OMNI ENERGY SERVICES CORP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the Quarterly period ended March 31, 2004

or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period _______ to _______

COMMISSION FILE NUMBER 0-23383

OMNI ENERGY SERVICES CORP.
(Exact name of registrant as specified in its charter)

LOUISIANA 72-1395273
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

4500 N.E. EVANGELINE THRUWAY
CARENCRO, LOUISIANA 70520
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (337) 896-6664

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of May 12, 2004 there were 11,394,224 shares of the Registrant's
common stock, $0.01 par value per share, outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 AND DECEMBER 31, 2003
(Thousands of dollars)

March 31, December 31,
2004 2003
-------------- -------------
(unaudited) (Note 1)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,657 $ 572
Trade receivable, net 7,469 7,002
Other receivables 2,048 2,272
Parts and supplies inventory 3,550 3,289
Prepaid expenses 2,770 3,058
Deferred tax asset 2,000 2,000
------------- -------------
Total current assets 23,494 18,193
------------- -------------

PROPERTY AND EQUIPMENT:
Land 647 362
Buildings and improvements 4,656 4,636
Drilling, field and support equipment 26,916 26,877
Aviation equipment 13,141 10,224
Shop equipment 425 425
Office equipment 1,611 1,573
Vehicles 2,755 2,476
------------- -------------
50,151 46,573
Less: accumulated depreciation 20,381 19,463
------------- -------------
Total property and equipment 29,770 27,110
------------- -------------

OTHER ASSETS:
Goodwill 2,279 2,129
Intangible asset, net 1,695 1,720
Other 1,554 1,137
------------- -------------
Total other assets 5,528 4,986
------------- -------------
Total assets $ 58,792 $ 50,289
============= =============

The accompanying notes are an integral part of financial statements.

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OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 AND DECEMBER 31, 2003
(Thousands of dollars)

March 31, December 31,
2004 2003
----------- ------------
(unaudited) (Note 1)

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 2,620 $ 2,051
Notes payable, insurance 1,592 2,314
Accounts payable 6,307 5,326
Accrued expenses 1,562 1,627
---------- ------------
Total current liabilities 12,081 11,318
---------- ------------

LONG-TERM LIABILITIES:
Line of credit 6,487 4,633
Other long-term liabilities 324 328
Convertible Debentures, net of discount 9,050 ---
Long-term debt, less current maturities 12,071 9,624
---------- ------------
Total long-term liabilities 27,932 14,585
---------- ------------

Total liabilities 40,013 25,903
---------- ------------

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, no par value, 5,000,000 shares authorized;
2,339 and 12,100 shares issued and outstanding,
respectively, liquidation preference of $1,000 per share 2,339 12,100
Common stock, $.01 par value, 45,000,000 shares
authorized; 10,910,198 and 9,569,729 issued and
outstanding, respectively 109 96
Treasury stock, 361,800 shares acquired at cost (706) (706)
Preferred stock dividends declared 139 484
Additional paid-in capital 62,767 57,882
Accumulated deficit (45,867) (45,458)
Cumulative translation adjustment (2) (12)
---------- ------------
Total stockholders' equity 18,779 24,386
---------- ------------
Total liabilities and stockholders' equity $ 58,792 $ 50,289
========== ============

The accompanying notes are an integral part of these financial statements.

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OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended March 31,
----------------------------
2004 2003
----------- -----------
(unaudited) (Note 1)

Operating revenue $ 11,496 $ 6,207
Operating expenses 9,490 5,158
---------- -----------
Gross profit 2,006 1,049
General and administrative expenses 1,477 1,060
---------- -----------
Operating income (loss) 529 (11)
Interest expense 415 210
Other income (expense) (29) 6
---------- -----------
Income (loss) before taxes 85 (215)
Income taxes --- (100)
---------- -----------
Net income (loss) 85 (115)
Preferred stock dividends (485) ---
---------- -----------
Net loss applicable to common and common equivalent shares $ (400) $ (115)
========== ===========

Basic earnings (loss) per common share:
Net income (loss) $ 0.01 $ (0.01)
Net loss applicable to common and common equivalent shares $ (0.04) $ (0.01)
Diluted earnings (loss) per common share:
Net income (loss) $ 0.01 $ (0.01)
Net loss applicable to common and common equivalent shares $ (0.04) $ (0.01)

Weighted average shares outstanding:
Basic 9,966 8,740
Diluted 10,666 8,740

The accompanying notes are an integral part of these financial statements.

-4-

OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(THOUSANDS OF DOLLARS)

Three months ended March 31,
2004 2003
------------- ------------
(unaudited) (Note 1)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 85 $ (115)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities-
Depreciation 1,056 943
Amortization 91 70
Accretion of Bond Discount 50
Gain on fixed asset disposition (24) (38)
Changes in operating assets and liabilities-
Decrease (increase) in assets-
Receivables-
Trade (467) 402
Other 224 17
Inventory (262) (126)
Prepaid expenses 305 657
Other (633) 23
Increase (decrease) in liabilities-
Due to affiliates 27 ---
Accounts payable and accrued expenses 887 (697)
------------- ------------
Net cash provided by operating activities 1,339 1,136
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of fixed assets 31 293
Purchase of fixed assets (2,217) (1,125)
------------- ------------
Net cash used in investing activities (2,186) (832)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of convertible debentures 10,000 ---
Redemption of preferred stock (10,591) ---
Proceeds from the issuance of common stock 3,899 ---
Proceeds from the issuance of long-term debt 2,414 ---
Principal payments on long-term debt (1,645) (1,478)
Net borrowings on line of credit 1,855 805
------------- -----------
Net cash provided by (used in) financing activities 5,932 (673)
------------- ------------

NET INCREASE (DECREASE) IN CASH 5,085 (369)
Cash and cash equivalents, at beginning of period 572 704
------------- -----------
Cash and cash equivalents, at end of period $ 5,657 $ 336
============= ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid for interest $ 365 $ 210
============= ===========
Equipment acquired under capital lease $ 1,506 $ ---
============= ===========

The accompanying notes are an integral part of these financial statements.

