UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report
February 16, 2010 (February 12, 2010)

(Date of earliest event reported)

GEOKINETICS INC.

(Exact name of registrant as specified in its charter)

 1500 CityWest Blvd., Suite 800

Houston, Texas, 77042

(Address of principal executive offices)

(713) 850-7600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 — Registrant’s Business and Operations

Item 1.01.  Entry into a Material Definitive Agreement.

As previously reported, on December 3, 2009, Geokinetics Inc. (“Geokinetics”) and certain of its subsidiaries entered into a definitive purchase agreement with Petroleum Geo-Services ASA and certain of its subsidiaries (“PGS”) under which Geokinetics acquired the onshore seismic data acquisition and multi-client data library business of PGS (“PGS Onshore”) in a cash and stock transaction.  The transaction closed on February 12, 2010. The purchase price paid by Geokinetics at closing was $210 million, on a cash free, debt free basis, less a $2.8 million adjustment for estimated net working capital below the included amount of $37.5 million.  The purchase price is subject to certain additional working capital adjustments after closing.  Geokinetics funded the acquisition through a combination of cash and common stock.  At closing, Geokinetics issued PGS approximately 2.15 million shares, which represented 19.9% of Geokinetics’ shares outstanding prior to the signing of the purchase agreement, valued for purposes of the transaction at $12.11 per share, or $26.1 million.  This amount represents 12% of Geokinetics’ current common shares outstanding.  The remainder of the purchase price, or $183.9 million, was paid in cash.  As part of this acquisition, PGS has the right to name two members of Geokinetics’ board of directors.  No nominations have been made at this point.

To fund the cash portion of the purchase price, Geokinetics Holdings USA, Inc. (f/k/a Geokinetics Holdings, Inc.) (“Geokinetics Holdings”), a wholly-owned subsidiary of Geokinetics, issued $300 million aggregate principal amount of its 9.75% senior secured notes due 2014 (the “Notes”) in a private offering.  The proceeds of this sale were held in escrow until the closing of the PGS Onshore acquisition.  In connection with the release of the proceeds from the escrow account, certain subsidiaries of Geokinetics Holdings and Geokinetics entered into a Supplemental Indenture with U.S. Bank National Association (the “Trustee” or “Collateral Trustee”) to provide additional guarantees for the Notes and to supplement the Indenture by and among Geokinetics Holdings, Geokinetics and the Trustee, dated as of December 23, 2009.  In addition, Geokinetics, Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., (together with Avista Capital Partners, L.P., the “Avista Holders”), Levant America S.A., (“Levant”), and PGS entered into a Second Amended and Restated Registration Rights Agreement (“2010 Registration Rights Agreement”) to provide certain registration rights to the parties to the agreement. The following is a brief summary of the material terms and conditions of the Supplemental Indenture and the 2010 Registration Rights Agreement:

Supplemental Indenture — The Supplemental Indenture extends the guarantees provided in the Indenture to all of Geokinetics’ domestic subsidiaries.  The Notes become unconditionally guaranteed, jointly and severally and on a senior secured basis, by Geokinetics and its domestic subsidiaries as if they had been parties to the Indenture.  The Indenture remains in effect as previously described.

2010 Registration Rights Agreement - Pursuant to the 2010 Registration Rights Agreement, Geokinetics granted PGS and the Series B Preferred Stockholders certain demand and piggyback registration rights with respect to the shares of common stock owned by PGS or the Avista Holders or such shares into which the Series B Preferred Stock is convertible.  The 2010 Registration Rights Agreement amends and restates the Registration Rights Agreement dated as of  July 28, 2008 (“2008 Registration Rights Agreement”), covering certain shares of Geokinetics’ Series B-2 Convertible Preferred Stock sold pursuant to that certain Securities Purchase Agreement, dated as of July 28, 2008, among Geokinetics and the Purchasers named therein.  All shares of Geokinetics’ Series B Senior Convertible Preferred Stock, Series C Preferred Stock and shares of common stock held by PGS are now subject to the provisions of the 2010 Registration Rights Agreement.

The foregoing summaries of the Supplemental Indenture and the 2010 Registration Rights Agreement are qualified in their entirety by the terms of such agreements, as applicable, each of which is attached hereto as Exhibits 4.2 and 4.3, respectively, and incorporated herein by reference.

Mexico DP and Libya Agreements - As part of the transaction, Geokinetics entered into an agreement with PGS, PGS Mexicana S.A. de C.V., (“Mexicana”), and PGS Administración y Servicios S.A. de C.V., (“Old ServiceCo”) whereby PGS will cause certain subject assets, including the Mexican data processing operations conducted by Old ServiceCo, and the Mexican data processing assets owned by Mexicana to be removed from Mexicana when approved by the third party for which such services are provided.  Until the third party approves the spin off, Mexicana and Old ServiceCo, as newly-acquired subsidiaries of Geokinetics, agree to continue to operate the contract for the benefit of PGS.  Geokinetics also entered into a substantially similar agreement with PGS and

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PGS Exploration (UK) Ltd. whereby PGS Exploration (UK) Ltd. agrees to operate the Libyan contract, as a subsidiary of PGS, until such time as when Geokinetics or a subsidiary of Geokinetics has been established and become qualified to do business in Libya or Geokinetics decides not to do business in Libya.

