Management's Discussion and Analysis of Financial Condition and Results of Operations contains certain "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"), which reflect management's best judgment based on factors currently known. Actual results could differ materially from those anticipated in these "forward looking statements" as a result of a number of factors, including but not limited to those discussed under the headings "Cautionary Statements," "Risk Factors," and "Forward Looking Statements" provided by us pursuant to the safe harbor established by the federal securities laws should be evaluated in the context of these factors.

This discussion and analysis should be read in conjunction with our consolidated financial statements and accompanying notes contained herein.

EXECUTIVE OVERVIEW

Our business is driven by the supply and demand of hydrocarbon commodities in the United States and, to a certain extent, the international markets. Virtually all of our customers are involved in the exploration and/or production of oil and natural gas in the continental United States and the coastal waters of the Gulf of Mexico. Not surprisingly, a higher demand for oil and gas results in a higher demand for our equipment and services. Our operational levels for 2008 were consistent with 2007 for the first three quarters of the year but declined during the fourth quarter as the demand for natural gas fell.

In the immediate past, we have been very active in acquiring companies which we believe are well aligned with our Company philosophy. The companies acquired have been complementary to our core business segments. We plan to diversify into other service lines and other service areas through additional acquisitions, as such opportunities arise that we believe fit into our overall business strategy.

We continue to maintain a large and visible presence along the coast of Louisiana to service our customers in the offshore exploration and production markets. While the offshore rig counts in the Gulf of Mexico have fallen in recent years and remained stagnant from 2007 to 2008, we feel that there is still adequate activity in the area to allow us to remain profitable in that region.

Our acquisitions have allowed us to expand our operations into what currently appear to be more prolific areas of activity, such as the Rocky Mountain and prolific shale regions in the South Central United States.

We anticipate that the Rocky Mountain region will continue to be a very active area in terms of natural gas exploration. During 2006, we opened an Equipment Leasing location in Rock Springs, Wyoming to allow us to establish a presence in the Rocky Mountain region. In conjunction with the acquisition of Holston, we were able to expand our visibility in the Rocky Mountains with the addition of an additional leasing location in Vernal, Utah.

The Haynesville and Fayetteville Shale region in northern Louisiana and southern Arkansas also appear to be a very active area in terms of oil and gas exploration and production. Our acquisition of Rig Tools in November 2006 and Industrial Lift in April 2008 allowed us to position ourselves in some of the more prolific share regions to take advantage of the anticipated growth in those geographical area. It is our intention to continue to expand into areas that we feel are beneficial to the growth and well-being of the Company.

GENERAL

DEMAND FOR OUR SERVICES. We receive our revenues from customers in the energy industry. Demand for our seismic services is principally impacted by conditions affecting geophysical companies engaged in the acquisition of 3-D seismic data. All other services and equipment rentals are a function of exploration and production activities of oil and gas companies operating in the continental United States, as well as, in the Gulf of Mexico. The level of demand for our services and equipment rentals is primarily influenced by the level of capital expenditures by oil and gas companies.

A number of factors affect the decision of oil and gas companies to pursue the acquisition of seismic data and the exploration for oil and gas, including
(i) prevailing and expected oil and gas demand and prices; (ii) the cost of exploring for, producing and developing oil and gas reserves; (iii) the discovery rate of new oil and gas reserves; (iv) the availability and cost of permits and consents from landowners to conduct seismic activity; (v) local and international political and economic conditions; (vi) governmental regulations; and (vii) the availability and cost of capital. The ability to finance the acquisition of seismic data in the absence of oil and gas companies' interest in obtaining the information is also a factor, as some geophysical companies will acquire seismic data on a speculative basis.

The demand for our environmental, equipment rental, transportation and fluid and other services are affected by the level of activity in the exploration and production of oil and gas companies in the Gulf of Mexico, the Rocky Mountains and the Barnett, Fayetteville and Haynesville Shale regions.