-5-

OMNI ENERGY SERVICES CORP.
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements included herein, which have not been audited pursuant
to the rules and regulations of the Securities and Exchange Commission, reflect
all adjustments which, in the opinion of management, are necessary for a fair
presentation of our financial position, results of operations and cash flows for
the interim periods on a basis consistent with the annual audited statements.
All such adjustments are of a normal recurring nature. The results of operations
for interim periods are not necessarily indicative of the results that may be
expected for any other interim period of a full year. Certain information,
accounting policies and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's Annual Report on Form 10-K and Form 10-K/A for the
year ended December 31, 2003 filed with the Securities and Exchange Commission
on March 30, 2004 and April 29, 2004, respectively.

Changes in Estimates

Effective January 1, 2004, we changed the estimated residual value of our fleet
of aircraft from 10% to 30% for aircraft over five years of age and from 10% to
40% for aircraft five years of age or less. We believe the revised amounts more
properly match costs over the useful lives and salvage value of these assets.

Decreased depreciation expense was recorded for the Company's fleet of aircraft
as a result of Management's first quarter 2004 change in the fleet's estimated
residual value. The effect of that change to select items in the financial
statements is shown in the table below (in thousands):

NOTE 2. EARNINGS PER SHARE

Basic Earnings Per Share (EPS) excludes dilution and is determined by dividing
income available to common stockholders by the weighted average number of shares
of common stock outstanding during the periods presented. Diluted EPS reflects
the potential dilution that could occur if options and other contracts to issue
shares of common stock were exercised or converted into common stock.

We had 12,163 options outstanding, warrants to purchase 1,090,000 shares of
common stock and securities convertible into 2,026,779 shares of common stock as
of March 31, 2004 that were excluded from the calculation of diluted EPS,
because they were antidilutive. Likewise, we also had 1,008,879 options
outstanding, warrants to purchase 2,121,662 shares of common stock and
securities convertible into 4,560,000 shares of common stock as of March 31,
2003 that were excluded from the calculation of diluted EPS, because they were
antidilutive.

On April 15, 2004, we issued warrants to purchase shares of common stock and
securities convertible into shares of common stock. These warrants could have an
impact on EPS in the future. In addition, we redeemed 25 shares of Series A
Preferred Stock and 2,284 shares of Series B Preferred Stock. This redemption
will have an antidilutive impact to EPS.

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NOTE 3. LONG-TERM DEBT

Line of Credit and Term Debt

In December 2003, we entered into a $11.0 million senior credit facility with a
bank that includes a $8.0 million working capital revolving line of credit (the
"Line") and a $3.0 million term loan. The proceeds were used to repay term debt
refinance our then existing revolving line of credit and provide working
capital.

Availability under the Line is the lower of: (i) $8.0 million or (ii) the sum of
85% of eligible accounts receivable, plus the lesser of: $2.0 million or 80% of
the appraised orderly liquidation value of eligible inventory of parts and
supplies. The Line accrues interest at the prime interest rate plus 1.5% (5.5%
at March 31, 2004) and matures on December 31, 2006. The Line is collateralized
by accounts receivable and inventory and is subject to certain customer
concentration limitations. As of March 31, 2004 we had $6.5 million outstanding
under the Line and $2.9 million outstanding on the term loan. In early April
2004, we reduced the amount outstanding on the Line by $5.0 million to $1.5
million, with an offsetting reduction in cash and working capital.

At March 31, 2004, we also had outstanding approximately $11.8 million in other
senior secured debt including approximately $1.0 million with an equipment
finance company. This loan amortizes over seven years, bears interest at LIBOR
plus 5.0%, is secured by certain seismic drilling equipment and matures in July
2006.

At March 31, 2004, also included in the $11.8 million in other senior secured
debt, was an additional $1.7 million outstanding to an aviation equipment
finance company. This loan is secured by certain aviation fleet equipment,
amortizes over ten years, accrues interest at 8% per annum and matures January
2007. Additionally, we had $6.4 million in capital leases on eleven helicopters
and two vehicles payable to various finance companies. This includes $3.6
million entered into during the first quarter ended March 31, 2004. The proceeds
were used to reduce the Line by $2.4 million. Our real estate is financed with a
bank with payments amortized over 20 years, bears interest at prime plus 1.5%
and matures in August 2024. At March 31, 2004, the balance outstanding under our
real estate loan was $1.4 million.

Our senior secured credit agreements contain customary financial covenants
requiring, among other things, minimum levels of tangible net worth, debt to
EBITDA ratios, and limitations on annual capital expenditures. As of March 31,
2004 we were in compliance with these covenants and we expect to maintain
compliance throughout 2004.

Convertible Debentures

Pursuant to a Securities Purchase Agreement, dated February 12, 2004, we sold
(i) $10,000,000 in principal amount of 3-year, 6.5% fixed rate, Convertible
Debentures (the "Debentures") that are convertible into shares of Common Stock
at an initial conversion price of $7.15 per share, (ii) 1-year Common Stock
Series A Warrants to purchase an aggregate of 700,000 shares of Common Stock at
an initial exercise price of $7.15 per share, and (iii) 5-year Common Stock
Series B Warrants to purchase an aggregate of 390,000 shares of Common Stock at
an initial exercise price of $8.50 per share. The Warrants are not exercisable
for a period of six months and one day after the issue date of such warrants and
in no event will the exercise prices of such warrants be less than $6.15 per
share. In accordance with Accounting Principles Board (APB) Opinion No. 14, the
warrants were valued at fair market value using a Black Scholes model and
performed by an outside valuation expert. These sales were made pursuant to a
private placement in reliance on Section 4(2) of the Securities Act of 1933.

Prior to maturity of the Debentures, the holders of the Debentures have the
right to require the repayment or conversion of up to an aggregate of $8.75
million of the Debentures (the "Put Option"). Following the effective date of
the

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registration statement covering the resale of Common Stock issued pursuant to
the conversion of the Debentures and the exercise of the Warrants, a Put Option
can be exercised in ten consecutive and equal monthly installments commencing
the first full month, if the registration statement becomes effective on or
prior to the fifteenth day of such calendar month, or the second full month, if
the registration statement becomes effective later than the fifteenth day of
such calendar month. Upon receipt of the Debenture holders' intent to exercise
a Put Option, we will have the irrevocable option to deliver cash or, if
certain conditions set forth in the Debentures are satisfied, Common Stock with
respect to the Put Option. If we elect to pay the Put Option with Common Stock,
the underlying shares will be valued at a 12.5% discount to the average trading
price of our Common Stock for the applicable pricing period, as defined in the
Debentures.

