OMNI ENERGY SERVICES CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 0-23383

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

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

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE PER SHARE

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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

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

The aggregate market value of the voting stock held by non-affiliates of
the registrant at June 28, 2002 was $9,070,909.

The number of shares of the Registrant's common stock, $0.01 par value per
share, outstanding at March 26, 2003 was 9,101,778.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for our 2003 annual meeting of
shareholders have been incorporated by reference into Part III of this Form
10-K.
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OMNI ENERGY SERVICES CORP.
ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2002

TABLE OF CONTENTS

1

PART I

ITEMS 1 AND 2. BUSINESS AND PROPERTIES

GENERAL

OMNI Energy Services Corp. is an oilfield service company specializing in
providing an integrated range of onshore seismic drilling, permitting, survey
and helicopter support services to geophysical companies operating in
logistically difficult and environmentally sensitive terrain in the United
States. Our principal market 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. During the latter part of 1997, we commenced operations in the
mountainous regions of the Western United States. We previously operated in
Canada and South America but in 1999 we ceased these international operations
pending improvements in the international marketplace.

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 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 also maintain a fleet of helicopters, including an
inventory of aviation parts, turbine engines and other miscellaneous flight
equipment used in providing aviation services to our customers.

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. On
December 4, 1997, we completed a share exchange, pursuant to which the holders
of common units in OMNI Geophysical, L.L.C. exchanged all of the outstanding
common units of OMNI Geophysical, L.L.C. for 4,000,000 shares of OMNI's common
stock, $0.01 par value per share (the "Common Stock"), and completed an initial
public offering of 1,150,000 shares of Common Stock.

INDUSTRY OVERVIEW

Seismic data generally consists of computer-generated three-dimensional
("3-D") images or two-dimensional ("2-D") cross sections of subsurface geologic
formations and is used in the exploration for new hydrocarbon reserves and as a
tool for enhancing production from existing reservoirs. Onshore seismic data is
acquired by recording subsurface seismic waves produced by an energy source,
usually dynamite, at various points ("source points") at a project site.
Historically, 2-D surveys were the primary technique used to acquire seismic
data. However, advances in computer technology have made 3-D seismic data, which
provides a more comprehensive geophysical image, a practical and capable oil and
gas exploration and development tool. 3-D seismic data has proven to be more
accurate and effective than 2-D data at identifying potential hydrocarbon-
bearing geological formations. The use of 3-D seismic data to identify locations
to drill both exploration and development wells has improved the economics of
finding and producing oil and gas reserves, which in turn has created increased
demand for 3-D seismic surveys and seismic support services.

Oil and gas companies generally contract with independent geophysical
companies to acquire seismic data. Once an area is chosen for seismic analysis,
we obtain permits and landowner consents, either by us, by the geophysical
company or by special permitting agents. The geophysical company then determines
the layout of the source and receiving points. For 2-D data, the typical
configuration of source and receiving points is a straight line with a source
point and small groups of specialized sensors ("geophones") or geophone stations
placed evenly every few hundred feet along the line. For 3-D data, the
configuration is generally a grid of perpendicular lines spaced a few hundred to
a few thousand feet apart, with geophone stations spaced evenly every few
hundred feet along one set of parallel lines, and source points spaced evenly
every few hundred feet along the perpendicular lines. This configuration is
designed by the geophysical company to provide the best

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imaging of the targeted geological structures while taking into account surface
obstructions such as water wells, oil and gas wells, pipelines and areas where
landowner consents cannot be obtained. A survey team then marks the source
points and geophone locations, and the source points are drilled and loaded with
dynamite.

After the source points have been drilled and loaded and the network of
geophones and field recording boxes deployed over a portion of the project area,
the dynamite is detonated at a source point. Seismic waves generated by the
blast move through the geological formations under the project area and is
reflected by various subsurface strata back to the surface where they are
detected by geophones. The signals from the geophones are collected and
digitized by recording boxes and transmitted to a central recording system. In
the case of 2-D data, the geophones and recording devices from one end of the
line are then shuttled, or "rolled forward," to the other end of the line and
the process is repeated. In the case of 3-D data, numerous source points,
typically located between the first two lines of a set of three or four parallel
lines of geophone stations, are activated in sequence. The geophone stations and
recording boxes from the first of those lines are then rolled forward to form
the next line of geophone stations. The process is repeated, moving a few
hundred feet at a time, until the entire area to be analyzed has been covered.

After the raw seismic data has been acquired, it is sent to a data
processing facility. The processed data can then be manipulated and viewed on
computer workstations by geoscientists to map the subsurface structures to
identify formations where hydrocarbons are likely to have accumulated and to
monitor the movement of hydrocarbons in known reservoirs. Domestically, seismic
drilling and survey services are typically contracted to companies such as OMNI
as geophysical companies have found it more economical to outsource these
services and focus their efforts and capital on the acquisition and
interpretation of seismic data.

DESCRIPTION OF OPERATIONS

We provide an integrated range of onshore services including seismic
drilling, operational support, permitting, and surveying and helicopter support
to geophysical companies operating in logistically difficult and environmentally
sensitive terrain in the United States.

Seismic Drilling. Our primary activity is the drilling and loading of
source points for seismic analysis. Once the geophysical company has plotted the
various source points and a survey crew has marked their locations, our drill
crews are deployed to drill and load the source points.

In the Transition Zone, we use water pressure rotary drills mounted on
various types of vehicles to drill the source holes. The nature, accessibility
and environmental sensitivity of the terrain surrounding the source point
determine the type of vehicle used. Transition Zone source holes are generally
drilled to depths of 40 to 180 feet depending on the nature of the terrain and
the needs of the geophysical company, using ten-foot sections of drill pipe,
which are carried with the drilling unit. Our Transition Zone vehicles are
typically manned with a driver and one or two helpers. The driver is responsible
for maneuvering the vehicle into position and operating the drilling unit, while
the helper sets and guides the drill into position, attaches the drilling unit's
water source, if drilling in dry areas, and loads the drill pipe sections used
in the drilling process. Once the hole has been drilled to the desired depth, it
is loaded with dynamite, which is carried onboard our vehicles in special
containers. The explosive charge is set at the bottom of the drill hole and then
tested to ensure that the connection has remained intact. Once the charge has
been tested, the hole is plugged in accordance with local, state and federal
regulations and marked so that the geophysical company can identify it for
detonation at a later date. This process is repeated throughout the survey area
until all source points have been drilled and loaded.

In seismic rock drilling, we use compressed air rotary/hammer drills to
drill holes that are typically shallower than Transition Zone holes. Rock drills
are manned by a two-man or three-man crew and are transported to and from
locations by hand, surface vehicle or helicopter. Once the hole has been drilled
to the desired depth, it is loaded with explosives, which are delivered to the
job site in an explosive magazine carried by hand, vehicle or helicopter.

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Operational Support. We are able to coordinate a variety of related
services to customers performing 3-D seismic data acquisition projects that
produce significant economies and value. Our substantial base of experience
gained from years of work supporting 3-D seismic projects enables us to provide
significant pre-job planning information to the customer during job design
analysis. Typical 3-D seismic data acquisition projects in the field involve
large amounts of equipment, personnel and logistics coordination. Coordination
of movements between permitting, drilling, survey and recording crews is of
critical importance to timely, safe and cost effective execution of the job. We
have a pool of senior field supervisors, who have broad seismic industry
experience and are able to coordinate the activities of drill crews, permit
agents and survey teams with the recording crews to achieve improved results.
These personnel also have the ability to recommend changes to the customer field
representatives in the manner of executing the job in the field to improve
performance and reduce costs. By having the ability to perform significant field
coordination, we are able to streamline field decision making and information
flow and reduce customer overhead costs that otherwise would be required to
perform these supervisory tasks. We also have one of the industry's leading
Health, Safety and Environmental ("HSE") programs. The involvement of our
experienced personnel monitoring HSE field practices greatly reduces customer
involvement in this area. By offering the only integrated combination of seismic
drilling, permit acquisition, seismic survey and operational support, in
addition to an equipment fleet that is one of the largest in terms of number of
units and most diverse in the industry, we provide significant operational
advantages to the customer.

Permitting. In November 2000, we created a "Geophysical Permit Acquisition
Division." Our staff of contract permit agents first conducts research in public
land title records to determine ownership of the lands located in the seismic
projects. The permit agents then contact, negotiate and acquire permits and
landowner consents for the survey, drilling and recording crews to conduct their
operations. Throughout the seismic data acquisition process, the permit agents
assist the crews in the field with landowner relations and permit restrictions
in order to reduce field-crew downtime for noncompliance with landowner
requests. Our permit services are enhanced with the assistance of a proprietary
database software program specifically designed for efficient management of
seismic projects.

Currently we have 21 permit agents under contract conducting services
throughout the Gulf Coast States. These agents have significant experience in
the permit acquisition and management process.

Survey. Once all permits and landowner consents for a seismic project have
been obtained and the geophysical company has determined the placement of source
and receiving points, survey crews are sent into the field to plot each source
and receiving point prior to drilling. We employ both GPS (global positioning
satellite) equipment, which is more efficient for surveying in open areas, and
conventional survey equipment, which is generally used to survey wooded areas.
We have successfully integrated both types of equipment in order to complete
projects throughout the varied terrain of the Transition Zone and elsewhere. In
addition, the survey crews have access to our extensive fleet of specialized
transportation equipment, as opposed to most other survey companies, which must
rent this equipment.

Helicopter Support. Through our Aviation Division, created with the
acquisition of substantially all of the assets of American Aviation Incorporated
("American Aviation") in July 1997, we provide helicopter support services to
geophysical companies throughout the continental United States. Also, we have
ongoing offshore contracts with service companies operating in the Gulf of
Mexico, and we provide helicopter support to certain federal and state
governmental agencies when needed. We use long-line helicopters to shuttle
geophones and recorders used to collect seismic data between receiving points.
Once seismic data has been acquired from a portion of the project site, the
geophones and recorders must be moved into position to collect data from the
next area to be analyzed. By using helicopters, we are able to reduce delays in
completing stages of a seismic project by transporting the geophones and
recording boxes to the next receiving points in the survey area in an efficient
manner and with minimal environmental impact. Our helicopters are also used to
transport heli-portable drilling units into remote or otherwise inaccessible
terrain in an efficient and environmentally sensitive manner.

Currently we own and operate 9 helicopters. In order to improve the
utilization of our fleet, we have decided to reduce the number of aircraft used
solely in our seismic support services. We are currently

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considering plans to sell 2 aircraft used solely to support our seismic
operations. Our pilots have an average of approximately 13,000 flight hours. We
perform all routine maintenance and repairs on our aircraft at our facilities in
Carencro, Louisiana.

International Operations. We commenced line cutting and survey services in
South America in July 1998, in conjunction with the formation of our joint
venture, OMNI International Energy Services -- South America, Ltd. During 1999,
we removed a portion of our equipment from South America and reduced operating
levels to a minimum pending improvements in market conditions. We are currently
trying to sell our remaining assets in South America.

Fabrication and Maintenance. At our Carencro facilities, we perform all
routine repairs and maintenance for our Transition Zone and highland drilling
equipment. We design and fabricate aluminum marsh all terrain vehicles (ATV's),
a number of our support boats and pontoon boats, and the drilling units we use
on all of our Transition Zone equipment. We purchase airboats directly from the
manufacturer and then modify the airboats to install the drilling equipment. We
have also designed and built a limited number of highland drilling units by
installing our drilling equipment on tractors bought directly from the
manufacturer. We also fabricate rock-drilling equipment and have the capability
of fabricating other key equipment, such as swamp ATV's. Because of our ability
to fabricate and maintain much of our equipment, we do not believe that we are
dependent on any one supplier for our drilling equipment or parts.

FACILITIES AND EQUIPMENT

Facilities. In early 1998, we completed the construction of two new
buildings, which house our corporate headquarters, fabrication facility and
primary maintenance facility. The buildings are located on approximately 34
acres of land in Carencro, Louisiana. The buildings provide approximately 20,000
square feet of office space and 32,000 square feet of covered maintenance and
fabrication space. From 1999 to 2001, we leased from an affiliate two additional
buildings adjacent to our main headquarters. The buildings provided
approximately 2,500 square feet of office space and 19,000 square feet of
covered maintenance, fabrication and warehouse space. We used these buildings
for the storage and maintenance of a portion of our survey and aviation assets.
The lease on these facilities expired in 2001, at which point we moved the
remaining assets and personnel into our primary maintenance facility.

During part of 2002, we leased an operations base in Loveland, Colorado to
support our rock-drilling operations. The lease expired in 2002 at which point
we decided to consolidate our equipment into our primary maintenance facility in
Carencro, Louisiana. We own an office and warehouse facility in Santa Cruz,
Bolivia, which is currently being sold.

Transition Zone Transportation and Drilling Equipment. Because of the
varied terrain throughout the Transition Zone and the prevalence of
environmentally sensitive areas, we employ a wide variety of drilling vehicles.
We believe that we are the only company currently operating in the Transition
Zone that owns and operates all of the following types of equipment:

5

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(1) Twenty-four of these drilling units are currently dedicated to seismic rock
drilling operations outside of the Transition Zone.

