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 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (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 heading "Forward-Looking Statements." "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 should be read in conjunction with the financial statements and the accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K, for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 13, 2009.

RECENT DEVELOPMENTS

On November 13, 2009, we entered into the Fourth Amendment and Waiver to Loan Agreement (the "Amendment") to the Senior Credit Facility. The Amendment grants a waiver of the fixed charge coverage ratio covenant violation at September 30, 2009 and each and every Event of Default (as defined in the Senior Credit Facility) arising solely from the violation. In addition, the Amendment includes the following additional modifications to the Senior Credit Facility: (i) the interest rate was adjusted to a rate equal to the greater of the applicable one month LIBOR rate or 1.0% to be set at the beginning of each calendar month plus an additional margin of 4.50% with respect to the Term Loan and an additional margin of 4.00% with respect to the Revolver; (ii) the total commitment under the Senior Credit Facility was adjusted to $56.0 million, reflecting principal payments made since the Term Loan's inception and reducing the limit on the Revolver to $20.0 million; (iii) the fixed charge coverage ratio on the Senior Credit Facility was modified to reflect a requirement of .90 to 1.00 for the twelve month period ending December 31, 2009 and June 30, 2010, 1.00 to 1.00 for the twelve month periods ending March 31, 2010, September 30, 2010, and December 31, 2010, and 1.10 to 1.00 for the twelve month periods ending March 31, 2011, June 30, 2011, September 30, 2011, and December 31, 2011; and (iv) the leverage ratio was modified to reflect a requirement of 3.00 to 1.00 for the twelve month periods ending December 31, 2009, March 31, 2010, June 30, 2010 and September 30, 2010 and 2.50 to 1.00 for each twelve month periods ending on March 31st, June 30th, September 30th or December 31st thereafter.

FORWARD-LOOKING STATEMENTS

Certain of the statements contained in all parts of this document (including the portion, if any, to which this Form 10-Q is attached), including, but not limited to, those relating to our acquisition plans, the effect of changes in strategy and business discipline, future tax matters, future general and administrative expenses, future growth and expansion, expansion of our operations, review of acquisitions, expansion and improvement of our capabilities, integration of new technology into operations, credit facilities, redetermination of our borrowing base, attraction of new members to the management team, future compensation programs, new alliances, future capital expenditures (or funding thereof) and working capital, sufficiency of future working capital, borrowings and capital resources and liquidity, projected rates of return, timely conversion of backlog into revenue, retained earnings and dividend policies, projected cash flows from operations, future, outcome, effects or timing of any legal proceedings or contingencies, the impact of any change in

accounting policies on our financial statements, realization of post-closing price adjustments with respect to the recent acquisitions, management's assessment of internal control over financial reporting, the identification of material weaknesses in internal control over financial reporting and any other statements regarding future operations, financial results, opportunities, growth, business plans and strategy and other statements that are not historical facts are forward looking statements. These forward-looking statements reflect our current view of future events and financial performance. When used in this document, the words "budgeted," "anticipate," "estimate," "expect," "may," "project," "believe," "intend," "plan," "potential," "forecast," "might," "predict," "should" and similar expressions are intended to be among the statements that identify forward-looking statements. These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Such statements involve risks and uncertainties, including, but not limited to, those set forth under ITEM 1A. "RISK FACTORS" and other factors detailed in our Form 10-K for the year ended December 31, 2008 filed on March 13, 2009 and our other filings with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties.

GENERAL

We were founded in 1987, as OMNI Drilling Corporation, to provide drilling services to the geophysical industry. In July 1996, OMNI Geophysical, L.L.C. acquired substantially all of the assets of OMNI Geophysical Corporation, the successor to the business of OMNI Drilling Corporation. OMNI Energy Services Corp. ("OMNI") was formed as a Louisiana corporation on September 11, 1997 to acquire all of the outstanding common units of OMNI Geophysical L.L.C.

We are an integrated oilfield service company specializing in a range of
(i) onshore seismic drilling, operational support, permitting, and survey services, (ii) dockside and offshore hazardous and non-hazardous oilfield waste management and environmental cleaning services, including tank and vessel cleaning and safe vessel entry for oil and gas companies operating primarily in the Gulf of Mexico, (iii) drilling fluid transportation and disposal services,
(iv) a large fleet of oilfield equipment rental oil and gas companies operating in the Gulf of Mexico, the Rocky Mountain region and the prolific shale regions in the South Central United States, and (v) other specialized services such as metal stress relieving, offshore cleaning, and wellhead reheating and installation. We operate in five business segments: Seismic Services (which includes seismic drilling, permitting and survey services), Environmental Services, Equipment Leasing, Fluid and Transportation Services and Other Services (which includes metal stress relieving, offshore cleaning and blasting and wellhead installations). For information about the revenues, operating income (loss) and other financial information relating to the segments, see Note 6 to our Consolidated Financial Statements.