Total proceeds of $14.3 million received from the sales, after expenses, dated
February 12, 2004 and April 15, 2004 was $9.5 million and $4.8 million,
respectively. Of the total proceeds received for these private placements, (see
Note 9). $8.2 million was used to redeem Series A Preferred Stock in March 2004
(Note 5) and the balance used for working capital purposes. In April 2004, we
redeemed 25 shares of Series A Preferred Stock for $0.3 million, including
accrued dividends and 2,293 shares of Series B Preferred Stock for $2.3 million,
including accrued dividends.

A Form S-3 was filed with the SEC on April 30, 2004, to register a total of
5,012,237 shares of our Common Stock for the Debentures issued February 12, 2004
and April 15, 2004. (see Note 9)

NOTE 4. LITIGATION

On February 13, 2004, we commenced litigation against a former director,
Advantage Capital Partners ("ACP") and their respective insurers in the Civil
District Court for the Parish of Orleans in the State of Louisiana. The suit
requests the court to determine our right under the Company's Articles of
Incorporation, as amended, to redeem the Series A 8% Convertible Preferred Stock
rather than to convert the shares into common stock. Furthermore, to the extent
the court determines we did not have a right to redeem, rather than convert, the
Series A Preferred Stock, the suit requests the court to determine that the
Unanimous Consent of the Board of Directors entered into on November 7, 2000
which, among other things, reduced the conversion price of the Series A
Preferred Stock from $2.50 to $0.75 (pre-split), per share, is null and void and
without effect because it was accomplished by the defendants in violation of
fiduciary duties and/or public policy and Louisiana law. We are seeking a
declaration that we have the right to redeem, rather than convert, Series A
Preferred Stock. Alternatively, we seek (a) a declaration that the Unanimous
Consent entered into on November 7, 2000 is null and void and without effect; or
(b) damages back against Mr. Stull and the Advantage Capital Partners as a
complete set-off to any additional dollars owed by us to the Advantage Capital
Partners as a result of the November 7, 2000 actions.

On March 26, 2004, ACP and its affiliates filed a lawsuit in the United States
District Court, Eastern District of Louisiana against us and certain of our
executive officers. ACP and its affiliates are alleging that (i) the Company and
the officers misrepresented material facts and failed to disclose material facts
related to its intention to redeem the Series A Preferred Stock and Series B
Preferred Stock of the Company, and (ii) the officers of the Company breached
their fiduciary duties. This lawsuit presents risks inherent in litigation
including continuing expenses, risks of loss, additional claims, and attorney
fee liability. ACP claims that (i) we and the officers misrepresented material
facts and failed to disclose material facts related to its intention to redeem
our Series A and Series B Convertible Preferred Stock, and (ii) the officers of
the Company breeched their fiduciary duties. They are claiming damages of
approximately $60 million. We have agreed to indemnify our officers in this
matter. Our costs and legal expenses related to this lawsuit are not currently
determinable.

-8-

NOTE 5. PREFERRED STOCK

During the years ended December 31, 1999, 2000 and 2001, we privately placed
with an affiliate, subordinated debentures totaling $7.5 million, $3.4 million
and $1.5 million, respectively. The debentures matured five years from their
date of issue and accrued interest at various rates ranging from a fixed rate of
12% per annum to a variable rate of interest starting at 12% per annum and
escalating to 20% per annum. In October 2000, we agreed to convert $4.6 million
of the subordinated debentures into our Series A Preferred Stock. In May 2001,
we agreed to pay the affiliate $3.0 million cash plus issue to the affiliate
$4.6 million of the Company's Series B Preferred Stock in full satisfaction of
all of the remaining outstanding subordinated debentures including accrued
interest of $1.8 million. This transaction resulted in the affiliate agreeing to
forgive $1.0 million of indebtedness, which has been reflected as a capital
contribution from the affiliate, rather than as income in the accompanying
financial statements.

In connection with the original issuance of the subordinated debentures, we
issued to the affiliate detachable warrants to purchase 1,912,833 shares of our
common stock, of which none remained outstanding at March 31, 2004.

The Series A Preferred Stock has an 8% cumulative dividend rate, is convertible
into our common stock with a conversion rate of $2.25 per share, is redeemable
at our option at $1,000 per share plus accrued dividends, contains a liquidation
preference of $1,000 per share plus accrued dividends, has voting rights on all
matters submitted to a vote of our stockholders, has separate voting rights with
respect to matters that would affect the rights of the holders of the Preferred
Stock, and has aggregate voting rights of the affiliate limited to 49% of our
total outstanding common and preferred shares with voting rights. In respect to
the Series A Preferred Stock, the affiliate has agreed to waive its conversion
rights until our EBITDA (as defined) reaches a mutually agreed upon level.
Pursuant to an agreement with the preferred stockholders, dividends did not
accrue on the outstanding stock from April 2001 through June 2002. Dividends
were accreted at 8% during the free dividend period. As of September 2003, there
were approximately $0.4 million dividends in arrears relating to these
outstanding shares of Series A Preferred Stock. The affiliate previously agreed
that dividends would not accrue after June 30, 2003, until our EBITDA reached a
mutually agreed upon level. During the third quarter of 2003, we agreed with the
holders of the preferred stock that our EBITDA had reached an acceptable level
for the resumption of conversion rights and the accrual of dividends. Pursuant
to our senior secured credit agreements, the dividends can be paid "in kind" (in
shares of like preferred stock) or in cash. In February 2004, we issued $10
million of 6.5% Subordinated Convertible Debentures. The proceeds were used to
redeem $8.2 million of the Series A Preferred Stock outstanding, including
accrued dividends. At March 31, 2004, we had a total of 25 shares of Series A
Preferred Stock outstanding, which were redeemed in April 2004 for $0.03
million.