(2) These drilling units are currently held for sale (see Note 5 to the
Consolidated Financial Statements).

Because of our extensive fleet of Transition Zone transportation and
seismic drilling equipment, much of which we fabricated, we believe that we are
the only company that currently can provide an integrated range of seismic
drilling and survey services in all of the varied terrain of the Transition Zone
and simultaneously support operations for multiple, large-scale seismic
projects.

Highland Drilling Units and Water Buggies. We currently own and operate 72
highland drilling units for seismic drilling in dry land areas, 17 of which are
currently dedicated to our seismic rock drilling operations outside of the
Transition Zone. These units generally consist of a tractor-like vehicle with a
drilling unit mounted on the rear of the vehicle. This highland drilling unit
can be driven over land from point to point and is accompanied by a unit
referred to as a "water buggy" that carries water required for water pressure
rotary drills. This type of vehicle is used around the world for this type of
terrain.

Marsh ATV's. The environmentally sensitive wetlands along the U.S. Gulf
Coast containing water grasses on dry land and in shallow water and areas mixed
with open water are referred to as marsh areas. When there is a minimum amount
of water in these areas, marsh ATV's, which are amphibious vehicles supported by
pontoons that are surrounded by tracks, are used to provide seismic drilling
services. The pontoons enable the marsh ATV to float while the tracks propel the
vehicle through the water and over dry marsh areas. Each marsh ATV is equipped
with a drilling unit and a small backhoe for digging and a small hole to collect
water necessary for drilling.

Some marsh areas have sufficient surrounding water to support drilling
without an external water source, but often water must be pumped into the area
from a remote water source or a portable supply must be carried by the marsh
ATV.

We own and operate 23 marsh ATV's, of which 8 are made of stainless steel
and 15 are made of aluminum. All of the stainless steel marsh ATV's are
currently held for sale. The aluminum ATV's are lighter than steel vehicles and
are specifically designed for the environmentally sensitive areas typically
found in marsh terrain. Landowner consents will often require the use of
aluminum ATV's in an effort to reduce the environmental impact of seismic
drilling. The aluminum marsh ATV is the most widely accepted marsh vehicle for
drilling operations in all Louisiana, state and federal refuges. We fabricated
our own aluminum marsh ATV's at our facilities in Carencro, Louisiana.

Airboat Drilling Units. We own and operate 40 airboat drilling units. An
airboat-drilling unit consists of a drilling unit fabricated and installed on a
large, three-engine airboat. Because of their better mobility, airboat-drilling
units are used in shallow waters and all marsh areas where sufficient water is
present.

Swamp ATV's and Pullboats. Wooded lowlands typically covered with water
are referred to as the "swamp areas" of the Transition Zone. Our swamp ATV's are
used to provide drilling services in these areas. Swamp ATV's are smaller,
narrower versions of the marsh ATV's. The smaller unit is needed in swamp areas
due to the dense vegetation typical in the terrain. Because of its smaller size,
the swamp ATV uses a skid-mounted drilling unit installed in a pullboat, a
non-motorized craft towed behind the swamp ATV. We own and operate 30 swamp
ATV's and 18 pullboats. Swamp ATV's are also used in connection with survey
operations in swamp areas.

Pontoon Boats. We own and operate 18 pontoon boats that are used in
shallow or protected inland bays and lakes and shallow coastal waters. Each
pontoon boat uses a skid-mounted drilling unit installed on board.

Jack-Up Rigs. When a seismic survey requires source points to be drilled
in deeper inland bays or lakes or in deeper coastal waters, we use jack-up rigs
equipped with one of our skid-mounted drilling units. Seismic activity in water
deeper than approximately 20 feet is generally conducted by using offshore
seismic techniques that do not include the drilling and loading of source
points.

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Skid-Mounted Drilling Units. A skid-mounted drilling unit is a drilling
unit mounted on I-beam supports, which allows the drilling unit to be moved
easily between pullboats, pontoon boats, jack-up rigs and other equipment we
operate based on customer needs. We manufacture our skid-mounted drilling units
at our facilities in Carencro, Louisiana and we own 18 of these units, one of
which is located outside of the Transition Zone.

Miscellaneous. We own and operate 88 single engine airboats and 21
outboard powered boats, which we use to ferry personnel and supplies to
locations throughout the Transition Zone. We also maintain a fleet of 5
tractor-trailer trucks and numerous other trucks, trailers and vehicles to move
our equipment and personnel to projects throughout the Transition Zone.

Heli-portable and Seismic Rock Drilling Equipment. We had 37 heli-portable
and man-portable drilling units and 36 highland drilling units dedicated to
seismic rock drilling. We also have the ability to manufacture our own
heli-portable and man-portable seismic rock-drilling units, and often export and
provide servicing of heli-portable and man-portable drilling units. Seven
heli-portable drilling units were sold subsequent to December 31, 2002.

Aviation Equipment. The following table sets forth the type and number of
helicopters that are operated by our Aviation division:

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(1) Includes one Bell 407 acquired after December 31, 2002.

MATERIALS AND EQUIPMENT

The principal materials and equipment we use in our operations, which
include drills, heli-portable and man-portable drills, drill casings, drill
bits, engines, gasoline and diesel fuel, dynamite, aluminum and steel plate,
welding gasses, trucks and other vehicles, are currently in adequate supply from
many sources. We do not depend upon any single supplier or source for such
materials.

SAFETY AND QUALITY ASSURANCE

We maintain a stringent safety assurance program to reduce the possibility
of costly accidents. Our HSE department establishes guidelines to ensure
compliance with all applicable state and federal safety regulations and provides
training and safety education through orientations for new employees, which
include first aid and CPR training. Our HSE manager reports directly to our
Chief Executive Officer and supervises two HSE field advisors and one instructor
who provides Occupational Safety and Health Act ("OSHA") mandated training. We
believe that our safety program and commitment to quality are vital to
attracting and retaining customers and employees.

Each drilling crew is supervised at the project site by a field supervisor
and, depending on the project's requirements, an assistant supervisor and
powderman who is in charge of all explosives. For large projects or when
required by a customer, a separate advisor from our HSE department is also
located at the project site. Management is provided with daily updates for each
project and believes that our daily review of field performance together with
the on-site presence of supervisory personnel helps ensure high quality
performance for all of our projects.

Our pilots are trained to the Federal Aviation Administration ("FAA")
Federal Aviation Regulation ("FAR") 135 (non-scheduled commercial passenger) or
133 (external load) standards and must satisfy annual FAA check-rides. Licensed
maintenance personnel are deployed to each project site at which aircraft are
used.

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CUSTOMERS; MARKETING; CONTRACTING

Customers. Our customers are primarily geophysical companies, although in
many cases the oil and gas company participates in determining which drilling,
permitting, survey or aviation company will be used on our seismic projects. A
few customers have historically generated a large portion of our revenue. For
example, our largest customers (those which individually accounted for more than
10% of revenue in a given year, listed alphabetically) collectively accounted
for 34% (Western Geophysical), 71% (Grant Geophysical, Quantum Geophysical and
Western Geophysical) and 84% (Veritas DGC and Western Geophysical) of revenue
for fiscal 2000, 2001 and 2002, respectively.

Marketing. Our services traditionally have been marketed by our principal
executive officers. We believe that this marketing approach helps us preserve
long-term relationships established by our executive officers. As our
geographical and service capabilities expand, we intend to continue implementing
our marketing efforts in the Transition Zone and in the Rocky Mountain region
from our principal offices in Carencro, Louisiana.

Contracting -- Seismic Drilling. We generally contract with our customers
for seismic drilling services on a unit-price basis, either on a "per hole" or
"per foot" basis. These contracts are often awarded after a competitive bidding
process. We price our contracts based on detailed project specifications
provided by the customer, including the number, location and depth of source
holes and the project's completion schedule. As a result, we are generally able
to make a relatively accurate determination prior to pricing a contract of the
type and amount of equipment required to complete the contract on schedule.

Because of unit-price contracting, we sometimes bear a portion of the risk
of production delays that are beyond our control, such as those caused by
adverse weather. We often bill the customer standby charges if our operations
are delayed due to delays in permitting or surveying or for other reasons within
the geophysical company's control.

Contracting -- Permitting Services. We contract with our customers for
permitting services on a day rate or per project basis. Under the per project
basis, revenue is recognized when certain percentages of the permitting process
are completed. Contracts are often awarded to us only after competitive bidding.
In the case of the per project basis, we determine the price after we have taken
into account such factors as the number of permit agents, the number of permits
and the detailed project specification provided by the customer.

Contracting -- Survey Services. We contract with our customers for seismic
survey services on a day rate or per mile basis. Under the per mile basis,
revenue is recognized when the source or receiving point is marked by one of our
survey crews. Contracts are often awarded to us only after competitive bidding.
In each case, the price is determined after we have taken into account such
factors as the number of surveyors and other personnel, the type of terrain and
transportation equipment, and the precision required for the project based on
detailed project specifications provided by the customer.

COMPETITION

Seismic Drilling Services. The principal competitive factors for seismic
drilling services are price and the ability to meet customer schedules, although
other factors including safety, capability, reputation and environmental
sensitivity are also considered by customers when deciding upon a provider of
seismic drilling services. We have numerous competitors in the Transition Zone
and, in particular, in the highland areas in which we operate. We believe that
no other company operating in the Transition Zone owns a fleet of Transition
Zone seismic drilling equipment as varied or as large as ours. Our extensive and
diverse equipment base allows us to provide drilling services to our customers
throughout the Transition Zone with the most efficient and environmentally
appropriate equipment. We believe there are numerous competitors offering rock
and heli-portable drilling in the Rocky Mountain region and internationally.

Permitting Services. Our competitors include a number of larger,
well-established companies with a number of permit agents comparable to us.

8

Survey Services. Our competitors include a number of larger,
well-established companies with a number of crews comparable to us.

Helicopter Support Services. We have numerous competitors that provide
helicopter support services to geophysical companies operating in the Transition
Zone and service companies operating offshore in the Gulf of Mexico. We believe
that we are the only company offering both seismic drilling and long-line
support services in the Transition Zone. We believe that there are numerous
companies offering helicopter services in rock drilling and other mountain
areas, as well as internationally. Some of these companies have greater
experience in these areas and several operate more aircraft than we do in these
areas.

SEASONALITY AND WEATHER RISKS

Our operations are subject to seasonal variations in weather conditions and
daylight hours. Since our activities take place outdoors, the average number of
hours worked per day, and therefore the number of holes drilled or surveyed per
day, generally is less in winter months than in summer months, due to an
increase in rainy, foggy and cold conditions and a decrease in daylight hours.
Furthermore, demand for seismic data acquisition activity by oil and gas
companies at the end of the fourth quarter and in the first quarter is generally
lower than at other times of the year. As a result, our revenue and gross profit
during the fourth quarter and the first quarter of each year are typically low
as compared to the other quarters. Operations may also be affected by the rainy
weather, lightning, hurricanes and other storms prevalent along the Gulf Coast
throughout the year and by seasonal climatic conditions in the Rocky Mountain
area. In addition, prolonged periods of dry weather result in slower drill rates
in marsh and swamp areas as water in the quantities needed to drill is more
difficult to obtain and equipment movement is impeded. Adverse weather
conditions and dry weather can also increase maintenance costs for our equipment
and decrease the number of vehicles available for operations.

BACKLOG

Our backlog represents those seismic drilling and survey projects for which
a customer has hired us and has scheduled a start date for the project. Projects
currently included in our backlog are subject to termination or delay without
penalty at the option of the customer, which could substantially reduce the
amount of backlog currently reported.

As of December 31, 2002, our backlog was approximately $33.3 million
compared to $29.3 million at December 31, 2001. Backlog at December 31, 2002
includes seismic drilling and survey projects in the Transition Zone in addition
to seismic rock drilling projects. Our aviation and permitting divisions
historically have not measured backlog due to the nature of our business and our
contracts which are generally cancelable by either party with thirty days
written notice.

GOVERNMENTAL REGULATION

Our operations and properties are subject to and affected by various types
of governmental regulation, including laws and regulations governing the entry
into and restoration of wetlands, the handling of explosives and numerous other
federal, state and local laws and regulations. To date our cost of complying
with such laws and regulations has not been material, but because such laws and
regulations are changed frequently, it is not possible for us to accurately
predict the cost or impact of such laws and regulations on our future
operations.

Furthermore, we depend on the demand for our services by the oil and gas
industry and are affected by tax legislation, price controls and other laws and
regulations relating to the oil and gas industry generally. The adoption of laws
and regulations curtailing exploration and development drilling for oil and gas
in our areas of operations for economic, environmental or other policy reasons
would adversely affect our operations by limiting demand for our services. We
cannot determine to what extent our future operations and earnings may be
affected by new legislation, new regulations or changes in existing regulations.

Aviation. As a commercial operator of small aircraft, we are subject to
regulations pursuant to the Federal Aviation Administration Authorization Act of
1994, as amended (the "Federal Aviation Act"), and

9

other statutes. The FAA regulates our flight operations, and in this respect,
exercises jurisdiction over personnel, aircraft, ground facilities and other
aspects of our operations.