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. With the exception of Environmental Services, our business segments experienced continued compression in business activity in the third quarter. We continue to see flat exploration activity in the market areas in which we operate.

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 opportunities arise that we believe fit into our overall business strategy. Additionally, we have begun an organic growth initiative to expand into other energy production areas such as geothermal energy as well as geographic migration into the Marcellus Shale region of the northeastern United States.

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, we feel that there is still adequate activity in the area to allow us to remain profitable in that region.

We anticipate that the Rocky Mountain region will continue to be an 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 equipment leasing location in Vernal, Utah. While the rig count has declined during the past two quarters, we are still active in the region and consider the geographical area to be a good long-term marketing opportunity for our company.

The Haynesville Shale region in East Texas and Northern Louisiana also appears to be an 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 shale regions to take advantage of the anticipated growth in those geographical areas. It is our intention to continue to expand into areas that we feel are beneficial to the growth and well-being of the Company.

The Marcellus Shale region in the northeastern United States is perhaps the most significant active shale play in the country and we estimate that less than 5% of the terrain has had 3D seismic data acquired creating a significant potential demand for our Seismic Services segment. During the quarter, we were awarded our first seismic job in the region and anticipate additional opportunities to grow in that segment as well as our other service segments.

Seismic Services.

The principal market of our Seismic Services segment is the marsh, swamp, shallow water and contiguous dry land areas along the Gulf of Mexico (the "Transition Zone"), primarily in Louisiana and Texas, where we believe we are the leading provider of seismic drilling support services. In addition, we have seismic services operations in the mountainous regions of the Western United States.

We own and operate a fleet of specialized seismic drilling and transportation equipment for use in the Transition Zone. We believe we are the only domestic company that currently can both provide an integrated range of seismic drilling, permitting, and survey services in all of the varied terrain of the Transition Zone and simultaneously support operations for multiple, large-scale seismic projects. With the acquisition of all of the assets of AirJac Drilling, a division of Veritas Land DGC, we became the largest domestic provider of seismic drilling services to geophysical companies.

Environmental Services.

We provide dock-side and offshore hazardous and non-hazardous oilfield waste management and environmental cleaning services, including drilling rig, tank and vessel cleaning, safe vessel entry, naturally occurring radioactive material ("NORM") decontamination, platform abandonment services, pipeline flushing, gas dehydration, and hydro blasting. Demand for our dock-side vessel and tank cleaning and non-hazardous waste treatment businesses are primarily driven by drilling and well-site abandonment activity in the shallow waters of the Gulf of Mexico, as reflected by the drilling rig count. Much of the cleaning and waste treatment is from residual waste created in the drilling process.

In March 2007, we completed the acquisition of Holston. This acquisition provided us with additional opportunities to expand our Environmental Services segment with corrosion proofing and offshore cleaning capabilities. Additionally, we provide NORM surveys, cleaning and waste disposal; tank degassing and demolition; rig pit cleaning; oilfield waste disposal; hydro blasting; dockside and offshore cleaning; and offshore sandblasting and painting.

Equipment Leasing.

Through our subsidiaries Preheat, Rig Tools and Holston, we provide rental equipment for various oilfield and commercial applications including pressure washers, steam cleaners, water, mud and disposal pumps; mud, fuel and frac tanks; air compressors; wireline units; generators; high pressure washers; light towers; tubing; and handling tools.

The April 2008 acquisition of Industrial Lift allowed us to further expand the line of products that we provide for lease into specialized lifting units such as industrial forklifts and manlifts. Industrial Lift has operating facilities in Broussard, Louisiana and Lincoln, Texas.

Fluid and Transportation Services.

Through Holston, we offer transportation of non-hazardous byproducts, such as saltwater and spent drilling fluids. Holston also operates three saltwater disposal wells for the disposal of non-hazardous byproducts.

In June 2007, we acquired certain assets of Bailey Operating, Inc., which geographically extended our core businesses into the Barnett Shale region in North Texas. These assets included an additional saltwater disposal well for the disposal of non-hazardous byproducts. Not only did we acquire an exceptional facility for the disposal of non-hazardous oilfield waste by-products, the acquisition also established a platform for further geographic expansion of our core businesses. We have expanded our fluid and transportation services and equipment leasing operations into the Barnett Shale region. We have also expanded our operations into the Haynesville Shale and Fayetteville Shale areas.