In May 2001, we committed to issue 4,600 shares of Series B Preferred Stock to
an affiliate of ours in satisfaction of all outstanding principal and interest
owed under the subordinated debt agreements (See Note 3). These shares were
issued in March 2002. The Series B Preferred Stock has an 8% cumulative dividend
rate, is convertible into our common stock with an initial conversion rate of
$3.75 per share, is redeemable at our option at $1,000 per share plus accrued
dividends, contains a liquidation preference of $1,000 per share plus accrued
dividends and has no voting rights until such time as it becomes convertible.
The Series B Preferred Stock does not have conversion rights until our EBITDA
(as defined) reaches a mutually agreed upon level, and until all shares of
Series A Preferred Stock become convertible. Pursuant to an agreement with the
preferred stockholders, dividends did not accrue on the outstanding stock from
April 2001 through June 2002. Dividends were accreted at 8% during the free
dividend period. As of September 2003 there were approximately $0.1 million
dividends in arrears relating to these outstanding shares of Series B Preferred
Stock. The affiliate previously agreed that dividends would not accrue after
June 30, 2003 until our EBITDA reached a mutually agreed upon level. During the
third quarter of 2003 we agreed with the holders of the preferred stock that our
EBITDA had reached an acceptable level for the

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resumption of conversion rights and the accrual of dividends. Pursuant to our
senior secured credit agreements, the dividends can be paid "in kind" (in shares
of like preferred stock) or in cash. At March 31, 2004, we had a total of 2,314
shares of Series B Preferred Stock outstanding. In April 2004, we redeemed
approximately 2,293 shares of the Series B Stock outstanding for $2.3 million,
including accrued dividends.

NOTE 6. SEGMENT INFORMATION

The following shows industry segment information for our four operating
segments, Drilling, Aviation, Survey, and Permitting for the three months ended
March 31, 2004 and 2003 (in thousands):

Three months ended March 31,
2004 2003
----------- ------------

Operating revenues:
Drilling $ 7,371 $ 5,288
Aviation 3,434 740
Survey --- ---
Permitting 691 179
----------- -----------
Total $ 11,496 $ 6,207
----------- -----------

Gross profit (loss):
Drilling $ 1,040 $ 891
Aviation 983 258
Survey (12) (23)
Permitting 97 38
Other (102) (115)
------------ ------------
Total $ 2,006 $ 1,049
----------- -----------

General and administrative expenses 1,477 1,060
Other expense 444 204
----------- -----------
Income (loss) before taxes $ 85 $ (215)
=========== ============

Identifiable Assets:
Drilling $ 21,656 $ 22,057
Aviation 19,364 7,014
Survey 1,862 1,448
Permitting 246 ---
Other 15,664 9,422
----------- -----------
Total $ 58,792 $ 39,942
=========== ===========

Capital Expenditures:
Drilling $ 44 $ ---
Aviation 1,849 1,115
Survey --- ---
Permitting --- ---
Other 324 5
----------- -----------
Total $ 2,217 $ 1,120
=========== ===========

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NOTE 7. ACQUISITION

On November 20, 2003, we purchased American Helicopters, Inc. for the aggregate
acquisition cost of $5.4 million, including $4.6 million in cash and the
assumption of current and long-term liabilities of $0.6 million and $0.2
million, respectively. American Helicopters, Inc. operates 17 helicopters from
base locations in Louisiana and Texas and is headquartered in Angleton, Texas.
The results of American Helicopters' operations have been included in our
consolidated financial statements since the acquisition date. The following
summarized unaudited data reflects our consolidated pro forma results of
operations as if the American Helicopters, Inc. transaction had taken place
January 1, 2003. (in thousands):

UNAUDITED PRO FORMA RESULTS

THREE MONTHS ENDED
MARCH 31, 2003
------------------

INCOME STATEMENT DATA
Revenue ....................................................... $ 8,490
Gross Profit .................................................. $ 1,913
Net income .................................................... $ 221
Basic income (loss) per common share:
Net Income ................................................. $ 0.03
Net Income applicable to common and common equivalent shares $ 0.03
Diluted income (loss) per common share:
Net Income ................................................. $ 0.03
Net Income applicable to common and common equivalent shares $ 0.03

The following table summarizes the estimated fair values of the assets acquired
and liabilities assumed at the date of acquisition. The allocation of the
purchase price is subject to refinement as acquired asset and liability values
are being finalized (amounts in thousands):

UNAUDITED FINANCIAL DATA:

MARCH 31, 2004
--------------

BALANCE SHEET DATA
Current assets............................... $ 2,129
Property, plant, and equipment............... 3,322
Current Liabilities.......................... (598)
Long-term liabilities........................ (213)
----------------
Cash purchase price...................... $ 4,640
================

NOTE 8. STOCK BASED COMPENSATION

We account for employee stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees".

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Accordingly, the provisions of Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation," do not affect our
reported results of operations. Pro forma disclosures as if we had adopted the
provisions of SFAS No. 123 are presented below.

Had compensation cost been determined based on the fair value at the grant date
consistent with the provisions of SFAS No. 123, our net income and earnings per
common share would have approximated the pro forma amounts below:

FOR THE THREE MONTHS ENDED
-----------------------------------------------------------------------
MARCH 31, 2004 MARCH 31, 2003
---------------------------------- -----------------------------------
AS COMPEN- PRO AS COMPEN PRO
REPORTED SATION(1) FORMA REPORTED -SATION FORMA
-------- --------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Net income (loss) available to
common and common equivalent shares $ (400) $ (233) $ (633) $ (115) $ (17) $ (132)
Basic income (loss) per share ......... $ (0.04) $ (0.02) $ (0.06) $ (0.01) $ -- $ (0.02)
Diluted income (loss) per share ....... $ (0.04) $ (0.02) $ (0.06) $ (0.01) $ -- $ (0.02)

(1) Represents stock based employee compensation expense determined under
fair value based method for all awards, net of tax.

NOTE 9. SUBSEQUENT EVENTS

On April 15, 2004, we sold to Provident Premier Master Fund Ltd. and Portside
Growth and Opportunity Fund each (i) $1,250,000 in principal amount of 3-year,
6.5% fixed rate, Convertible Debentures that are convertible into shares of our
common stock at an initial conversion price of $7.20 per share and (ii) 5-year
common stock Warrants to purchase an aggregate of 37,500 shares of common stock
at an initial exercise price of $9.00 per share. We sold to Manchester
Securities Corp. (i) $2,500,000 in principal amount of 3-year, 6.5% fixed rate,
Convertible Debentures that are convertible into shares of our common stock at
an initial conversion price of $7.20 per share and (ii) 5-year common stock
Warrants to purchase an aggregate of 75,000 shares of common stock at an initial
exercise price of $9.00 per share. We sold to Gemini Master Fund, Ltd. (i)
$50,000 in principal amount of 3-year, 6.5% fixed rate, Convertible Debentures
that are convertible into shares of our common stock at an initial conversion
price of $7.20 per share and (ii) 5-year common stock Warrants to purchase an
aggregate of 1,500 shares of common stock at an initial exercise price of $9.00
per share. The warrants described in this paragraph are not exercisable for a
period of six months and one day after the issue date of such warrants and in no
event will the exercise prices of such warrants be less than $7.11 per share. In
accordance with Accounting Principles Board (APB) Opinion No. 14, the warrants
were valued at fair market value using a Black Scholes model and performed by an
outside valuation expert. These sales were made pursuant to a private placement
in reliance on Section 4(2) of the Securities Act of 1933.