We carry persons and property in our aircraft pursuant to authority granted
by the FAA. Under the Federal Aviation Act it is unlawful to operate certain
aircraft for hire within the United States unless such aircraft are registered
with the FAA and the FAA has issued the operator of such aircraft an operating
certificate. We have all FAA certificates required to conduct our helicopter and
aviation operations, and all of our aircraft are registered with the FAA.

Generally, aircraft may be registered under the Federal Aviation Act only
if the aircraft is owned or controlled by one or more citizens of the United
States and operated pursuant to an operating certificate, which may be granted
only to a citizen of the Untied States. For purposes of these requirements, a
corporation is deemed to be a citizen of the United States only if, among other
things, at least 75% of the voting interest therein is owned or controlled by
United States citizens. In the event that persons other than United States
citizens should come to own or control more than 25% of the voting interest in
us, we have been advised that our aircraft may be subject to deregistration
under the Federal Aviation Act and loss of the privilege of operating within the
United States. None of our aircraft are currently owned, in whole or in part, by
a foreign entity. Our Articles of Incorporation and bylaws include provisions
that are designed to ensure compliance with this requirement.

Explosives. Because we load the holes that are drilled with dynamite, we
are subject to various local, state and federal laws and regulations concerning
the handling and storage of explosives and are specifically regulated by the
Bureau of Alcohol, Tobacco and Firearms of the U.S. Department of Justice. We
must take daily inventories of the dynamite and blasting caps that we keep for
our seismic drilling and are subject to random checks by state and federal
officials. We are licensed by the Louisiana State Police as an explosives
handler. Any loss or suspension of these licenses would result in a material
adverse effect on our results of operations and financial condition. We believe
that we are in compliance with all material laws and regulations with respect to
our handling and storage of explosives.

Environmental. Our operations and properties are subject to a wide variety
of increasingly complex and stringent federal, state and local environmental
laws and regulations, including those governing discharges into the air and
water, the handling and disposal of solid and hazardous wastes, the remediation
of soil and groundwater contaminated by hazardous substances and the health and
safety of employees. In addition, certain areas where we operate are federally
protected or state-protected wetlands or refuges where environmental regulation
is particularly strict. These laws may provide for "strict liability" for
damages to natural resources and threats to public health and safety, rendering
a party liable for environmental damage without regard to negligence or fault on
the part of such party. Sanctions for noncompliance may include revocation of
permits, corrective action orders, administrative or civil penalties and
criminal prosecution. Certain environmental laws provide for strict, joint and
several liability for remediation of spills and other releases of hazardous
substances, as well as damage to natural resources. In addition, we may be
subject to claims alleging personal injury or property damage as a result of
alleged exposure to hazardous substances. Such laws and regulations may also
expose us to liability for the conduct of, or conditions caused by, others, or
for our acts that were in compliance with all applicable laws at the time such
acts were performed.

The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, and similar laws provide for responses to and liability for
releases of hazardous substances into the environment. Additionally, the Clean
Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the
Safe Drinking Water Act, the Emergency Planning and Community Right to Know Act,
each as amended, and similar state or local counterparts to these federal laws,
regulate air emissions, water discharges, hazardous substances and wastes, and
require public disclosure related to the use of various hazardous substances.
Compliance with such environmental laws and regulations may require the
acquisition of permits or other authorizations for certain activities and
compliance with various standards or procedural requirements. We believe that
our facilities are in substantial compliance with current regulatory standards.

Worker Safety. Laws and regulations relating to workplace safety and
worker health, primarily OSHA and regulations promulgated thereunder, govern our
operations. In addition, various other governmental and
10

quasi-governmental agencies require us to obtain certain permits, licenses and
certificates with respect to our operations. The kind of permits, licenses and
certificates required in our operations depend upon a number of factors. We
believe that we have all permits, licenses and certificates necessary to the
conduct of our existing business.

INSURANCE

Our operations are subject to the inherent risks of inland marine activity,
heavy equipment operations and the transporting and handling of explosives,
including accidents resulting in personal injury, the loss of life or property,
environmental mishaps, mechanical failures and collisions. We maintain insurance
coverage against certain of these risks, which we believe are reasonable and
customary in the industry. We also maintain insurance coverage against property
damage caused by fire, flood, explosion and similar catastrophic events that may
result in physical damage or destruction to our equipment or facilities. All
policies are subject to deductibles and other coverage limitations. We believe
our insurance coverage is adequate. Historically, we have not experienced an
insured loss in excess of our policy limits; however, there can be no assurance
that we will be able to maintain adequate insurance at rates which we consider
commercially reasonable, nor can there be any assurance such coverage will be
adequate to cover all claims that may arise.

EMPLOYEES

As of December 31, 2002, we had approximately 185 employees, including
approximately 161 operating personnel and 24 corporate, administrative and
management personnel. These employees are not unionized or employed pursuant to
any collective bargaining agreement or any similar agreement. We believe our
relations with our employees are generally good.

EXECUTIVE OFFICERS OF THE REGISTRANT

The name, age and offices held by each of the executive officers as of
March 28, 2003 are as follows:

James C. Eckert was appointed our President and Chief Executive Officer in
March 2001. He served as Vice-President for Business Development of Veritas DGC
Land Inc. from 1998 to 2000. Prior to 1998, Mr. Eckert supervised the highland
and transition seismic acquisitions of Veritas DGC Land Inc. Prior to 1992, he
served as President of GFS Company, a company that he co-founded in 1985, until
its acquisition in 1992 by Digicon, Inc., a predecessor by merger to Veritas,
Inc. Mr. Eckert graduated from University of Southern Mississippi in 1971.

Burton T. Zaunbrecher is currently serving as our Company's Executive
Vice-President and Chief Operating Officer. Mr. Zaunbrecher joined us in
November 2000. He served as president of Burton T. Zaunbrecher, Inc., an oil,
gas and mineral lease, and geophysical permit acquisition company, which he
founded in 1990. Prior to 1990, Mr. Zaunbrecher conducted independent
abstracting and land services. Mr. Zaunbrecher graduated from the University of
Southwestern Louisiana in 1984.

G. Darcy Klug is our Chief Financial Officer. He joined us in May 2001
after being involved in private investments since 1987. Between 1983 and 1987,
Mr. Klug held various positions with a private oil and gas fabrication company
including the position of Chief Operating Officer and Chief Financial Officer.
Prior to 1983 he held various financial positions with Galveston-Houston
Company, a manufacturer of oil and gas equipment listed for trading on the New
York Stock Exchange. Between 1973 and 1979, he was a member of the audit staff
of Pricewaterhouse Coopers. Mr. Klug is a graduate of Louisiana State University
and is a member of the Louisiana State Board of Certified Public Accountants.

11

ITEM 3. LEGAL PROCEEDINGS

Several of our former Board members and one current Board member, as well
as our directors and officers insurance companies, have been named as defendants
in a lawsuit filed by certain shareholders in connection with our private sale
of securities in October 2000 (See Note 1). The lawsuit alleges, among other
things, federal and state securities violations and misrepresentations. We are
not named as defendants in this lawsuit; however, we may have indemnification
obligations to the named individuals for actions in their capacity as members of
our Board of Directors. We maintain directors and officers insurance for these
types of matters, and we do not currently believe that these obligations will
have a material adverse effect on our financial position.

One of our current directors has been named as a defendant in a lawsuit
filed by an officer and director of the Company in connection with our private
sale of securities in October 2000 (See Note 1). The lawsuit alleges, among
other things, negligent misrepresentation, omission of material facts, and state
securities violations. We are not named as a defendant in this lawsuit; however,
we may have indemnification obligations to the named individual for actions in
his capacity as a member of our Board of Directors. We maintain directors and
officers insurance for these types of matters, and we do not currently believe
that this obligation will have a material adverse effect on our financial
position.

In connection with our private sale of securities in October 2000 (See Note
1), we have also received two shareholder derivative demands requesting that we
take legal action against all of our former Board members and officers for
breaches of their duties and obligations to us and our shareholders. We have
appointed a committee of our Board consisting of independent members to
investigate and evaluate the allegations in these demands and make
recommendations to the Board of Directors as they deem advisable.

We are involved in various legal and other proceedings that are incidental
to the conduct of our business. We believe that none of these proceedings, if
adversely determined, would have a material effect on our financial condition,
results of operations or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our Common Stock is listed for quotation on the Nasdaq National Market
under the symbol "OMNI". At March 26, 2003 we had 2,029 shareholders of record
of Common Stock. The following table sets forth the range of high and low sales
prices of our Common Stock as reported by the Nasdaq National Market for the
periods indicated, giving retroactive effect to the one for three reverse stock
split effective July, 3 2002.

12

We have never paid cash dividends on our Common Stock. We intend to retain
future earnings, if any, to meet our working capital requirements and to finance
the future operations of our business. Therefore, we do not plan to declare or
pay cash dividends to holders of our Common Stock in the foreseeable future. In
addition, certain of our credit arrangements contain provisions that limit our
ability to pay cash dividends on our Common Stock.

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information about our Common Stock that may be
issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of December 31, 2002:

PLAN NOT APPROVED BY STOCKHOLDERS

In January 1999, we approved the Stock Option Plan (the "Option Plan") to
provide for the grant of options to purchase shares of our Common Stock to
non-officer employees of our company and our subsidiaries in lieu of year-end
cash bonuses. The Option Plan is intended to increase shareholder value and
advance our interests by providing an incentive to employees and by increasing
employee awareness of us in the marketplace. Under the Option Plan, we may grant
options to any of our employees with the exception of our officers. The options
become exercisable immediately with respect to one-half of the shares, and the
remaining one-half shall be exercisable one year following the date of the
grant. The exercise price of any stock option granted may not be less than the
fair market value of the Common Stock on the effective date of the grant. A
total of 100,000 shares of Common Stock are authorized, of which 46,994 remain
available for issuance at December 31, 2002.

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data as of and for the five years ended December 31,
2002 are derived from our audited consolidated financial statements. The
following information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included elsewhere in
this Annual Report. The per share data gives retroactive effect to the one for
three reverse stock split effective July 3, 2002.

The financial statements for the years ended December 31, 1998, through
2001, were audited by Arthur Andersen LLP ("Andersen"), who has ceased
operations. A copy of the report previously issued by Andersen on our financial
statements as of December 31, 2001 and 2000, and for each of the three years in

13

the period ended December 31, 2001, is included elsewhere in this Form 10-K.
Such report has not been reissued by Andersen.

ITEM 7. 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, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which reflect management's best judgment based on factors currently
known. Actual results could differ materially from those anticipated in these
"forward looking statements" as a result of a number of factors, including but
not limited to those discussed under the heading "Cautionary 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 and analysis should be read in conjunction with our
consolidated financial statements and notes thereto.

14

RECENT DEVELOPMENTS

In January 2002, we acquired the assets of AirJac Drilling, a division of
Veritas DGC Land, Inc., a seismic drilling support company headquartered in New
Iberia, Louisiana. The aggregate purchase price was $2.0 million cash plus
certain other consideration (See Note 12 to the Consolidated Financial
Statements). In this acquisition we acquired the following types of equipment:

GENERAL

Demand. We receive our revenues from customers in the energy industry.
Demand for our services is principally impacted by conditions affecting
geophysical companies engaged in the acquisition of 3-D seismic data. The level
of activity among geophysical companies is primarily influenced by the level of
capital expenditures by oil and gas companies for seismic data acquisition
activities. A number of factors affect the decision of oil and gas companies to
pursue the acquisition of seismic data, including (i) prevailing and expected
oil and gas demand and prices; (ii) the cost of exploring for, producing and
developing oil and gas reserves; (iii) the discovery rate of new oil and gas
reserves; (iv) the availability and cost of permits and consents from landowners
to conduct seismic activity; (v) local and international political and economic
conditions; (vi) governmental regulations; and (vii) the availability and cost
of capital. The ability to finance the acquisition of seismic data in the
absence of oil and gas companies' interest in obtaining the information is also
a factor, as some geophysical companies will acquire seismic data on a
speculative basis.

During 1999, with the reduction in the price of oil and gas, we began to
experience a decrease in demand for our services. In 2001, the market
experienced a rebound. For the years ended December 31, 2000, 2001 and 2002, our
operating revenues were $16.6 million, $23.7 million, and $27.8 million,
respectively.

Seasonality and Weather Risks. Our operations are subject to seasonal
variations in weather conditions and 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 in winter months than in summer months due
to an increase in rainy, foggy, and cold conditions and a decrease in daylight
hours.

15

RESULTS OF OPERATIONS

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

YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31, 2002

Operating revenues increased 17%, or $4.1 million, from $23.7 million to
$27.8 million for the years ended December 31, 2001 and 2002, respectively. This
increase was due primarily to the aforementioned acquisition of the assets of
AirJac Drilling and improved market conditions in the geophysical industry in
2002. As a result, drilling revenues increased from $18.0 million for the year
ended December 31, 2001 to $24.5 million for the year ended December 31, 2002.
The increase in drilling revenues was partially offset by a decline in revenues
in our other divisions. Our newly formed permitting division reported revenues
of $0.2 million for the year ended December 31, 2002 as compared to $1.5 million
for the same period of 2001. Survey revenues decreased from $0.6 million for the
year ended December 31, 2001 to zero for the year ended December 31, 2002. This
decline is attributable to our decision to concentrate our personnel, equipment
and available working capital on the more profitable segments of the seismic
industry. Aviation revenues decreased from $3.7 million for the year ended
December 31, 2001 to $3.1 million for the year ended December 31, 2002 as we
continued to reduce our seismic aviation fleet in order to concentrate on the
more profitable offshore market. Operating revenues are expected to increase in
2003 as demand for our services continues to improve.

