Thank you for standing by. Welcome to the Mitcham Industries fiscal 2008third quarter earning conference call. During today’s presentation all parties will be in a listen onlymode. Following the presentation, theconference will be open for questions. If you have a question, please press the star followed by the one onyour touchtone phone. If you’d like towithdraw a question, press the star followed by the two. If you are using speaker equipment, pleaselife the handset before making your selection. This conference is being recorded today, December 4, 2007. I would now like to turn the conference overto Karen Croan. Please go ahead madam.

Thank you Joshua. Good morning and welcome to the MitchamIndustries fiscal 2008 third quarter conference call. We appreciate all of you joining us heretoday. Your host will be Bill Mitcham,President and Chief Executive Officer and Rob Capps, Executive Vice Presidentand Chief Financial Officer. Before I turn the call over to management,I have a few items to cover. If youwould like to be added to the company’s email distribution list, please callDRGE office at 713-529-6600 and relay that information to us, or you can sendan email to me at kcroan@drg-e.com. If you would like to listen to a replay oftoday’s call, it is available by webcast by going to the investor relationssection of the company’s website at www.mitchemindustries.com or via arecorded instant replay until December 11th. Information on how to access the replay wasprovided in yesterday’s earning’s release. Information reported on this call speaksonly as of today, Tuesday, December 4, 2007. And,therefore, you are advised that time sensitive information may no longer beaccurate as of the time of any replay. Before we begin, let me remind you that certain statements made bymanagement during this call may constitute forward-looking statements withinthe meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the company’sfuture, including without limitation, the company’s future expected financialposition, result of operation, cash flow, financing plans, gross margins,business strategy, budgets, projected costs and expenses, capital expenditures,competitive positions, product offerings, access to capital and growthopportunities are forward-looking statements. These forward-looking statements are basedon managements’ current expectations and includes known and unknown risks,uncertainties and other factors, many of which the company is unable to predictor control that may cause the company’s actual future results or performance tomaterially differ from any future results or performance expressed or impliedby those statement. These risks and uncertainties include therisks’ factors disclosed by the company from time-to-time in its filings withthe SEC. Including in its annual reporton Form 10K for the year ending January 31, 2007. Furthermore, as we start this call, pleasealso refer to the statements regarding forward-looking statements incorporatedin our press release issued yesterday. And, please note, that the contents of our conference call this morning,are covered by these statements. Now, I will turn the call over theMitcham’s President and CEO, Bill Mitcham.

Thanks Karen and good morningeveryone. Thank you for joining us todayto discuss our fiscal 2008 third quarter results. I’ll begin by providing you with a fewhighlights for the quarter. Rob willdiscuss the financial details and I will then return with some final comments. Obviously, we are very please with ourthird quarter results and as we’ve continued to see strong demand in our coreside; the equipment leasing business both land and marine as well as ourequipment manufacturing and sells business. Certainly several note worthy events in the quarter. Our third quarter revenues were up 35% to$17.2 million driven by continued growing global demand for seismic equipment,expansion utilization of our lease pool assets, continued expansion and growthin several geographic markets and strength in our manufacturing and salesbusiness. This is our best third quarter ever, bothin terms of total revenues as well as revenue generated from our core equipmentleasing business. We’ve never posted an $8 million dollars inequipment leasing revenue in any prior third quarter. Certainly keep in mind that our second andthird quarters conceivably are our weakest quarters of the year. Seismic activity slows down during the warmermonths in certain areas like Canadaand Russia. We added $18 million dollars in new leasepool equipment during the combined fourth quarter of fiscal 2007 and firstquarter of fiscal 2008. And we’vebenefited from this investment over the last several quarters as revenues fromequipment leasing were up 36% year-over-year for the first nine-months offiscal 2008. At Seamap, our marine seismic equipmentmanufacturing and sales business revenues more than doubled in the thirdquarter to approximately $5.1 million. Driven by strong demands from our GunLink, BooieLink and WhiteCollarproducts. Equally as important withSeamap was the improvement on gross margins, which rose to 39% during the thirdquarter. It was up from 33% in thesecond quarter of 2008 and 21% from a year ago third quarter. We reported quarterly net earnings of $2.4million or $0.24 per diluted share on the 39% affective tax rate as compared to38% per diluted share earned in the year [inaudible] quarter, which reflectedin that net tax benefit. Quarter-over-quarter, we were impacted by a$2. million dollar swing in income taxes from a $1.3 million dollar tax benefitlast year after recognition of deferred tax assets to a $1.6 million taxexpense this year. On a pretax basis,our income increased 58% this quarter over the third quarter of last fiscalyear. Now, I’ll turn the call over to Rob, ourChief Financial Officer who will give you a detailed review of our financialresults and I’ll return with some final remarks. Rob.

