314606--4/2/2007--GEOKINETICS

related topics

{gas, price, oil}

{operation, natural, condition}

{customer, product, revenue}

{stock, price, share}

{operation, international, foreign}

{debt, indebtedness, cash}

{product, market, service}

{personnel, key, retain}

{stock, price, operating}

{acquisition, growth, future}

{cost, operation, labor}

{cost, contract, operation}

{loan, real, estate}

{regulation, change, law}

{cost, regulation, environmental}

The Company depends on capital expenditures by the oil and natural gas industry, and the decline in the price of oil and natural gas or decreases in the level of such expenditures could adversely affect the Company s operations. The seismic data acquisition services industry is capital intensive and sources of cash to finance the Company s capital expenditures may not always be available. The Company s seismic data acquisition services are often conducted in extreme weather, in difficult terrain and marine environments. As a result, these operations are subject to risks of injury to Company personnel and loss of seismic data acquisition equipment and operating in these environments can adversely affect the Company s profitability. The Company s operating results from seismic data acquisition services can be significantly impacted from quarter to quarter due to a change in the timing of a few large jobs occurring at any one time. Historically, the Company has been dependent on a few customers operating in a single industry; the loss of one or more customers could adversely affect its financial condition and results of operations. The Company s seismic data acquisition services revenues are subject to seasonal conditions and its customers budgeting cycles. The Company s high level of fixed costs can leave it vulnerable to downturns in revenues, which can result in losses. The Company may not be able to make its seismic data processing and interpretation services segment a profitable business segment. The Company faces intense competition in its business that could result in downward pricing pressure and the loss of market share. The Company relies on a limited number of key suppliers for specific seismic services and equipment. The profitability of many of the Company s contracts depends significantly on its ability to perform the services without delays, which is often subject to factors beyond the Company s control. The Company may not realize its backlog, which may lead to lower than expected revenues. The Company is subject to risks related to its international operations that could harm its business and results of operations. The Company s results of operations can be significantly affected by currency fluctuations. The Company s operations are subject to government regulation which may adversely affect its future operations. If the Company does not effectively integrate the Grant acquisition, its operating results could be affected. The Company may be unable to retain and attract management and skilled and technically knowledgeable employees. The Company s common stock is currently traded on the over the counter ( OTC ) market, which may generally involve certain risks not present in all securities. The Company s stock price may be volatile and may decrease in response to various factors, which could adversely affect its business and cause its stockholders to suffer significant losses. The Company may not be approved for listing on a nationally recognized exchange and/or an active trading market may not develop to provide investors with adequate liquidity. A majority of the Company s voting stock is controlled by a small number of stockholders whose interests may conflict with those of other holders and consent of the holders of the Company s Series B Preferred Stock will be required to take certain actions. The Company has a substantial amount of debt, which could adversely affect the Company s financial health and adversely affect the trading price of Company s common stock. The majority of the Company s debt is floating rate. The indentures governing the Company s various credit agreements contain various restrictive covenants that limit management s discretion in operating the Company s business. In particular, these covenants limit the Company s ability to, among other things:

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314606--4/2/2007--GEOKINETICS_INC