Total proceeds of $14.3 million received from the sales, after expenses, dated
February 12, 2004 (see Note 3) and April 15, 2004 was $9.5 million and $4.8
million, respectively. Of the total proceeds received for these private
placements, $8.2 million was used to redeem Series A Preferred Stock in March
2004 (Note 5) and the balance used for working capital purposes. In April 2004,
we redeemed 25 shares of Series A Preferred Stock for $0.3 million, including
accrued dividends and 2,293 shares of Series B Preferred Stock for $2.3 million,
including accrued dividends.

A Form S-3 was filed with the SEC on April 30, 2004, to register a total of
5,012,237 shares of our Common Stock for the Debentures issued February 12, 2004
and April 15, 2004. (Note 9)

-12-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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, 2003.

GENERAL

OMNI Energy Services Corp. is a leading oilfield service company specializing in
providing an integrated range of (i) onshore seismic drilling, permitting,
survey and helicopter support services to geophysical companies operating in
logistically difficult and environmentally sensitive terrain and (ii) helicopter
transportation services to oil and gas companies operating primarily in the
shallow waters of the Gulf of Mexico. We operate in two business divisions:
Seismic Drilling and Aviation Services.

The principal region in which our Seismic Drilling division operates is the
marsh, swamp, shallow water and contiguous dry land areas along the U.S. Gulf
Coast (the "Transition Zone"), primarily in Louisiana and Texas, where we are
the leading provider of seismic drilling support services. In 2003, we initiated
seismic drilling activities in various Transition Zone regions of Mexico.

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, survey and helicopter support services in all of the varied terrain
of the Transition Zone and simultaneously support operations for multiple,
large-scale seismic projects. In February 2002, we acquired all of the assets of
AirJac Drilling, a division of Veritas Land DGC. This acquisition created the
largest domestic provider of seismic drilling services to geophysical companies.

We operate a fleet of 29 company-owned, leased and customer-owned helicopters,
and one fixed-wing aircraft, from bases or heliports located in the Gulf Coast
regions of Louisiana and Texas. Our land-based aviation customers are primarily
geophysical companies operating in various regions of the United States. Our
offshore aviation customers include oil and gas companies operating primarily in
the shallow waters of the Gulf of Mexico. We maintain and operate certain
customer-owned aircraft providing air medical transportation services for
hospitals and medical programs in approximately 15 counties in Texas. The
aircraft dedicated to this operation are specifically outfitted to accommodate
emergency patients and emergency medical equipment. We also maintain an
inventory of aviation maintenance parts, turbine engines and other miscellaneous
flight equipment used in connection with providing aviation services to our
customers. In November 2003, we acquired American Helicopters, Inc. ("AHI")
establishing us as a leading provider of helicopter transportation services in
the Gulf of Mexico.

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

-13-

Services Corp. ("OMNI") was formed as a Louisiana corporation on September 11,
1997.

Seasonal Trends and Weather Risks. Our operations are subject to seasonal
variations in weather conditions and available daylight hours. Since our
activities take place outdoors, on average, fewer hours are worked per day and
fewer holes are generally drilled or surveyed per day. Additionally, flight
hours are lower in winter months than in summer months, due to an increase in
rain, fog, and cold conditions and a decrease in daylight hours.

THREE MONTHS ENDED MARCH 31,
RESULTS OF OPERATIONS (IN THOUSANDS) 2004 2003
------------ ------------

Operating revenue $ 11,496 $ 6,207
Operating expense 9,490 5,158
------------ ------------
Gross profit 2,006 1,049
General and administrative expenses 1,477 1,060
------------ ------------
Operating income (loss) 529 (11)
Interest expense 415 210
Other income (expense) (29) 6
------------ ------------
Income (loss) before income taxes 85 (215)
Income taxes --- (100)
------------ ------------
Net income (loss) 85 (115)
Preferred stock dividends (485) ---
------------ ------------
Net loss applicable to common and common
equivalent shares $ (400) $ (115)
============ ============

THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE MONTHS ENDED MARCH 31, 2003

Operating revenues increased 85% or $5.3 million, from $6.2 million for the
three months ended March 31, 2003 to $11.5 million for the three months ended
March 31, 2004. This increase was due primarily to improved market conditions in
the geophysical industry, our expanded role in aviation transportation to oil
and gas companies operating in the shallow waters of the Gulf of Mexico and
additional focus on the permitting acquisition and management process. Drilling
revenues increased $2.1 million, to $7.4 million for the three months ended
March 31, 2004 from $5.3 million for the three months ended March 31, 2003. This
is primarily due to our increased activity on jobs taken at competitive rates to
maximize our utilization of equipment and personnel during normally slow, winter
months. Aviation revenues increased $2.7 million from $0.7 million to $3.4
million for the three months ended March 31, 2004 compared to the same period in
2003 as a result of an increase of 834 flight hours from 3,776 to 4,610 flight
hours, due primarily from our recent acquisition of American Helicopters.
Permitting revenues increased from $0.2 million for the three month period ended
March 31, 2003 to $0.7 million for the three month period ended March 31, 2004,
due to an increased focus on permitting acquisition and management processes
using contract permit agents and our proprietary database software program.

Operating expenses increased 83%, or $4.3 million, from $5.2 million for the
three months ended March 31, 2003 to $9.5 million for the three months ended
March 31, 2004. Increases in payroll costs in all divisions accounted for 33% of
this increase as operating payroll expense increased from $2.4 million to $3.8
million for the three months ended March 31, 2003 and 2004, respectively. The
number of field personnel we employed in drilling activities increased from 161
for the three months ended March 31, 2003 to 269 for the three months ended
March 31, 2004, as a result of our efforts to maximize utilization of personnel
at competitive rates. Also, as a result of the increased seismic activity
between the periods,

-14-

explosives and repairs and maintenance expenses increased $0.8 million and $0.5
million, respectively, from the first three months of 2003 to the same period of
2004. The increase in explosives expense was due to an increase in the cost of
explosives on jobs performed in 2004 versus 2003. Repairs and maintenance
increased, as we prepared our aircraft and facilities for the start of the W & T
contract, which begins in the second quarter of 2004. We anticipate increased
activity on all other contracts expected during the remainder of 2004. We
currently utilize third party contactors to perform all permitting services and
some drilling services. Third party contract services increased $0.8 million
from the first quarter of 2003 to the first quarter of 2004, as a result of the
increased levels of activity in each of these divisions.