SEASONALITY AND WEATHER RISKS. Our seismic services operations are subject to seasonal variations in weather conditions and daylight hours as our activities take place outdoors. On average, fewer hours are worked per day and fewer holes are generally drilled or surveyed per day in winter months than in summer months due to an increase in rainy, foggy, and cold conditions and a decrease in daylight hours. Our environmental, equipment rental, transportation and fluid and other services are potentially affected by hurricanes in the Gulf of Mexico region. The hurricane season is from June 1 through November 30 each year.

RESULTS OF OPERATIONS

The following discussion provides information related to the results of our operations.

Year Ended December 31, 2007 Compared To The Year Ended December 31, 2008:



                                                             YEAR ENDED DECEMBER 31,
                                                          2007                      2008
                                                                  (In thousands)
Operating revenue
Services                                            $        140,695          $        149,559
Rentals                                                       31,784                    44,027

Total operating revenue                                      172,479                   193,586

Operating expenses
Direct costs (exclusive of depreciation and
amortization shown separately below)
Services                                                      95,703                   105,668
Rentals                                                       14,549                    21,807
Depreciation and amortization                                 10,761                    13,313
General and administrative expenses
(exclusive of depreciation and amortization
shown separately above) (includes litigation
settlement of $2,400 in 2008)                                 28,117                    31,006

Total operating expenses                                     149,130                   171,794

Impairment of goodwill and intangibles                            -                     25,047
Impairment of fixed assets                                        -                        417

Operating income (loss)                                       23,349                    (3,672 )
Interest expense                                              (6,936 )                  (6,826 )
Gain (loss) on debt extinguishment                            (1,100 )                     120
Other income (expense)                                           360                      (109 )

Income (loss) before income taxes                             15,673                   (10,487 )
Income tax expense                                            (5,504 )                  (3,153 )

Net income (loss)                                             10,169                   (13,640 )
Preferred stock dividends                                       (503 )                    (489 )
Non-cash charge attributable to beneficial
conversion features of preferred stock                          (255 )                      -

Net income (loss) available to common
stockholders                                        $          9,411          $        (14,129 )

Consolidated operating revenues increased 12% or $21.1 million, from $172.5 million for the year ended December 31, 2007 to $193.6 million for the year ended December 31, 2008. This increase was due to an increase of $8.9 million in Service revenue and an increase of $12.2 million in Rental revenues.

Service revenues. The increase of $8.9 million in Service revenues was due in part to the January 2008 BEG acquisition which contributed $18.7 million of the $24.2 million increase in our Fluid and Transportation Services segment revenues. Offsetting decreases in revenue of $4.3 million occurred in the Environmental Services segment, $1.8 million occurred in the Other Services segment, and $9.2 million occurred in the Seismic Services segment.

Rental revenues. Revenues from the Equipment Leasing segment increased by $12.2 million primarily due to the increase in revenues resulting from our acquisition of Industrial Lift in April 2008, which contributed $8.6 million of the increase in Rental revenue for 2008.

Direct cost, excluding depreciation and amortization increased 16%, or $17.2 million, from $110.3 million for the year ended December 31, 2007 to $127.5 million for the year ended December 31, 2008. This increase was due to an increase of $10.0 million in direct costs associated with Service revenue and an increase of $7.2 million in direct costs related to Rental revenues.

Direct cost, excluding depreciation and amortization-Services. Direct cost, excluding depreciation and amortization related to Service revenues increased by $10.0 million due in part to the BEG acquisition which contributed $12.7 million to the increase in our Fluid and Transportation Services direct costs of $16.6 million. Offsetting decreases in direct costs of $3.2 million occurred in the Environmental Services segment, $0.7 million occurred in the Other Services segment, and $2.6 million occurred in the Seismic Services segment.

Direct cost, excluding depreciation and amortization-Rentals. Direct cost, excluding depreciation and amortization related to Rental activities increased by $7.2 million due partly to the increase in direct costs resulting from our acquisition of Industrial Lift in April 2008 which contributed $4.7 million.

Depreciation and amortization costs increased $2.5 million from $10.8 million for the year ended December 31, 2007 to $13.3 million for year ended December 31, 2008. Depreciation expense increased $0.7 million due primarily to the increase in revenue-producing assets from the acquisitions of BEG in January 2008 and Industrial Lift in April 2008. Amortization expense increased $1.8 million due to the increase in intangibles related to the aforementioned acquisitions as well as adjustments made to intangibles of prior acquisitions.