Thanks Bill. Good morning everyone. I’d like to review the financial details ofthe third quarter. This is totalrevenues for the third quarter were up 35% to $17.2 million from $12.7 milliona year ago. Equipment leasing segment generatedrevenues of $12.1 million for the quarter a 19% increase from a year ago andgross profits at $7.4 million, which is a 34% increase. As you may recall this segment includesrevenues not only for our core leasing business but also from sales of leasepool equipment and sells in which we act as a reseller of third-partyequipment. The gross profit margin forthe segment was 61%, an improvement from the 54% gross margins for the third quartera year ago. Revenues from our core equipment leasingbusiness, which excludes the equipment sales was $8.4 million. That’s an increase of 36% from a year ago andthis represents about 49% of our total revenues. The growth in core lease revenues wasdriven by increased demand for seismic equipment, large amount of equipmentadded to our lease building in the fourth quarter 2007 and the first quarter ofthis year and our expansion into new geographic markets. Sales of new seismic and SAP equipment weredown about 38% year-over-year with third quarter revenues coming in at about$2.0 million and gross profits decreasing to about $.5 million from the $1.1million earned a year ago. This declinedrelates to seismic equipment sells, equipment sells from SAP, our Australiansubsidiary were actually up in the quarter as compared to last years. Our lease pool equipment sales increased97% from a year ago with $1.6 million in revenues for this quarter. Gross profit on those sales was about $1.4million, which is up from $.6 million a year ago. As you recall, these sales tend to be highlyerratic as they are largely based on customer demand and the re-deployment ofcapital in other assets.…

Thanks Rob. Well, we find ourselves in a very similar position as last quarterduring the last nine-months of 2007 we continue to see strong demand forseismic equipment worldwide. As the highcommodity price environment continues to drive oil and gas exploration. In addition, the need for better imaging andmore sophisticated seismic surveys both onshore and offshore have been and willcontinue to be major capitalists for the seismic equipment demand. As a result the size and complexity ofseismic surveys are increasing, driving the need for more advanced equipment aswell as services that support them. Casein point of the past 12 months we’ve seen an increase in international crewcount from 195 to over 227, which includes the United States. The US crew count during the sameperiod has increased from 64 last year to 79 as of November 1st. Our view is that the international oilcompanies are being driven to get more out of what they have and drill inplaces where they can still gain access as to opposed to places where there arepolitical restrictions or turmoil. Theseneeds are driving a new cycle in geophysics in both land and marine and willcontinue to require the collection of new data with more sophisticatedequipment. Beside from a highly favorable economicenvironment for our business we’ve also made strategic investments that havepositioned us to take advantage of higher growth markets and diversify ourrevenue base. The performance of our Russian operations,MSE, confirms our belief that this reason the world holds great promise. Year-to-date, MSE or Mitcham Seismic hascontributed $2.4 million or about 10% of our core leasing revenue and that’sfrom a base of zero just about a year ago. And we will continue to look foropportunities to grow our presence in this market and have earmarked a portionof our recently delivered equipment to Russia. By yearend we should have approximately15,000 land channels in the Russian market. We also expect Seamap to play an essentialroll in broadening our international footprint in helping us serve the growingoffshore market. Seamap represents a pivotalpart of our growth strategy as their products continue to gain acceptance inthe marine seismic market. We’ve also been able to improve productionefficiencies including the relocation of our primary production facilities to Singapore fromthe UKis certain to help profit margins in this segment. Based on our strong year-to-date resultsand our current business outlook, but keeping in mind that the overallseasonality of our business as well as the large swings in the revenue that canoccur with our equipment sales, we are revising our prior guide and[inaudible]. For fiscal 2008 we now expect our revenuesto be in the range of $65 to $70 million from prior guidance of $60 to $65million and our operating income to be in the range of $15 to $16 million from$13.5 to $14 and a half million. We continue to expect an effective tax ratefor the year of about 34%. That concludes my formal remarks and we’lltake questions out there.

Thank you. (Operator Instructions) Ourfirst question comes from the line of Bob McKenzie with Pritchard Capital. Please go ahead.

Hey guys, congratulations on what wouldhave been a good year from a couple of years back. Hey Bill could you give us a little bit ofupdate on what you see going into winter for Russia and Canada on channel countkind of overall levels and so forth?

Sure Bo, thanks. We had a little over 10,000 channels in theRussian market last year. We’ve seen alot of our customers have come back, but we’ve also starting to pick-up somenew customers in that market to the extend that we’ll have as I said about15,000 or may be a little over 15,000 channels this year versus a little over10,000 last year and that market itself is generally a 120 plus day market in aseason of four-month guarantee, so we’re certainly excited about thepossibilities in Russia, I believe that easily over the next couple of yearswe’ll be able to move that channel count to about 20,000 channels. In Canada, I know there’s been a lotof talk about slow downs with the tax situation and the high price of rigs andservice, but I tell you seismic in Canada, you know you have a verynarrow window every year. You missseismic, you miss it for the year. We’renot seeing a slow down, in fact we think this will probably be one of the biggeryears that we’ve ever experienced in the Russian… I mean in the Canadianmarket. I’m on the wrong side of theworld. We expect it to be a very good, very goodwinter in Canada. I don’t know the exact channel count. I can… it’s over 15, it’s probably closer to18 to 20,000 channels in that market this winter.

Alright. And then, can you give some preliminary ideas as to what you might belooking at in terms of capx next year? Where you might see some opportunities for even further expansion beyondwhat you guys have done this year?

No.

I mean do you think the next year could besomething in the realm of 10 to 20 again kind of overall expansion lease poolor not?

Well, we spent $25 million dollars lastyear in lease pool equipment and thought that would kind of tide up over for alittle while. I think we all here fullyexpected to…when we looked at it, expected to be in the neighborhood of $8 to$12 million. Certainly, there were anumber of opportunities for us; wide [inaudible] surveys, so we’ve added marineequipment, we added more streamer this year for another long-term job and thechannel count has gone off the charts. Would I expect another $8 to $10 million dollar, that’s were we start,where do we end-up. We’ll be, what willwe be Rob, $20 plus million this year? I’d be surprised if it was less than $15 million for next year.

Our next question comes from the line ofTerese Fabian - Sidoti & Company. Please go ahead. TereseFabian - Sidoti & Company: Thank you. Good morning. I have a question,actually sort of following-up on Bo’s. How do you decide when to add seismic equipment to the lease sinceyou’re obviously seeing a strong market, but do you need a contract in hand ora couple of indications of interests before you buy?

Terese we’ve always been prettyconservative about how we buy equipment. We, for the most part, we’ve always let the demand drive our purchasesand certainly we have some economic measures to that. We don’t go out and buy $10 million dollarsof equipment for a one-month rental, but we look at the return on investmentcapital and that pretty much drives our model to buy the equipment. If we can’t…there’s no way in the world wecan service the customer without buying equipment and certainly we’re going tobuy some more equipment for the most part. TereseFabian - Sidoti & Company: Okay, then a question on the marketsegments you talked a little about Canada and Russia and Multi, but how are youseeing growth? Do you get a lot fromother areas of the world like South America, Africa. Can youtalk a little about that?

Well, we have two fairly large contracts inSouth America right now that have been runningfor quite sometime. And, we actuallyhave a couple more that I think we’ll end-up contracting this year. Presently, we have four jobs running indifferent parts of Africa and one small job in the Middle East, so I mean we’renot just confined to one are, the Russian the winter or Canada in the winter. I mean it’s certainly a global operation.