Gross profit increased 100% or $1.0 million from $1.0 million to $2.0 million
for the first quarter of 2003 and 2004, respectively. Further, our gross profit
margins improved from 16.9% in 2003 to 17.5% in 2004. This resulted from greater
revenues on more profitable areas of our business partially offset by our focus
on increasing our activity on jobs taken, at times, at breakeven or competitive
rates in order to maximize our utilization of equipment and personnel during
normally slow winter months.

General and administrative expenses increased $0.4 million from $1.1 million for
the three months ended March 31, 2003 to $1.5 million for the three months ended
March 31, 2004. Payroll costs accounted for the majority of this increase, as
well as costs for operating additional aircraft bases and other general costs
associated with our recent acquisition of American Helicopters.

Interest expense increased approximately $0.2 million from the three month
period ended March 31,2003 to $0.4 million for the three month periods ended
March 31, 2004. This increase is primarily attributable to increased levels of
debt between the periods, resulting primarily from the acquisition of American
Helicopters, three additional aircraft acquired for our new offshore aviation
contract with W & T Offshore and our 6.5% Debentures issued on February 12,
2004. In addition, accretion of bond discount of $.05 million on the Debentures
was recorded as interest expense during the three month period ended March 31,
2004.

Due to our past history of operating losses, we recorded a valuation allowance
during the periods against our net operating loss carry-forwards, which resulted
in our not reporting any income tax expense or benefit during those periods. For
the quarter ended March 31, 2003, the Company reversed $0.1 million of this
related reserve due to the Company's expectation of generating income in fiscal
2003. For the period ended March 31, 2004, we did not record any income tax
expense or benefit.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Liquidity is calculated using cash and all other current assets, plus
availability on the Line, less current liabilities. At March 31, 2004, we had
approximately $5.7 million in cash compared to approximately $0.6 million at
December 31, 2003 and working capital of approximately $11.4 million at March
31, 2004, compared to approximately $6.9 million at December 31, 2003.

Our liquidity increased by 43% from $8.0 million to $11.4 million for the
periods ended December 31, 2003 and March 31, 2004, respectively. The increase
is primarily as a result of the increase in business activity, as well as, the
completion of financing related to our acquisition of American Helicopters and
three additional aircraft acquired for our new aviation contract with W& T
Offshore. During early April 2004, we reduced the Line by $5.0 million to $1.5
million, with no corresponding effect to liquidity.

Line of Credit and Term Debt

In December 2003, we entered into a $11.0 million senior credit facility with a
bank, including a $8.0 million working capital revolving line of credit (the
"Line") and a $3.0 million term loan. The proceeds were used to repay term debt,
refinance our revolving line of credit and provide working capital.

-15-

Availability under the Line is the lower of: (i) $8.0 million or (ii) the sum
of 85% of eligible accounts receivable, plus the lesser of: $2.0 million or 80%
of the appraised orderly liquidation value of eligible inventory of parts and
supplies. The Line accrues interest at the prime interest rate plus 1.5% (5.5%
at March 31, 2004) and matures on December 31, 2006. The Line is collateralized
by accounts receivable and inventory and is subject to certain customer
concentration limitations. As of March 31, 2004 we had $6.5 million outstanding
under the Line and $2.9 million outstanding on the term loan. In early April
2004, we reduced the line $5.0 million to $1.5 million, with an offsetting
reduction in cash and working capital.

At March 31, 2004, we also had outstanding approximately $11.8 million in other
senior secured debt including approximately $1.0 million with an equipment
finance company. This loan amortizes over seven years, bears interest at LIBOR
plus 5.0%, is secured by certain seismic drilling equipment and matures in July
2006.

At March 31, 2004, also included in the $11.0 million in other secured debt, was
an additional $1.7 million outstanding to an aviation equipment finance company.
This loan is secured by certain aviation fleet equipment, amortizes over ten
years, accrues interest at 8% per annum and matures January 2007. Additionally,
we had $4.3 million and $2.1 million, respectively, in capital leases on eleven
helicopters and two vehicles payable to various finance companies. This includes
$3.6 million entered into during the 1st quarter ended March 31, 2004. The
proceeds were used to reduce our working capital revolving line of credit by
$2.4 million. Additionally, our real estate is financed with a bank with
payments amortized over 20 years, bears interest at prime plus 1.5% and matures
in August 2024. At March 31, 2004, the balance outstanding under our real estate
loan was $1.4 million.

Our senior secured credit agreements contain customary financial covenants
requiring, among other things, minimum levels of tangible net worth, debt to
EBITDA ratios, and limitations on annual capital expenditures. As of March 31,
2004, we were in compliance with these covenants and we expect to maintain
compliance throughout 2004.

Convertible Debentures

Pursuant to a Securities Purchase Agreement, dated February 12, 2004, we sold
(i) $10,000,000 in principal amount of 3-year, 6.5% fixed rate, Convertible
Debentures (the "Debentures")that are convertible into shares of Common Stock at
an initial conversion price of $7.15 per share, (ii) 1-year Common Stock Series
A Warrants to purchase an aggregate of 700,000 shares of Common Stock at an
initial exercise price of $7.15 per share, and (iii) 5-year Common Stock Series
B Warrants to purchase an aggregate of 390,000 shares of Common Stock at an
initial exercise price of $8.50 per share. The warrants are not exercisable for
a period of six months and one day after the issue date of such warrants and in
no event will the exercise prices of such warrants be less than $6.15 per share.
In accordance with Accounting Principles Board (APB) Opinion No. 14, the
warrants were valued at fair market value using a Black Scholes model and
performed by an outside valuation expert. These sales were made pursuant to a
private placement in reliance on Section 4(2) of the Securities Act of 1933.

