Dawson Geophysical Company (DWSN), a leading provider of U.S. onshore seismic data acquisition services to oil and natural gas exploration and development companies, announced strong third quarter financial results this morning. Revenues were $84.6 million, an increase of 23% over prior year sales. Net income increased 28% to $9.7 million, or $1.27 per share. Analysts surveyed expected Dawson to report earnings of $1.13 per share on $82.7 million in revenues.

Fossil fuel prices near historical highs have Dawson’s clients engaged in frenzied domestic exploration activities, particularly those seeking natural gas shale plays like the Haynesville and Barnett. The company continues to make capital investments to meet this surging demand. After taking delivery of seven ION vibrator energy source units during the quarter, Dawson now accumulates seismic data across 115,000 channels with 143 vibrator units.

Stephen Jumper, President and CEO of Dawson Geophysical Company said, “Increased demand for higher subsurface resolution and lower finding and development costs by our clients fueled record third quarter and nine months results. This success further led to the fielding of an additional crew, our sixteenth, in May 2008 by redeploying an existing I/O MRX recording system. This crew has a smaller channel count and is initially committed to large scale 2D and smaller 3D seismic projects in the Appalachian Basin.”

Shares of DWSN closed at $54.30 yesterday and have traded in a 52-week range of $48.75 – $85.67. With 7.67 million shares outstanding, DWSN has a market cap of $420 million and a trailing 12-month P/E of 12.1. Trading in DWSN has historically been moderately correlated with action in the OIH, the oil services ETF. Since mid-May, however, that relationship has been broken, with DWSN down approximately 30% while the OIH is relatively unchanged.

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