Our next question comes from the line ofJason Rangler - Almond Rose. Please go ahead.

Good morning guys, great quarter. I guess to hit the last one. Have you guys seen an increase from theAustralian office as far as more activity going out or has that picked-up inthe last year?

This is Rob. I think our activity Australia in the past12, 19 months is probably has not been up very much, purely stable, but we arestarting to see a little bit of up-kicks going forward on the leasing, seismicleasing side. What we are seeing someup-kicks in that part of the world is on our hydrographic and oceanographicbusiness. We’re seeing some interestingprospects there and exactly as we saw in this quarter. We’ve seen some up-kicks in our salesrevenues out of that part of the business.

Okay, and then kind of a jump around onyou, but on the costs side you did mention moving everything to Singapore. Is that kind of the third quarterpre-representative of what that’s going to look like going forward or is therestill some savings going forward?

I still believe there are some things wecan do. The majority of the productionoperations were there in the third quarter, so we’ve pretty much completed thatmove with a couple of small exceptions, but I think as we kind of get thatoperation more settled and just matures in that location, we’ll continue to seesome improvements.

Our next question comes from the line ofPierre Conner - Capital One.

Morning gentlemen.

Morning Pierre.

Congratulations on a good quarter.

Thank you.

Trust everything’s going well today?

Yes, it went very well.

Great. Alright, quickly, I don’t know if you’ve tracked it this way, but yougathered some segments, some streamer segments and I wondered about yourrevenue exposure on the marine side from a total company standpoint? I believe we were in the 20% range. Can you look at it that way, and what is yourmarine exposure versus land exposure?

Pierre, this is Rob, let me answer that. The leaking business is about 20%, okay marine and the balanced land,but, obviously all the cement sales are non-marine. So from that standpoint, clearly more than50% of our company wide revenues are marine driven.

What do you expect with these additionalsegments? I guess they’re just cominginto the lease pool? Is that percentagegoing to move up 25% or so range on the leasing cod beam marine lever?

Not necessarily. I think we’ll see continued increase. The issue is, a certain bit of a problem, butit’s certainly not a problem, the land leases growing also. So, I don’t know that we’ll see thatpercentage of marine business as a component of the overall leasing necessarilyincrease.

Also, in some other areas in thestarting-up things I wanted to ask you about was in control source ofelectronic magnetics, is there any material impact to equipment that you havein the pool relating to that and is that fairly standard for the foreseeablefuture? Do you see any growth in there?

You’re saying for the pool…that a productwe manufacture and sale in Seamap. Wedon’t have that in the rental pool.

Okay.

We certainly have some orders for that, butcertainly we’ve seen an increase in that activity, I don’t think there much atall in the third quarter. There will besome in the fourth quarter.

Our next question comes the line of TysonBauer - Wealth Monitors. Please goahead.

Great quarter gentlemen and a fantasticyear so far. A couple of quickquestions; One, what percentage of your lease pool is now consistent of theSurf Sale product and do you ever get concerned of getting too tied in to onemain factor?

I’d say right now in terms of our landchannels probably 70…65 to 70% is surf sale and certainly we’re not surfing,but what we’re buying, what we have on order right now is Surf Sale. No, are we worried about being branded asurf sale shop, I don’t know that that’s all bad, but we, we offer everybody anopportunity to rent anything that they want – that they need. But when you look at the market, I can’t tellyou the exact number, but I can tell you that by the end of this year, SurfSale would have sold over, since 1999 would have sold over a million and ahalf, I wonder whose that phone is… would have sold over a million and a halfchannels. So, we have a fairly largeinstalled base to service with our equipment. Could you hear me, there’s some static orsomething on the line?

I can hear you. I’m not sure what that is, but yeah I canhear you.

So no, are we worried about being brandedno. I mean people still call. We have other manufacturer’s equipment. We certainly still have quite a bit ofinput/output equipment. We have othermanufacturers in terms of Geophones and things, so no I’m not worried aboutbeing branded. What we’d like to bebranded is a one-stop shop. You canshow-up here and get what you need.

Okay, and my follow-up question, given thestrength of the environment that you’re operating in both land and marine areyou still as enthusiastic as looking for other areas of growth outside ofchannel growth or Seamap growth or are you just looking to take advantage ofthe current environment that you have in front of you.

Well, certainly we’re continuing to takeadvantage of the current environment, but that doesn’t stop us from looking atother opportunities within the seismic sector and may be some outside. But, no we’re not just happy to slide alonghere. No, we’re always looking for otheropportunities to add.

Our next question comes from the line ofTerese Fabian - Sidoti & Company. Please go ahead. TereseFabian - Sidoti & Company: Okay, thank you. Can you give a channel count number adequateat the end of January of ’08 and tell me again what it is was again at the endof January of ’07?

It could be around 70 land channels at theend of the year, roughly. And, we wouldhave added about 15,000 land channels this year. TereseFabian - Sidoti & Company: Okay, thank you. And I remember you said on your lastconference call that some of your GunLink products were going into your leasepool? Are those there already and areyou getting good utilization out of them?

Yes and yes. They’ve been in the pool since early in thisfiscal year. They went in the pool, weput some GunLink 2000, five actually into the pool in the first quarter. And they’ve been out steadily consistentlyever since then.

Our next question comes from the line of BobMcKenzie - Pritchard Capital. Please goahead.

Speaking on the Seamap for a minute, whatdo you guys see venturing into fiscal 2009? I know that we’ve had just a tremendous year this year in marineseismic, but it is somewhat [inaudible]. Can you talk about what you can see a backlog filling over the 4000 andsuch and where you stand on the kinda 2000, 25000 upgrade products?

We don’t want to talk about backlog rightnow. I would say that we aren’t seeingany disturbing trends in our backlog. We’re taking on new orders all the time. You are right, we’ve had a very strong year in Seamap this year,especially the first quarter. So, thisis going to be a difficult year to replicate on the revenue side. As we’ve talked, we think we can do somethings on the profit side that can, may be bring the bottom line in just asgood or better. But, I think it’s goingto be tuff to repeat the top line at Seamap this next year. As far as new products such as the GunLink2500 you mentioned. We are ongoingly, ina constant state looking for some new products and doing some development workthere, so I think you see some new things as we get into next year.

I have to ask this and I don’t have it inmy model, and I just have to ask it every once in a while, is there anythingnew on the Australian Navy thing?

He’s talking about the Royal…no, that wentaway a year ago.

Alright guys. Thanks a lot.

Our next question comes from the line ofTamara Monuchin - Greenwood Investments. Please go ahead.

Hi guys. Very strong quarter. So Rob youmentioned that for the fourth quarter capital expenditures is going to be $7million or so. I was wondering when isthat going to be placed into operation.

It’ll be towards the very end of thequarter, so we will not see much, if any impact on the revenue life from thatequipment this year. It won’t be untilnext year.

Okay, and my follow-up is aboutG&A. I was wondering, I think thatyou mentioned that there was increased provision for a bad debt. I waswondering is that something we should be worried about? What is that related to?

We had a specific situation, which causedus to want to increase that provision. So, it’s not a general situation we’re seeing, so I don’t think that’ssomething you should be concerned or overly concerned about. That’s something that we watch closely allthe time.

Our next question comes from the line ofPierre Conner - Capital One. Please goahead.

Thanks Rob. I just want to follow-up because I didn’t catch the numbers you gave atthe beginning. The gross profit on thelease pool equipment sales and the other equipment sales numbers.

The lease pool equipment sales, I believethe gross profit was around $1.5… $1.4 on the lease pool sales. And on the other equipment sales, the grossprofit was about $.5 million, $500.000.

Got it. That was it.

There are no further questions at thistime. I would now turn the conferenceback over to management for any closing remarks.

We just want to thank you for your interestin the company. We look forward totalking with you after our fourth quarter.

Ladies and gentlemen this concludes theMitcham Industries fiscal 2008 third quarter earnings conference call. If you would like to listen to a replay oftoday’s conference, please dial 3035903000 or 1-800-405-2236. The passcode is 11102847#. We would like to thank you for yourparticipation. You may now disconnectand have a pleasant day.