General and administrative costs increased $2.9 million, from $28.1 million during the year ended December 31, 2007 to $31.0 million for the year ended December 31, 2008 partially as a result of the acquisitions of BEG and Industrial Lift in 2008. Of the increase over the prior year, $2.4 million relates to the settlement of litigation with Siemens Water Technologies.

We test goodwill for impairment on an annual basis, or more often if circumstances indicate our goodwill might be impaired. Our tests for 2006 and 2007 resulted in no indications of impairment. However, upon completion of our test in 2008, there were indicators that the a portion of the goodwill and intangibles of our Seismic Services, Equipment Leasing and Environmental Services segments might be impaired. As required by Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" we calculated the implied fair value of the goodwill and intangibles for these segments and determined that the implied fair value was less than the carrying value of the goodwill and intangibles, meaning that the goodwill and intangibles were impaired. As a result, during the fourth quarter of 2008, we recorded a pre-tax charge of approximately $25.0 million to write off a portion of the intangible and goodwill balances related to our Seismic Services, Equipment Leasing and Environmental Services segments. Management of the Company believes that the intangibles and goodwill of these segments were impaired because of the overall economic downturn and deterioration in the global credit markets and specifically the downturn in the oilfield services sector, which has resulted in a decline in the Company's stock price and market valuation. The intangibles and goodwill which were written off arose from our acquisitions of Cypress, Preheat, Rig Tools, Holston and Industrial Lift between February 2006 and April 2008.

Interest expense decreased approximately $0.1 million from $6.9 million for the year ended December 31, 2007 to $6.8 million for the year ended December 31, 2008. Increased levels of debt including financing for recent acquisitions were offset by decreases in variable interest rates from 2007 to 2008.

Loss on debt extinguishment decreased $1.2 million from 2007 to 2008 primarily as a result of the early repayment of our previous revolving line of credit in March 2007. In November 2008, as an accommodation to the holder of a former shareholder note, we paid the $1.0 million due in February 2009 in exchange for a discounted payment by $0.1 million. This discount is reflected as a gain on early extinguishment of debt in the financial statements. Accordingly, any remaining deferred loan cost attributable to line of credit was expensed at that time in addition to an early payment penalty.

Other income decreased from $0.4 million in 2007 to $(0.1) million in 2008. This decrease was primarily attributable to a $0.5 million increase in loss on sale of assets.

For the year ended December 31, 2007, the provision for income tax expense was $5.5 million compared to $3.2 million for 2008. The provision for income taxes for 2008 on the loss before income taxes is partially derived from the non-deductibility of certain goodwill impairment charges.

Preferred stock dividends were $0.5 million each for the years ended December 31, 2007 and 2008. Furthermore, we recorded a non-cash charge (deemed dividend) of $0.3 million attributable to the beneficial conversion feature associated with the Series C 9% Convertible Preferred Stock issued in 2007 and $0 million for 2008.

Year Ended December 31, 2006 Compared To The Year Ended December 31, 2007:



                                                             YEAR ENDED DECEMBER 31,
                                                          2006                      2007
                                                                  (In thousands)
Operating revenue
Services                                            $         82,819          $        140,695
Rentals                                                       16,179                    31,784

Total operating revenue                                       98,998                   172,479

Operating expenses
Direct costs (exclusive of depreciation and
amortization shown separately below)
Services                                                      54,565                    95,703
Rentals                                                        5,265                    14,549
Depreciation and amortization                                  5,660                    10,761
General and administrative expenses
(exclusive of depreciation and amortization
shown separately above)                                       13,780                    28,117

Total operating expenses                                      79,270                   149,130

Operating income                                              19,728                    23,349
Interest expense                                              (4,966 )                  (6,936 )
Gain (loss) on debt extinguishment                                15                    (1,100 )
Other income                                                     233                       360

Income before taxes                                           15,010                    15,673
Income tax benefit (expense)                                   6,805                    (5,504 )

Net income                                                    21,815                    10,169
Preferred stock dividends                                       (488 )                    (503 )
Non-cash charge attributable to beneficial
conversion features of preferred stock                          (458 )                    (255 )

Net income available to common stockholders         $         20,869          $          9,411

Consolidated operating revenues increased 74% or $73.5 million, from $99.0 million for the year ended December 31, 2006 to $172.5 million for the year ended December 31, 2007. This increase was due to an increase of $57.9 million in Service revenue and an increase of $15.6 million in Rental revenues.