Prior to maturity of the Debentures, the holders of the Debentures have the
right to require the repayment or conversion of up to an aggregate of $8.75
million of Debentures. Following the effective date of the registration
statement covering the resale of Common Stock issued pursuant to the Debentures
and the Warrants, a Put Option can be exercised in ten consecutive and equal
monthly installments commencing the first full month, if the registration
statement becomes effective on or prior to the fifteenth day of such calendar
month, or the second full month, if the registration statement becomes effective
later than the fifteenth day of such calendar month. Upon receipt of the
Debenture holders' intent to exercise a Put Option, we will have the irrevocable
option to deliver cash or, if certain conditions set forth in the Debentures are
satisfied, Common Stock with respect to the Put Option. If we elect to pay the
Put Option with Common Stock, the underlying shares will be valued at a 12.5%
discount to the average trading price of our Common Stock for the applicable
pricing period, as defined in the Debentures.

-16-

Total proceeds of $14.3 million received from the sales, after expenses, dated
February 12, 2004 and April 15, (See Note 9) was $9.5 million and $4.8 million,
respectively. Of the total proceeds received, $8.2 million was used to redeem
Series A Preferred Stock in March 2004 (Note 5) and the balance will be used for
working capital purposes. In April 2004, we redeemed 25 shares of Series A
Preferred Stock for $0.3 million, including accrued dividends and 2,293 shares
of Series B Preferred Stock for $2.3 million, including accrued dividends.

Capital

Historically, our capital requirements have primarily related to the purchase or
fabrication of new seismic drilling equipment and related support equipment,
additions to our aviation fleet and new business acquisitions. In 2003, we
acquired American Helicopters Inc., approximately $3.5 million of aircraft
accounted for as capital leases, and approximately $0.2 million of new vehicles
accounted for as a capital lease. Thus far in 2004, we have acquired
approximately $1.1 million of aircraft accounted for as capital leases and
approximately $0.4 million of new vehicles accounted for as a capital lease. For
the remainder of 2004, we expect to continue renewing our rolling stock,
expanding our aviation fleet and continuing to pursue various strategic
acquisitions.

CRITICAL ACCOUNTING POLICIES

Aside from the change in estimated residual values of our aircraft, there have
been no changes to the Company's accounting policies as disclosed in our Form
10-K for the period ended December 31, 2003.

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements other than statements of historical fact included in this
report regarding our financial position and liquidity, our strategic
alternatives, future capital needs, business strategies and other plans and
objectives of our management for future operations and activities, are
forward-looking statements. These statements are based on certain assumptions
and analyses made by our management in light of our experience and our
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances. Such forward-looking statements are subject to uncertainties that
could cause our actual results to differ materially from such statements. Such
uncertainties include but are not limited to: the volatility of the oil and gas
industry, including the level of offshore exploration, production and
development activity; changes in competitive factors affecting our operations;
operating hazards, including the significant possibility of accidents resulting
in personal injury, property damage or environment damage; the effect on our
performance of regulatory programs and environmental matters; seasonality of the
offshore industry in the Gulf of Mexico; and our dependence on certain
customers. These and other uncertainties related to our business are described
in detail in our other public filings. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. You are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof. We undertake no obligation to update any of our
forward-looking statements for any reason.

On February 13, 2004, we commenced litigation against a former director,
Advantage Capital Partners ("ACP") and their respective insurers in the Civil
District Court for the Parish of Orleans in the State of Louisiana. On March 26,
2004, ACP and its affiliates filed a lawsuit in the United States District
Court, Eastern District of Louisiana against us and certain of our executive
officers. This lawsuit presents risks inherent in litigation including
continuing expenses, risks of loss, additional claims, and attorney fee
liability. We believe that the claims or litigation arising therefrom will have
no material impact on us or our business and all disputes surrounding
securities matters will likely be covered by our insurance. If this lawsuit is
decided against us, however, and if it exceeds our Insurance coverage,
it could adversely affect our financial condition, results of operations
and cash flows. (Note 4)

-17-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our market risks since the year ended
December 31, 2003. For more information, please read the consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the
year ended December 31, 2003.

ITEM 4. CONTROLS AND PROCEDURES

As required by paragraph (b) of Rules 13a-15 and 15d-15 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), our principal executive
officer and principal financial officer have evaluated our disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act) as of the end of our first fiscal quarter of 2004 (the
"Evaluation Date"). Based on this evaluation, such officers have concluded that,
as of the Evaluation Date, our disclosure controls and procedures are effective
in alerting them on a timely basis to material information relating to us
(including its consolidated subsidiaries) required to be included in our
periodic filings under the Exchange Act.

There have not been changes in our internal control over financial reporting
that occurred during our last fiscal quarter that have materially affected, or
are reasonable likely to materially affect our internal control over financial
reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On February 13, 2004, we commenced litigation against a former director,
Advantage Capital Partners ("ACP") and their respective insurers in the Civil
District Court for the Parish of Orleans in the State of Louisiana. The suit
requests the court to determine our right under the Company's Articles of
Incorporation, as amended, to redeem the Series A 8% Convertible Preferred Stock
rather than to convert the shares into common stock. Furthermore, to the extent
the court determines we did not have a right to redeem, rather than convert, the
Series A Preferred Stock, the suit requests the court to determine that the
Unanimous Consent of the Board of Directors entered into on November 7, 2000
which, among other things, reduced the conversion price of the Series A
Preferred Stock from $2.50 to $0.75 (pre-split) per share, is null and void and
without effect because it was accomplished by the defendants in violation of
fiduciary duties and/or public policy and Louisiana law. We are seeking a
declaration that we have the right to redeem, rather than convert, Series A
Preferred Stock. Alternatively, we seek (a) a declaration that the Unanimous
Consent entered into on November 7, 2000 is null and void and without effect; or
(b) damages back against Mr. Stull and the Advantage Capital Partners as a
complete set-off to any additional dollars owed by us to the Advantage Capital
Partners as a result of the November 7, 2000 actions.

On March 26, 2004, ACP and its affiliates filed a lawsuit in the United States
District Court, Eastern District of Louisiana against us and certain of our
executive officers. ACP and its affiliates are alleging that (i) the Company and
the officers misrepresented material facts and failed to disclose material facts
related to its intention to redeem the Series A Preferred Stock and Series B
Preferred Stock of the Company, and (ii) the officers of the Company breached
their fiduciary duties. This lawsuit presents risks inherent in litigation
including continuing expenses, risks of loss, additional claims, and attorney
fee liability. ACP claims that (i) we and the officers misrepresented material
facts and failed to disclose material facts related to its intention to redeem
our Series A and Series B Convertible Preferred Stock, and (ii) the officers of
the Company breeched their fiduciary duties. They are claiming damages of
approximately $60 million. We have agreed to indemnify our officers in this
matter. Our costs and legal expenses related to this lawsuit are not currently
determinable.