Item 1.02.  Termination of a Material Definitive Agreement.

In connection with the closing of the acquisition from PGS of its onshore and multi-client library business, Geokinetics repaid its borrowings under its credit facility with PNC Bank, National Association (“PNC”), as lender, and terminated the PNC Facility.  The PNC Facility was replaced with the Loan Agreement described in Item 2.03 of this Current Report on Form 8-K.

SECTION 2 —Financial Information

Item 2.01.  Completion of Acquisition or Disposition of Assets.

The description of the PGS Onshore acquisition in Item 1.01 is incorporated herein by reference.

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On February 12, 2010, Geokinetics Holdings completed the closing of a new credit facility under the terms of a Credit Agreement (the “Loan Agreement”) with Royal Bank of Canada (“RBC”), as Administrative Agent and Collateral Agent for each lender party to the Loan Agreement.  Under the Loan Agreement, the lenders agree to provide, subject to the terms and conditions set forth in the Loan Agreement, a $50,000,000 revolving credit facility and letters of credit for the account of Geokinetics Holdings.  Geokinetics Holdings, Geokinetics and each of Geokinetics’ principal subsidiaries are liable for payment of Geokinetics Holdings’ obligations under the Loan Agreement.  The foregoing description is a summary of the material terms of the Loan Agreement and does not purport to be complete, and is qualified in its entirety by reference to the Loan Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1.

As a condition for entering into loans or letters of credit under the Loan Agreement, Geokinetics and certain of its subsidiaries had to execute a Guaranty whereby they will provide unconditional and irrevocable guarantees of payment to the lenders.  The Guaranty is incorporated herein by reference and is attached to this Current Report on Form 8-K as Exhibit 10.2.

SECTION 3 —Securities and Trading Markets

Item 3.02.  Unregistered Sales of Equity Securities.

On February 12, 2010, Geokinetics issued 2,153,616 shares of common stock to PGS as partial consideration for the PGS Onshore acquisition.  For purposes of the transaction, the shares were valued at $12.11 per share; however, they were issued at fair market value on the date the Purchase Agreement was executed and did not include any provisions to make up any valuation differences between the date of the Purchase Agreement and the closing of the acquisition.  The shares of common stock were issued pursuant to the exemption from registration provided by Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). PGS represented to Geokinetics that it was an “accredited investor” as defined in Regulation D under the Securities Act and that the securities were acquired for its own account and without a view to the distribution of such securities.

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SECTION 5 — Corporate Governance and Management

Item 5.03.  Amendment to Articles of Incorporation or Bylaws.

In connection with the consummation of the PGS Onshore acquisition, as described in Item 1.01, Geokinetics amended its Certificate of Incorporation (i) to reflect changes in the interest rate stated within the First Amended Certificate of Designation of Series C Senior Preferred Stock attached as Exhibit 4.4 hereto and incorporated herein by reference, and (ii) to reflect changes required by the amendment of the rights, preferences and privileges of the Series B Senior Convertible Preferred Stock, as stated within the Fourth Amended Certificate of Designation of Series B Senior Convertible Preferred Stock attached as Exhibit 4.5 hereto and incorporated herein by reference.

SECTION 7 — Regulation FD

Item 7.01.  Regulation FD Disclosure.

On February 15, 2010, Geokinetics issued a press release announcing the completion of its acquisition of PGS Onshore.  A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SECTION 9 — Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits.

(a)   Financial statements of businesses acquired.

The financial statements and pro forma financial information required to be filed with this acquisition will be filed by amendment not later than 71 days after the date of this report.

(d)   Exhibits.

4.1        Indenture dated as of December 23, 2009 relating to the Notes, incorporated herein by reference to the Current Report on Form 8-K filed December 28, 2009.

4.2        Supplemental Indenture dated as of February 12, 2010.

4.3        Second Amended and Restated Registration Rights Agreement dated as of February 12, 2010.

4.4        First Amended Certificate of Designation of Series C Senior Preferred Stock.

4.5        Fourth Amended Certificate of Designation of Series B Senior Convertible Preferred Stock.

10.1      Credit Agreement dated as of February 12, 2010 by and among Geokinetics Holdings and Royal Bank of Canada as administrative and collateral agent to the certain lenders named therein.

10.2      Guaranty dated as of February 12, 2010.

99.1      Press Release dated February 15, 2010, announcing the completion of the acquisition of the onshore seismic data acquisition and multi-client data library business of Petroleum Geo-Services ASA.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit Index

(d)  Exhibits:

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