Operating expenses increased 6%, or $1.2 million, from $20.9 million in
2001 to $22.1 million in 2002. Operating payroll expense increased $0.8 million
from $8.4 million to $9.2 million for the years ended December 31, 2001 and
2002, respectively. The increase in seismic activity resulted in a corresponding
increase in the amount of personnel employed. The average number of field
employees was 185 in 2002 and 172 in 2001. Also, as a result of the increased
activity levels in 2002 as compared to 2001, explosives expenses and repairs and
maintenance expenses increased $0.5 million and $0.9 million, respectively.
These increases were partially offset by a $1.2 million decrease in rental
expense and related insurance expense on leased aviation equipment from 2001 to
2002. The decrease in rental expense resulted from the refinancing of our
aviation fleet in December 2001. Our aviation fleet was previously operated
under an operating lease. Insurance expense declined as we reduced the size of
our aviation fleet dedicated solely to support our seismic drilling operations.
While operating expenses are expected to continue to increase in 2003 as
operating revenues increase, we expect these expenses to remain in line with
revenues.

16

Gross profit increased 104%, or $2.9 million, from $2.8 million to $5.7
million, for the years ended December 31, 2001 and 2002, respectively. Further,
our gross profit margin improved from 11.8% in 2001 to 20.9% in 2002. The
increase in gross profit margin is a result of increased business activity in
our more profitable business segments, improved utilization of our equipment and
personnel for the services provided and more stringent controls over operating
expenses.

General and administrative expenses increased $0.7 million, or 23%, from
$3.1 million for 2001 compared to $3.8 million for 2002. Payroll expenses
accounted for $0.4 million of this increase as administrative payroll costs
increased from $1.2 million for the year ended December 31, 2001 to $1.6 million
for the year ended December 31, 2002. This increase is principally attributable
to an increase in the average number of administrative employees between the
periods. During 2001 we realized savings in certain general and administrative
costs by renegotiating lease and vendor agreements with more favorable terms
than those in preceding years. General and administrative expenses are expected
to increase slightly in 2003 due to increased business activity.

During 2001, we recorded asset impairment charges of $0.6 million (See Note
5) compared to $0.0 million in 2002.

Interest expense was $1.1 million for the year ended December 31, 2002
compared to $1.3 million for the year ended December 31, 2001. The increase was
principally attributable to increased debt levels resulting from our decision to
acquire our aviation fleet in December 2001 that was previously operated through
an operating lease.

Other income decreased $7.9 million between the year ended December 31,
2001 and the year ended December 31, 2002. The decrease was primarily
attributable to the receipt of $7.5 million in proceeds from a key-man life
insurance policy in 2001 procured on the life of our founder and former CEO. He
was killed in a private aircraft accident in February 2001.

For the year ended December 31, 2001, losses incurred by us generated an
additional net operating loss carryforward for which a reserve has been provided
(see Note 10), resulting in income tax expense of $0. In 2002 the Company
reversed $0.4 million of this related reserve due to the Company's expectation
of generating income in fiscal 2003.

Accretion of preferred stock decreased $0.2 million from $0.7 million for
the year ended December 31, 2001 to $0.5 million for the year ended December 31,
2002. The decrease is due to the accretion of dividends at 8% during the free
dividend period from April 2001 through June 30, 2002.

17

YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

Operating revenues increased 43%, or $7.1 million, from $16.6 million to
$23.7 million for the years ended December 31, 2000 and 2001, respectively. This
increase was due primarily to an upswing in the seismic market in 2001. As a
result, drilling revenues doubled from $8.9 million for the year ended December
31, 2000 to $18.0 million for the year ended December 31, 2001. Our newly formed
permitting division reported revenues of $1.5 million for the year ended
December 31, 2001 with no revenues reported for the corresponding period of
2000. Survey revenues decreased from $1.4 million for the year ended December
31, 2000 to $0.6 million for the year ended December 31, 2001, primarily due to
our decision to concentrate our personnel, equipment and available working
capital on the more profitable segments of the seismic industry. Aviation
revenues decreased from $6.3 million for the year ended December 31, 2000 to
$3.7 million for the year ended December 31, 2001 as we continue to reduce our
seismic aviation fleet to concentrate on the more profitable offshore market.
Operating revenues in 2002 are expected to continue to increase due to an
increased demand for our services.

Operating expenses increased 3%, or $0.7 million, from $20.2 million in
2000 to $20.9 million in 2001. Operating payroll expense increased $0.4 million
from $8.0 million to $8.4 million for the years ended December 31, 2000 and
2001, respectively. The significant increase in seismic activity has resulted in
a corresponding increase in the amount of personnel employed, as the average
number of field employees has increased to 172 in 2001 compared to 155 in 2000.
Also, as a result of the increased activity levels in 2001 as compared to 2000,
explosives expenses increased $1.1 million from $0.9 million for the year ended
December 31, 2000 to $2.0 million for the year ended December 31, 2001.
Contracting services increased $2.2 million from $0.2 million for the year ended
December 31, 2000 to $2.4 million for the year ended December 31, 2001
principally as a result of the commencement of our newly formed permitting
division. These increases were partially offset by a $2.5 million decrease in
the repairs and maintenance expense, rental expense and related insurance
expense on leased aviation equipment. The decreases resulted from fewer
helicopters being leased from third parties during 2001 compared to 2000.
Depreciation expense and property and casualty insurance expense decreased $0.5
million from the year ended December 31, 2000 to the year ended December 31,
2001 because of an overall reduction in our operating equipment. Operating
expenses are expected to continue to increase in 2002 as operating revenues
increase.

18

Gross profit increased $6.4 million, or 178%, from a gross loss of $3.6
million to a gross profit of $2.8 million for the years ended December 31, 2000
and 2001, respectively. This increase is a result of increased business activity
in our more profitable business segments, increased prices received for the
services provided and more stringent controls over operating expenses.

General and administrative expenses decreased $2.9 million, or 48%, from
$6.0 million for 2000 compared to $3.1 million for 2001. Payroll expenses
accounted for 45% of this decrease as they decreased $1.3 million from $2.5
million for the year ended December 31, 2000 to $1.2 million for the year ended
December 31, 2001. This decrease is due to a 30% reduction in the average number
of administrative employees between the periods, as well as significantly
reduced base compensation levels of our management. We realized approximately
$1.2 million in savings during 2001 by renegotiating certain lease and vendor
agreements with terms more favorable to us than those agreements in 2000. We
experienced a $0.1 million reduction in each of entertainment and communications
expenses from the year ended December 31, 2000 to the year ended December 31,
2001. Amortization expense decreased $0.2 million from $0.4 million to $0.2
million for the years ended December 31, 2000 and 2001, respectively, due to the
asset impairment charges realized in the latter part of 2000 (See Note 5).
General and administrative expenses are expected to increase slightly in 2002
due to increased business activity.

During 2001, we realized asset impairment charges of $0.6 million (See Note
5) compared to $11.3 million in 2000.

Interest expense was $1.3 million for the year ended December 31, 2001
compared to $3.0 million for the year ended December 31, 2000.

Other income increased $9.8 million from a loss of $1.8 million for the
year ended December 31, 2000 to $7.9 million for the year ended December 31,
2001. The increase is primarily from the receipt of $7.5 million in proceeds
from a key-man life insurance policy procured on the life our CEO, who was
killed in a private aircraft accident in February 2001. The increase was also
due to $1.8 million of net losses on the sale of assets in 2000 offset by $0.1
million in interest income in 2001.

For the year ended December 31, 2000 and 2001, losses incurred by us
generated additional net operating loss carryforwards for which a reserve has
been provided (see Note 10), resulting in income tax benefit/expense of $0 in
each year.

Accretion of preferred stock increased $0.7 million from $0 for the year
ended December 31, 2000 to $0.7 million for the year ended December 31, 2001.
The increase is due to the accretion of dividends at 8% during the free dividend
period from April 2001 through June 2002 for our preferred stock.

LIQUIDITY AND CAPITAL RESOURCES

To meet the capital requirements of the increasing market demand for our
services, during the second half of fiscal 2000 and the first half of fiscal
2001, we significantly improved our capital structure and available liquidity.
In late 2000, we successfully raised $5.1 million in new private equity. In
early 2001 we received $7.5 million in key man life insurance proceeds. With the
new equity and the life insurance proceeds, we initiated a program to
restructure our senior and subordinated credit facilities.

During 1999, 2000 and 2001, we privately placed a total of $7.5 million,
$3.4 million and $1.5 million, respectively, in subordinated debentures with an
affiliate. The debentures accrued interest at 12% per annum or a rate commencing
at 12% per annum and escalating over the life of the note to a maximum of 20%
per annum. The debentures matured five years from the date of their issuance
with interest payable quarterly. Detachable from these debentures, were warrants
to purchase 1,912,833 shares of our common stock. The warrants vested over four
years and with exercise prices from ranging from $2.25 to $15.00. We recorded
each warrant at its relative fair value at date of issuance.

In July 2000, we factored with an affiliate and with recourse to us,
approximately $1.0 million of trade receivables of a major customer. The
receivable had become ineligible under the terms of our revolving credit
facility. In exchange for transferring ownership rights and title in the trade
receivable of this customer, the

19

affiliate forgave approximately $1.0 million of the subordinated debt. The
amount was factored at a discount charge of 1.5% of the amount advanced against
the trade receivables transferred. As of December 2002, we have received $0.8 of
the $1.0 million factored amount due. The remaining $0.2 million is classified
as amounts due to affiliate. In addition, we borrowed $0.5 million from this
affiliate during 2002. As of December 31, 2002, $0.1 million remained
outstanding. We are currently finalizing repayment terms with the affiliate of
all of the remaining outstanding balances. The loan is secured by the amounts
due from certain customers.

As more fully described below, during the fourth quarter of 2000 and the
first quarter of 2001, we dramatically improved our financial position with the
successful raise of $5.1 million of new equity and the receipt of $7.5 million
in proceeds from a key-man life insurance policy. With the proceeds we repaid
approximately $2.0 million of senior secured indebtedness. Further, we reached
an agreement to eliminate all of the remaining subordinated debt to an affiliate
by the payment of approximately $1.0 million to satisfy $2.0 million of the
indebtedness and the issuance of shares of Series B Preferred Stock for the
remaining outstanding balance. We extended the maturity dates for all of our
senior secured indebtedness; and negotiated a 1.5% fixed interest rate reduction
on approximately $6.9 million of our senior secured debt.

On October 31, 2000, we completed the private placement of approximately
2.3 million shares of our common stock for approximately $4.3 million. In
addition, the purchasers of the common stock received options to purchase
approximately 0.9 million shares of our common stock at an exercise price of
$2.25 per share. Further, in the event of the death of our founder and then CEO,
the terms of the private placement permitted the private equity shareholders to
"put" their stock back to us for the amount of their investment. To secure the
private equity shareholders' right to "put" the acquire common stock, we
purchased a $7.5 million key-man life insurance policy on the life of our
founder and then CEO. In addition, we issued to an affiliate 800 shares of
Series A Preferred Stock for $0.8 million in cash and converted approximately
$4.6 million of subordinated debt into 4,550 shares of Series A Preferred Stock.
This conversion reduced the amount of subordinated debentures outstanding at
December 31, 2000 to $5.5 million. With the completion of these capital
transactions, we reached agreements to extend the maturity dates of
approximately $13.0 million senior secured debt.

The proceeds of the October 2000 private placement of stock were used to
repay $1.3 million of secured indebtedness, complete the acquisition of Gulf
Coast Resources, Inc. and provide working capital.

On February 10, 2001, our founder and then CEO, was killed in a private
aircraft accident. As a result, we received $7.5 million in insurance proceeds
from the key man insurance policy purchased in connection with the
aforementioned private placement. The private placement shareholders waived
their right to "put" their stock back to us. In connection with the receipt of
these waivers, we also obtained commitments from our senior secured lenders to
modify the then existing credit agreements. Under the terms of these revised
commitments, the maturity dates were extended and interest rates were reduced
from prime plus 3% to prime plus 1.5%. With the proceeds we paid $2.0 million of
our senior secured term indebtedness and we reached an agreement with an
affiliate, the holder of our outstanding subordinated debt to convert our
remaining outstanding subordinated debt into $4.6 million of Series B Preferred
Stock. Under the terms of this agreement, we paid the holder of our outstanding
subordinated debt, $1.0 million in satisfaction of $2.0 million of indebtedness
and issued 4,600 shares of Series B Preferred Stock in full satisfaction of the
remaining unpaid subordinated debentures.

In September 2002, we entered into a $10.5 million senior credit facility
with a bank including a $7.0 million working capital revolving line of credit
(the "Line") and a $3.5 million term loan. The proceeds were used to repay term
debt, refinance our revolving line of credit and provide working capital.