Service revenues. The increase of $57.9 million in Service revenues was due in part to the February 2007 Cypress acquisition which contributed to the $30.5 million increase in our Seismic Services revenues; enhanced by the offshore and dockside operations, the Holston acquisition in March 2007 contributed to the $7.2 million

increase in our Environmental Services revenues; the acquisition of Holston contributed to the $6.9 million increase in the Other Services segment; and the acquisition of Holston contributed all $13.3 million of the increase in the Fluid and Transportation Services segment.

Rental revenues. Revenues from the Equipment Leasing segment increased by $15.6 million primarily due to the increase in revenues resulting from our acquisitions of Rig Tools in November 2006 and Preheat in February 2006, which contributed $12.9 and $1.0 million, respectively, of the increase in Rental revenue for 2007. The increase in Rental revenues resulting from our acquisitions was also due to the acquisition of Holston in March 2007 which contributed $1.7 million in revenues.

Direct cost, excluding depreciation and amortization increased 85%, or $50.5 million, from $59.8 million for the year ended December 31, 2006 to $110.3 million for the year ended December 31, 2007. This increase was due to an increase of $41.2 million in direct costs associated with Service revenue and an increase of $9.3 million in direct costs related to Rental revenues.

Direct cost, excluding depreciation and amortization-Services. Direct cost, excluding depreciation and amortization related to Service revenues increased by $41.2 million due in part to the Cypress acquisition which contributed to the increase in our Seismic Services direct costs of $20.1 million; the Holston acquisition contributed to the increase in the direct costs for our Environmental Services segment of $5.5 million; the acquisition of Holston contributed to the $5.6 million increase in the Other Services segment; and all $10.0 million of the increase in the Fluid and Transportation Services segment.

Direct cost, excluding depreciation and amortization-Rentals. Direct cost, excluding depreciation and amortization related to Rental activities increased by $9.3 million due to the increase in direct costs resulting from our acquisition of Rig Tools in November 2006 and Preheat in February 2006, which contributed $6.6 and $2.1 million, respectively. Additionally, $0.6 million of the increase in direct costs related to rental activities resulted from our acquisition of Holston in March 2007.

Depreciation and amortization costs increased $5.1 million from $5.7 million for the year ended December 31, 2006 to $10.8 million for year ended December 31, 2007. Depreciation expense increased $3.9 million due primarily to the increase in revenue-producing assets from the acquisitions of Preheat in February 2006, Rig Tools in November 2006, Cypress in February 2007 and Holston in March 2007. Amortization expense increased $1.2 million due to the increase in intangibles related to the aforementioned acquisitions.

General and administrative costs increased $14.3 million, from $13.8 million during the year ended December 31, 2006 to $28.1 million for the year ended December 31, 2007 primarily as a result of the acquisitions of Preheat, Rig Tools, Cypress and Holston. Of this increase, $4.6 million relates to increased payroll costs and $1.2 million relates to professional services. Additionally, anticipated and negotiated transition incentive packages for two executives are included in 2007 in the amount of $5.0 million.

Interest expense increased approximately $1.9 million from $5.0 million for the year ended December 31, 2006 to $6.9 million for the year ended December 31, 2007. The increase in interest expense was primarily attributable to increased levels of debt including financing for the recent acquisitions.

Loss on debt extinguishment increased $1.1 million from 2006 to 2007 primarily as a result of the early repayment of our previous revolving line of credit in March 2007. Accordingly, any remaining deferred loan cost attributable to line of credit was expensed at that time in addition to an early payment penalty.

Other income increased from $0.2 million in 2006 to $0.4 million in 2007. This increase was partially attributable to a $0.1 million increase in gain on sale of assets.

