Geokinetics Announces First Quarter 2008 Results

COMPANY ACHIEVES RECORD REVENUES AND INCREASES BACKLOG

HOUSTON, May 7 /PRNewswire-FirstCall/ -- Geokinetics Inc. (Amex: GOK)
announced today financial results of operations for the first three months of
2008. Highlights include:
-- Increased revenue by 8% from 2007 to $120.2 million for the three
months ending March 31, 2008.
-- EBITDA decreased by 1% from 2007 to $18.4 million for the three months
ending March 31, 2008.
-- Net income to common stockholders of $2.6 million, or $0.24 per
fully-diluted common share for the three months ending March 31, 2008,
as compared to $5.1 million, or $0.75 per fully-diluted common share in
the same quarter last year.
-- Mobilized operations in Bangladesh, Bolivia and Tanzania and assembled
new transition zone crew for initial work in Australia and New Zealand.
-- Invested $25.7 million in the first quarter of 2008, primarily to
increase channel count internationally, as part of the Company's 2008
$64.5 million capital budget.
-- Increased backlog to $417 million at March 31, 2008, from $411 million
at December 31, 2007 and $283 million at March 31, 2007.

Three Months Results
In the first quarter ended March 31, 2008, revenue increased 8% to $120.2
million compared to $111.0 million for the first quarter of 2007. Revenue
consisted of $61.7 million for North American data acquisition, $55.6 million
for International data acquisition and $2.9 million from data processing.
Increased revenues were driven primarily by a stronger Canadian winter season
in 2008 and the impact of the Company's 2007 capital investment program
increasing revenue generating capacity in 2008.
EBITDA (as defined below) decreased slightly to $18.4 million for the
first quarter of 2008, compared to $18.6 million in the first quarter of 2007.
EBITDA improved in Data Processing and North America, both in Canada and the
U.S., however, the contribution internationally was reduced due to the first
quarter of 2007 including a very large international project that accelerated
a significant amount of revenue into the quarter; excluding the effect of this
project, activity levels were up internationally during the first quarter of
2008.
The Company had net income to common stockholders of $2.6 million, or
$0.24 per diluted common share, in the first quarter of 2008, compared to net
income of $5.1 million, or $0.75 per diluted common share, for the same
quarter in 2007. The reduced net income was primarily due to higher
depreciation expense as a result of the Company's capital investment program
and the impact of a $1.5 million gain from an insurance claim which occurred
in the first quarter of 2007. These were partially offset by lower interest
expense in the 2008 quarter due to lower debt levels and lower interest rates
during the quarter.
Selected Balance Sheet Data
Cash and cash equivalents and restricted cash totaled $23.8 million at
March 31, 2008, of which $1.4 million was restricted cash. Total debt was
$92.0 million with $20.2 million of that amount being current. Total debt to
capitalization was 31.9% as compared to 29.4% at December 31, 2007. The
increase was primarily a result of additional borrowings to fund the Company's
capital investment program.
Backlog Increases
The Company's backlog at the end of the first quarter reached a new
quarterly high of $417 million, up from $411 million at December 31, 2007, and
$283 million at the end of the first quarter of 2007. Approximately $235
million of current backlog is related to international business (excluding
Canada), with the remaining $182 million in North America ($176 million of
this amount is attributed to the United States). Current backlog does not
include a $59 million project in Argentina which was previously included in
backlog starting in July 2007. This project has been excluded from current
backlog because of continuing delays and uncertainty regarding the timing of
commencement and eventual completion of the project, however, this project was
included in backlog at December 31, 2007.
Operations Overview
During the first quarter of 2008, crew activity and utilization increased
over the fourth quarter of 2007. In Canada, the Company operated five crews
most of the quarter in Alberta and the Northwest Territories. In the United
States, a total of eight crews worked actively in Central Texas, North Dakota
and the Texas/Louisiana Gulf Coast region. In Latin America, the Company
operated four to six crews during the quarter, primarily in Brazil and
Colombia, and mobilized a crew into Bolivia. In the Eastern Hemisphere,
marketing efforts initiated in 2007 delivered positive results. The Company
operated its transition zone crew in Egypt most of the quarter and the
Company's ocean bottom cable ("OBC") crew in Australia worked approximately
two months of the quarter. In addition, the Company mobilized crews in
Bangladesh and Tanzania which have now commenced operations. Finally, the
Company began mobilizing for operations in Mozambique and set up a new
transition zone crew that will initially work in Australia and New Zealand.
In the first quarter of 2008, Geokinetics continued to invest in
revenue-generating equipment and capacity. A total of $25.7 million was
invested primarily in international operations. The Company added channels
for Latin America and the Eastern Hemisphere during the quarter. Investment
in these recording channels provides Geokinetics' clients with enhanced
sub-surface resolution and further enables the Company to compete on larger
contracts. In addition, the Company added additional Sercel SeaRay equipment
for its Australian OBC crew and outfitted a new transition zone crew for the
Australasia region. As of March 31, 2008, Geokinetics had approximately
94,700 stations of single-component and 7,450 stations of multi-component
recording equipment, equating to a total channel count of 118,300. This
compares to 108,000 channels at December 31, 2007 and 94,000 channels at
March 31, 2007 using this methodology.
Second Quarter 2008 Activity Outlook
Geokinetics is providing this update to assist shareholders in
understanding the operational expectations for the second quarter of 2008. As
is typical with the conclusion of the Canadian winter season, the Company
reduced operations in Canada and expects to operate only one crew for part of
the second quarter while the ground thaws and incur repair and maintenance
costs, as compared to operating five crews during most of the first quarter.
Geokinetics expects to continue operating eight crews in the United States as
it did in the first quarter of 2008, and while the Company has experienced
some weather delays early in the second quarter which affected two crews, the
Company expects to have strong utilization for the remainder of the quarter.
Geokinetics expects activity levels in Colombia to remain strong, but down
slightly from first quarter. The ramp-up of a crew in Bolivia that commenced
operations late in the first quarter, combined with consistent activity levels
in Brazil, is expected to keep crews working for the majority of the second
quarter. In the Eastern Hemisphere, Geokinetics expects its OBC crew in
Australia to be down for at least half of the quarter before ramping-up
operations later in the quarter. The Company's new transition zone crew in
Australia commenced operations mid-quarter and is expected to work the
remainder of the quarter. In Egypt, the Company's crew is expected to work the
majority of the quarter, with the exception of time needed for a move between
projects. In Bangladesh, one crew is expected to work a majority of the
second quarter versus being idle for most of the first quarter. In addition,
new crews are expected to commence operations in Tanzania and Mozambique
during the quarter, but are not expected to contribute significantly to the
second quarter. Finally, the Company is currently in the early stages of
mobilizing two crews for operations in Angola which are expected to commence
during the third and fourth quarters.
Management Comment
Richard Miles, President and Chief Executive Officer, said: "Continued
investment in recording channel capacity, combined with 2007 international
marketing efforts, contributed to strong results in the first quarter of 2008.
Typically, our first quarter revenues and profits increase from the fourth
quarter as Canada completes its winter season, and this year has been no
exception. The second quarter is historically our lowest quarter due to the
Canadian thaw and other seasonality in our business. We expect the severity
of any decrease to be largely dependent on how well we are able to perform
with our new country startups and the restart of our upgraded OBC crew in
Australia during the quarter. Our backlog remains strong and I am excited
about our revenue visibility into next year. The increase in our order book is
a testament to the increasing demand for our innovative solutions, which help
our customers maximize the returns from their complex E&P projects. In
addition, an increasing part of our order book and opportunities are coming
from the shallow water environments around the world, which is very
encouraging given our expertise in those areas."
Miles continued, "Robust customer demand is driving our capital investment
decisions for adding increased revenue generating capacity. In the first
quarter we spent $25.7 million on new equipment to increase our recording
capacity in Latin America, the Eastern Hemisphere and to start up a new
transition zone crew. We continue to focus on improving our worldwide
operations for improved efficiency and service to our customers, profitability
and shareholder value."
Below are condensed consolidated Statements of Results of Operations.
More detailed information is available in the Company's Form 10-Q for the
quarter ended March 31, 2008 which will be filed by May 12, 2008.
For the Quarter Ended
March 31,
2008 2007
(In thousands)
Revenue $120,154 $110,964

Expenses:
Operating expenses 92,415 83,129
General and administrative 9,302 9,220
Depreciation and amortization 10,991 7,532
Total expenses 112,708 99,881
Other gain (loss), net (81) 1,542
Income from operations 7,365 12,625

Other income (expense):
Interest expense, net (1,321) (3,887)
Other (661) 253
(1,982) (3,634)
Income before income taxes 5,383 8,991
Provision for income taxes 1,520 2,687
Net income 3,863 6,304
Preferred stock dividend and accretion costs 1,276 1,178
Income applicable to common stockholders $2,587 $5,126

Income per common share - basic $0.25 $0.89
Income per common share - diluted $0.24 $0.75

Weighted average common shares outstanding
- basic 10,316 5,758
Weighted average common shares outstanding
- diluted 10,594 8,377

The Company defines EBITDA as Earnings before Interest, Taxes, Other
Income (Expense) (including returns to preferred stockholders, foreign
exchange gains/losses, gains/losses on sale of equipment and insurance
proceeds, warrant expense and other income/expense), and Depreciation and
Amortization. EBITDA is not a measure of financial performance derived in
accordance with Generally Accepted Accounting Principles ("GAAP") and should
not be considered in isolation or as an alternative to net income as an
indication of operating performance. See below for reconciliation from Net
Income to Common Stockholders to EBITDA amounts referred to above:

For the Quarter Ended
March 31,
2008 2007
(In thousands)
Net Income to Common Stockholders $2,587 $5,126
Preferred Stock Dividends and Accretion Costs 1,276 1,178
Net Income 3,863 6,304
Provision for income taxes 1,520 2,687
Interest Expense, net 1,321 3,887
Other Expense (Income) (as defined above) 742 (1,795)
Depreciation and Amortization 10,991 7,532
EBITDA $18,437 $18,615

Conference Call and Webcast Information
Geokinetics has scheduled a conference call and webcast on Thursday,
May 8, 2008, beginning at 11:00 a.m. Eastern Daylight Time and 10:00 a.m.
Central Daylight Time to discuss its first quarter 2008 financial and
operational results. The webcast may be accessed online through Geokinetics'
website at http://www.geokinetics.com in the Investor Relations section. A
limited number of telephone lines will also be available to participants ten
minutes prior to the start of the webcast by dialing (877) 407-8035 for
domestic or (201) 689-8035 for international.
A replay of the webcast will be available online at
http://www.geokinetics.com in the Investor Relations section and at
http://www.investorcalendar.com. A telephone audio replay will also be
available through May 22, 2008, by dialing (877) 660-6853 for domestic or
(201) 612-7415 for international, account #286 and conference ID#281917. If
you have any questions regarding this procedure, please contact Diane Anderson
at (713) 850-7600.
About Geokinetics Inc.
Geokinetics Inc., based in Houston, Texas, is a leading global provider of
seismic acquisition and high-end seismic data processing services to the oil
and gas industry. Geokinetics has strong operating presence in North America
and is focused on key markets internationally. Geokinetics operates in some of
the most challenging locations in the world from the Arctic to mountainous
jungles to the transition zone environments. More information about
Geokinetics is available at http://www.geokinetics.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements, other than statements of historical facts, included in this
earnings release that address activities, events or developments that
Geokinetics expects, believes or anticipates will or may occur in the future
are forward- looking statements. These statements include but are not limited
to statements about the business outlook for the year, backlog and bid
activity, business strategy, related financial performance and statements with
respect to future benefits. These statements are based on certain assumptions
made by Geokinetics based on management's experience and perception of
historical trends, industry conditions, market position, future operations,
profitability, liquidity, backlog, capital resources and other factors
believed to be appropriate. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
Geokinetics, which may cause actual results to differ materially from those
implied or expressed by the forward-looking statements. These include risks
relating to financial performance and results, job delays or cancellations,
impact from severe weather conditions and other important factors that could
cause actual results to differ materially from those projected, or backlog not
to be completed, as described in the Company's reports filed with the
Securities and Exchange Commission. Backlog consists of written orders and
estimates of Geokinetics' services which it believes to be firm, however, in
many instances, the contracts are cancelable by customers so Geokinetics may
never realize some or all of its backlog, which may lead to lower than
expected financial performance.
Although Geokinetics believes that the expectations reflected in such
statements are reasonable, it can give no assurance that such expectations
will be correct. All of Geokinetics' forward-looking statements, whether
written or oral, are expressly qualified by these cautionary statements and
any other cautionary statements that may accompany such forward-looking
statements. Any forward-looking statement speaks only as of the date on which
such statement is made and Geokinetics undertakes no obligation to correct or
update any forward-looking statement, whether as a result of new information,
future events or otherwise.
SOURCE Geokinetics Inc.

Scott A. McCurdy, Vice President and CFO of Geokinetics Inc., +1-713-850-7600,
Fax, +1-713-850-7330