At December 31, 2002, we had approximately $0.7 million in cash on hand as
compared to approximately $1.2 million at December 31, 2001. At December 31,
2002, we had working capital of approximately $2.9 million as compared to
approximately $2.3 million at December 31, 2001. The increase in working capital
is due to increased profitability, improved cash flow generated by our
operations and the impact of our debt restructuring efforts.

20

Cash provided by operating activities was $5.0 million and $6.4 million in
the years ended December 31, 2002 and 2001, respectively. Income provided from
our operations was the single largest contributing factor in both years.

Availability under the Line is the lower of: (i) $7.0 million or (ii) the
sum of 85% of eligible accounts receivable, plus the lessor of: 50% of the cost
of eligible inventory 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% (5.75% at December 31, 2002) and matures on August 31,
2004. The Line is collateralized by accounts receivable and inventory and is
subject to certain customer concentration limitations. As of December 31, 2002
we had $3.0 million outstanding under the Line and additional borrowing
availability of $0.8 million. The weighted-average interest rate on borrowings
under our revolving lines of credit was 9.2% and 6.2% for the years ended
December 31, 2001 and 2002, respectively.

At December 31, 2002, we also had outstanding approximately $10.6 million
in other senior secured debt including approximately $1.5 million with an
equipment finance company. This loan amortizes over seven years bears interest
at LIBOR plus 5.0%, is secured by seismic drilling equipment and matures in July
2006. Further, at December 31, 2002 we had approximately $3.3 million
outstanding to an aviation equipment finance company. This loan is secured by
the aviation fleet, amortizes over ten years, accrues interest at 8% per annum
and matures January 2007. Our real estate is financed with a bank with payments
amortized ten years, bearing interest at prime plus 1.5% and matures in August
2004. At December 31, 2002, the balance outstanding under our real estate loan
was $1.8 million.

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
2002, we acquired the assets of AirJac Drilling (See Notes 12 and 14) and
approximately $0.4 million of new vehicles accounted for as a capital lease. In
2003 we expect to continue renewing our rolling stock, expanding our aviation
fleet and continuing to pursue various strategic acquisitions. At this time, we
have no material commitments outstanding for expenditures nor do we anticipate
acquiring a significant amount of capital assets in 2003.

CONTRACTUAL COMMITMENTS

We have the following contractual obligations as of December 31, 2002:

In addition to the obligations described above, we also have a revolving
line of credit, which is secured by our accounts receivable and inventory. The
line of credit matures on August 31, 2004. The balance outstanding on the line
of credit was $3.0 million at December 31, 2002.

We periodically finance insurance policies on a short-term basis. As of
December 31, 2002, $1.6 million was outstanding for various polices financed
with maturity dates ranging from June 2003 to September 2003.

We believe that cash flow generated from operations in 2003 will be
sufficient to fund our working capital needs, satisfy our debt service
requirements and fulfill our capital expenditure requirements for at least the
next twelve months.

CAUTIONARY STATEMENTS

This Annual Report contains "forward-looking statements." Such statements
include, without limitation, statements regarding our expectations regarding
revenue levels, profitability and costs, the expected results of our business
strategy, and other plans and objectives of management for future operations and
activities.

21

Important factors that could cause actual results to differ materially from
our expectations include, without limitation, our dependence on activity in the
oil and gas industry, risks associated with our rapid growth, dependence on a
relatively small number of significant customers, seasonality and weather risks,
the hazardous conditions and difficult terrain in which we operate, and risks
associated with our international expansion. Many of these factors are beyond
our control.

RELATED PARTY TRANSACTIONS

During the year ended December 31, 2001, we leased a facility from an
affiliate. Lease payments totaled approximately $0.1 million which approximated
market value. The lease was terminated in July 2001 (See Notes 4, 8 and 9 for
transactions with our affiliates).

In July 2000, we entered into a series of transactions with the same
affiliate that enabled us to factor, with recourse, approximately $1.0 million
of the trade receivable of a major customer. This receivable had become
ineligible under the terms of our revolving line of credit. As of December 31,
2002 we were liable to the affiliate for approximately $0.2 million. In
addition, we borrowed $0.5 million from this affiliate during 2002. As of
December 31, 2002, $0.1 million remained outstanding. We are currently
finalizing repayment terms with the affiliate of all of the remaining
outstanding balances. The loan is secured by the amounts due from certain
customers.

During the years ended December 31, 2000 and 2001, we privately placed with
an affiliate subordinated debentures totaling $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 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 (See
Note 9 regarding the accounting for preferred stock).

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 967,000 have been cancelled as of December 31, 2002. The
remaining 945,833 warrants outstanding are all exercisable with exercise prices
ranging from $2.25 to $6.00 per share.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of financial condition and results of operation
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. We evaluate our estimates on an on-going basis, based on historical
experience and on various other assumptions that we believe to be reasonable
under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation on our consolidated
financial statements.

We extend credit to customers and other parties in the normal course of
business. We regularly review outstanding receivables, and provide for estimated
losses through an allowance for doubtful accounts. In evaluating the level of
established reserves, we make judgments regarding the parties' ability to make
required payments, economic events and other factors. As the financial condition
of these parties change, circumstances develop or additional information becomes
available, adjustments to the allowance for doubtful account may be required.
Due to the nature of our industry, we have a concentration of credit risks. As a
result, adjustments to the allowance for doubtful accounts may be significant.

22

We have made significant investments in inventory to service our equipment.
On a routine basis, we use judgments in determining the level of reserves
required to state inventory at the lower of cost or market. Technological
innovations, market activity levels and the physical condition of products
primarily influence our estimates. Changes in these or other factors may result
in adjustments to the carrying value of inventory.

Deferred tax assets and liabilities are recognized for differences between
the book basis and tax basis of our net assets. In providing for deferred taxes,
we consider current tax regulations, estimates of future taxable income and
available tax planning strategies. We have established reserves to reduce our
net deferred tax assets to estimated realizable value. If tax regulations
change, operating results or the ability to implement tax planning strategies
vary, adjustments to the carrying value of our net deferred tax assets and
liabilities may be required. In making this determination we have considered
future income in assessing the ultimate recoverability of the recognized net
deferred tax asset.

We record liabilities for environmental obligations when remedial efforts
are probable and the costs can be reasonably estimated. Our estimates are based
on currently enacted laws and regulations. As more information becomes available
or environmental laws and regulations change, such liabilities may be required
to be adjusted. Additionally, in connection with acquisitions, we obtain
indemnifications from the seller related to environmental matters. If the
indemnifying parties do not fulfill their obligations, adjustments of recorded
amounts may be required.

We maintain insurance coverage for various aspects of our business and
operations. We retain a portion of losses that occur through the use of
deductibles and self-funded insurance programs. We regularly review estimates of
reported and unreported claims and provide for losses through insurance
reserves. As claims develop and additional information becomes available,
adjustments to loss reserves may be required.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 142 "Goodwill and Other Intangible Assets." Under SFAS 142, goodwill and
indefinite-lived intangible assets are no longer amortized but are reviewed for
impairment annually, or more frequently if circumstances indicate potential
impairment. Separable intangible assets that are not deemed to have an
indefinite life will continue to be amortized over their useful lives. For
goodwill and indefinite-lived intangible assets acquired prior to July 1, 2001,
goodwill continued to be amortized through 2001 at which time amortization
ceased and a transitional goodwill impairment test was performed. Any impairment
charges resulting from the initial application of the new rules were classified
as a cumulative change in accounting principle. The initial transition
evaluation was completed by June 30, 2002, which is within the six-month
transition period allowed by the new standard. Our goodwill balances were
determined not to be impaired. Goodwill amortization for each of the years ended
December 31, 2002, 2001 and 2000 was $0, $103,000, and $21,000, respectively.
The following table presents our net income as reported in our consolidated
financial statements compared to what would have been reported had the SFAS No.
142 been in effect as of January 1, 2000.

23

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS 145 requires that gains or losses recorded from the
extinguishment of debt that do not meet the criteria of Accounting Principles
Board ("APB") Opinion No. 30 should not be presented as extraordinary items.
This statement is effective for fiscal years beginning after May 15, 2002 as it
relates to the reissued FASB Statement No. 4, with earlier application
permitted. Any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet the criteria in
APB No. 30 for classification as an extraordinary item should be reclassified.
We have elected not to adopt this statement early.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity," under which
a liability for an exit cost was recognized at the date of an entity's
commitment to an exit plan. SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized at fair value when
the liability is incurred. The provisions of this statement are effective for
exit or disposal activities that are initiated after December 31, 2002. SFAS 146
has no impact on the financial statements for the year ended December 31, 2002.

In November 2002, the FASB issued FASB Interpretation ("FIN") 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others," which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of
the guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applied prospectively to guarantees issued
or modified after December 31, 2002. The adoption of these recognition
provisions will result in recording liabilities associated with certain
guarantees provided by us. The disclosure requirements of this Interpretation
are effective for financial statements of interim or annual periods ending after
December 15, 2002. Management does not expect this Interpretation to have a
material impact to the Consolidated Financial Statements.

In December 2002, SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure -- An Amendment of FASB Statement No.
123," was issued by the FASB and amends FASB Statement No. 123, "Accounting for
Stock-Based Compensation." This Statement provides alternative methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation and amends the disclosure
provisions of SFAS No. 123 to require prominent disclosure about the effects on
reported net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. Additionally, this Statement amends APB
Opinion No. 28, "Interim Financial Reporting," to require disclosure about those
effects in interim financial information. The transition method provisions of
this Statement are effective for fiscal years ending after December 15, 2002.
The interim financial reporting requirements of this Statement are effective for
financial reports containing condensed financial statements for interim periods
beginning after December 15, 2002. We will continue to account for this
compensation in accordance with APB No. 25. We will adopt the interim reporting
requirements in the first fiscal period of the year ending 2003. In January
2003, the FASB issued FIN 46 "Consolidation of Variable Interest Entities,"
which clarifies the application of Accounting Research Bulletin ("ARB") 51,
Consolidated Financial Statements, to certain entities (called variable interest
entities) in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. The disclosure requirements of this Interpretation
are effective for all financial statements issued after January 31, 2003. The
consolidation requirements apply to all variable interest entities created after
January 31, 2003. In addition, public companies must apply the consolidation
requirements to variable interest entities that existed prior to February 1,
2003 and remain in existence as of the beginning of annual or interim periods
beginning after June 15, 2003. Management is currently assessing the impact of
FIN 46, and does not expect this Interpretation to have a material impact to the
Consolidated Financial Statements.

24

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

We are exposed to interest rate risk due to changes in interest rates,
primarily in the United States. Our policy is to manage interest rates through
the use of a combination of fixed and floating rate debt. We currently do not
use any derivative financial instruments to manage our exposure to interest rate
risk. The table below provides information about the future maturities of
principal for outstanding debt instruments at December 31, 2002. All instruments
described are non-traded instruments and approximated fair value.

FOREIGN CURRENCY RISKS

Our transactions are in U.S. dollars. Previously, we had one subsidiary,
which conducted our operations in Canadian dollars. However, those operations
were closed in July 1999. Currently, the South American joint venture transacts
all of its activity in U.S. dollars. Operations in South America have been
curtailed pending future developments in that market.

25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

26

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
OMNI Energy Services Corp.

We have audited the accompanying consolidated balance sheet of OMNI Energy
Services Corp. as of December 31, 2002, and the related consolidated statements
of operations, changes in equity and comprehensive loss, and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of OMNI Energy
Services Corp. as of December 31, 2001 and for each of the two years in the
period ended December 31, 2001, were audited by other auditors who have ceased
operations and whose report dated March 14, 2002, expressed an unqualified
opinion on those statements before the restatement adjustments and transitional
disclosures described in Note 1.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the 2002 financial statements referred to above present
fairly, in all material respects, the consolidated financial position of OMNI
Energy Services Corp. at December 31, 2002, and the consolidated results of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 1 to the financial statements, effective January 1,
2002, the Company adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" ("FAS 142").

As discussed above, the financial statements of OMNI Energy Services Corp.
as of December 31, 2001, and for each of the two years in the period ended
December 31, 2001, were audited by other auditors who have ceased operations. As
described in Note 1, these financial statements have been revised. The Company's
board of directors approved a one-for-three reverse stock split, and all
references to number of shares and per-share information in the financial
statements have been adjusted to reflect the reverse stock split on a
retroactive basis. We audited the adjustments that were applied to restate the
number of shares and per-share information reflected in the 2001 and 2000
financial statements. Our procedures included (a) agreeing the authorization for
the one-for-three reverse stock split to the Company's underlying records
obtained from management, and (b) testing the mathematical accuracy of the
restated number of shares, basic and diluted earnings per-share, and other
applicable disclosures such as stock options. We also applied audit procedures
with respect to the disclosures in Note 1 pertaining to financial statement
revisions to include the transitional disclosures required by FAS 142. In our
opinion, the restatement adjustments for the reverse stock split for 2001 and
2000 described in Note 1 are appropriate and have been properly applied and the
FAS 142 transitional disclosures for 2001 and 2000 in Note 1 are appropriate.
However, we were not engaged to audit, review, or apply any procedures to the
2001 and 2000 financial statements of the Company other than with respect to
such restatement adjustments and transitional disclosures and, accordingly, we
do not express an opinion or any other form of assurance on the 2001 and 2000
financial statements taken as a whole.

Ernst & Young LLP

New Orleans, Louisiana
March 27, 2003

27

THIS IS A COPY OF THE AUDIT REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP IN
CONNECTION WITH OMNI'S FILING ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 2001. THIS AUDIT REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP IN
CONNECTION WITH THIS FILING ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
2002. FOR FURTHER DISCUSSION, SEE EXHIBIT 23.2 WHICH IS FILED HEREWITH AND
HEREBY INCORPORATED BY REFERENCE INTO THE FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2002 OF WHICH THIS REPORT FORMS A PART.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of OMNI Energy Services Corp.:

We have audited the accompanying consolidated balance sheets of OMNI Energy
Services Corp. and subsidiaries, a Louisiana corporation, as of December 31,
2000 and 2001, and the related consolidated statements of operations, changes in
equity and comprehensive loss and cash flows for each of the three years in the
period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of OMNI Energy Services Corp.
and subsidiaries as of December 31, 2000 and 2001 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

ARTHUR ANDERSEN LLP

New Orleans, Louisiana
March 14, 2002

28

OMNI ENERGY SERVICES CORP.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2002

The accompanying notes are an integral part of these consolidated financial
statements.
29

OMNI ENERGY SERVICES CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

The accompanying notes are an integral part of these consolidated financial
statements.
30

OMNI ENERGY SERVICES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

The accompanying notes are an integral part of these consolidated financial
statements.
31

OMNI ENERGY SERVICES CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

The accompanying notes are an integral part of these consolidated financial
statements.
32

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of OMNI Energy
Services Corp., a Louisiana corporation, and subsidiaries in which we have a
greater than 50% ownership. All material intercompany accounts and transactions
have been eliminated in these financial statements. Certain prior year amounts
have been reclassified to be consistent with current year financial statement
presentation.

The consolidated financial statements and related notes thereto include the
retroactive effect of a one-for-three reverse stock split which was effective
July 3, 2002.

NATURE OF BUSINESS AND CURRENT OPERATING ENVIRONMENT

We are an oilfield service company specializing in providing an integrated
range of onshore seismic drilling and survey services to geophysical companies
operating in logistically difficult and environmentally sensitive terrain in the
continental United States. Our primary market is the marsh, swamp, shallow water
and contiguous dry land areas along the U.S. Gulf Coast (the "Transition Zone"),
primarily Louisiana and Texas, where we are the leading provider of seismic
drilling services.

We receive our revenues from customers in the energy industry. The seismic
market has remained depressed due primarily to the excess capacity of available
seismic data in the market. This volatile market has impacted our ability, as
well as that of our customers and others in the industry, to change their
forecasts and budgets in response to future uncertainties of commodity pricing.
These fluctuations can rapidly impact our cash flows as supply and demand
factors impact the number and size of seismic projects available.

We continue to adjust our operations to current market conditions by
downsizing our operations through closure of certain operating locations,
disposing of excess equipment and reducing our corporate overhead structure (see
Note 5).

During the later half of 2000, we began to experience an increase in
bidding activity. During this same time we continued our efforts to renegotiate
our loan agreements with our senior lenders and raise additional equity capital.
During the fourth quarter of 2000, we completed the raising of additional equity
capital which facilitated the restructuring of our senior secured credit
facilities.

On October 31, 2000 we completed a $4.3 million private equity offering in
exchange for 2,320,000 shares of common stock and the option to acquire an
additional 942,500 shares of common stock at an exercise price of $2.25 per
share. The private equity shareholders received the right to "put" their shares
back to us in the event of the death of our founder and then CEO. To secure the
"put" we acquired a $7.5 million key man life insurance policy. A portion of the
insurance policy was assigned to the private equity shareholders to secure their
"put." In addition, we sold to an affiliate 800 shares of Series A preferred
stock for $0.8 million cash and also converted $4.6 million in subordinated debt
into 4,550 shares of Series A preferred stock. In connection with the completion
of these capital transactions, we reached agreements with our secured lenders to
extend the maturity dates of approximately $13 million in senior secured
indebtedness. The proceeds from the sale of stock were used to repay debt,
acquire Gulf Coast Resources, Inc. (see Note 12) and provide working capital.

On February 10, 2001, our founder and then CEO was killed in a private
plane accident. As a result of this accident, we received $7.5 million of
proceeds from the aforementioned key man life insurance policy. The receipt of
the insurance proceeds is included as "other income" in the Statement of
Operations. The private equity shareholders waived their right to "put" their
common shares back to us. In connection with obtaining these waivers, we also
obtained from our senior secured lenders commitments to modify the existing loan
agreements. Under these revised agreements, the maturity dates were extended
with principal amortization remaining substantially the same. Additionally, the
interest rate on $6.9 million of the indebtedness was reduced from prime plus 3%
to prime plus 1.5%. In connection with the revised agreements, we repaid
33

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$2.0 million of the then existing senior secured term indebtedness and
restructured all of the outstanding subordinated debt.

In May 2001 we reached an agreement with our affiliate, the holders of our
outstanding subordinated debt, to pay $1.0 million in full satisfaction of $2.0
million of indebtedness. We further agreed to issue shares of Series B Preferred
Stock in satisfaction of the remaining outstanding subordinated debt, including
accrued interest (See Note 4).

In November 2001 we renegotiated with our senior secured lenders the
amortization of certain senior secured term indebtedness, the maturity dates of
all senior secured debt and a reduction in the interest rates of certain senior
secured debt from the prime interest rate plus 3% to the current rate of LIBOR
plus 5%.

In September 2002, we refinanced our working capital revolving line of
credit and certain equipment term indebtedness with a $10.5 million senior
credit facility including a $7.0 million revolving line of credit and a $3.5
million equipment term loan.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. The more significant estimates include asset
impairment reserves, useful lives for depreciation and amortization, receivables
reserve requirements and the realizability of deferred tax assets. Actual
results could differ from those estimates.

RECENT PRONOUNCEMENTS

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which establishes accounting and reporting standards that
every derivative instrument be recorded in the balance sheet as either an asset
or liability measured at its fair value. The adoption did not have an impact on
the Company's financial position as it has not entered into any derivative
instruments.

In July 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible
Assets." Under SFAS 142, goodwill and indefinite-lived intangible assets are no
longer amortized but are reviewed for impairment annually, or more frequently if
circumstances indicate potential impairment. Separable intangible assets that
are not deemed to have an indefinite life will continue to be amortized over
their useful lives. For goodwill and indefinite-lived intangible assets acquired
prior to July 1, 2001, goodwill continued to be amortized through 2001 at which
time amortization ceased and a transitional goodwill impairment test was
performed. Any impairment charges resulting from the initial application of the
new rules were classified as a cumulative change in accounting principle. The
initial transition evaluation was completed by June 30, 2002, which is within
the six-month transition period allowed by the new standard. The Company's
goodwill balances were determined not to be impaired. Goodwill amortization for
each of the years ended December 31, 2001 and 2000 was $103,000, and $21,000,
respectively. The following table presents the Company's

34

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

net income as reported in the Company's consolidated financial statements
compared to what would have been reported had the SFAS No. 142 been in effect as
of January 1, 2000.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS No. 145 requires that gains or losses recorded from the
extinguishment of debt that do not meet the criteria of Accounting Principles
Board (APB) Opinion No. 30 should not be presented as extraordinary items. This
statement is effective for fiscal years beginning after May 15, 2002 as it
relates to the reissued FASB Statement No. 4, with earlier application
permitted. Any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet the criteria in
APB 30 for classification as an extraordinary item should be reclassified. The
Company has elected not to adopt this statement early.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity," under which
a liability for an exit cost was recognized at the date of an entity's
commitment to an exit plan. SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized at fair value when
the liability is incurred. The provisions of this statement are effective for
exit or disposal activities that are initiated after December 31, 2002. SFAS 146
has no impact on the financial statements for the year ended December 31, 2002.

In November 2002, the FASB issued FASB Interpretation ("FIN") 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others," which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of
the guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applied prospectively to guarantees issued
or modified after December 31, 2002. The adoption of these recognition
provisions will result in recording liabilities associated with certain
guarantees provided by the Company. The disclosure requirements of this
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. Management does not expect this
Interpretation to have a material impact to the Consolidated Financial
Statements.

In December 2002, SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure -- An Amendment of FASB Statement No.
123," was issued by the FASB and amends FASB Statement No. 123, "Accounting for
Stock-Based Compensation." This Statement provides alternative

35

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation and amends the
disclosure provisions of SFAS 123 to require prominent

36

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

disclosure about the effects on reported net income of an entity's accounting
policy decisions with respect to stock-based employee compensation.
Additionally, this Statement amends APB Opinion No. 28, "Interim Financial
Reporting," to require disclosure about those effects in interim financial
information. The transition method provisions of this Statement are effective
for fiscal years ending after December 15, 2002. The interim financial reporting
requirements of this Statement are effective for financial reports containing
condensed financial statements for interim periods beginning after December 15,
2002. In January 2003, the FASB issued FIN 46 "Consolidation of Variable
Interest Entities," which clarifies the application of Accounting Research
Bulletin ("ARB") 51, Consolidated Financial Statements, to certain entities
(called variable interest entities) in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The disclosure requirements
of this Interpretation are effective for all financial statements issued after
January 31, 2003. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. In addition, public companies must
apply the consolidation requirements to variable interest entities that existed
prior to February 1, 2003 and remain in existence as of the beginning of annual
or interim periods beginning after June 15, 2003. Management is currently
assessing the impact of FIN 46, and does not expect this Interpretation to have
a material impact to the Consolidated Financial Statements.

IMPAIRMENT OF LONG-LIVED ASSETS

Through December 31, 2001, we evaluated our long-lived assets for financial
impairment when events or changes in circumstances indicate that the carrying
amount of such assets may not be fully recoverable. We evaluated the
recoverability of long-lived assets not held for sale by measuring the carrying
amount of the assets against the estimated undiscounted future cash flows
associated with them. At the time such evaluations indicated that the future
undiscounted cash flows of certain long-lived assets were not sufficient to
cover the carrying value of such assets, the assets were adjusted to their
estimated fair values. Effective January 1, 2002 we adopted SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets". These new
rules on asset impairment supersede SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The adoption
of SFAS No. 144 did not have a material effect on our financial statements for
the year ended December 31, 2002.

REVENUE RECOGNITION

We recognize revenue as service is rendered. Revenue from our drilling
operations is recognized on a per hole basis. Once we have drilled and loaded a
source point, revenue from the drilling of such source point is recognized.
Similarly, revenue is recognized from our seismic survey operations either on a
day rate or per mile basis. Under the per mile basis, revenue is recognized when
the source or receiving point is marked by one of our survey crews. Permitting
is recognized on a per day basis as services are incurred. Our aircraft, which
are usually either chartered with a monthly guaranteed rate or for a guaranteed
minimum number of hours per day, generate revenue pursuant to a fixed hourly
rate.

CASH AND CASH EQUIVALENTS

We consider investments with an original maturity of 90 days or less to be
cash equivalents. Due to its short-term nature the fair value of cash and cash
equivalents approximates book value.

ACCOUNTS RECEIVABLE

Trade and other receivables are stated at net realizable value. We grant
short-term credit to our customers, primarily geophysical companies. We
regularly review outstanding receivables and provide for estimated losses
through our allowance for doubtful accounts.

36

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES

Inventories consist of parts and supplies used for our drilling and
aviation operations. All inventories are valued at lower of average cost or
market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation. We
provide for depreciation by charging operations in amounts estimated to allocate
the cost of the assets over their estimated useful lives and salvage values as
follows:

Additions to property and equipment and major replacements are capitalized.
Gains and losses on dispositions, maintenance, repairs and minor replacements
are reflected in the Statement of Operations. Drilling equipment, which is
fabricated, is comprised of direct and indirect costs incurred during
fabrication. Costs include materials and labor consumed during fabrication.
Interest is also capitalized during the fabrication period. Included in property
and equipment at December 31, 2002 is approximately $750,000, which is net of
accumulated depreciation of approximately $225,000 for vehicles purchased under
capital lease obligations and $125,000, net of accumulated depreciation of
$5,000, for compressors purchased under capital lease obligations.

GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the excess of the purchase price of acquisitions over
the fair value of the net assets acquired. Such excess costs were being
amortized on a straight-line basis over a twenty-five year period. Through
December 31, 2001, we periodically assessed the recoverability of the
unamortized balance based on expected future profitability and undiscounted
future cash flows of the acquisitions and their contribution to our overall
operation. Effective January 1, 2002 we adopted SFAS No. 142, "Goodwill and
Other Intangible Assets." Under SFAS No. 142, goodwill and intangible assets
with indefinite lives are no longer amortized but are reviewed annually (or more
frequently if impairment indicators arise) for impairment. Separable intangible
assets that are not deemed to have indefinite lives will continue to be
amortized over their useful lives (but with no maximum life). The amortization
provisions of SFAS No. 142 apply to goodwill and intangible assets acquired
after June 30, 2001. As of December 31, 2001 and 2002, accumulated goodwill
amortization totaled approximately $123,811 and $123,811 respectively. (See Note
5 for impairment charges related to goodwill.) As of December 31, 2001 and 2002,
we have goodwill of $2.0 million. We recognized approximately $21,000 and
$103,000 in goodwill amortization expense for the year ended December 31, 2000
and 2001, respectively. No goodwill amortization expense was recorded in the
year ended December 31, 2002. There were no changes to goodwill balances during
the years ended December 31, 2001 and 2002 other than amortization expense for
2001. We also recognized $100,000 in amortization expense related to the
customer intangible asset for the year ended December 31, 2002.

