock, voting together as a single class, shall be required to
alter, amend or repeal, or adopt any provision inconsistent
with, this Paragraph 14 or any provision hereof."

SECOND: That thereafter, pursuant to resolution of the Board of
Directors, the proposed amendment was submitted to the stockholders of the
Company, and the necessary number of shares as required by statute was voted in
favor of the amendment.

THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of Delaware.

FOURTH: That this Certificate of Amendment shall be effective upon the
filing hereof.

9
<PAGE> 12
IN WITNESS WHEREOF, the Company has caused this Certificate of
Amendment to be executed this ____ day of May, 1997.

EAGLE HORIZON, INC.

By:
------------------------------
Jay N. Silverman, President

<PAGE> 1
EXHIBIT 3.2

AMENDED AND RESTATED BYLAWS

EAGLE GEOPHYSICAL, INC., A DELAWARE CORPORATION

Article I

Offices

Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.

Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.

Article II

Stockholders

Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.

Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, the holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned
<PAGE> 2
meeting shall be given to each stockholder of record entitled to vote at such
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally called.

Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.

Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.

Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.

If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.

A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

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Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.

Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.

Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.

No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.

Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.

Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer,

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<PAGE> 4
agent or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.

All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.

At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.

Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.

Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:

(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.

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Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.

Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.

Article III

Board of Directors

Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.

The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the Board of
Directors (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the Board of Directors). If the Board of Directors makes no such
determination, the number of directors shall be the number set forth in the
Certificate of Incorporation. Each director shall hold office for the term for
which he is elected, and until his successor shall have been elected and
qualified or until his earlier death, resignation or removal.

Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.

Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.

Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.

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<PAGE> 6
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.

Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.

Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.

Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.

Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.

If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.

Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.

Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may

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be taken without a meeting if all members of the Board of Directors or
committee, as the case may be consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee. Such consent shall have the same force and effect as a unanimous
vote at a meeting, and may be stated as such in any document or instrument
filed with the Secretary of State of Delaware.

Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.

Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.

Article IV

Committees

Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to

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<PAGE> 8
declare a dividend or to authorize the issuance of stock. Any such designated
committee may authorize the seal of the Corporation to be affixed to all papers
which may require it. In addition to the above such committee or committees
shall have such other powers and limitations of authority as may be determined
from time to time by resolution adopted by the Board of Directors.

Section 2. Procedure; Meetings; Quorum. Any committee
designated pursuant to Section 1 of this Article shall choose its own chairman,
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when requested, shall fix its own rules or procedures, and shall
meet at such times and at such place or places as may be provided by such
rules, or buy resolution of such committee or resolution of the Board of
Directors. At every meeting of any such committee, the presence of a majority
of all the members thereof shall constitute a quorum and the affirmative vote
of a majority of the members present shall be necessary for the adoption by it
of any resolution.

Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.

Article V

Officers

Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, one or more Vice Presidents (any one or more
of whom may be designated Executive Vice President or Senior Vice President), a
Treasurer, a Secretary and, if the Board of Directors so elects, a Chairman of
the Board and such other officers as the Board of Directors may from time to
time elect or appoint. Each officer shall hold office until his successor
shall be duly elected and shall qualify or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation provides otherwise. Except for the Chairman of the Board, if
any, no officer need be a director.

Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.

Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.

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Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.

Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.

Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.

Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.

Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform the duties of the President, and when so
acting shall have all the powers of and be subject to all the restrictions upon
the President. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.

Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.

Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers

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and duties pertaining to his office, together with such other powers and duties
as designated in these bylaws and as from time to time may be assigned to him
by the chief executive officer or the Board of Directors. The Assistant
Treasurers shall exercise the powers of the Treasurer during that officer's
absence or inability or refusal to act.

Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.

Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.

Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.

Article VI

Indemnification of Directors,
Officers, Employees and Agents

Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the

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Delaware General Corporation Law, as the same exists or may hereafter be
amended, (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment)
against all expense, liability and loss (including, without limitation,
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as to a
person who has ceased to serve in the capacity which initially entitled such
person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.

Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.

Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

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Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.

Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.

Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.

Article VII

Capital Stock

Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.

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Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.

Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.

Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.

Article VIII

Miscellaneous Provisions

Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.

Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.

Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice shall be deemed to have been given
on the day of such transmission or mailing, as

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the case may be.

Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or the bylaws.

Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.

Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.

Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.

Article IX

Amendments

If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.

Adopted as of May 21, 1997, by the Board of Directors of Eagle Geophysical,
Inc.

/s/ RICHARD W. McNAIRY
------------------------------------
Richard W. McNairy, Secretary

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EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report and to all references to our Firm included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

Houston, Texas
June 2, 1997

<PAGE> 1
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.

Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers