ION Closes $40.7MM Private Placement

ION Geophysical Corp.

ION has closed on the private placement of 18,500,000 shares of its common stock at a purchase price of $2.20 per share. ION will use the approximately $38.0 million in net proceeds from the private placement, along with approximately $3.0 million in cash on hand, to repay in full its bridge loan under a Bridge Loan Agreement dated December 30, 2008, with Jefferies Finance LLC.

ION has provided Jefferies Finance LLC with a required pre-payment notice. By repaying the bridge loan prior to its maturity, ION will avoid certain duration payments it would have been required to pay in connection with the loan and reduce its future cash interest expenses. After retiring the bridge loan, outside of normal trade payables, ION will not have any outstanding indebtedness maturing prior to 2013.

Brian Hanson, Executive Vice President and Chief Financial Officer, commented, "The private placement and pre-payment of the bridge loan have the effect of increasing shares of common stock outstanding by 18,500,000 and decreasing our 2009 annual interest expense related to our outstanding debt by approximately $5.4 million. As a result, we now anticipate 2009 interest expense of between $30.0 million and $35.0 million. After applying these changes, we now anticipate 2009 earnings (losses) of between ($0.01) and $0.15 per diluted share if we exclude approximately $0.25 per diluted share of special charges taken in the first quarter related to impairments of our intangible assets and severance charges, and between ($0.10) and ($0.26) per diluted share if we include the special charges. We are very pleased that our investors continue to demonstrate their support for our business, strategy and prospects."