In January 2008, we acquired the assets of B.E.G. Liquid Mud Services Corp., which was an extension of our fluid and transportation services and our land-based equipment leasing operations. It allows us to better serve our customers by offering a drilling support package including the supply of drilling fluids, chemicals, storage, mixing and fluid pumping services as well as fluid trucking, recycling, tank cleaning and disposal services. Through Holston, we currently handle the transportation of oilfield drilling and production fluids in Louisiana. Our land-based equipment leasing operation through Rig Tools has been primarily focused on drilling equipment rental in Louisiana and Central Texas. The acquisition of BEG strategically positions us for further geographic expansion of these services and also extends our transportation and land-based equipment leasing operations into the southern regions of the Barnett Shale and into East Texas. Additionally, we believe we will be able to capitalize on our existing customer relationships to geographically expand BEG's fluid service distribution facilities into other prolific onshore regions of the United States.

Other Services.

The acquisition of Preheat allowed us to offer additional services to our customers including wellhead installation, metal stress relieving services and environmental pit cleaning.

All of our operations are subject to seasonal variations in weather conditions and available daylight hours. Since our drilling and environmental activities take place outdoors, on average we experience lower production in winter months than in summer months, due to an increase in rain, fog, and cold conditions and a decrease in daylight hours. These winter conditions also generally result in fewer hours worked per day and fewer holes drilled or surveyed per day during that season.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, and provide a basis for making judgments about the carrying value of assets and liabilities that are not readily available through open market quotes. Estimates and assumptions are reviewed periodically, and actual results may differ from those estimates under different assumptions or conditions. We must use our judgment related to uncertainties in order to make these estimates and assumptions.

For a description of our critical accounting policies and estimates as well as certain sensitivity disclosures related to those estimates, see our Annual Report on Form 10-K for the year ended December 31, 2008. Our critical accounting policies and estimates have not changed materially during the nine months ended September 30, 2009.

RESULTS OF OPERATIONS



                                                    Three Months Ended            Nine Months Ended
                                                      September 30,                 September 30,
                                                    2008           2009          2008           2009
                                                       (in thousands, except per share amounts)
Operating revenue
Services                                         $   40,676      $ 22,844      $ 111,496      $ 75,926
Rentals                                              12,608         5,515         31,669        19,938

Total operating revenue                              53,284        28,359        143,165        95,864

Operating expenses:
Direct costs (exclusive of depreciation and
amortization shown separately below)
Services                                             27,856        17,206         79,524        53,702
Rentals                                               6,392         2,883         15,945        10,459
Depreciation and amortization                         3,620         3,365          9,776        10,145
General and administrative expenses                   7,282         5,007         23,417        17,707

Total operating expenses                             45,150        28,461        128,662        92,013

Impairment of fixed assets                               -            164             -            237

Operating income (loss)                               8,134          (266 )       14,503         3,614
Interest expense                                     (1,518 )        (691 )       (5,231 )      (2,414 )
Other expense, net                                       65            18           (137 )          16

Income (loss) before income tax expense               6,681          (939 )        9,135         1,216
Provision for income tax (expense) benefit           (2,572 )          94         (3,688 )        (896 )

Net income (loss)                                     4,109          (845 )        5,447           320
Dividends on preferred stock                           (123 )        (122 )         (367 )        (363 )

Net income (loss) available to common
stockholders                                     $    3,986      $   (967 )    $   5,080      $    (43 )

THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2008

Operating revenues decreased $24.9 million, from $53.3 million for the three months ended September 30, 2008 to $28.4 million for the three months ended September 30, 2009. Operating revenues related to services decreased $17.8 million. Our seismic services segment, other services segment, and fluid and transportation services segment accounted for $10.9 million, $1.9 million and $5.1 million of the decrease, respectively. The decrease in revenues was due to the erosion of production and drilling activity of our customers in the regions in which we operate. Seismic services are driven by the front-end activity in exploration for hydrocarbons. The other services and fluid and transportation services are directly impacted by the number of rigs operating in the United States and the Gulf of Mexico. The rig counts were off sharply compared to the number of rigs operating during the same period of 2008. These decreases were offset, in part, by increases in our environmental services segment of $0.1 million. The increase in environmental services was principally attributable to specialized cleaning projects on client facilities in the Gulf of Mexico. Operating revenues related to our equipment leasing segment, including the Industrial Lift acquisition effective April 2008, decreased by $7.1 million. This reduction in equipment leasing activity is attributable to the reduction in rigs operated by our customers in the areas we serve.