-18-

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES

On February 12, 2004, we sold to Provident Premier Master Fund Ltd. and Portside
Growth and Opportunity Fund each, (i) $2,500,000 in principal amount of 3-year,
6.5% fixed rate, Convertible Debentures that are convertible into shares of our
common stock at an initial conversion price of $7.15 per share, (ii) 1-year
common stock Series A Warrants to purchase an aggregate of 175,000 shares of
common stock at an initial exercise price of $7.15 per share and (iii) 5-year
common stock Series B Warrants to purchase an aggregate of 97,500 shares of
common stock at an initial exercise price of $8.50 per share. In addition, we
sold to Manchester Securities Corp. (i) $5,000,000 in principal amount of
3-year, 6.5% fixed rate, Convertible Debentures that are convertible into shares
of our common stock at an initial conversion price of $7.15 per share, (ii)
1-year common stock Series A Warrants to purchase an aggregate of 350,000 shares
of common stock at an initial exercise price of $7.15 per share and (iii) 5-year
common stock Series B Warrants to purchase an aggregate of 195,000 shares of
common stock were issued to investors at an initial exercise price of $8.50 per
share. The warrants described in this paragraph are not exercisable for a period
of six months and one day after the issue date of such warrants and in no event
will the exercise prices of such warrants be less than $6.15 per share. In
accordance with Accounting Principles Board (APB) Opinion No. 14, the warrants
were valued at fair market value using a Black Scholes model and performed by an
outside valuation expert. These sales were made pursuant to a private placement
in reliance on Section 4(2) of the Securities Act of 1933.

Prior to maturity of the Debentures, the holders of the Debentures have the
right to require the repayment or conversion of up to an aggregate of $8.75
million of the Debentures (the "Put Option"). Following the effective date the
registration statement covering the resale of Common Stock issued pursuant to
the conversion of the Debentures and the exercise of the warrants, a Put Option
can be exercised in ten consecutive and equal monthly installments commencing
the first full month, if the registration statement becomes effective on or
prior to the fifteenth day of such calendar month, or the second full month, if
the registration statement becomes effective later than the fifteenth day of
such calendar month. Upon receipt of the Debenture holders' intent to exercise a
Put Option, we will have the irrevocable option to deliver cash or, if certain
conditions set forth in the Debentures are satisfied, Common Stock with respect
to such Put Option. If we elect to pay the Put Option with Common Stock, the
underlying shares will be valued at a 12.5% discount to the average trading
price of OMNI Common Stock for the applicable pricing period, as defined in the
Debentures.

Total proceeds of $14.3 million received from the sales, after expenses, dated
February 12, 2004 and April 15, 2004 (See Note 9) was $9.5 million and $4.8
million, respectively. Of the total proceeds received for these private
placements, $8.2 million was used to redeem Series A Preferred Stock in March
2004 (Note 5) and the balance used for working capital purposes. In April 2004,
we redeemed 25 shares of Series A Preferred Stock for $0.3 million, including
accrued dividends and 2,293 shares of Series B Preferred Stock for $2.3 million,
including accrued dividends.

-19-

The following table provides information about purchases by the Company and its
affiliated purchasers during the quarter ended March 31, 2004 of equity
securities that are registered by the Company pursuant to Section 12 of the
Exchange Act.

ISSUER PURCHASES OF EQUITY SECURITIES

MAXIMUM NUMBER (OR
TOTAL NUMBER OF APPROXIMATE DOLLAR
SHARES PURCHASED AS VALUE) OF SHARES
TOTAL NUMBER OF PART OF PUBLICLY THAT MAY YET BE
SHARES AVERAGE PRICE PAID ANNOUNCED PLANS OR PURCHASED UNDER THE
PERIOD PURCHASED (1) PER SHARE PROGRAMS (2) PLANS OR PROGRAMS
- -------------------- --------------- ------------------ ------------------- -------------------

01/01/04 - 01/31/04
Series A Preferred --- --- --- ---
Series B Preferred --- --- --- ---
02/01/04 - 02/29/04
Series A Preferred 7,475 $2.25 7,475 25
Series B Preferred --- --- --- ---
03/01/04 - 03/31/04
Series A Preferred --- --- --- ---
Series B Preferred 2,286 $3.75 2,286 2,314

TOTAL
Series A Preferred 7,475 $2.25 7,475 25
Series B Preferred 2,286 $3.75 2,286 2,314

(1) We repurchased an aggregate of 7,475 and 2,286 shares of our Series A
Preferred Stock and Series B Preferred Stock respectively, pursuant to
the terms and conditions of the preferred stock. (Note 5)

(2) Our Board of Directors approved the repurchase by us of 7,500 Series A
Preferred Stock and 4,600 Series B Preferred Stock having a value of up
to $12.1 million in the aggregate pursuant to the terms and conditions of
the preferred stock. (Note 5)

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

31.1 Section 302 Certification of Chief Executive Officer

31.2 Section 302 Certification of Chief Financial Officer

32.1 Section 906 Certification of Chief Executive Officer

32.2 Section 906 Certification of Chief Financial Officer

(b) Reports on Form 8-K

The Company filed a Current Report on Form 8-K on February 13, 2004
regarding the Securities Purchase Agreement dated February 12, 2004.

We also furnished information to the SEC on a Current Report on Form 8-K on
March 31, 2004 under Item 12, Results of Operations and Financial Condition.
Current Reports on Form 8-K under Item 12 are not considered to be "filed" for
purposes of Section 18 of the Exchange Act and are not subject to the
liabilities of that section, but are filed to provide full disclosure under
Regulation FD.

-20-

SIGNATURES

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

OMNI ENERGY SERVICES CORP.

Dated: May 17, 2004 /s/ James C. Eckert
--------------------------------------------
James C. Eckert
President and Chief Executive Officer
(Principal Executive Officer)

Dated: May 17, 2004 /s/ G. Darcy Klug
--------------------------------------------
G. Darcy Klug
Chief Financial Officer
(Principal Financial and Accounting
Officer)

-21-

EXHIBIT INDEX

31.1 Section 302 Certification of Chief Executive Officer

31.2 Section 302 Certification of Chief Financial Officer

32.1 Section 906 Certification of Chief Executive Officer

32.2 Section 906 Certification of Chief Financial Officer