Provision for income taxes for the year ended December 31, 2006 reflected a benefit of $6.8 million as a result of reversing our previously recorded valuation allowance on our deferred tax assets. All of the benefits related to net operating loss carryforwards were recorded by the end of 2006. For the year ended December 31, 2007, the provision for income tax expense was $5.5 million.

Preferred stock dividends were $0.5 million each for the years ended December 31, 2006 and 2007. Furthermore, we recorded a non-cash charge (deemed dividend) of $0.5 million attributable to the beneficial conversion feature associated with the Series C 9% Convertible Preferred Stock issued in 2006 and $0.3 million issued in 2007.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2008, we had approximately $2.0 million in cash on hand and approximately $12.0 million available for future borrowings on our revolving line of credit. This compares to approximately $13.4 million in cash on hand and approximately $0.0 million available for future borrowings on our revolving line of credit at December 31, 2007 because we borrowed the full availability under our revolving line of credit to better illustrate for investors and financial analysts our funds availability at the end of the year. The amount was repaid on the first business day of January 2008. At December 31, 2008, we had working capital of approximately $4.0 million as compared to approximately $4.4 million at December 31, 2007. Our decrease in working capital is attributable to the increase in the current portion of long-term debt as a result of acquisitions in 2008.

Cash provided by continuing operating activities was $28.7 million, $34.6 million, and $22.4 million for the years ended December 31, 2008, 2007 and 2006, respectively. In 2006 and 2007, the largest contributing factor to our increase over the previous year was income from operations. In 2008, the largest contributing factor to our decrease over the prior year was an increase in accounts payable and accrued expenses.

Historically, our capital requirements have primarily related to the purchase or fabrication of new seismic drilling equipment, and related support equipment. As our business has diversified, the capital requirements have expanded to include additions to our equipment rental fleet and expansion of our rolling stock. In 2006 we acquired Preheat and Rig Tools, purchased approximately $5.1 million in equipment and refinanced our rolling stock of vehicles previously accounted for as capital leases into operating leases. In 2007, we acquired Holston and certain assets of Cypress and BOI, and purchased approximately $13.8 million in equipment. For the year ended December 31, 2008, we completed the acquisitions of BEG and Industrial Lift and expended approximately $12.2 million on equipment and other fixed assets. In 2009, we will continue to explore strategic business opportunities and upgrade our equipment to improve efficiency of our operations enabling to us to continue to be responsive to our markets as directed by the needs of our customers.

Effective as of April 24, 2008, we completed a modification of our $90.0 million credit facility ("Senior Credit Facility"), including a $50.0 million term loan, a $25.0 million working capital revolving line of credit, and a $15.0 million delayed draw term loan available to fund future acquisitions. With the proceeds from the Senior Credit Facility, we (i) repaid approximately $28.7 million of outstanding principal balance under our previous term loan; (ii) repaid approximately $2.1 million of outstanding principal balance under our previous capital expenditure loan; (iii) repaid the balance on the previous line of credit; and (iv) closed the acquisition of Industrial Lift. The balance of the proceeds available under the Senior Credit Facility was used to pay fees and expenses of the aforementioned transaction and to provide additional working capital.

On August 28, 2008, the Senior Credit Facility was amended to remove the $15.0 million delayed draw term loan. As an accommodation to our lender, we agreed to remove the delayed draw portion of the Senior Credit Facility in order to make syndication of the loan more manageable.

Loan closing costs related to our various credit facilities of $1.8 million were incurred during the year ended December 31, 2008 compared to $2.4 million for the year ended December 31, 2007.

We believe that our internally generated cash flow from operations is sufficient to finance the majority of our cash requirements for current and future operations, budgeted capital expenditures and debt service for 2009. As we have historically done, we may, from time to time, access available funds under our Senior Credit Facility to supplement our liquidity to meet our cash requirements for day to day operations and times of peak needs throughout the year. Our planned capital expenditures as well as any acquisitions we choose to pursue, are expected to be financed through a combination of cash on hand, cash flow from operations and borrowings under our Senior Credit Facility.

Our Senior Credit Facility contains numerous covenants that govern our ability to make investments and to repurchase our stock. Even if we experience a more . . .