37

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

We provide for deferred taxes in accordance with SFAS No. 109, "Accounting
for Income Taxes," which requires an asset and liability approach for measuring
deferred taxes and liabilities due to temporary differences existing at year-end
using currently enacted rates.

FOREIGN CURRENCY TRANSLATION

Our Canadian subsidiary maintained its accounting records in the local
currency (Canadian Dollar) before this operation was closed in July 1999. The
currency was converted to United States Dollars with the effect of the foreign
currency translation reflected as a component of shareholders' equity in
accordance with SFAS No. 52, and SFAS No. 130, "Reporting Comprehensive Income."
Currently, all other international activity is transacted in United States
Dollars. Foreign currency transaction gains or losses are credited or charged to
income, and such amounts are insignificant for the periods presented.

OVERHAUL AND REPAIR COSTS

Major overhaul of component parts for our owned aircraft are capitalized as
prepaid items as incurred and amortized over service hours flown. Major
overhauls to bring leased aircraft to specifications required at the termination
of our operating leases are accrued on the basis of hours flown. Routine repairs
and maintenance are expensed as incurred.

2. VALUATION ALLOWANCE ACCOUNTS

The allowance for uncollectible accounts consists of the following (in
thousands):

The accrual to bring leased aircraft back to repair specifications at the
termination of the operating lease is as follows (in thousands):

38

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT AND LINE OF CREDIT

Long-term debt consists of the following (dollars in thousands):

Annual maturities of long-term debt during each of the following years
ended December 31, are as follows (in thousands):

2003........................................................ $ 2,235
2004........................................................ 3,502
2005........................................................ 2,907
2006........................................................ 515
2007........................................................ 1,416
-------
$10,575
=======

The estimated fair value of long-term debt, based on borrowing rates
currently available to us for notes with similar terms and average maturities,
approximated the carrying value as of December 31, 2001 and 2002.

We have a working capital revolving line of credit agreement (the "Line")
with a bank. Availability under the Line is the lower of: (i) $7.0 million or,
(ii) the sum of 85% of eligible accounts receivable, plus the lessor of: 50% of
the cost of eligible inventory 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% (5.75% at December 31, 2002) and matures on August
31, 2004. The Line is collateralized by accounts receivable and inventory and is
subject to certain customer concentration limitations. As of December 31, 2002
we had $3.0 million outstanding under the Line and additional borrowing
availability of $0.8 million. The weighted-average interest rate on borrowings
under our revolving lines of credit was 9.2% and 6.2% for the years ended
December 31, 2001 and 2002,

39

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The senior secured credit agreements contain customary financial covenants
requiring, among other things, minimum levels of EBITDA, working capital,
tangible net worth and debt to EBITDA ratios. As of December 31, 2002 we were in
compliance with all of these covenants.

Subsequent to December 31, 2002, we agreed to renegotiated maturity dates
of certain credit facilities and entered into an agreement to extend the
amortization of the principal balance on one of our senior credit facilities.
The revised maturity dates have been reflected in the consolidated financial
statement and the related notes thereto. The extended amortization of the
principal balance of the one senior credit facility will be reflected in our
financial statements for the first quarter of the year ending 2003.

4. SUBORDINATED DEBT

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 (See Note 9 regarding the accounting for
preferred stock).

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 967,000 have been cancelled. The remaining 945,833
warrants outstanding are all exercisable with exercise prices ranging from $2.25
to $6.00 per share.

The following table summarizes the exercise prices of outstanding warrants
as of December 31, 2002:

5. ASSET IMPAIRMENT AND OTHER NON-RECURRING CHARGES

During 1997 and the first half of 1998, we experienced significant growth
through a series of strategic acquisitions, and increasing demand for our
services. Due to a significant decrease in the price of oil and gas and the
resultant impact on drilling activity, we experienced a sharp decline in the
demand for our services during the second half of 1998 through 2000. This
decline in customer demand materialized quickly from the previous growth period
and caused us to reassess our overall operations. This change in our market and

40

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reassessment of operations resulted in our recording of the following charges to
asset impairment during 2000, 2001, and 2002 (in thousands):

As a result of the continuing market decline during 2000, we recorded an
asset impairment of $11.3 million. The principal component of this charge was a
net $7.5 million writeoff of goodwill, which consisted of $4.9 million related
primarily to the international drilling and line cutting segments and $2.6
million related to the survey segment. Based on historical and projected
undiscounted revenue and expense trends, we do not believe that these segments
will generate sufficient activity to realize the carrying value of the goodwill.
The $3.4 million of impairment of drilling, aviation and field equipment
represents the writedown to estimated fair value of excess equipment that we
have identified that is no longer needed to support future operations. The
assets include leasehold improvements for an aviation hanger no longer used by
the aviation division, estimated losses on the return of aircraft under an
operating lease and certain domestic and international seismic drill units and
related field equipment. The $0.3 million of other assets represents loan
closing costs written off that are related to loans that have been renegotiated
with various lenders during 2000.

In 2001 we revalued the tractors being held for sale to prices that more
closely approximated their fair market values. In doing so, we recognized asset
impairment charges of $0.2 million for the year ended December 31, 2001, by the
end of 2001 all of the tractors were sold at prices that approximated their
newly assigned values. We also revalued the steel marsh buggies being held for
sale to their appraised fair market values as of December 31, 2001. This
revaluation resulted in an additional $0.4 million charge to asset impairment
for the year ended December 31, 2001.

In 2002 we collected $0.1 million of rent on facilities located in South
America, which have been applied as a reduction of the value of these assets in
held for sale.

At December 31, 2001 and 2002, we had $0.6 million and $0.5 million in
assets held for sale of which $0.1 million is included in "Other Assets" and
$0.4 million is included in "Assets Held for Sale" in the accompanying balance
sheet as of December 31, 2002. As of December 31, 2002, assets held for sale
include 8 steel marsh buggies as well as the remaining assets of our South
American operation, for which we have specific agreements to sell. We expect to
dispose of the remaining assets held for sale during 2003. The carrying values,
which we believe approximate fair market value of our assets held for sale at
December 31, 2002, are is as follows (in thousands):

6. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2001 we leased a facility from a major
shareholder at a total lease expense of $0.1 million, which approximated market
values. We were under a lease contract for a portion of 2001 (See Note 8). See
also Notes 4 and 9 for other transactions with our affiliates.
41

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In July 2000, we entered into a series of transactions with the same
affiliate that enabled us to factor, with recourse, approximately $1.0 million
of the trade receivable of a major customer. This receivable had become
ineligible under the terms of our Line. As of December 31, 2002 we were liable
to the affiliate for approximately $0.2 million related to this agreement. In
addition, we borrowed $0.5 million from this affiliate during 2002. As of
December 31, 2002, $0.1 million remained outstanding. We are currently
finalizing repayment terms with the affiliate of all of the remaining
outstanding balances. The loan is secured by the amounts due from certain
customers.

We also placed subordinated debt with our major shareholder, which was
subsequently converted to preferred stock (See Notes 4 and 9).

7. CUSTOMER AND CREDIT CONCENTRATION

During the year ended December 31, 2000, three customers accounted for 49%
(34%, 8% and 7%, respectively) of our total revenues. Included in accounts
receivable as of December 31, 2000, are amounts owed from these customers
totaling approximately 39% (27%, 12% and 0%, respectively) of total accounts
receivable.

During the year ended December 31, 2001, three customers accounted for 71%
(43%, 16% and 12%, respectively) of our total revenues. Included in accounts
receivable as of December 31, 2001, are amounts owed from these customers
totaling approximately 74% (7%, 34% and 33%, respectively) of total accounts
receivable.

During the year ended December 31, 2002, two customers accounted for 84%
(58% and 26%, respectively) of our total revenues. Included in accounts
receivable as of December 31, 2002, are amounts owed from these customers
totaling approximately 68% (67% and 1%, respectively) of total accounts
receivable.

Included in "Other Receivables" at December 31, 2002 is $0.5 million
related to the work performed in Bolivia. We are pursuing collection from the
related customer, however, the final amount to be collected depends on a number
of factors and the ultimate resolution may be less than the recorded receivable.

8. COMMITMENTS AND CONTINGENCIES

LEASES

During 1999, we entered into a sale-leaseback transaction with our aviation
fleet. We received $8.0 million upon sale of the aircraft and entered into an
operating lease for a period of 10 years. Monthly rental payments under the
lease were approximately $80,000. In December 2001, we exercised our option to
acquire the aviation fleet previously under this lease obligation resulting in a
$4.7 million note payable at December 31, 2001 (See Note 3). Future payments
under this agreement will be recorded as a reduction in principal of the debt.

In connection with our new senior secured credit facility (See Note XX), in
September 2002, we negotiated with a financing institution for the acquisition
of certain drilling equipment and the early termination of the lease of certain
seismic aviation equipment previously accounted for as non-cancelable operating
leases.

Total rental expense was $2,612,840, $1,558,767 and $489,517 for the years
ended December 31, 2000, 2001 and 2002, respectively. At December 31, 2002 there
were no material non-cancelable operating leases in effect.

42

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INSURANCE

We carried workers compensation insurance coverage with a deductible amount
of $250,000 per incident for claims incurred in 1997. In 1999, we changed
insurance carriers and had no deductible. Management is not aware of any
significant workers compensation claims or any significant claims incurred but
not reported as of December 31, 2002.

LITIGATION

Several of our former Board members and one current Board member, as well
as our directors' and officers' insurance companies, have been named as
defendants in a lawsuit filed by certain shareholders in connection with our
private sale of securities in October 2000 (See Note 1). The lawsuit alleges,
among other things, federal and state securities violations and
misrepresentations. We are not named as defendants in this lawsuit; however, we
may have indemnification obligations to the named individuals for actions in
their capacity as members of our Board of Directors. We maintain directors' and
officers' insurance for these types of matters, and we do not currently believe
that these obligations will have a material adverse effect on our financial
position.

One of our current directors has been named as a defendant in a lawsuit
filed by an officer and director of the company in connection with our private
sale of securities in October 2000 (See Note 1). The lawsuit alleges, among
other things, negligent misrepresentation, omission of material facts, and state
securities violations. We are not named as a defendant in this lawsuit; however,
we may have indemnification obligations to the named individual for actions in
his capacity as a member of our Board of Directors. We maintain directors and
officers insurance for these types of matters, and we do not currently believe
that this obligation will have a material adverse effect on our financial
position.

In connection with our private sale of securities in October 2000 (See Note
1), we have also received two shareholder derivative demands requesting that we
take legal action against all of our former Board members and officers for
breaches of their duties and obligations to us and our shareholders. We have
appointed a committee of our Board consisting of independent members to
investigate and evaluate the allegations in these demands and make
recommendations to the Board of Directors as they deem advisable.

In the normal course of our business, we become involved in various
litigation matters including, among other things, claims by third parties for
alleged property damages, personal injuries and other matters. While we believe
we have meritorious defenses against these claims, management has used estimates
in determining our potential exposure and has recorded reserves in our financial
statements related thereto where appropriate. It is possible that a change in
our estimates of that exposure could occur, but we do not expect such changes in
estimate costs will have a material effect on our financial position or results
of operations.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with certain key executive
officers which include base salaries and terms of employment.

9. STOCKHOLDERS' EQUITY

PREFERRED STOCK

At December 31, 2002 we had a total of 7,500 shares of Series A Preferred
Stock and 4,600 shares of Series B Preferred Stock, at a total liquidation value
of $12.1 million.

The Series A Preferred Stock has an 8% cumulative dividend rate, is
convertible into our common stock with a conversion rate of $2.25, is redeemable
at our option at $1,000 per share plus accrued dividends, contains a liquidation
preference of $1,000 per share, has voting rights on all matters submitted to a
vote of our
43

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shareholders, 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. The preferred shareholders
also agreed that dividends would not accrue on the outstanding stock from April
2001 through June 2002. Dividends were accreted at 8% during the free dividend
period. As of April 2001 there were approximately $0.3 million of dividends in
arrears relating to these outstanding shares of Series A Preferred Stock. The
affiliate has also agreed that dividends will not accrue after June 30, 2002
until our earning reach a mutually agreed upon level.

In March 2002, we issued 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 4). 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, is redeemable at our option at $1,000
per share plus accrued dividends, contains a liquidation preference of $1,000
per share 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. We also agreed that dividends would
not accrue on the outstanding stock from May 2001 through June 2002. Dividends
were accreted at 8% during the free dividend period. As of May 2001 there were
no dividends in arrears relating to the outstanding shares of Series B Preferred
Stock. The affiliate has also agreed that dividends will not accrue after June
30, 2002 until our earning reach a mutually agreed upon level.