Direct costs related to services decreased $10.7 million, from $27.9 million for the three months ended September 30, 2008 to $17.2 million for the three months ended September 30, 2009. Direct costs for our seismic services segment, environmental services segment, other services segment, and fluid and transportation services segment enhanced by the BEG acquisition accounted for $6.6 million, $0.4 million, $1.2 million and $2.5 million of the decrease, respectively. The decreases were in response to lower activity levels as described above. Direct costs related to rentals decreased $3.5 million, from $6.4 million for the three months ended September 30, 2008 to $2.9 million for the three months ended September 30, 2009. Of the total decrease in direct costs, $4.7 million relates to repairs and maintenance and cost of parts sold, $2.4 million relates to explosives and down-hole supplies, $2.9 million relates to payroll costs, $1.2 million relates to fuel and oil, $1.4 million relates to third-party contract services, $0.6 million relates to insurance and $0.4 million relates to property damages.

Depreciation and amortization costs decreased $0.2 million from $3.6 million for the three month period ended September 30, 2008 to $3.4 million for the three month period ended September 30, 2009. Depreciation expense increased $0.1 million due to the reallocation of the purchase price of Preheat and Rig Tools in 2008. Amortization expense decreased $0.3 million due to the impairment of intangibles recorded at December 31, 2008.

General and administrative costs decreased $2.3 million, from $7.3 million during the three month period ended September 30, 2008 to $5.0 million during the same three month period of 2009. Payroll and related costs decreased $1.3 million, professional services and related costs decreased $0.3 million, fuel and oil decreased $0.2 million as did business promotions.

Interest expense decreased approximately $0.8 million from $1.5 million for the three month period ended September 30, 2008, to $0.7 million for the three month period ended September 30, 2009. The decrease in interest expense was attributable to decreased interest rates on variable interest debt between the periods along with a lower level of debt between the periods. Also, we reduced interest expense by approximately $0.2 million through the reduction of a previous accrual related to a sales tax assessment. Interest expense includes $0.4 million and $0.3 million for the three month periods ended September 30, 2008 and 2009, respectively, related to amortization of deferred loan costs.

Income tax expense decreased by approximately $2.7 million from $2.6 million for the period ended September 30, 2008, to ($0.1) million for the three month period ended September 30, 2009. The decrease is attributable to reduced income before taxes for the current quarter compared to the same period in 2008. The effective tax rate for the 2009 quarter is 10.0%. The rate is different than the statutory federal rate because of the addition of state income taxes and permanent differences encountered in the course of the Company's day-to-day operations.

NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2008

Operating revenues decreased $47.3 million, from $143.2 million for the nine months ended September 30, 2008 to $95.9 million for the nine months ended September 30, 2009. Operating revenues related to services decreased $35.5 million. Our seismic services segment, other services segment, and fluid and transportation services segment accounted for $23.5 million, $5.1 million and $8.5 million of the decrease, respectively. The decrease in revenues was due to the erosion of production and drilling activity of our customers in the regions in which we operate. Seismic services are driven by the front-end activity in exploration for hydrocarbons. The other services and fluid and transportation services are directly impacted by the number of rigs operating in the United States and the Gulf of Mexico. The rig counts were off sharply compared to the number of rigs operating during the first nine months of 2008. These decreases were offset by increases in our environmental services segment of $1.6 million. The increase in environmental services was principally attributable to specialized cleaning projects on client facilities in the Gulf of Mexico. Operating revenues related to our equipment leasing segment, after taking into account the Industrial Lift acquisition effective April 2008, decreased by $11.8 million. This reduction in equipment leasing activity is attributable to the reduction in rigs operated by our customers in the areas we serve.

Direct costs related to services decreased $25.8 million, from $79.5 million for the nine months ended September 30, 2008 to $53.7 million for the nine months ended September 30, 2009. Direct costs for our seismic services segment, other services segment, fluid and transportation services segment enhanced by the BEG acquisition, and environmental services segment accounted for $17.4 million, $3.2 million, $4.8 million and $0.4 million of the decrease, respectively. The decreases were in response to lower activity levels as described above. Direct costs related to rentals decreased $5.4 million, from $15.9 million for the nine months ended September 30, 2008 to $10.5 million for the nine months ended September 30, 2009. Of the total decrease in direct costs, $8.9 million relates to repairs and maintenance and cost of parts sold, $4.9 million relates to third-party contract services, $5.8 million relates to explosives and down-hole supplies, $6.1 million relates to payroll costs, $3.0 million relates to fuel and oil and $1.4 million relates to insurance.

Depreciation and amortization costs increased $0.3 million from $9.8 million for the nine month period ended September 30, 2008 to $10.1 million for the nine month period ended September 30, 2009. Depreciation expense increased $2.2 million due partially to the increase in revenue-producing assets from the acquisitions of BEG in January 2008 and Industrial Lift in April 2008 and . . .