STOCK OPTIONS

In September 1997, we adopted and our sole shareholder approved the Stock
Incentive Plan (the "Incentive Plan") to provide long-term incentives to our key
employees, officers, directors who are our employees, and our consultants and
advisors and non-employee directors ("Eligible Persons"). Under the incentive
plan, we may grant incentive stock options, non-qualified stock options,
restricted stock, other stock-based awards, or any combination thereof to
Eligible Persons. Options generally vest over a four-year period and expire if
unused after ten years. The exercise price of any stock option granted may not
be less than the fair market value of the common stock on the date of grant. A
total of 1,000,000 shares of common stock have been authorized under the
Incentive Plan, of which 198,514 remain available for issuance at December 31,
2002.

In January 1999, we approved the Stock Option Plan (the "Option Plan") to
provide for the grant of options to purchase shares of our common stock to
non-officer employees of our company and our subsidiaries in lieu of year-end
cash bonuses. The Option Plan is intended to increase shareholder value and
advance our interests by providing an incentive to employees and by increasing
employee awareness of us in the marketplace. Under the Option Plan, we may grant
options to any of our employees with the exception of our officers. The options
become exercisable immediately with respect to one-half of the shares, and the
remaining one-half shall be exercisable one year following the date of the
grant. The exercise price of any stock option granted may not be less than the
fair market value of the common stock on the effective date of the grant. A
total of 100,000 shares of common stock are authorized, of which 46,994 remain
available for issuance at December 31, 2002.

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". Accordingly, the provisions of 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.

44

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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:

- ---------------

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

A summary of our stock options as of December 31, 2000, 2001 and 2002, and
changes during the years then ended, which give retroactive effect to the one
for three reverse stock split effective July 3, 2002, are presented below:

The weighted average fair value at date of grant for options granted during
2000 was $1.62 per option. The fair value of options granted is estimated on the
date of grant using the Black-Scholes option-pricing model with the following
assumptions: (a) dividend yield of 0.00%; (b) expected volatility 111%; (c)
average risk-free interest rate of 5.86%; and (d) expected life of 6.5 years.

The weighted average fair value at date of grant for options granted during
2001 was $1.98 per option. The fair value of options granted is estimated on the
date of grant using the Black-Scholes option-pricing model with the following
assumptions: (a) dividend yield of 0.00%; (b) expected volatility 94%; (c)
average risk-free interest rate of 4.17%; and (d) expected life of 6.5 years.

The weighted average fair value at date of grant for options granted during
2002 was $1.94 per option. The fair value of options granted is estimated on the
date of grant using the Black-Scholes option-pricing

45

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

model with the following assumptions: (a) dividend yield of 0.00%; (b) expected
volatility of 150%; (c) average risk-free interest rate of 3.11%; and (d)
expected life of 6.5 years.

The following table summarizes information about stock options outstanding
as of December 31, 2002:

COMMON STOCK

The consolidated financial statements and related notes thereto include the
retroactive effect of a one for three reverse stock split effective July 3,
2002. We currently have 15,000,000 shares of our $0.01 par value common stock
authorized; of these authorized shares, there were 9,098,491 and 9,101,778
issued at December 31, 2001 and 2002, respectively. In November 2000, 1,302,489
new shares were issued in conjunction with the acquisition of Gulf Coast
Resources, Inc. (See Note 12) and 2,320,000 were issued in conjunction with the
private placement (See Note 1). In 2001 we repurchased 361,800 shares, which are
classified as treasury shares.

EARNINGS PER SHARE

Basic 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 period. 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. Giving retroactive effect the one for
three reverse stock split effective July 3, 2002, we had 538,983, 371,698 and
985,615 options outstanding in the years ended December 31, 2000, 2001 and 2002,
respectively, that were excluded from the calculation of diluted EPS as
antidilutive. In addition, warrants to purchase up to 1,912,833, 184,722 and
2,121,662 shares of common stock were also excluded for the years ended December
31, 2000, 2001 and 2002, respectively.

The following table sets forth the computation of basic and diluted
weighted average shares for the years ended December 31, 2000, 2001 and 2002 (in
thousands):

46

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES

The components of deferred tax assets and liabilities as of December 31,
2001 and 2002 are as follows (in thousands):

The income tax expense (benefit) for the years ended December 31, 2000,
2001 and 2002 consisted of the following (in thousands):

The reconciliation of Federal statutory and effective income tax rates for
the years ended December 31, 2000, 2001 and 2002 is shown below:

As of December 31, 2001, for tax purposes, we had net operating loss
carryforwards (NOLs) of approximately $37.3 million. The NOLs will expire
commencing 2019. We account for income taxes under the provision of SFAS No. 109
which requires recognition of future tax benefits (NOLs and other temporary
differences), subject to a valuation allowance based on the likelihood of a
concept of "more-likely-than-not" of realizing such benefit. In determining
whether it is "more-likely-than-not" that we will realize such benefits, SFAS
No. 109 requires that all negative and positive evidence be considered (with
more weight given

47

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

to evidence that is "objective and verifiable") in making the determination.
SFAS No. 109 indicated that "forming a conclusion that a valuation allowance is
not needed is difficult when there is negative evidence such

48

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

as cumulative losses in recent years"; therefore we determined that it was
required by the provision of SFAS No. 109 to maintain a valuation allowance of
$9.4 million for all of the recorded net deferred tax assets. In 2002 the
Company reversed $0.4 million of this related reserve due to the Company's
expectation of generating income in fiscal 2003. Future favorable adjustments to
the valuation allowance may be required if and when circumstances change.

11. SEGMENT INFORMATION

SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," which requires that companies disclose segment data based on how
management makes decisions about allocating resources to segments and measuring
their performance. Currently, we operate principally in four segments, which
operate in North America. As of December 31, 2002, approximately $0.5 million of
our assets are located in South America. All remaining assets are located in
North America.

Drilling revenue is derived primarily from drilling and loading of the
source points for seismic analysis. Aviation revenue is derived through
transport of geophones and recorders used to collect the seismic data between
receiving points. Helicopters are also used to transport heli-portable drilling
units into remote or otherwise inaccessible terrain, as well as to transport
people and equipment to offshore oil rigs. Survey revenue is recorded after the
customer has determined the placement of source and receiving points, and after
survey crews are sent into the field to plot each source and receiving point
prior to drilling. Permitting revenue is derived from services provided in
conjunction with obtaining permits from landowners. In 1998, we expanded
internationally into South America. In 2000 we ceased providing services in
South America.

The following shows industry segment information for the years ended
December 31, 2000, 2001 and 2002:

49

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) In September 2002, we acquired certain drilling equipment previously under
lease obligation.

(2) In December 2001, we exercised our purchase option to acquire the aviation
fleet previously under lease obligation.

(3) Net of assets obtained in acquisitions (See Note 12).

12. ACQUISITION

Effective October 31, 2000, we acquired Gulf Coast Resources, a seismic
drilling support company headquartered in Broussard, Louisiana. The aggregate
purchase price was $3.7 million consisting of $0.8 million in cash and 1,302,489
shares of common stock valued at $2.4 million. The excess cost over the
estimated fair value of the net assets resulted in goodwill of approximately
$2.1 million, which is being amortized on a straight-line basis over 20 years.
Our pro forma results as though Gulf Coast Resources transaction had taken place
on January 1, 2000 would have resulted in revenues, net loss and basic loss per
share of $20 million, $(25.7) million and $(1.24), respectively. The operating
results of Gulf Coast Resources have been included in consolidated statements of
income from the effective date of acquisition.

On January 18, 2002 we acquired the assets of AirJac Drilling (AirJac), a
division of Veritas DGC Land, Inc., a seismic drilling support company
headquartered in New Iberia, Louisiana (Veritas). The aggregate acquisition cost
was $4.2 million, including $2.0 million cash, acquisition costs, assumption of
a capital lease and a commitment valued at $1.9 million to discount future work
to be performed for Veritas over a four year period. In this acquisition we
acquired inventory, vehicles, shop equipment and drilling, field and support
equipment. The acquisition resulted in the recognition of a $1.9 million
customer relationship intangible asset. We established a liability for these
future minimum discounts which will be recognized as work is performed. The
results of AirJac's operations have been included in our consolidated financial
statements since the acquisition

49

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

date. The following summarized unaudited data reflects our consolidated pro
forma results of operations as if the AirJac transaction had taken place on
January 1, 2001 (in thousands):

UNAUDITED PRO FORMA RESULTS

The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition (amounts in
thousands):

Current assets.............................................. $ 154
Property, plant, and equipment............................ 2,101
Customer relationship..................................... 1,920
Capital lease obligation assumed.......................... (179)
Obligation for future discounts........................... (1,920)
-------
Cash purchase price.................................... $ 2,076
=======

The amount assigned to the customer relationship intangible will be
amortized over a twenty year period and will not result in any residual value.
The amortization expense related to this amount is expected to be $0.5 million
over the next five years.

13. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

50

OMNI ENERGY SERVICES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) The fourth quarter of 2000 includes a provision for valuation allowance of
$10.9 million. (See Note 10).

(2) The fourth quarter of 2001 includes an insurance premium receivable recorded
of approximately $0.3 million and an inventory book to physical adjustment
of approximately $0.4 million.

(3) The second and third quarters of 2001 have been restated to record accretion
of preferred stock (See Note 9).

51

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On August 8, 2002, we dismissed Arthur Andersen LLP ("Arthur Andersen") as
our independent public accountants and on August 9, 2002 engaged Ernst & Young
LLP ("E & Y") as our independent public accountants for the fiscal year ending
December 31, 2002. These actions were approved by the Board of Directors.

Arthur Andersen's reports on our Financial Statements for each of the
fiscal years ended December 31, 2001 and 2000 did not contain an adverse opinion
or disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principles.

During fiscal year ended December 31, 2001 and 2000, and through August 8,
2002, there were no disagreements with Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to Arthur Andersen's satisfaction,
would have caused Arthur Andersen to make reference to the subject matter in
connection with its report on our Financial Statements for such years. There
were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

We provided Arthur Andersen with a copy of the foregoing disclosures.
Arthur Andersen informed us that due to then current difficulties it was unable
to respond to the Company's filing stating its agreement with such statements.

During the fiscal years ended December 31, 2001 and 2000, and through
August 8, 2002, we did not consult with E & Y with respect to the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our Financial Statements,
or any matters or reportable events as set forth in Items 304(a)(2)(i) and (ii)
of Regulation S-K.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning our directors and officers called for by this item
will be included in our definitive Proxy Statement prepared in connection with
the 2003 Annual Meeting of shareholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

Information concerning the compensation of our executives called for by
this item will be included in our definitive Proxy Statement prepared in
connection with the 2003 Annual Meeting of shareholders and is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning security ownership of certain beneficial owners and
management called for by this item will be included in our definitive Proxy
Statement prepared in connection with the 2003 Annual Meeting of shareholders
and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions
called for by this item will be included in our definitive Proxy Statement
prepared in connection with the 2003 Annual Meeting of shareholders and is
incorporated herein by reference.

52

ITEM 14. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

Based on their evaluation of our disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange
Act of 1934) as of a date within 90 days of the filing of this annual
report, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are designed to
ensure that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC's rules and forms
and are operating in an effective manner.

(b) Changes in internal controls

There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the
date of their evaluation.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following financial statements, schedules and exhibits are filed as
part of this Report:

(1) Financial Statements. Reference is made to Item 8 hereof.

(2) Financial Statement Schedules: None.

(3) Exhibits. See Index to Exhibits on page E-1. We will furnish to
any eligible shareholder, upon written request of such shareholder, a copy
of any exhibit listed upon the payment of a reasonable fee equal to our
expenses in furnishing such exhibit.

(b) Reports on Form 8-K:

None.

53

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant)

By: /s/ JAMES C. ECKERT
------------------------------------
James C. Eckert
President and Chief Executive
Officer
(Principal Executive Officer)

Date: March 31, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

54

OMNI ENERGY SERVICES CORP.
A LOUISIANA CORPORATION
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
SECTION 302 CERTIFICATION

I, James C. Eckert, certify that:

1. I have reviewed this annual report on Form 10-K of OMNI Energy Services
Corp., a Louisiana corporation (the "registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

/s/ JAMES C. ECKERT
--------------------------------------
James C. Eckert
Chief Executive Officer

Date: March 31, 2003

55

OMNI ENERGY SERVICES CORP.
A LOUISIANA CORPORATION
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
SECTION 302 CERTIFICATION

I, G. Darcy Klug, certify that:

1. I have reviewed this annual report on Form 10-K of OMNI Energy Services
Corp., a Louisiana corporation (the "registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

/s/ G. DARCY KLUG
--------------------------------------
G. Darcy Klug
Chief Financial Officer

Date: March 31, 2003

56

OMNI ENERGY SERVICES CORP.
EXHIBIT INDEX

- ---------------

* Management contract or compensation plan or arrangement

(1) Incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 31, 1997

(2) Incorporated by reference to our Registration Statement on Form S-1
(Registration Statement No. 333-36561).

(3) Incorporated by reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999.

(4) Incorporated by reference to our Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999.

(5) Incorporated by reference to our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001.

(6) Incorporated by reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001.

(7) Incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 31, 2000.

(8) Incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 31, 2001.